<PAGE>

                                                                           1997
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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-K
(MARK ONE)
  [X]            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 1997
                                      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 NO. 1-9117

                         INLAND STEEL INDUSTRIES, INC.
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              DELAWARE                                  36-3425828
      (STATE OF INCORPORATION)               (I.R.S. EMPLOYER IDENTIFICATION
  30 WEST MONROE STREET, CHICAGO,                          NO.)
              ILLINOIS                                    60603
  (ADDRESS OF PRINCIPAL EXECUTIVE                       (ZIP CODE)
              OFFICES)

      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (312) 346-0300

          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

         TITLE OF EACH CLASS                       NAME OF EACH EXCHANGE
                                                    ON WHICH REGISTERED
    Common Stock ($1.00 par value),             New York Stock Exchange, Inc.
including Preferred Stock Purchase Rights

          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                                     NONE

  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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

  As of February 2, 1998, the aggregate market value of the voting stock of
the registrant held by non-affiliates of the registrant was approximately
$977,000,000.(/1/)

  The number of shares of Common Stock ($1.00 par value) of the registrant
outstanding as of February 2, 1998 was 49,016,795.

(1) Excluding stock held by directors and executive officers of registrant,
    without admission of affiliate status of such individuals for any other
    purpose; also, excluding Series E ESOP Convertible Preferred Stock of the
    registrant, which Series is not publicly traded.

                      DOCUMENTS INCORPORATED BY REFERENCE

  Parts I and II of this Report on Form 10-K incorporate by reference certain
information set forth in Exhibit 99, "Financial Information (to be included in
the Annual Report to Shareholders for 1997)," which is attached hereto, and is
incorporated by reference herein. Part III of this Report on Form 10-K
incorporates by reference certain information from the Company's definitive
Proxy Statement which will be furnished to stockholders in connection with the
Annual Meeting of Stockholders of the Company scheduled to be held on May 27,
1998.

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<PAGE>

                                    PART I

ITEM 1. BUSINESS.

  Inland Steel Industries, Inc. (the "Company"), a Delaware corporation, is
the sole stockholder of Inland Steel Company and the holder of stock
representing approximately 87% of the economic interest in Ryerson Tull, Inc.
("RT"). Inland Steel Company is an integrated domestic steel company that
produces and sells a wide range of steels, of which approximately 99% consists
of carbon and high-strength low-alloy steel grades. It is also a participant
in certain iron ore production and steel-finishing joint ventures. RT is the
sole stockholder of Joseph T. Ryerson & Son, Inc. ("Ryerson") and J. M. Tull
Metals Company, Inc. ("Tull"). Ryerson and Tull are leading steel service,
distribution and materials processing organizations.

BUSINESS SEGMENTS

  The business segments of the Company and its subsidiaries are Steel
Manufacturing (including iron ore operations) and Materials Distribution. For
the three years ended December 31, 1997, information relating to net sales,
operating profit, identifiable assets, depreciation and capital expenditures
for both business segments of the Company appears in Note 19 of Notes to
Consolidated Financial Statements included in Exhibit 99, "Financial
Information, " which is attached hereto, and is incorporated by reference
herein.

STEEL MANUFACTURING OPERATIONS

 General

  Inland Steel Company, a wholly owned subsidiary of the Company, is directly
engaged in the production and sale of steel and related products and the
transportation of iron ore, limestone and certain other commodities (primarily
for its own use) on the Great Lakes. Certain subsidiaries and associated
companies of Inland Steel Company are engaged in the mining and pelletizing of
iron ore and in the operation of a cold-rolling mill and steel galvanizing
lines. All raw steel made by Inland Steel Company is produced at its Indiana
Harbor Works located in East Chicago, Indiana, which also has facilities for
converting the steel produced into semi-finished and finished steel products.

  Inland Steel Company has two divisions--the Inland Steel Flat Products
Company division and the Inland Steel Bar Company division. The Flat Products
division manages the Inland Steel Company's iron ore operations, conducts its
ironmaking operations, and produces the major portion of its raw steel. This
division also manufactures and sells steel sheet, strip and certain related
semi-finished products for the automotive, appliance, office furniture, steel
service center and electrical motor markets. The Flat Products division closed
its plate operations at year-end 1995. The Bar division manufactures and sells
special quality bars and certain related semi-finished products for forgers,
steel service centers, heavy equipment manufacturers, cold finishers and the
transportation industry.

  Inland Steel Company and Nippon Steel Corporation ("NSC") are participants,
through subsidiaries, in two joint ventures that operate steel-finishing
facilities near New Carlisle, Indiana. The total cost of these two facilities
was approximately $1.1 billion. I/N Tek, owned 60% by a wholly owned
subsidiary of Inland Steel Company and 40% by an indirect wholly owned
subsidiary of NSC, operates a cold-rolling mill. I/N Kote, owned equally by
wholly owned subsidiaries of Inland Steel Company and NSC (indirect in the
case of NSC), operates two galvanizing lines. Inland Steel Company is also a
participant, through a subsidiary, in another galvanizing joint venture
located near Walbridge, Ohio.
<PAGE>

 Raw Steel Production and Mill Shipments

  The following table shows, for the three years indicated, Inland Steel
Company's production of raw steel and, based upon American Iron and Steel
Institute data, its share by percentage of total domestic raw steel
production:

<TABLE>
<CAPTION>
                                                      RAW STEEL PRODUCTION
                                                --------------------------------
                                                INLAND STEEL    INLAND STEEL
                                                  COMPANY     COMPANY AS A % OF
                                                (000 TONS*)  U.S. STEEL INDUSTRY
                                                ------------ -------------------
      <S>                                       <C>          <C>
      1997.....................................    5,814             5.4%**
      1996.....................................    5,519             5.3
      1995.....................................    5,419             5.2
</TABLE>
--------
 *Net tons of 2,000 pounds.
**Based on preliminary data from the American Iron and Steel Institute.

  The annual raw steelmaking capacity of Inland Steel Company is 6.0 million
net tons. The basic oxygen process accounted for 92% of raw steel production
of the Company in both 1997 and 1996. The remainder of such production was
accounted for by electric furnace.

  The total tonnage of steel mill products shipped by Inland Steel Company for
each of the five years 1993 through 1997 was 5.3 million tons in 1997; 5.1
million tons in 1996; 5.1 million tons in 1995; 5.2 million tons in 1994 and
4.8 million tons in 1993. In 1997, sheet, strip and certain related semi-
finished products accounted for 82% of the total tonnage of steel mill
products shipped from the Indiana Harbor Works, and bar and certain related
semi-finished products accounted for 18%.

  In each of 1997 and 1996, approximately 94% of the shipments of the Flat
Products division and 98% and 92%, respectively, of the shipments of the Bar
division were to customers in 20 mid-American states. Approximately 76% of the
shipments of the Flat Products division and 92% of the Bar division in 1997
were to customers in a five-state area comprised of Illinois, Indiana, Ohio,
Michigan and Wisconsin, compared to 74% and 82% in 1996. Both divisions
compete in these geographical areas, principally on the basis of price,
service and quality, with the nation's largest producers of raw steel as well
as with foreign producers and with many smaller domestic mills.

  The steel market is highly competitive with major integrated producers,
including Inland Steel Company, facing competition from a variety of sources.
Many steel products compete with alternative materials such as plastics,
aluminum, ceramics, glass and concrete. Domestic steel producers have also
been adversely impacted by imports from foreign steel producers. Imports of
steel mill products accounted for 24.1% of the domestic market in 1997, up
from 23.3% in 1996 but below the 1984 peak of 26.4%. Many foreign producers
are owned, controlled, or subsidized by their governments, allowing them to
ship steel products into the domestic market despite decreased profit margins
or losses on such sales.

  Mini-mills provide significant competition in various product lines. Mini-
mills are relatively efficient, low-cost producers that manufacture steel
principally from scrap in electric furnaces and, at this time, generally have
lower capital, overhead, employment and environmental costs than the
integrated steel producers, including Inland Steel Company. Mini-mills have
been adding capacity and expanding their product lines in recent years to
produce larger structural products and certain flat rolled products. Thin-slab
casting technologies have allowed mini-mills to enter certain sheet markets
traditionally supplied by integrated producers. Several mini-mills using this
advanced technology are in operation in the United States and a significant
increase in modern mini-mill capacity is anticipated within the next two
years.

  Certain facilities at the Indiana Harbor Works have been permanently closed
and others have been shut down for temporary periods. All coke batteries were
closed by year-end 1993, a year earlier than previously

                                       2
<PAGE>

anticipated. An additional provision was required with respect to those
closures. (See "Environment" below.) At year-end 1995 the plate mill was
closed. Provisions for such closure were taken prior to and in 1991.

  For the three years indicated, shipments by market classification of steel
mill products produced by Inland Steel Company at its Indiana Harbor Works,
including shipments to affiliates of Inland Steel Company, are set forth
below. As shown in the table, a substantial portion of shipments by the Flat
Products division was to steel service centers and transportation-related
markets.

<TABLE>
<CAPTION>
                                                PERCENTAGE OF TOTAL TONNAGE
                                                    OF STEEL SHIPMENTS
                                               ---------------------------------
                                                 1997        1996        1995
                                               ---------   ---------   ---------
     <S>                                       <C>         <C>         <C>
     Steel Service Centers:
       Non-Affiliates.........................        25%         25%         25%
       Affiliates.............................         9          10           9
                                               ---------   ---------   ---------
                                                      34          35          34
     Automotive...............................        29          27          28
     Steel Converters/Processors..............        17          14          15
     Appliance................................         9           9           8
     Industrial, Electrical and Farm
      Machinery...............................         7           8           8
     Construction and Contractors' Products...         2           2           2
     Other....................................         2           5           5
                                               ---------   ---------   ---------
                                                     100%        100%        100%
                                               =========   =========   =========
</TABLE>

  Some value-added steel processing operations for which Inland Steel Company
does not have facilities are performed by outside processors, including joint
ventures, prior to shipment of certain products to Inland Steel Company's
customers. In 1997, approximately 43% of the products produced by Inland Steel
Company were processed further through value-added services such as
electrogalvanizing, painting and slitting.

  Approximately 74% of the finished steel shipped to customers during 1997 was
transported by truck, with the remainder transported primarily by rail. A
wholly owned truck transport subsidiary of Inland Steel Company was
responsible for shipment of approximately 10% of the total tonnage of products
transported by truck in 1997.

  Substantially all of the steel mill products produced by the Flat Products
division are marketed through its own selling organization, with offices
located in Chicago, Illinois; Southfield, Michigan; and Nashville, Tennessee.
Substantially all of the steel mill products produced by the Bar division are
marketed through its sales office in East Chicago, Indiana.

  See "Product Classes" below for information relating to the percentage of
consolidated net sales accounted for by certain classes of similar products of
steel manufacturing operations.

 Raw Materials

  Inland Steel Company obtains iron ore pellets primarily from two iron ore
properties, located in the United States, in which subsidiaries of Inland
Steel Company have varying interests--the Empire Mine in Michigan and the
Minorca Mine in Minnesota.

  During the second quarter of 1997, Inland Steel Company completed the sale
of its interest in the Wabush Mines located in Labrador and Quebec, Canada.
Inland Steel Company entered into a contract with the purchaser of such
interest, effective January 1, 1997 and expiring December 31, 2006, to sell to
Inland Steel Company, at prices approximating market, any of Inland Steel
Company's iron ore pellet requirements up to one million gross tons annually
not met by Inland Steel Company's equity sources. See "Properties Relating to
Steel Manufacturing Segment--Raw Materials Properties and Interests" in Item 2
below for further information relating to such iron ore properties.

                                       3
<PAGE>

  The following table shows (1) the iron ore pellets available to Inland Steel
Company, as of December 31, 1997, from properties of its subsidiaries, through
interests in raw materials ventures; (2) 1997 and 1996 iron ore pellet
production or purchases from such sources; and (3) the percentage of Inland
Steel Company's iron ore requirements represented by production or purchases
from such sources in 1997 and 1996.

<TABLE>
<CAPTION>
                                         IRON ORE
                                   TONNAGES IN THOUSANDS
                                  (GROSS TONS OF PELLETS)
                                ---------------------------       % OF
                                AVAILABLE AS OF PRODUCTION  REQUIREMENTS (1)
                                 DECEMBER 31,   ----------- ----------------
                                    1997(2)     1997  1996    1997      1996
                                --------------- ----- ----- --------  --------
<S>                             <C>             <C>   <C>   <C>       <C>
INLAND STEEL MINING COMPANY
 PROPERTY
  Minorca--Virginia, MN........      57,000     2,583 2,735    35%       38%
IRON ORE VENTURES
  Empire (40% owned)--Palmer,
   MI; Wabush (15.09% owned in
   1996)--Wabush, Labrador and
   Point Noire, Quebec,
   Canada(3)...................      68,000     3,389 4,034    45        55
                                    -------     ----- ----- --------  --------
    Total Iron Ore.............     125,000     5,972 6,769    80%       93%
                                    =======     ===== ===== ========  ========
</TABLE>
--------
(1) Requirements in excess of production are purchased or taken from
    stockpile.
(2) Net interest in proven reserves.
(3) Wabush Mines interest was sold in the second quarter of 1997 and
    production is not included in 1997 amounts shown above.

  All of Inland Steel Company's coal requirements are satisfied from
independent sources. In April 1996, Inland Steel Company entered into a
contract to purchase one million tons of steam coal for the period of April 1,
1996 to December 31, 1997. Inland Steel Company purchased 39% of its 1997 coal
requirements under such contract, representing 74% of its steam coal
requirements. The balance of steam coal requirements have been met through a
short-term contract. In connection with commencement of operation of the heat
recovery coke battery and associated energy facility discussed below, Inland
Steel Company's coal fired generating station will be temporarily idled in the
second quarter of 1998, thereby eliminating steam coal requirements in the
interim.

  Inland Steel Company's other coal requirements are for the PCI Associates
joint venture, in which a subsidiary of Inland Steel Company holds a 50%
interest. The PCI facility pulverizes coal for injection into Inland Steel
Company's blast furnaces. During 1997, the PCI facility's coal needs were
satisfied under a requirements contract subject to a force majeure provision.
This agreement continues in 1998.

  In December 1993, the last of Inland Steel Company's cokemaking facilities
was permanently shut down. Inland Steel Company has entered into three long-
term purchase contracts, one of which requires the purchase of approximately
one million tons of coke between January 1, 1998 and December 31, 1999. The
second contract requires the purchase of 350,000 tons of coke annually for the
period January 1, 1996 through December 31, 2000 on a take-or-pay basis, with
a provision allowing Inland Steel Company to sell the coke to others. Both
contract terms require purchases on an annualized basis at prices negotiated
annually based on certain market determinants. During 1997, Inland Steel
Company satisfied 80% of its total coke needs under such arrangements. The
remainder of its purchased coke requirements was obtained through short-term
contracts. Under the third contract, Inland Steel Company has committed to
purchase, for approximately 15 years, beginning approximately June 1998 when
the heat recovery coke battery (discussed below) is expected to reach full
production, 1.2 million tons of coke annually on a take-or-pay basis at prices
determined by certain cost factors, as well as energy produced by the facility
through the tolling arrangement.

  In the 1996 fourth quarter, Inland Steel Company reached an agreement with
Sun Coal and Coke Company and a unit of NIPSCO Industries for a heat recovery
coke battery and an associated energy recovery and flue-gas desulphurization
facility, to be located on land leased from Inland Steel Company at its
Indiana Harbor Works. Sun designed, built, financed, and will operate the
cokemaking portion of the project. A unit of NIPSCO Industries designed,
built, financed, and will operate the portion of the project which will clean
the coke plant's

                                       4
<PAGE>

flue gas and convert the heat into steam and electricity. Sun, the NIPSCO unit
and other third parties will invest approximately $350 million in the project.
The facility is designed to be the primary coke source for the largest blast
furnace at the Indiana Harbor Works and is expected to commence operations in
the first quarter of 1998. Inland Steel Company also advanced $30 million
during construction of the project, which is recorded as a deferred asset on
the balance sheet and will be credited against required cash payments during
the second half of the energy tolling arrangement.

  Inland Steel Company sold all of its limestone and dolomite properties in
September 1990 and entered into a long-term contract with the buyer of the
properties to purchase, subject to certain exceptions and at prices which
approximate market, the full amount of the annual limestone needs of the
Indiana Harbor Works through 2002.

  Approximately 80% of the iron ore pellets and all of the limestone received
by Inland Steel Company at its Indiana Harbor Works in 1997 were transported
by its Great Lakes carriers. Contracts are in effect for the transportation on
the Great Lakes of the remainder of its iron ore pellet requirements.
Approximately 25% of Inland Steel Company's coal requirements were transported
in its hopper cars by unit train in 1997. The remainder of Inland Steel
Company's coal requirements was transported in independent carrier-owned
equipment or leased equipment. Approximately 25% of Inland Steel Company's
coke requirements in 1997 were transported in its own hopper cars, 47% in
leased hopper cars, 8% in independent carrier-owned hopper cars, and 20% in
independent carrier-owned river barges.

  See "Energy" below for further information relating to the use of coal in
the operations of Inland Steel Company.

 Product Classes

  The following table sets forth the percentage of consolidated net sales of
Inland Steel Company, for the three years indicated, contributed by each class
of similar products of Inland Steel Company and accounted for 10% or more of
consolidated net sales in such time period. The data includes sales to
affiliates of Inland Steel Company.

<TABLE>
<CAPTION>
                                                                 1997  1996  1995
                                                                 ----  ----  ----
    <S>                                                          <C>   <C>   <C>
      Sheet and Strip...........................................  81%   81%   82%
      Bar.......................................................  19    19    18
                                                                 ---   ---   ---
                                                                 100%  100%  100%
                                                                 ===   ===   ===
</TABLE>

  Sales to General Motors Corporation approximated less than 10% of
consolidated net sales in each of 1997 and 1996 and 10% in 1995. No other
customer accounted for more than 10% of the consolidated net sales of the
Company during any of these years.

 Capital Expenditures and Investments in Joint Ventures

  In recent years, Inland Steel Company and its subsidiaries have made
substantial capital expenditures, principally at the Indiana Harbor Works, to
improve quality and reduce costs, and for pollution control. Additions by
Inland Steel Company and its subsidiaries to property, plant and equipment,
together with retirements and adjustments, for the five years ended December
31, 1997, are set forth below. Net capital additions during such period
aggregated $417.9 million.

<TABLE>
<CAPTION>
                                                DOLLARS IN MILLIONS
                                   ---------------------------------------------
                                             RETIREMENTS             NET CAPITAL
                                   ADDITIONS  OR SALES   ADJUSTMENTS  ADDITIONS
                                   --------- ----------- ----------- -----------
      <S>                          <C>       <C>         <C>         <C>
      1997........................  $ 98.4     $ 40.8       $ 6.1      $ 63.7
      1996........................   155.8        8.5         5.6       152.9
      1995........................   113.9       36.7         1.5        78.7
      1994........................   223.7       47.8         2.0       177.9
      1993........................    86.1      140.2        (1.2)      (55.3)
</TABLE>


                                       5
<PAGE>

  In recent years, Inland Steel Company's largest capital improvement projects
at the Indiana Harbor Works have emphasized reducing costs and improving
quality in the steel-processing sequence of Inland Steel Company. Inland Steel
Company and its subsidiaries made capital expenditures of $98 million in 1997.
Such expenditures principally related to the purchase of new machinery and
equipment to maintain or improve operations at the Indiana Harbor Works.

  In July 1987, a wholly owned subsidiary of Inland Steel Company formed a
partnership, I/N Tek, with an indirect wholly owned subsidiary of NSC to
construct, own, finance and operate a cold-rolling facility with an annual
capacity of 1,500,000 tons, of which approximately 40% is cold-rolled
substrate for I/N Kote (described below). The I/N Tek facility is located near
New Carlisle, Indiana. Inland Steel Company, which owns, through its
subsidiary, a 60% interest in the I/N Tek partnership is, with certain limited
exceptions, the sole supplier of hot band to be processed by the I/N Tek
facility and generally has exclusive rights to the production capacity of the
facility.

  In September 1989, a wholly owned subsidiary of Inland Steel Company formed
a second partnership, I/N Kote, with an indirect wholly owned subsidiary of
NSC to construct, own, finance and operate two sheet steel galvanizing lines
adjacent to the I/N Tek facility. The subsidiary of Inland Steel Company owns
a 50% interest in I/N Kote. The I/N Kote facility consists of a hot-dip
galvanizing line and an electrogalvanizing line with a combined annual
capacity of 900,000 tons. Inland Steel Company has guaranteed 50% of I/N
Kote's permanent financing. I/N Kote has contracted to acquire its cold-rolled
steel substrate from Inland Steel Company, which supplies the substrate from
the I/N Tek facility and Inland Steel Company's Indiana Harbor Works.

  Further information regarding the I/N Tek and I/N Kote joint venture
projects will be set forth under the caption "Certain Relationships and
Related Transactions--Joint Ventures" in the Company's definitive Proxy
Statement which will be furnished to stockholders of the Company in connection
with its Annual Meeting scheduled to be held on May 27, 1998, and is
incorporated by reference into Item 13 of this Report.

  The amount budgeted for 1998 capital expenditures by Inland Steel Company
and its subsidiaries is approximately $110 million. It is anticipated that
capital expenditures will be funded from cash generated by operations and
advances from and capital contributions by the Company. (See "Environment"
below for a discussion of capital expenditures for pollution control
purposes.)

 Employees

  The monthly average number of active employees of Inland Steel Company and
its subsidiaries receiving pay during 1997 was approximately 8,900. At year-
end, approximately 6,900 employees were represented by the United Steelworkers
of America, of whom approximately 470 were on furlough or indefinite layoff.
Total employment costs decreased from $649 million in 1996 to $642 million in
1997, as lower employee benefit costs were in part offset by higher profit
sharing provisions.

  Beginning in 1991, Inland Steel Company embarked upon a major turnaround
strategy, with the assistance of an outside consulting firm, to significantly
reduce costs, increase revenues and improve asset utilization at Inland Steel
Company. With the closure of the plate operations at year-end 1995, Inland
Steel Company completed the workforce reduction program which was part of the
turnaround strategy, reducing employment by 25%.

  The current labor agreement between Inland Steel Company and the United
Steelworkers of America, effective August 1, 1993, covers wages and benefits
through July 31, 1999. Among other things, the agreement provided a wage
increase of $.50 per hour in 1995 and a $500 bonus in each of 1993 and 1994
(totalling in each case approximately $4 million). All active employees
received an additional week of vacation in 1994 and in 1996. The agreement
provided for a reopener on wages and certain benefits in 1996 with an
arbitration provision to resolve unsettled issues, thereby precluding a work
stoppage over the six-year term of the contract. On September 17, 1996 an
arbitrator issued a decision selecting Inland Steel Company's final offer of
terms covering

                                       6
<PAGE>

the second half of the six year agreement. The terms provided a wage increase
of $.50 per hour retroactive to August 1, 1996 with increases of $.25 an hour
in 1997 and 1998. A $1,000 lump sum would be paid to active employees in each
of the three remaining years of the contract (totalling approximately $20
million). One additional holiday was provided and retirement benefits were
increased for active employees. The agreement also provided for election of a
union designee acceptable to the Company's Board of Directors (Dr. Robert B.
McKersie is such union designee), restrictions on the ability of Inland Steel
Company to reduce the union workforce (generally limited to attrition and
major facilities shutdowns) while allowing greater flexibility to institute
work rule changes, quarterly rather than annual payment of profit sharing
amounts, significant improvements in pension benefits for active employees,
and the securing of retiree health care obligations through certain trust and
second mortgage arrangements. "First dollar" health care coverage is
eliminated under the agreement through the institution of co-payments and
increased deductibles on medical benefits.

 Environment

  Inland Steel Company is subject to environmental laws and regulations
concerning emissions into the air, discharges into ground water and waterways,
and the generation, handling, labeling, storage, transportation, treatment and
disposal of waste material. These include various federal statutes regulating
the discharge or release of pollutants to the environment, including the Clean
Air Act, Clean Water Act, Resource Conservation and Recovery Act,
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA," also known as "Superfund"), Safe Drinking Water Act, and Toxic
Substances Control Act, as well as state and local requirements. Violations of
these laws and regulations can give rise to a variety of civil,
administrative, and, in some cases, criminal actions and could also result in
substantial liabilities or require substantial capital expenditures. In
addition, under CERCLA the United States Environmental Protection Agency (the
"EPA") has authority to impose liability for site remediation on waste
generators, past and present site owners and operators, and transporters,
regardless of fault or the legality of the original disposal activity.
Liability under CERCLA is strict, joint and several.

  By year-end 1993, the last of Inland Steel Company's cokemaking facilities
was permanently shut down. Inland Steel Company has entered into three long-
term contracts to satisfy the majority of its coke needs. In November 1996,
Inland Steel Company reached an agreement with Sun Coal and Coke Company and a
unit of NIPSCO for a heat recovery coke battery. (See "Raw Materials" above.)
In addition, Inland Steel Company participates in a joint venture that has
constructed and is operating a pulverized coal injection facility for blast
furnace application, reducing Inland Steel Company's coke needs by
approximately 25%.

  Capital spending for pollution control projects totaled $7 million in 1997
and $19 million in 1996. Another $46 million was spent in 1997 to operate and
maintain such equipment, versus $44 million a year earlier. During the five
years ended December 31, 1997, Inland Steel Company spent $279 million to
construct, operate and maintain environmental control equipment at its various
locations.

  Environmental projects previously authorized and presently under
consideration, including those designed to comply with the 1990 Clean Air Act
Amendments, but excluding any amounts that would be required under the consent
decree settling the 1990 EPA lawsuit, will require capital expenditures of
approximately $4 million in 1998. It is anticipated that Inland Steel Company
will make annual capital expenditures of $2 million to $5 million in each of
the four years thereafter. In addition, Inland Steel Company will have ongoing
annual expenditures of $40 million to $50 million for the operation of air and
water pollution control facilities to comply with current federal, state and
local laws and regulations. Due to the inability to predict the costs of
corrective action that may be required under the Resource Conservation and
Recovery Act and the consent decree in the 1990 EPA lawsuit, Inland Steel
Company cannot predict the amount of additional environmental expenditures
that will be required. Such additional environmental expenditures, excluding
amounts that may be required in connection with the consent decree in the 1990
EPA lawsuit, however, are not expected to be material to the financial
position or results of operations of Inland Steel Company.

                                       7
<PAGE>

  See Item 3 below for information concerning certain proceedings pertaining
to environmental matters in which Inland Steel Company is involved.

 Energy

  Coal, together with coke, all of which are purchased from independent
sources, accounted for approximately 76% of the energy consumed by Inland
Steel Company at the Indiana Harbor Works in 1997.

  Natural gas and fuel oil supplied approximately 22% of the energy
requirements of the Indiana Harbor Works in 1997 and are used extensively by
Inland Steel Company at other facilities that it owns or in which it has an
interest. Utilization of the pulverized coal injection facility (see
"Environment" above) has reduced natural gas and fuel oil consumption at the
Indiana Harbor Works.

  Inland Steel Company both purchases and generates electricity to satisfy
electrical energy requirements at the Indiana Harbor Works. In 1997, Inland
Steel Company produced approximately 59% of its electrical energy requirements
at the Indiana Harbor Works. The purchase of electricity at the Indiana Harbor
Works is subject to curtailment under rules of the local utility when
necessary to maintain appropriate service for various classes of its
customers.

  A subsidiary of NIPSCO has leased land at the Indiana Harbor Works and built
a 75 megawatt steam turbine on such land. Pursuant to a 15-year toll-charge
contract between Inland Steel Company and the NIPSCO subsidiary, the turbine
facility generates electricity for use by Inland Steel Company utilizing steam
produced by burning waste blast furnace gas. The facility became operational
in the first half of 1996. During 1997, this facility produced approximately
60% of the purchased electricity requirements of the Indiana Harbor Works.

MATERIALS DISTRIBUTION OPERATIONS

  The Company's materials distribution operations in the United States are
conducted by its majority-owned materials distribution subsidiary, RT, through
its operating subsidiaries--Ryerson and Tull. RT has a single business
segment, which is comprised of Ryerson and Tull, leading steel service,
distribution and materials processing organizations. RT also owns 50% of
Ryerson de Mexico, a joint venture general line metals service center and
processor with facilities in Mexico.

  On February 13, 1997, RT, through Ryerson, purchased all of the outstanding
stock of Thypin Steel Co., Inc. ("Thypin") for $120 million in cash plus the
assumption of $23 million of debt. Thypin was a privately held distributor of
carbon and stainless steel products with seven locations in the eastern United
States. On March 3, 1997, RT, through Tull, acquired substantially all the
assets of Cardinal Metals, Inc. ("Cardinal"), a privately held distributor and
processor of carbon steel products with a single facility located in Pounding
Mill, VA. On August 22, 1997, RT, through Ryerson, purchased all of the
outstanding stock of Omni Metals, Inc. ("Omni"), a privately held processor
and distributor of flat-rolled carbon steel products with a facility in
Knoxville, TN. Thypin and Omni have subsequently been merged into Ryerson.

  Ryerson, Tull and Ryerson Coil Processing Company ("Ryerson Coil"), a
specialized processing unit of Ryerson, are organized into five business units
along regional and product lines. RT believes that it is the largest metals
service center in the United States based on sales revenue, with 1997 sales of
$2.8 billion and a current U.S. market share of approximately 10%, based on
RT's analysis of data prepared by the Steel Service Center Institute ("SSCI").
RT distributes and processes metals and other materials throughout the
continental United States, and is among the largest purchasers of steel in the
United States.

                                       8
<PAGE>

 Joseph T. Ryerson & Son, Inc.

  Ryerson, with business unit headquarters in Philadelphia, PA (Ryerson East),
Chicago, IL (Ryerson Central), and Tukwila, WA (Ryerson West), is a leading
materials distribution organization. With full-line service centers in 35
major cities, Ryerson is engaged in the nationwide sale of its products
through its own sales organization. Ryerson maintains heavy-duty shears,
slitters, precision cut-to-length lines, high-speed saws, flame-cutting
machines and other processing equipment for use in furnishing custom cutting
and miscellaneous shapes in accordance with customer orders. The Ryerson Coil
unit, headquartered in Chicago, IL, performs processing through five
facilities for customers who traditionally buy large quantities of sheet steel
products. Ryerson also markets plant equipment products through a wholesale
industrial catalog.

 J. M. Tull Metals Company, Inc.

  Tull is one of the largest distributors of metals in the southeastern United
States. Tull and its wholly-owned subsidiary, AFCO Metals, Inc. ("AFCO"),
operate 20 service centers and two processing facilities located throughout
the southeastern and south-central United States. Tull produces a variety of
metals products with value-added processing, including welded steel tubing and
roll-formed shapes. Tull's products are sold principally through its own sales
staff.

 Ryerson de Mexico

  RT also owns, indirectly, a 50% interest in Ryerson de Mexico, a joint
venture with Altos Hornos de Mexico, S.A. de C.V., an integrated steel mill
operating in Mexico. Ryerson de Mexico, which was formed in 1994, is a general
line metals service center and processor with 12 facilities in Mexico. The
impact of Ryerson de Mexico on RT's results of operations has not been
material.

 Industry Overview

  Primary steel producers typically sell steel in the form of standard-sized
coils, sheets, plate, structurals, bars and tubes and generally sell in large
volumes with long lead times for production and delivery. Other primary metals
producers, such as producers of stainless steel and aluminum, also typically
sell their products in large volumes with long lead times for production and
delivery. However, many customers seek to purchase metals with customized
specifications, including value-added processing, in smaller volumes, on
shorter lead times and with more reliable delivery than primary metals
producers are able to provide. Metals service centers act as intermediaries
between primary metals producers and customers by purchasing metals in a
variety of shapes and sizes from primary metals producers in large volumes,
allowing metals service centers to take advantage of producer economies of
scale resulting in lower costs of materials purchased, and engaging in a
variety of distribution and value-added processing operations to meet the
demands of specific customers. Because metals service centers purchase metals
from a number of primary producers, they can maintain a consistent supply of
various types of metal used by their customers. Most importantly, however,
metals service centers generally have lower fixed costs than primary metals
producers. By purchasing products from metals service centers, customers may
be able to lower their inventory levels, decrease the time between the
placement of an order and receipt of materials and reduce internal expenses,
thereby lowering their total cost of raw materials. RT believes that the
increased prevalence of just-in-time inventory needs of manufacturers and
intermediate processors has made and will continue to make the value-added
inventory, processing and delivery functions performed by metals service
centers more important in the metals market.

  The industry is cyclical (with periods of strong demand and higher prices
followed by periods of weaker demand and lower prices), principally due to the
cyclical nature of the industries in which the largest consumers of metals
operate. Any significant slowdown in one or more of those industries could
have a material adverse effect on the demand for metals, resulting in lower
prices for metals and reduced profitability for metals service centers,
including RT. Metals prices and metals service center profitability improve as
metal-consuming industries experience recoveries following economic downturns.


                                       9
<PAGE>

  The industry is comprised of many companies, the majority of which have
operations limited as to product line and size of inventory, with customers
located in a specific geographic area. Based on SSCI data, RT believes that
the industry is comprised of between 750 and 1,000 service centers, operating
out of approximately 2,000 locations and servicing approximately 300,000
customers. The industry is highly fragmented, consisting of a large number of
small companies and a few relatively large companies. Based on RT's analysis
of SSCI data, the industry handled approximately 29 million tons or
approximately 24.4% of the metals distributed in the United States in 1997.

  The industry is divided into three major groups: general line service
centers, specialized service centers and processing centers, each of which
targets different market segments. General line service centers handle a broad
line of metals products and tend to concentrate on distribution rather than
processing. General line service centers range in size from one location to a
nationwide network of locations. For general line service centers, individual
order size in terms of dollars and tons tends to be small relative to
processing centers, while the total number of orders is typically very high.
Specialized service centers focus their activities on a narrower range of
product and service offerings than general line companies. Such service
centers provide a narrower range of services to their customers and emphasize
product expertise and lower operating costs, while maintaining a moderate
level of investment in processing equipment. Processing centers typically
process large quantities of steel purchased from primary producers for resale
to large industrial customers, such as the automotive industry. Because orders
are typically large, operation of a processing center requires a significant
investment in processing equipment.

 Products and Services

  RT carries a full line of carbon steel, stainless steel and aluminum, and a
limited line of alloy steel, nickel, red metals and plastics. These materials
are inventoried in a number of shapes, including coils, sheets, rounds,
hexagons, square and flat bars, plate, structurals and tubing.

  The following table sets forth RT's shipments (by percentage of RT's sales
revenue) for 1995, 1996 and 1997 for each of RT's major product lines.

<TABLE>
<CAPTION>
                                                               PERCENTAGE OF
      PRODUCT LINE                                             SALES REVENUE
      ------------                                             ----------------
                                                               1995  1996  1997
                                                               ----  ----  ----
      <S>                                                      <C>   <C>   <C>
      Stainless and aluminum..................................  27%   26%   27%
      Carbon flat rolled......................................  24    27    27
      Bars, tubing and structurals............................  22    22    20
      Fabrication and carbon plate............................  20    20    20
      Other...................................................   7     5     6
                                                               ---   ---   ---
        Total................................................. 100%  100%  100%
                                                               ===   ===   ===
</TABLE>

  More than one-half of the materials sold by RT is processed. RT uses
techniques such as sawing, slitting, blanking, pickling, cutting to length,
levelling, flame cutting, laser cutting, edge trimming, edge rolling,
fabricating and grinding to process materials to specified thickness, length,
width, shape and surface quality pursuant to specific customer orders. Among
the most common processing techniques used by RT are pickling, a chemical
process using an acidic solution to remove surface oxide, commonly called
"scale," from steel which develops after the steel is hot rolled; slitting,
which is cutting coiled metals to specified widths along the length of the
coil; levelling, which is flattening metals and cutting them to exact lengths;
and edge rolling, a process which imparts round or smooth edges. Although RT
often uses third-party fabricators to outsource certain limited processes that
RT is not able to perform internally, outsourcing these processes does not
affect a significant part of RT's operations or constitute a significant part
of RT's operating costs and expenses.

  The plate burning and fabrication processes are particularly important to
RT. These processes require sophisticated and expensive processing equipment.
As a result, rather than making investments in such equipment, manufacturers
have increasingly outsourced these processes to metals service centers. RT has
flame or laser cutting capacity in 45 of its 63 facilities.

                                      10
<PAGE>

  RT also provides services and technical advice to its customers as an
integral part of providing products to its customers. RT does not charge
customers separately for such services or advice, but rather includes the
costs of such services and advice in the price of products sold to such
customers.

  RT's services include: just-in-time delivery, production of kits containing
multiple products for ease of assembly by the customer, the provision of
company-owned materials to the customer and the placement of company employees
at the customer's site for inventory management, production and technical
assistance. RT also provides special stocking programs where products that
would not otherwise be stocked by RT are held in inventory to meet certain
customers' needs. The foregoing services are designed to reduce customers'
costs by minimizing their investment in inventory and improving their
production efficiency.

 Customer Base

  RT's customer base is diverse, numbering over 50,000. No customer accounted
for more than 2% of RT's sales in 1997 and the top ten customers accounted for
approximately 7% of RT's sales in 1997. RT's customer base includes most
metal-consuming industries, most of which are cyclical. RT's shipments (by
percentage of RT's sales revenue) for 1995, 1996 and 1997 for each class of
RT's customers were as set forth in the table below.

<TABLE>
<CAPTION>
                                                            PERCENTAGE
      CLASS OF CUSTOMER                                  OF SALES REVENUE
      -----------------                                  ---------------------
                                                         1995    1996    1997
                                                         -----   -----   -----
      <S>                                                <C>     <C>     <C>
      Machinery manufacturers...........................    38%     38%     37%
      Fabricated metals producers.......................    25      26      26
      Transportation equipment producers................    10      10       9
      Electrical machinery producers....................     9       8       8
      Wholesale distributors............................     3       3       4
      Construction-related purchasers...................     3       4       5
      Metals mills and foundries........................     3       3       3
      Other.............................................     9       8       8
                                                         -----   -----   -----
        Total...........................................   100%    100%    100%
                                                         =====   =====   =====
</TABLE>

  RT's flat-rolled processing business unit, Ryerson Coil, generally serves a
customer base that differs from RT's general line service center business. A
large portion of Ryerson Coil's customers have long-term supply contracts.
These contracts are typically at fixed prices and are generally from three
months to one year in duration, although Ryerson Coil has a small number of
arrangements with large customers that extend beyond one year. Ryerson Coil
attempts to limit its financial exposure on these fixed-price sales
arrangements by entering into fixed-price supply arrangements with one or more
suppliers for comparable periods of time. Ryerson Coil's customers often seek
large quantities of carbon sheet product that have undergone one or more of
the following processes: pickling, cutting to length, slitting, tension
levelling, texturing or blanking. Many of Ryerson Coil's approximately 600
customers are in the transportation, appliance, office furniture or cabinetry
businesses.

 Suppliers

  In 1997, RT purchased in excess of 3.0 million tons of materials from many
suppliers, including approximately 500,000 tons (or approximately 10.5% of the
purchase dollars) from Inland Steel Company. RT expects to continue purchasing
significant amounts of steel from Inland Steel Company in the future, although
there can be no assurance that such purchases will continue. Excluding Inland
Steel Company, RT's top 25 suppliers accounted for approximately 38% of 1997
purchases in dollars.

  RT purchases the majority of its inventories in the open market at
prevailing market prices. However, occasionally RT enters into long-term,
fixed-price supply contracts to offset its long-term, fixed-price sales
contracts in order to minimize its financial exposure.

                                      11
<PAGE>

  Because RT uses many suppliers and because there is a substantial overlap of
product offerings from these suppliers, RT believes it will be able to meet
its materials requirements for the foreseeable future. RT works with and
monitors its suppliers in order to obtain improvements in price, quality,
service, delivery and performance. RT believes it has good relationships with
most of its suppliers.

 Sales and Marketing

  Each of RT's business units maintains its own sales and marketing force. In
addition to its office sales staff, RT markets and sells its products through
the use of its field sales force that has extensive product and customer
knowledge and through a comprehensive catalog of RT's products. RT's office
and field sales staffs, which together consist of approximately 800 employees,
include technical and metallurgical personnel. In addition, RT's technically-
oriented marketing departments develop advertising materials and maintain
product expertise for each of the various types of materials sold and
industries serviced by RT.

 Capital Expenditures

  In recent years RT has made capital expenditures to maintain, improve and
expand processing capabilities. Additions by RT to property, plant and
equipment, together with retirements, for the five years ended December 31,
1997, excluding the initial purchase price of acquisitions, are set forth
below. Net capital additions during such period aggregated $85.2 million.

<TABLE>
<CAPTION>
                                                      DOLLARS IN MILLIONS
                                               ---------------------------------
                                                         RETIREMENTS NET CAPITAL
                                               ADDITIONS   OR SALES   ADDITIONS
                                               --------- ----------- -----------
      <S>                                      <C>       <C>         <C>
      1997....................................   $40.3      $12.0       $28.3
      1996....................................    24.1        6.0        18.1
      1995....................................    19.3        4.7        14.6
      1994....................................    20.4       12.4         8.0
      1993....................................    19.3        3.1        16.2
</TABLE>

  RT anticipates that capital expenditures and investments in joint ventures,
excluding acquisitions, will be in the range of $40 million to $50 million for
1998, which will be funded from cash generated by operations plus possible
borrowing under RT's credit facility.

 Employees

  As of December 31, 1997, RT employed approximately 5,400 persons, of which
approximately 2,550 were salaried employees and approximately 2,850 were
hourly employees. Approximately 40% of the hourly employees were members of
various unions, including the United Steelworkers and the Teamsters, and an
additional approximately 29% of the hourly employees have voted for union
certification in proceedings currently pending before the National Labor
Relations Board. RT's relationship with the various unions generally has been
good, but occasional work stoppages have occurred. Over the last five years,
work stoppages have occurred at two facilities (approximately 4% of the total
number of facilities), have involved an average of 43 employees and have
lasted an average of six days. During 1998, labor contracts covering
approximately 160 employees at five facilities will expire. During 1999,
contracts covering approximately 740 employees at 17 facilities will expire.
The current agreement with the United Steelworkers will expire on July 31,
1999, and agreements with the Teamsters expire on various dates during the
period March 31, 1998 through November 15, 2003. While management does not
expect any unresolvable issues to arise in connection with the renewal of any
of these contracts, no assurances can be given that any of these contracts
will be extended prior to their expiration.

  Prior to April 30, 1996, certain of RT's employees were eligible to
participate in the Inland Steel Industries, Inc. Pension Plan, a
noncontributory defined benefit pension plan. Effective April 30, 1996, that
portion of the Inland Steel Industries, Inc. Pension Plan covering RT's
current and former employees was separated and became the Ryerson Tull Pension
Plan.


                                      12
<PAGE>

  Effective January 1, 1998, RT froze the benefits accrued under the Ryerson
Tull Pension Plan, a defined benefit pension plan for certain salaried
employees and instituted a defined contribution plan. Salaried employees
vested in their benefits accrued under the defined benefit plan at December
31, 1997 will be entitled to those benefits upon retirement. Certain
transition rules have been established for those salaried employees meeting
the specified age and service requirements.

 Competition

  RT is engaged in a highly fragmented and competitive industry. In general,
competition is based on quality, service, price and geographic proximity.
Based on SSCI data, RT believes that the industry is comprised of between 750
and 1,000 service centers, operating out of approximately 2,000 locations. RT
competes with many other general line service centers, specialized service
centers and processing centers on a regional and local basis, some of which
may have greater financial resources and flexibility than RT. RT also competes
to a lesser extent with primary steel producers. Primary steel producers
typically sell to very large customers that require regular shipments of large
volumes of steel. Although these large customers sometimes use metals service
centers to supply a portion of their metals needs, metals service center
customers typically are consumers of smaller volumes of metals than customers
of primary steel producers. To the extent that some of RT's competitors
purchase a higher percentage of metals than RT from foreign steelmakers, such
competitors may benefit from favorable exchange rates or other economic or
regulatory factors that may result in a competitive advantage. This
competitive advantage may be offset somewhat by higher transportation costs
associated with importing metals into the United States. Excess capacity of
metals relative to demand in the industry since mid-1995 led to a weakening in
prices. As a result, RT has been reducing its prices since mid-1995 to remain
competitive.

 Environmental, Health and Safety Matters

  RT's operations are subject to many federal, state and local regulations
relating to the protection of the environment and to workplace health and
safety. In particular, RT's operations are subject to extensive federal, state
and local laws and regulations governing waste disposal, air and water
emissions, the handling of hazardous substances, environmental protection,
remediation, workplace exposure and other matters. RT's management believes
that RT is presently in substantial compliance with all such laws and does not
currently anticipate that RT will be required to expend any substantial
amounts in the foreseeable future in order to meet current environmental,
workplace health or safety requirements. However, additional costs and
liabilities may be incurred to comply with current and future requirements,
which costs and liabilities could have a material adverse effect on RT's
results of operations or financial condition.

  There are no known pending remedial actions or claims relating to
environmental matters that are expected to have a material effect on RT's
financial position or results of operations. Some of the properties owned or
leased by RT, however, are located in industrial areas or have a history of
heavy industrial use. These properties may potentially incur environmental
liabilities in the future that could have a material adverse effect on RT's
financial condition or results of operations.

  Capital and operating expenses for pollution control projects were
significantly below $1 million per year for the past five years and are
expected to remain at similar levels.

 Patents and Trademarks

  RT owns several U.S. patents and U.S. and foreign trademarks, service marks
and copyrights. Certain of the trademarks are registered with the U.S. Patent
and Trademark Office and, in certain circumstances, with the trademark offices
of various foreign countries. The patents expire over various periods of time
beginning in 2011. RT believes that the expiration of its patents will not
materially adversely affect its business. RT considers certain other
information owned by it to be trade secrets. RT protects its trade secrets by,
among other things, entering into confidentiality agreements with its
employees regarding such matters and implementing measures to restrict access
to sensitive data and computer software source code on a need-to-know basis.
RT believes that these

                                      13
<PAGE>

safeguards adequately protect its proprietary rights and vigorously defends
these rights. While RT considers all of its intellectual property rights as a
whole to be important, RT does not consider any single right to be essential
to its operations as a whole.

OTHER FOREIGN OPERATIONS

  In 1994, the Company formed Inland International, Inc. to conduct the
Company's international operations, and it organized Inland International
Trading, Inc. to sell products and services of the Company and its affiliates
and purchase materials for them abroad. In 1995, Inland International Trading,
Inc. organized I.M.F. Steel International Limited, a Hong Kong company (in
which it and a subsidiary of MacSteel Holdings (Pte.), Ltd. (South Africa)
each holds a 50% interest), to engage in the world-wide purchase and sale of
steel and related products. In 1994, Inland Industries de Mexico, S.A. de C.V.
(a subsidiary of RT) and Altos Hornos de Mexico, S.A. de C.V., formed Ryerson
de Mexico, S.A. de C.V. to provide materials management services in Mexico. In
China, the Company has a joint venture with Baoshan Iron & Steel Corporation,
Shanghai Ryerson Limited, which was organized to conduct steel service center
operations. Such joint venture has begun construction of a steel service
center in Shanghai and is expected to commence operations in the first half of
1998. In 1997, the Company and The Tata Iron and Steel Co. Ltd. (India)
organized Tata Ryerson Limited to conduct steel service center operations in
India. Tata Ryerson Limited currently conducts operations organized in
Jamshedpur at an acquired facility and is developing another facility at Pune.
Substantially all of the Company's operations are located in the United
States. At year-end 1997, neither investments in foreign operations nor
foreign sales were material.

ITEM 2. PROPERTIES.

PROPERTIES RELATING TO STEEL MANUFACTURING SEGMENT

STEEL PRODUCTION

  All raw steel made by Inland Steel Company is produced at its Indiana Harbor
Works located in East Chicago, Indiana. The property on which this plant is
located, consisting of approximately 1,900 acres, is held by Inland Steel
Company in fee. The basic production facilities of Inland Steel Company at its
Indiana Harbor Works consist of furnaces for making iron; basic oxygen and
electric furnaces for making steel; a continuous billet caster, a continuous
combination slab/bloom caster and two continuous slab casters; and a variety
of rolling mills and processing lines which turn out finished steel mill
products. Certain of these production facilities, including a continuous
anneal line, are held by Inland Steel Company under leasing arrangements.
Inland Steel Company purchased the equity interest of the lessor of the No. 2
BOF Shop Caster Facility in March 1994 and assumed caster-related debt, which
was repaid by year-end 1994. Substantially all of the remaining property,
plant and equipment at the Indiana Harbor Works, other than the Caster
Facility and leased equipment, is subject to the lien of the First Mortgage of
Inland Steel Company dated April 1, 1928, as amended and supplemented. See
"Steel Manufacturing Operations--Raw Steel Production and Mill Shipments" in
Item 1 above for further information relating to capacity and utilization of
Inland Steel Company's properties. Inland Steel Company's properties are
adequate to serve its present and anticipated needs, taking into account those
issues discussed in "Capital Expenditures and Investments in Joint Ventures"
in Item 1 above.

  I/N Tek, a partnership in which a subsidiary of Inland Steel Company owns a
60% interest, has constructed a 1,500,000-ton annual capacity cold-rolling
mill on approximately 200 acres of land, which it owns in fee, located near
New Carlisle, Indiana. Substantially all the property, plant and equipment
owned by I/N Tek is subject to a lien securing related indebtedness. The I/N
Tek facility is adequate to serve the present and anticipated needs of Inland
Steel Company planned for such facility.

  I/N Kote, a partnership in which a subsidiary of Inland Steel Company owns a
50% interest, has constructed a 900,000-ton annual capacity steel galvanizing
facility on approximately 25 acres of land, which it owns in fee, located
adjacent to the I/N Tek site. Substantially all the property, plant and
equipment owned by I/N Kote is subject to a lien securing related
indebtedness. The I/N Kote facility is adequate to serve the present and
anticipated needs of Inland Steel Company planned for such facility.

                                      14
<PAGE>

  PCI Associates, a partnership in which a subsidiary of Inland Steel Company
owns a 50% interest, has constructed a pulverized coal injection facility on
land located within the Indiana Harbor Works. Inland Steel Company leases PCI
Associates the land upon which the facility is located. Substantially all the
property, plant and equipment owned by PCI Associates is subject to a lien
securing related indebtedness. The PCI Associates facility is adequate to
serve the present and anticipated needs of Inland Steel Company planned for
such facility.

  See "Steel Manufacturing Operations--Raw Materials" in Item 1 above for
information relating to the Sun and NIPSCO projects.

  Inland Steel Company owns three vessels for the transportation of iron ore
and limestone on the Great Lakes, and a subsidiary of Inland Steel Company
owns a fleet of 404 coal hopper cars (100-ton capacity each) used in unit
trains to move coal and coke to the Indiana Harbor Works. See "Steel
Manufacturing Operations--Raw Materials" in Item 1 above for further
information relating to utilization of Inland Steel Company's transportation
equipment. Such equipment is adequate, when combined with purchases of
transportation services from independent sources, to meet Inland Steel
Company's present and anticipated transportation needs.

  Inland Steel Company also owns and maintains research and development
laboratories in East Chicago, Indiana, which facilities are adequate to serve
its present and anticipated needs.

RAW MATERIALS PROPERTIES AND INTERESTS

  Certain information relating to raw materials properties and interests of
Inland Steel Company and its subsidiaries is set forth below. See "Steel
Manufacturing Operations--Raw Materials" in Item 1 above for further
information relating to capacity and utilization of such properties and
interests.

  Iron Ore

  The operating iron ore properties of Inland Steel Company's subsidiaries and
of the iron ore ventures in which Inland Steel Company has an interest are as
follows:

<TABLE>
<CAPTION>
                                                                   ANNUAL
                                                             PRODUCTION CAPACITY
                                                              (IN THOUSANDS OF
                                                                GROSS TONS OF
      PROPERTY                                LOCATION            PELLETS)
      --------                           ------------------- -------------------
      <S>                                <C>                 <C>
      Empire Mine....................... Palmer, Michigan           8,100
      Minorca Mine...................... Virginia, Minnesota        2,700
</TABLE>

  The Empire Mine is operated by the Empire Iron Mining Partnership, in which
Inland Steel Company has a 40% interest. Inland Steel Company, through a
subsidiary, is the sole owner and operator of the Minorca Mine. Inland Steel
Company also owns a 38% interest in the Butler Taconite project (permanently
closed in 1985) in Nashwauk, Minnesota. During the second quarter 1997, Inland
Steel Company completed the sale of its 15% interest in the Wabush Mines.

  The reserves at the Empire Mine and Minorca Mine are held under leases
expiring, or expected at current production rates to expire, between 2012 and
2040. Substantially all of the reserves at Butler Taconite are held under
leases. Inland Steel Company's share of the production capacity of its
interests in such iron ore properties is sufficient to provide the majority of
its present and anticipated iron ore pellet requirements. Any remaining
requirements have been and are expected to continue to be readily available
from independent sources.

  Coal

  Inland Steel Company's sole remaining coal property, the Lancashire No. 25
Property, located near Barnesboro, Pennsylvania, is permanently closed. All
Inland Steel Company coal requirements for the past several years have been
and are expected to continue to be met through contract purchases and other
purchases from independent sources.

                                      15
<PAGE>

PROPERTIES RELATING TO MATERIALS DISTRIBUTION SEGMENT

JOSEPH T. RYERSON & SON, INC.

  Ryerson owns its regional business unit headquarters offices in Chicago (IL)
and leases regional headquarters offices in West Chester (PA) and Tukwila
(WA). Ryerson East's service centers are at Birmingham (AL), Buffalo (NY),
Cambridge (MA), Carnegie (PA), Charlotte (NC) (two facilities), Chattanooga
(TN), Cleveland (OH), Easton (PA), Fairless Hills (PA), Long Island City (NY),
Philadelphia (PA), and Wallingford (CT). Ryerson Central's service centers are
at Chicago (IL), Cincinnati (OH), Dallas (TX), Des Moines (IA), Detroit (MI),
Holland (MI), Houston (TX), Indianapolis (IN), Kansas City (MO), Milwaukee
(WI), Omaha (NE), Plymouth (MN), St. Louis (MO), Tulsa (OK), and Wausau (WI).
Ryerson West's service centers are at Commerce City (CO), Emeryville (CA),
Phoenix (AZ), Portland (OR), Renton (WA), Spokane (WA), Salt Lake City (UT)
and Vernon (CA). Ryerson Coil's processing facilities are located in Canton
(GA), Chicago (IL) (two facilities), Knoxville (TN), Marshalltown (IA),
Plymouth (MN) and New Hope (MN).

  All of Ryerson's operating facilities are held in fee with the exception of
the facility at Birmingham (AL) (held under long-term lease), two at Cambridge
(MA) (both held under short-term lease), one at Charlotte (NC) (held under
long-term lease), one at Chicago (IL) (held under short-term lease), one at
Easton (PA) (held under long-term lease), one at Fairless Hills (PA) (held
under long-term lease), one at Holland (MI) (held under long-term lease), one
at Long Island City (NY) (held under short-term lease), one at New Hope (MN)
(held under short-term lease), a satellite facility at Omaha (NE) (held under
short-term lease), a portion of the property at Portland (OR) (held under
short-term lease), a portion of the property at St. Louis (MO) (held under
long-term lease), one facility at Salt Lake City (UT) (held under short-term
lease), and one at Wausau (WI) (held under short-term lease). In addition,
Ryerson holds under short-term lease a former operating facility at the
Village of Blasdell (NY). Ryerson's properties are adequate to serve its
present and anticipated needs.

J. M. TULL METALS COMPANY, INC.

  Tull maintains service centers at Baton Rouge (LA), Birmingham (AL),
Charlotte (NC), Columbia (SC), Greensboro (NC), Greenville (SC), Jacksonville
(FL), Miami (FL), New Orleans (LA), Pounding Mill (VA), Richmond (VA), Tampa
(FL), and Norcross (GA), where its headquarters is located. All of these
facilities are owned by Tull in fee, except for the Columbia facility, which
is held under short-term lease. AFCO operates service centers at Fort Smith
(AR), Jackson (MS), Little Rock (AR), Oklahoma City (OK), Shreveport (LA),
West Memphis (AR) and Wichita (KA). AFCO's headquarters are located at
Norcross (GA), where it leases space owned in fee by Tull. Each of AFCO's
facilities is held in fee except the Wichita facility, which is held under a
short-term lease. Tull's properties are adequate to serve its present and
anticipated needs.

RYERSON DE MEXICO

  Ryerson de Mexico, a joint venture in which RT owns, indirectly, a 50%
interest, owns twelve general line metals service centers and processing
centers in Mexico. Ryerson de Mexico's properties are adequate to serve its
present and anticipated needs.

OTHER PROPERTIES

  The Company and certain of its subsidiaries lease, under a long-term
arrangement, approximately 66% of the space in the Inland Steel Building
located at 30 West Monroe Street, Chicago, Illinois (where the Company's
principal executive offices are located), which property interest is adequate
to serve the Company's present and anticipated needs. Approximately 37% of
such space is under sublease to other parties.

  Inland Engineered Materials Corporation, a subsidiary of the Company, owns,
directly and indirectly, approximately 110 acres in northern Indiana and
approximately 90 acres in Brockway, PA. Certain subsidiaries of the Company
hold in fee at various locations an aggregate of approximately 355 acres of
land, all of which is for sale. Inland Steel Company also holds in fee
approximately 300 acres of land adjacent to the I/N

                                      16
<PAGE>

Tek and I/N Kote sites, which land is available for future development.
Approximately 1,060 acres of rural land, which are held in fee at various
locations in the north-central United States by various raw materials
ventures, are also for sale.

ITEM 3. LEGAL PROCEEDINGS.

  On June 10, 1993, the U.S. District Court for the Northern District of
Indiana entered a consent decree that resolved all matters raised by a lawsuit
filed by the EPA in 1990. The consent decree included a $3.5 million cash
fine, environmentally beneficial projects at the Indiana Harbor Works through
1997 costing approximately $7 million, and sediment remediation of portions of
the Indiana Harbor Ship Canal and Indiana Harbor Turning Basin estimated to
cost approximately $19 million over the next several years. The fine and
estimated remediation costs were provided for in 1991 and 1992. The Company's
reserve for environmental liabilities in connection with the consent decree
totaled $25 million at year-end 1997. The consent decree also defines
procedures for corrective action at Inland Steel Company's Indiana Harbor
Works. The procedures defined establish essentially a three-step process, each
step of which requires agreement of the EPA before progressing to the next
step in the process, consisting of: assessment of the site (including
stabilization measures), evaluation of corrective measures for remediating the
site, and implementation of the remediation plan according to the agreed-upon
procedures. Inland Steel Company is presently assessing the extent of
environmental contamination. Inland Steel Company anticipates that this
assessment will cost approximately $2 million to $4 million per year over the
next several years. Because neither the nature and extent of the contamination
nor the corrective actions can be determined until the assessment of
environmental contamination and evaluation of corrective measures is
completed, Inland Steel Company cannot presently reasonably estimate the costs
of or the time required to complete such corrective actions. Such corrective
actions may, however, require significant expenditures over the next several
years that may be material to the financial position and results of operations
of Inland Steel Company. Insurance coverage with respect to such corrective
actions is not significant.

  On March 22, 1985, the EPA issued an administrative order to Inland Steel
Company's former Inland Steel Container Company Division ("Division") naming
the former Division and various other unrelated companies as responsible
parties under the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") in connection with the cleanup of a waste disposal
facility operated by Duane Marine Salvage Corporation at Perth Amboy, New
Jersey. The administrative order alleged that certain of the former Division's
wastes were transported to, and disposed of at, that facility and required
Inland Steel Company to join with other named parties in taking certain
actions relating to the facility. Inland Steel Company and the other
administrative order recipients have completed the work required by the order.
In unrelated matters, the EPA also advised the former Division and various
other unrelated parties of other sites located in New Jersey at which the EPA
expects to spend public funds on any investigative and corrective measures
that may be necessary to control any releases or threatened releases of
hazardous substances, pollutants and contaminants pursuant to the applicable
provisions of CERCLA. The notice also indicated that the EPA believes Inland
Steel Company may be a responsible party under CERCLA. The extent of Inland
Steel Company's involvement and participation in these matters has not yet
been determined. While it is not possible at this time to predict the amount
of Inland Steel Company's potential liability, none of these matters is
expected to materially affect Inland Steel Company's financial position.
Results of operations could be materially affected for the particular
reporting periods in which expenses are incurred.

  On March 29, 1996, the EPA filed a lawsuit against Inland Steel Company in
the U.S. District Court for the Northern District of Indiana for alleged
violations of effluent limits contained in its National Pollution Discharge
Elimination System ("NPDES") permit and for the alleged discharge of
pollutants without the authorization of an NPDES permit. On December 17, 1997,
the Court entered a consent decree that resolved all matters raised by this
lawsuit. The consent decree includes a $150,000 cash fine and an
environmentally beneficial project at the Indiana Harbor Works costing
approximately $350,000.

  The EPA has adopted a national policy of seeking substantial civil penalties
against owners and operators of sources for noncompliance with air and water
pollution control statutes and regulations under certain

                                      17
<PAGE>

circumstances. It is not possible to predict whether further proceedings will
be instituted against Inland Steel Company or any of its subsidiaries pursuant
to such policy, nor is it possible to predict the amount of any such penalties
that might be assessed in any such proceeding.

  Inland Steel Company received a Special Notice of Potential Liability
("Special Notice") from Indiana Department of Environmental Management
("IDEM") on February 18, 1992 relating to the Four County Landfill Site,
Fulton County, Indiana (the "Facility"). The Special Notice stated that IDEM
has documented the release of hazardous substances, pollutants and
contaminants at the Facility and was planning to spend public funds to
undertake an investigation and control the release or threatened release at
the Facility unless IDEM determined that a potentially responsible party
("PRP") will properly and promptly perform such action. The Special Notice
further stated that Inland Steel Company may be a PRP and that Inland Steel
Company, as a PRP, may have potential liability with respect to the Facility.
In August 1993, Inland Steel Company, along with other PRPs, entered into an
Agreed Order with IDEM pursuant to which the PRPs agreed to perform a Remedial
Investigation/Feasibility Study ("RI/FS") for the Facility and pay certain
past and future IDEM costs. In addition, the PRPs agreed to provide funds for
operation and maintenance necessary for stabilization of the Facility. The
costs which Inland Steel Company has agreed to assume under the Agreed Order
are not currently anticipated to exceed $300,000. The cost of the final
remedies which will be determined to be required with respect to the Facility
cannot be reasonably estimated until, at a minimum, the RI/FS is completed.
Inland Steel Company is therefore unable to determine the extent of its
potential liability, if any, relating to the Facility or whether this matter
could materially affect Inland Steel Company's financial position or results
of operations.

  In October 1996, Inland Steel Company received a notification from IDEM, as
lead administrative trustee, that the natural resource trustees (which also
include the Indiana Department of Natural Resources, the U.S. Department of
the Interior, Fish and Wildlife Service and the National Park Service) intend
to perform a natural resource damage assessment on the Grand Calumet River and
Indiana Harbor Canal system. The notification further states that Inland Steel
Company has been identified as a PRP in connection with the release of
hazardous substances and oil and the subsequent damages resulting from natural
resource injury. Because of the preliminary nature of this matter, it is not
possible at this time to predict the amount of Inland Steel Company's
potential liability or whether such potential liability could materially
affect Inland Steel Company's financial position.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.

  Not applicable.
                       EXECUTIVE OFFICERS OF REGISTRANT.

  Officers are elected by the Board of Directors of the Company to serve for a
period ending with the next succeeding annual meeting of the Board of
Directors held immediately after the annual meeting of stockholders. All
executive officers of the Company, with the exception of Neil S. Novich and
George A. Ranney, Jr., have been employed by the Company or a subsidiary of
the Company throughout the past five years.

  Set forth below are the executive officers of the Company as of February 2,
1998 and the age of each as of such date. Their principal occupations at
present and during the past five years, including positions and offices held
with the Company or a significant subsidiary of the Company, are shown below.

    NAME, AGE AND PRESENT      POSITIONS AND OFFICES HELD DURING THE PAST FIVE
  POSITION WITH REGISTRANT                          YEARS

Robert J. Darnall, 59........  Mr. Darnall has been Chairman, President and
 Chairman, President, Chief    Chief Executive Officer of the Company since
 Executive Officer and         September 1992. He was elected President, Chief
 Director                      Operating Officer and a director of the Company
                               in April 1986. He has also been Chairman of
                               Inland Steel Company since September 1992, its
                               Chief Executive Officer from September 1992 to
                               January 1995 and since April 1996 and a
                               director since 1983. He also served as its
                               President for certain periods ending most
                               recently in May 1996. He joined Inland Steel
                               Company in 1962. He

                                      18
<PAGE>

    NAME, AGE AND PRESENT      POSITIONS AND OFFICES HELD DURING THE PAST FIVE
  POSITION WITH REGISTRANT                          YEARS

                               has been Chairman of RT since April 1995, a
                               position he also held from November 1990 to
                               June 1994.

Dale E. Wiersbe, 48..........  Mr. Wiersbe has been Senior Vice President of
 Senior Vice President         the Company and President and Chief Operating
                               Officer of Inland Steel Company since May 1996.
                               He was Senior Vice President of Operations of
                               Inland Steel Flat Products Company ("ISFPCO")
                               division of Inland Steel Company from December
                               1995 to May 1996. He was also Vice President--
                               Integrated Steelmaking and Hot Rolling of
                               ISFPCO from May 1995 to December 1995,
                               President of Inland Steel Bar Company division
                               of Inland Steel Company from November 1993 to
                               May 1995, Vice President--Planning of ISFPCO
                               from January 1993 to November 1993, Vice
                               President--Cold Rolling and Coating Operations
                               of ISFPCO from May 1991 to January 1993.

Neil S. Novich, 43...........  Mr. Novich has been President, Chief Executive
 President and                 Officer and Chief Operating Officer of RT,
 Chief Executive Officer       President of Ryerson and Chairman of Tull since
 of Ryerson Tull, Inc.         June 1994. Mr. Novich was also appointed a
                               Director of RT in June 1994. He served as
                               Chairman of Ryerson from June 1994 to April
                               1995 and since June 1996. He was a Senior Vice
                               President of the Company from January 1995 to
                               May 1996 and served as a Vice President of the
                               Company from June 1994 to January 1995. Prior
                               to joining the Company in 1994, he led the
                               Distribution and Logistics Practice at Bain &
                               Company ("Bain"), an international management
                               consulting firm.

Jay M. Gratz, 45.............  Mr. Gratz has been Vice President of the
 Vice President and Chief      Company and of RT since May 1997; Chief
 Financial Officer             Financial Officer of the Company since May 1996
                               and of RT since April 1996. He was Vice
                               President--Finance of the Company from May 1996
                               to April 1997, and of RT from September 1994 to
                               April 1997. He was also Vice President and
                               Principal Financial Officer of Inland Steel
                               Company from March 1993 to January 1995 and
                               Vice President--Finance of Inland Steel Flat
                               Products Company division of Inland Steel
                               Company from December 1991 to February 1993.


H. William Howard, 63........  Mr. Howard has been Vice President--Information
 Vice President--Information   Technology of the Company since September 1990.
 Technology                    He was Vice President--Automation and
                               Information Technology of Inland Steel Company
                               from May 1995 to December 1996. He was also
                               Vice President-- Automation and Information
                               Technology of Inland Steel Flat Products
                               Company division of Inland Steel Company from
                               January 1993 to May 1995.

George A. Ranney, Jr., 57....  Mr. Ranney has been Vice President and General
 Vice President and General    Counsel of the Company since July 1995. He is
 Counsel                       also a partner of the law firm of Mayer, Brown
                               & Platt, counsel to the Company. He has been a
                               partner with such firm since 1986.

Vicki L. Avril, 43...........
 Treasurer and Director--      Ms. Avril has been Treasurer of the Company and
 Corporate Planning            of Inland Steel Company since January 1994, and
                               Treasurer of RT, Ryerson and Tull since
                               February 1994. She also has been Director--
                               Corporate

                                      19
<PAGE>

    NAME, AGE AND PRESENT      POSITIONS AND OFFICES HELD DURING THE PAST FIVE
  POSITION WITH REGISTRANT                          YEARS

                               Planning since January 1995. In addition, she
                               was Director of Pension Investments and
                               Administration from June 1991 to January 1995,
                               and Assistant Treasurer of the Company from May
                               1993 to January 1994.

James M. Hemphill, 54........  Mr. Hemphill has been Controller of the Company
 Controller                    since September 1994. He was Director of
                               Financial Management of the Company from August
                               1992 to September 1994 and was Director of
                               Taxes of the Company from March 1988 to August
                               1992.

Charles B. Salowitz, 49......  Mr. Salowitz has been Secretary of the Company
 Secretary and Associate       since September 1995 and Associate General
 General Counsel               Counsel since January 1995, Secretary of Inland
                               Steel Company since September 1995 and
                               Corporate Secretary of RT since April 1996. He
                               was an Assistant General Counsel of the Company
                               from July 1989 to January 1995 and was
                               Assistant Secretary from July 1989 to September
                               1995.

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.

  The common stock of the Company is listed and traded on the New York Stock
Exchange. As of February 2, 1998, the number of holders of record of common
stock of the Company was 13,383.

  The remaining information called for by this Item 5 is set forth under the
caption "Summary by Quarter" in Exhibit 99, "Financial Information," which is
attached hereto, and is incorporated by reference herein.

ITEM 6. SELECTED FINANCIAL DATA.

  The information called for by this Item 6 with respect to each of the last
five years of the Company is set forth under the caption "Eleven-Year Summary
of Selected Financial Data and Operating Results" in Exhibit 99, "Financial
Information," which is attached hereto, and is incorporated by reference
herein.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
      RESULTS OF OPERATIONS.

  The information called for by this Item 7 is set forth under the caption
"Financial Review" in Exhibit 99, "Financial Information," which is attached
hereto, and is incorporated by reference herein.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

  The consolidated financial statements of the Company called for by this Item
8, together with the report thereon of the independent accountants dated
February 18, 1998, are set forth under the captions "Report of Independent
Accountants" and "Statement of Accounting and Financial Policies" as well as
in all consolidated financial statements and schedules of the Company and the
"Notes to Consolidated Financial Statements" in Exhibit 99, "Financial
Information," which is attached hereto, and are incorporated by reference
herein. The financial statement schedules listed under Item 14(a)2 of this
Report on Form 10-K, together with the report thereon of the independent
accountants dated February 18, 1998, should be read in conjunction with the
consolidated financial statements. Financial statement schedules not included
in this Report on Form 10-K have been omitted because they are not applicable
or because the information called for is shown in the consolidated financial
statements or notes thereto.

                                      20
<PAGE>

  Consolidated quarterly sales, earnings and per share common stock
information for 1997 and 1996 are set forth under the caption "Summary by
Quarter" in Exhibit 99, "Financial Information," which is attached hereto, and
are incorporated by reference herein.

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

  None.

                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

  The information called for by this Item 10 with respect to directors of the
Company will be set forth under the captions "Election of Directors" and
"Security Ownership of Directors and Management" in the Company's definitive
Proxy Statement which will be furnished to stockholders in connection with the
Annual Meeting of Stockholders to be held on May 27, 1998, and is hereby
incorporated by reference herein. The information called for with respect to
executive officers of the Company is included in Part I of this Report on Form
10-K under the caption "Executive Officers of Registrant."

ITEM 11. EXECUTIVE COMPENSATION.

  The information called for by this Item 11 will be set forth under the
caption "Executive Compensation" in the Company's definitive Proxy Statement
which will be furnished to stockholders in connection with the Annual Meeting
of Stockholders to be held on May 27, 1998, and is hereby incorporated by
reference herein.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

  (a) The information called for by this Item 12 with respect to security
ownership of more than five percent of the Company's common stock. Series E
ESOP Convertible Preferred Stock and its 10.23% Subordinated Voting Notes will
be set forth under the caption "Additional Information Relating to Voting
Securities" in the Company's definitive Proxy Statement which will be
furnished to stockholders in connection with the Annual Meeting of
Stockholders scheduled to be held on May 27, 1998, and is hereby incorporated
by reference herein.

  (b) The following beneficial owner of Series A $2.40 Cumulative Convertible
Preferred Stock, which owns shares of Series A Preferred Stock having less
than one percent of the combined voting power of the Company's outstanding
voting securities, is the only person known to the Company to be the
beneficial owner (as defined by the Securities and Exchange Commission), as of
February 17, 1998, of more than five percent of that class of the Company's
voting securities:

<TABLE>
<CAPTION>
                                                               NUMBER   PERCENT
          NAME AND ADDRESS                                    OF SHARES OF CLASS
          ----------------                                    --------- --------
      <S>                                                     <C>       <C>
      Forest Investment Management LLC
      Founders Financial Group L.P.
      Michael A. Boyd, Inc...................................  11,383    12.1%
      Michael A. Boyd
      53 Forest Avenue
      Old Greenwich, CT 06870
</TABLE>

  (c) The information called for by this Item 12 with respect to the security
ownership of directors and of management will be set forth under the caption
"Security Ownership of Directors and Management" in the Company's definitive
Proxy Statement which will be furnished to stockholders in connection with the
Annual Meeting of Stockholders to be held on May 27, 1998, and is hereby
incorporated by reference herein.

                                      21
<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

  Information called for by this Item 13 will be set forth under the caption
"Certain Relationships and Related Transactions" in the Company's definitive
Proxy Statement which will be furnished to stockholders in connection with the
Annual Meeting of Stockholders to be held on May 27, 1998, and is hereby
incorporated by reference herein.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

  (A)DOCUMENTS FILED AS A PART OF THIS REPORT.

    1. CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY. The consolidated
      financial statements listed below are set forth in Exhibit 99,
      "Financial Information," which is attached hereto, and are
      incorporated by reference in Item 8 of this Annual Report on Form 10-
      K.

      Report of Independent Accountants dated February 18, 1998.

      Statement of Accounting and Financial Policies.

      Consolidated Statements of Operations and Reinvested Earnings for
      the three years ended December 31, 1997.

      Consolidated Statement of Cash Flows for the three years ended
      December 31, 1997.

      Consolidated Balance Sheet at December 31, 1997 and 1996.

      Schedules to Consolidated Financial Statements at December 31, 1997
      and 1996, relating to:

              Investments and Advances.

              Property, Plant and Equipment.

              Long-Term Debt.

      Notes to Consolidated Financial Statements.

    2. FINANCIAL STATEMENT SCHEDULES OF THE COMPANY.

      Report of Independent Accountants on Financial Statement Schedules
      dated February 18, 1998. (Included on page 23 of this Report)

      Consent of Independent Accountants. (Included on page 23 of this
      Report)

      For the years ended December 31, 1997, 1996 and 1995:

              Schedule I -- Condensed Financial Information (Parent Company
              Only). (Included on pages 24 to 26, inclusive, of this Report)

              Schedule II -- Reserves. (Included on page 27 of this Report)

    3. EXHIBITS. The exhibits required to be filed by Item 601 of
      Regulation S-K are listed in the "Exhibit Index," which is attached
      hereto and incorporated by reference herein.

  (B)REPORTS ON FORM 8-K.

    On November 28, 1997, the Company filed a Current Report on Form 8-K,
    reporting the adoption of the Stockholder Rights Plan by the Board of
    Directors on November 25, 1997. No financial statements were filed with
    that report.

                                      22
<PAGE>

      REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES

To the Board of Directors
of Inland Steel Industries, Inc.

  Our audits of the consolidated financial statements referred to in our
report dated February 18, 1998, except as to Note 20, which is as of March 17,
1998, appearing on page 11 of Exhibit 99, "Financial Information," (which
report and consolidated financial statements are incorporated by reference in
this Annual Report on Form 10-K) also included an audit of the Financial
Statement Schedules listed in Item 14(a)2 of this Annual Report on Form 10-K.
In our opinion, these Financial Statement Schedules present fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.

                                          Price Waterhouse LLP

Chicago, Illinois
February 18, 1998, except as to Note 20, which is as of March 17, 1998

                      CONSENT OF INDEPENDENT ACCOUNTANTS
  We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statement on Form S-8 (No. 33-59783),
Registration Statement on Form S-8 (No. 33-48770), Registration Statement on
Form S-8 (No. 33-22902), Post-Effective Amendment No. 1 on Form S-8 to
Registration Statement on Form S-4 (No. 33-4046), Post-Effective Amendment No.
1 to Form S-8 Registration Statement No. 33-1329, Registration Statement on
Form S-8 (No. 33-32504), Post-Effective Amendment No. 2 to Form S-8
Registration Statement (No. 33-6627), Registration Statement on Form S-3 (No.
33-59161) and Registration Statement on Form S-3 (No. 33-62897) of Inland
Steel Industries, Inc. (or, for registrations prior to 1986, Inland Steel
Company) of our report dated February 18, 1998, except as to Note 20, which is
as of March 17, 1998, appearing on page 11 of Exhibit 99, "Financial
Information," which is attached hereto, and is incorporated by reference
herein. We also consent to the incorporation by reference of our report on the
Financial Statement Schedules which appears above.

                                          Price Waterhouse LLP

Chicago, Illinois
March 30, 1998

                                      23
<PAGE>

                         INLAND STEEL INDUSTRIES, INC.

                  SCHEDULE I--CONDENSED FINANCIAL INFORMATION
                             (PARENT COMPANY ONLY)

                            STATEMENT OF OPERATIONS
                  YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                             (DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                                                        1997   1996    1995
                                                       ------ ------  ------
<S>                                                    <C>    <C>     <C>
Income:
  Intercompany interest income........................ $ 25.1 $ 18.5  $ 16.3
  Equity in income of subsidiaries....................  107.9   41.4   157.8
  Interest income and other revenue...................    8.5   11.9     1.6
  Gain on sale of subsidiary stock....................    --    31.4     --
                                                       ------ ------  ------
                                                        141.5  103.2   175.7
Expenses:
  Interest and other expenses.........................   14.5   32.6    31.0
  Intercompany interest expense.......................    3.6    2.4     5.7
                                                       ------ ------  ------
                                                         18.1   35.0    36.7
Income before income taxes and extraordinary loss.....  123.4   68.2   139.0
Provision for income taxes............................    4.1    8.0     7.8 Cr.
                                                       ------ ------  ------
Income before extraordinary loss......................  119.3   60.2   146.8
Extraordinary loss on early retirement of debt........    --   (14.5)    --
                                                       ------ ------  ------
Net income............................................ $119.3 $ 45.7  $146.8
                                                       ====== ======  ======
</TABLE>
--------
Cr. = Credit



           See Notes to Consolidated Financial Statements in Item 8.

                                       24
<PAGE>

                         INLAND STEEL INDUSTRIES, INC.

                  SCHEDULE I--CONDENSED FINANCIAL INFORMATION
                             (PARENT COMPANY ONLY)

                            STATEMENT OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                             (DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                                                       1997     1996     1995
                                                      -------  -------  -------
<S>                                                   <C>      <C>      <C>
OPERATING ACTIVITIES
Net income..........................................  $ 119.3  $  45.7  $ 146.8
Adjustments to reconcile net income to net cash
 provided from (used for) operating activities:
  Equity in undistributed earnings of subsidiaries..   (107.9)   (41.4)  (157.8)
  Depreciation......................................       .5       .5       .6
  Deferred income taxes.............................      2.0     11.7      4.5
  Deferred employee benefit cost....................      (.7)     2.3       .3
  Gain from issuance of subsidiary stock............      --     (31.4)     --
  Stock issued for coverage of employee benefit
   plans............................................     21.8     22.6     23.9
  Change in: Intercompany accounts..................    (85.3)  (201.2)    16.0
      Notes receivable..............................      (.6)     (.1)     (.3)
      Accounts payable..............................      (.5)      .9     (2.9)
      Accrued liabilities...........................       .7     (9.9)     4.9
  Other deferred items..............................     (6.0)    (5.4)     8.3
                                                      -------  -------  -------
    Net adjustments.................................   (176.0)  (251.4)  (102.5)
                                                      -------  -------  -------
    Net cash provided from (used for) operating
     activities.....................................    (56.7)  (205.7)    44.3
                                                      -------  -------  -------
INVESTING ACTIVITIES
Net investments in subsidiaries.....................     (4.9)    (6.1)   (10.2)
Dividends received from subsidiaries................     25.9    471.7     25.9
                                                      -------  -------  -------
    Net cash provided from investing activities.....     21.0    465.6     15.7
                                                      -------  -------  -------
FINANCING ACTIVITIES
Issuance of common stock............................      --       --      99.1
Long-term debt retired..............................    (15.3)  (238.4)    (8.3)
Dividends paid......................................    (20.8)   (21.0)   (31.6)
Acquisition of treasury stock.......................     (6.7)    (3.7)    (4.0)
                                                      -------  -------  -------
    Net cash provided from (used for) financing
     activities.....................................    (42.8)  (263.1)    55.2
                                                      -------  -------  -------
Net increase (decrease) in cash and cash equiva-
 lents..............................................    (78.5)    (3.2)   115.2
Cash and cash equivalents--beginning of year........    202.3    205.5     90.3
                                                      -------  -------  -------
Cash and cash equivalents--end of year..............  $ 123.8  $ 202.3  $ 205.5
                                                      =======  =======  =======
</TABLE>

           See Notes to Consolidated Financial Statements in Item 8.

                                       25
<PAGE>

                         INLAND STEEL INDUSTRIES, INC.

                  SCHEDULE I--CONDENSED FINANCIAL INFORMATION
                             (PARENT COMPANY ONLY)

                                 BALANCE SHEET
                         AT DECEMBER 31, 1997 AND 1996
                             (DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                                                               1997      1996
                                                             --------  --------
<S>                                                          <C>       <C>
ASSETS
Current Assets:
  Cash and cash equivalents................................  $  123.8  $  202.3
  Receivables from subsidiary companies....................     377.6     292.3
  Deferred income taxes....................................        .3        .3
  Notes receivable.........................................       1.3        .7
                                                             --------  --------
    Total current assets...................................     503.0     495.6
Investment in subsidiary companies.........................     645.5     558.6
Intangible pension asset...................................       --       76.3
Investment in Nippon Steel Corporation, net of valuation
 allowances of $7.1 and $4.8, respectively.................       7.5       9.8
Property, net of accumulated depreciation of $8.3 and $7.8,
 respectively..............................................        .8       1.3
Deferred income taxes......................................        .2        .3
Deferred charges and other assets..........................       1.3       2.4
                                                             --------  --------
    Total assets...........................................  $1,158.3  $1,144.3
                                                             ========  ========
LIABILITIES
Current Liabilities:
  Accounts payable.........................................  $    4.7  $    5.2
  Accrued liabilities......................................      10.3       9.6
  Long-term debt due within one year.......................      10.6       9.7
                                                             --------  --------
    Total current liabilities..............................      25.6      24.5
Long-term debt.............................................     185.9     202.1
Deferred employee benefits.................................       9.7      86.7
Deferred income and other deferred credits.................       8.9       9.9
                                                             --------  --------
    Total liabilities......................................     230.1     323.2
                                                             --------  --------
TEMPORARY EQUITY
Common stock repurchase commitment.........................      28.1      32.1
                                                             --------  --------
STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value, 15,000,000 shares
 authorized for all series, aggregate liquidation value
 $150.6 in 1997 and $153.9 in 1996.........................       3.1       3.2
Common stock, $1.00 par value; authorized--100,000,000
 shares; issued--50,556,350 shares.........................      50.6      50.6
Capital in excess of par value.............................   1,032.5   1,040.2
Accumulated deficit........................................     (45.6)   (146.0)
Unearned compensation--ESOP................................     (68.6)    (79.4)
Common stock repurchase commitment.........................     (28.1)    (32.1)
Treasury stock at cost--common stock of 1,557,635 shares in
 1997 and 1,647,954 shares in 1996.........................     (40.5)    (44.2)
Cumulative translation adjustment..........................      (3.3)     (3.3)
                                                             --------  --------
    Total stockholders' equity.............................     900.1     789.0
                                                             --------  --------
    Total liabilities, temporary equity, and stockholders'
     equity................................................  $1,158.3  $1,144.3
                                                             ========  ========
</TABLE>

Maturities of Long-Term Debt due within five years are: $10.5 million in 1998,
$111.5 million in 1999, $12.5 million in 2000, $13.6 million in 2001, and
$14.8 million in 2002.

           See Notes to Consolidated Financial Statements in Item 8.

                                      26
<PAGE>

             INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES

                             SCHEDULE II--RESERVES
             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
                             (DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                                             PROVISIONS FOR ALLOWANCES,
                                            CLAIMS AND DOUBTFUL ACCOUNTS
                                     ------------------------------------------
         YEARS                       BALANCE AT ADDITIONS DEDUCTIONS BALANCE AT
         ENDED                       BEGINNING   CHARGED     FROM      END OF
      DECEMBER 31                     OF YEAR   TO INCOME  RESERVES     YEAR
      -----------                    ---------- --------- ---------- ----------
        <S>                          <C>        <C>       <C>        <C>
         1997.......................   $22.5      $ 7.1   $(1.3)(A)    $23.5
                                                           (4.8)(B)
         1996.......................   $29.9      $ 1.7   $(2.5)(A)    $22.5
                                                           (6.6)(B)
         1995.......................   $24.9      $11.8   $(1.1)(A)    $29.9
                                                           (5.7)(B)
</TABLE>

NOTES:

(A) Bad debts written off during year.
(B) Allowances granted during year.

                                       27
<PAGE>

                                  SIGNATURES

  PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) 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.

Date: March 30, 1998                                 Robert J. Darnall
                                          By: _________________________________
                                                     Robert J. Darnall
                                                  Chairman, President and
                                                  Chief Executive Officer
                                               (Principal Executive Officer)


  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE COMPANY
AND IN THE CAPACITIES AND ON THE DATES INDICATED.

<TABLE>
<CAPTION>
             SIGNATURE                           TITLE                    DATE
             ---------                           -----                    ----


<S>                                  <C>                           <C>
         Robert J. Darnall             Chairman, President and      March 30, 1998
____________________________________ Chief Executive Officer and
         Robert J. Darnall               Director (Principal
                                          Executive Officer)

            Jay M. Gratz                  Vice President and         March 30, 1998
____________________________________   Chief Financial Officer
            Jay M. Gratz                 (Principal Financial
                                               Officer)

         James M. Hemphill                    Controller             March 30, 1998
____________________________________    (Principal Accounting
         James M. Hemphill                     Officer)



          A. Robert Abboud                     Director

         James A. Henderson                    Director

         Robert B. McKersie                    Director

                                                               Jay M. Gratz
           Leo F. Mullin                       Director By: ___________________
                                                               Jay M. Gratz
                                                             Attorney-in-fact
         Jean-Pierre Rosso                     Director       March 30, 1998


          Joshua I. Smith                      Director

          Nancy H. Teeters                     Director

          Arnold R. Weber                      Director

</TABLE>


                                      28
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
                                                                     SEQUENTIAL
  EXHIBIT                                                               PAGE
  NUMBER                     DOCUMENT DESCRIPTION                      NUMBER
  -------                    --------------------                    ----------
 <C>       <S>                                                       <C>
 3.(i)     Copy of Certificate of Incorporation, as amended, of
           the Company. (Filed as Exhibit 3.(i) to the Company's
           Annual Report on Form 10-K for the year ended December
           31, 1995, and incorporated by reference herein.)
 3.(ii)    Copy of By-laws, as amended, of the Company............
 4.A       Copy of Certificate of Designations, Preferences and
           Rights of Series A $2.40 Cumulative Convertible Pre-
           ferred 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 here-
           in.)
 4.C       Copy of Rights Agreement, dated as of November 25,
           1997, between the Company and Harris Trust and Savings
           Bank, as Rights Agent. (Filed as Exhibit 4.1 to the
           Company's Current Report on Form 8-A filed on November
           28, 1997, 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 Subordinated Voting Note due December 17, 1999
           in the amount of $100,000,000 from the Company to NS
           Finance III, Inc. (Filed as Exhibit 4.8 to Form S-3
           Registration Statement No. 33-62897, and incorporated
           by reference herein.)
 4.F       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-Fifth 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 Janu-
           ary 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 Cur-
           rent Report on Form 8-K for the month of November,
           1946; (ix) Exhibit 1, filed with Steel Company's Cur-
           rent Report on Form 8-K for the months of July and Au-
           gust, 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
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                     SEQUENTIAL
  EXHIBIT                                                               PAGE
  NUMBER                     DOCUMENT DESCRIPTION                      NUMBER
  -------                    --------------------                    ----------
 <C>       <S>                                                       <C>
           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 Ex-
           hibit 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) Ex-
           hibit B, filed with Steel Company's Current Report on
           Form 8-K for the month of September, 1975; (xix) Ex-
           hibit 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) Ex-
           hibit 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); (xxvii) Exhibit 4 filed with Steel Company's
           Current Report on Form 8-K dated June 23, 1993;
           (xxviii) Exhibit 4.C filed with the Steel Company's
           Quarterly Report on Form 10-Q for the quarter ended
           June 30, 1995; (xxix) Exhibit 4.C filed with the Steel
           Company's Quarterly Report on Form 10-Q for the quarter
           ended September 30, 1995, and (xxx) Exhibit 4.C filed
           with Steel Company's Quarterly Report on Form 10-Q for
           the quarter ended June 30, 1996.
 4.G       Copy of consolidated reprint of First Mortgage Inden-
           ture, 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 supple-
           mental indentures thereto, to and including the Thir-
           teenth Supplemental Indenture. (Filed as Exhibit 4-E to
           Form S-1 Registration Statement No. 2-9443, and incor-
           porated by reference herein.)
           [The registrant hereby agrees to provide a copy of any
           other agreement relating to long-term debt at the re-
           quest of the Commission.]
 10.A*     Copy of Inland Steel Industries, Inc. Annual Incentive
           Plan, as amended. (Filed as Exhibit 10.A to the
           Company's Quarterly Report on Form 10-Q for the quarter
           ended September 30, 1995, and incorporated by reference
           herein.)
 10.B*     Copy of Ryerson Tull Annual Performance Improvement In-
           centive Plan. (Filed as Exhibit 10.2 to the Ryerson
           Tull, Inc. Quarterly Report on Form 10-Q for the quar-
           ter year ended September 30, 1997, and incorporated by
           reference herein.)
 10.C*     Copy of Inland Steel Industries, Inc. Special Achieve-
           ment Award Plan. (Filed as Exhibit 10-I to the
           Company's Annual Report on Form 10-K for the fiscal
           year ended December 31, 1987, and incorporated by ref-
           erence herein.)
 10.D*     Copy of Ryerson Tull 1996 Incentive Stock Plan, as
           amended................................................
 10.E*     Copy of Inland 1995 Incentive Stock Plan, as amended...
</TABLE>


--------
*  Management contract or compensatory plan or arrangement required to be
   filed as an exhibit to the Company's Annual Report on Form 10-K.

                                      ii
<PAGE>

<TABLE>
<CAPTION>
                                                                     SEQUENTIAL
  EXHIBIT                                                               PAGE
  NUMBER                     DOCUMENT DESCRIPTION                      NUMBER
  -------                    --------------------                    ----------
 <C>       <S>                                                       <C>
 10.F*     Copy of Inland 1992 Incentive Stock Plan, as amended.
           (Filed as Exhibit 10.C to the Company's Quarterly Re-
           port on Form 10-Q for the quarter ended June 30, 1995,
           and incorporated by reference herein.)
 10.G*     Copy of Inland 1988 Incentive Stock Plan, as amended.
           (Filed as Exhibit 10.B to the Company's Quarterly Re-
           port on Form 10-Q for the quarter ended June 30, 1995,
           and incorporated by reference herein.)
 10.H*     Copy of Inland Steel Industries Non-Qualified Thrift
           Plan, as amended. (Filed as Exhibit 10.A to the
           Company's Quarterly Report on Form 10-Q for the quarter
           ended September 30, 1997, and incorporated by reference
           herein.)
 10.I*     Copy of Inland 1992 Stock Plan for Non-Employee Direc-
           tors, as amended. (Filed as Exhibit 10.E to the
           Company's Quarterly Report on Form 10-Q for the quarter
           ended June 30, 1995, and incorporated by reference
           herein.)
 10.J*     Copy of Inland Steel Industries Supplemental Retirement
           Benefit Plan for Covered Employees, as amended. (Filed
           as Exhibit 10.B to the Company's Quarterly Report on
           Form 10-Q for the quarter ended September 30, 1997, and
           incorporated by reference herein.)
 10.K*     Copy of Inland Steel Industries Special Retirement Ben-
           efit Plan for Covered Employees, as amended. (Filed as
           Exhibit 10.C to the Company's Quarterly Report on Form
           10-Q for the quarter ended September 30, 1997, and in-
           corporated by reference herein.)
 10.L*     Copy of Ryerson Tull, Inc. Supplemental Retirement Plan
           for Covered Employees, as amended. (Filed as Exhibit
           10.1 to the Ryerson Tull, Inc. Form 10-Q for the quar-
           ter ended September 30, 1997, and incorporated by ref-
           erence herein.)
 10.M*     Copy of the Inland Steel Industries Deferred Compensa-
           tion Plan for Certain Employees, as amended. (Filed as
           Exhibit 10.J to the Company's Annual Report on Form 10-
           K for the fiscal year ended December 31, 1994, and in-
           corporated by reference herein.)
 10.N*     Copy of the Inland Steel Industries Deferred Compensa-
           tion Plan for Directors, as amended. (Filed as Exhibit
           10-L to the Company's Annual Report on Form 10-K for
           the fiscal year ended December 31, 1992, and incorpo-
           rated by reference herein.)
 10.O*     Copy of Inland Steel Industries Terminated Retirement
           Plan for Non-Employee Directors. (Filed as Exhibit 10.M
           to the Company's Annual Report on Form 10-K for the
           fiscal year ended December 31, 1995, and incorporated
           by reference herein.)
 10.P*     Copy of Inland Steel Industries, Inc. Deferred Phantom
           Stock Unit Plan for Non-Employee Directors. (Filed as
           Exhibit 10.N to the Company's Annual Report on Form 10-
           K for the fiscal year ended December 31, 1995, and in-
           corporated by reference herein.)
 10.Q*     Copy of Outside Directors Accident Insurance Policy.
           (Filed as Exhibit 10-F to Inland Steel Company's Annual
           Report on Form 10-K for the fiscal year ended December
           31, 1983, and incorporated by reference herein.)
 10.R*     Copy of form of Severance Agreement, dated January 28,
           1998, between the Company and each of the four execu-
           tive officers of the Company identified on the exhibit
           relating to terms and conditions of termination of em-
           ployment following a change in control of the Company..
 10.S.(1)* Copy of Ryerson Tull Directors' Compensation Plan......
 10.S.(2)* Copy of Ryerson Tull Nonqualified Savings Plan, effec-
           tive January 1, 1998...................................
</TABLE>


--------
*  Management contract or compensatory plan or arrangement required to be filed
   as an exhibit to the Company's Annual Report on Form 10-K.

                                      iii
<PAGE>

<TABLE>
<CAPTION>
                                                                     SEQUENTIAL
  EXHIBIT                                                               PAGE
  NUMBER                     DOCUMENT DESCRIPTION                      NUMBER
  -------                    --------------------                    ----------
 <C>       <S>                                                       <C>
 10.T.(1)* Amended listing of executive officers of the Company
           who are parties to the form of Severance Agreement
           dated January 28, 1998 referred to in Exhibit 10.R
           above..................................................
 10.T.(2)* Copy of form of Change in Control Agreements dated
           March 27, 1996 between the Company and the parties
           listed on the schedule thereto. (Filed as Exhibit 10.5
           to the Ryerson Tull, Inc. Form S-1 Registration State-
           ment No. 333-3235, and incorporated by reference here-
           in.)
 10.T.(3)* Amended Schedule to Change in Control Agreements re-
           ferred to in Exhibit 10.T.(2) above....................
 10.T.(4)* Copy of form of Change in Control Agreements dated as
           of June 10, 1996 between Ryerson Tull, Inc. and the
           parties listed on the Schedule thereto. (Filed as Ex-
           hibit 10.10 to the Ryerson Tull, Inc. Annual Report on
           Form 10-K for the fiscal year ended December 31, 1997,
           and incorporated by reference herein.)
 10.T.(5)* Amended Schedule to Change in Control Agreements re-
           ferred to in Exhibit 10.T.(4) above (filed as Exhibit
           10.11 to the Ryerson Tull Inc. Annual Report on Form
           10-K for the fiscal year ended December 31, 1997, and
           incorporated by reference herein).
 10.T.(6)* Copy of Change in Control Agreement dated as of June
           10, 1996 between Ryerson Tull, Inc. and Neil S. Novich.
           (Filed as Exhibit 10.8 to the Ryerson Tull, Inc. Regis-
           tration Statement on Form S-1 (File No. 333-3235), and
           incorporated by reference herein.)
 10.T.(7)* Copy of Change in Control Agreement dated as of March
           27, 1996 between the Company and Neil S. Novich. (Filed
           as Exhibit 10.6 to the Ryerson Tull, Inc. Form S-1 Reg-
           istration Statement No. 333-3235, and incorporated by
           reference herein.)
 10.U.*    Copy of Employment Agreement dated as of April 8, 1994
           between the Company and Neil S. Novich. (Filed as Ex-
           hibit 10.N.(8) to the Company's Annual Report on Form
           10-K for the fiscal year ended December 31, 1994, and
           incorporated by reference herein.)
 10.V.*    Copy of Assumption and Amendment Agreement dated July
           24, 1996 by and among Inland Steel Industries, Inc.,
           Ryerson Tull, Inc. and Neil S. Novich. (Filed as Ex-
           hibit 10.A to the Company's Quarterly Report on Form
           10-Q for the quarter ended September 30, 1996, and in-
           corporated by reference herein.)
 10.W(1)*  Copy of Employment Agreement between the Company and
           Carl G. Lusted, dated June 27, 1990 (Filed as Exhibit
           10.4 to Ryerson Tull's Registration Statement on Form
           S-1 (File No. 333-3235), and incorporated by reference
           herein.)
 10.W(2)*  Copy of Assumption and Amendment Agreement dated Janu-
           ary 22, 1997 by and among the Company, Ryerson Tull,
           Inc. and Carl G. Lusted. (Filed as Exhibit 10.6 to the
           Ryerson Tull, Inc. Annual Report on Form 10-K for the
           fiscal year ended December 31, 1996, and incorporated
           by reference herein.)
 10.X*     Copy of Employment Agreement dated as of August 18,
           1995 between the Company and George A. Ranney, Jr. ....
 10.Y      Copy of Stock Purchase Agreement, dated as of July 7,
           1989, between the Company and Harris Trust and Savings
           Bank, as ESOP Trustee. (Filed as Exhibit 4-G to the
           Company's Quarterly Report on Form 10-Q for the quarter
           ended June 30, 1989, and incorporated by reference
           herein.)
</TABLE>


--------
*  Management contract or compensatory plan or arrangement required to be filed
   as an exhibit to the Company's Annual Report on Form 10-K.

                                       iv
<PAGE>

<TABLE>
<CAPTION>
                                                                     SEQUENTIAL
  EXHIBIT                                                               PAGE
  NUMBER                     DOCUMENT DESCRIPTION                      NUMBER
  -------                    --------------------                    ----------
 <C>       <S>                                                       <C>
 10.Z.(1)  Copy of Letter Agreement dated December 18, 1989 among
           the Company, Nippon Steel Corporation and NS Finance
           III, Inc. (an indirectly wholly owned subsidiary of
           Nippon Steel Corporation) relating to sale to NS Fi-
           nance III, Inc. of 185,000 shares of Series F Exchange-
           able 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.)
 10.Z.(2)  Copy of Basic Agreement dated as of July 21, 1987 be-
           tween the Company and Nippon Steel Corporation relating
           to the I/N Tek joint venture. (Filed as Exhibit 10-S-
           (3) to the Company's Annual Report on Form 10-K for the
           fiscal year ended December 31, 1989, and incorporated
           by reference herein.)
 10.Z.(3)  Copy of Partnership Agreement dated as of July 21, 1987
           between ISC Tek, Inc. (an indirectly wholly owned sub-
           sidiary of the Company) and NS Tek, Inc. (an indirectly
           wholly owned subsidiary of Nippon Steel Corporation)
           relating to the I/N Tek joint venture. (Filed as Ex-
           hibit 10-S-(4) to the Company's Annual Report on Form
           10-K for the fiscal year ended December 31, 1989, and
           incorporated by reference herein.)
 10.Z.(4)  Copy of Basic Agreement dated as of September 12, 1989
           between the Company and Nippon Steel Corporation relat-
           ing to the I/N Kote joint venture. (Filed as Exhibit
           10-S-(5) to the Company's Annual Report on Form 10-K
           for the fiscal year ended December 31, 1989, and incor-
           porated by reference herein.)
 10.Z.(5)  Copy of Partnership Agreement dated as of September 12,
           1989 between ISC Kote, Inc. (an indirectly wholly owned
           subsidiary of the Company) and NS Tek, Inc. (an indi-
           rectly wholly owned subsidiary of Nippon Steel Corpora-
           tion) relating to the I/N Kote joint venture. (Filed as
           Exhibit 10-S-(6) to the Company's Annual Report on Form
           10-K for the fiscal year ended December 31, 1989, and
           incorporated by reference herein.)
 10.Z.(6)  Copy of Substrate Supply Agreement dated as of Septem-
           ber 12, 1989 between Inland Steel Company and I/N Kote,
           an Indiana general partnership. (Filed as Exhibit 10-S-
           (7) to the Company's Annual Report on Form 10-K for the
           fiscal year ended December 31, 1989, and incorporated
           by reference herein.)
 10.Z.(7)  Copy of First Amendment to Substrate Supply Agreement
           dated as of May 1, 1990 between Inland Steel Company
           and I/N Kote relating to the I/N Kote joint venture.
           (Filed as Exhibit 10-R-(8) to the Company's Annual Re-
           port on Form 10-K for the fiscal year ended December
           31, 1990, and incorporated by reference herein.)
 10.Z.(8)  Copy of Letter Agreement dated as of May 1, 1990 among
           I/N Kote, the Company and Nippon Steel Corporation re-
           lating to partner loans. (Filed as Exhibit 10-R-(9) to
           the Company's Annual Report on Form 10-K for the fiscal
           year ended December 31, 1990, and incorporated by ref-
           erence herein.)
 10.Z.(9)  Copy of First Amendment to I/N Kote Basic Agreement
           dated as of May 1, 1990 between the Company and Nippon
           Steel Corporation relating to the I/N Kote joint ven-
           ture. (Filed as Exhibit 10-R-(10) to the Company's An-
           nual Report on Form 10-K for the fiscal year ended De-
           cember 31, 1990, and incorporated by reference herein.)
 10.Z.(10) Copy of Letter Agreement dated as of April 19, 1990 be-
           tween the Company and Nippon Steel Corporation relating
           to capital contributions to I/N Tek. (Filed as Exhibit
           10-R-(11) to the Company's Annual Report on Form 10-K
           for the fiscal year ended December 31, 1990, and incor-
           porated by reference herein.)
</TABLE>


                                       v
<PAGE>

<TABLE>
<CAPTION>
                                                                     SEQUENTIAL
  EXHIBIT                                                               PAGE
  NUMBER                     DOCUMENT DESCRIPTION                      NUMBER
  -------                    --------------------                    ----------
 <C>       <S>                                                       <C>
 10.Z.(11) Copy of Letter Agreement dated April 20, 1990 between
           ISC Tek, Inc. (an indirectly wholly owned subsidiary of
           the Company) and NS Tek, Inc. (an indirectly wholly
           owned subsidiary of Nippon Steel Corporation) relating
           to amendment of the partnership agreement of I/N Tek.
           (Filed as Exhibit 10-R-(12) to the Company's Annual Re-
           port on Form 10-K for the fiscal year ended December
           31, 1990, and incorporated by reference herein.)
 10.Z.(12) Copy of CCM Override Amendment dated as of April 20,
           1990 among the Company; Nippon Steel Corporation; In-
           land Steel Company; ISC Tek, Inc.; I/N Tek; NS Sales,
           Inc.; and NS Tek, Inc. relating to I/N Tek. (Filed as
           Exhibit 10-R-(13) to the Company's Annual Report on
           Form 10-K for the fiscal year ended December 31, 1990,
           and incorporated by reference herein.)
 10.AA     Copy of Inland Steel Industries Thrift Plan ESOP Trust,
           dated July 7, 1989, between the Company and Harris
           Trust and Savings Bank, as ESOP Trustee. (Filed as Ex-
           hibit 10-P to the Company's Quarterly Report on Form
           10-Q for the quarter ended June 30, 1989, and incorpo-
           rated by reference herein.)
 10.BB     Copy of First Amendment dated July 1, 1996 between the
           Company and LaSalle National Trust, N.A. as Successor
           ESOP Trustee, to the Inland Steel Industries Thrift
           Plan ESOP Trust, dated July 7, 1989, between the Com-
           pany and Harris Trust and Savings Bank, as ESOP Trust-
           ee. (Filed as Exhibit 10.BB to the Company's Annual Re-
           port on Form 10-K for the fiscal year ended December
           31, 1996, and incorporated by reference herein.)
 10.CC     Letter Agreement dated March 1, 1991 between Nippon
           Steel Corporation and the Company regarding Series F
           Exchangeable Preferred Stock. (Filed as Exhibit 10-U to
           the Company's Annual Report on Form 10-K for the fiscal
           year ended December 31, 1990, and incorporated by ref-
           erence herein.)
 10.DD     Letter Agreement dated May 10, 1991 by and between
           Nippon Steel Corporation and the Company relating to
           Letter Agreement dated December 18, 1989. (Filed as Ex-
           hibit 10-V to the Company's Quarterly Report on Form
           10-Q for the quarter ended March 31, 1991, and incorpo-
           rated by reference herein.)
 21        List of certain subsidiaries of the Company............
 23        Consent of Independent Accountants, appearing on page
           23 of this Annual Report on Form 10-K.
 24        Powers of attorney.....................................
 27        Financial Data Schedule.
 99        Financial Information to be included in the Annual Re-
           port to Shareholders for 1997..........................
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