<PAGE>   1
 
                                                                            1995
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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, 1995 OR
 
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
    EXCHANGE ACT OF 1934
 
FOR THE TRANSITION PERIOD FROM ________________ TO _______________
 
COMMISSION FILE NUMBER 1-9117
 
                         INLAND STEEL INDUSTRIES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                                  <C>
                    DELAWARE                                            36-3425828
            (STATE OF INCORPORATION)                       (I.R.S. EMPLOYER IDENTIFICATION NO.)
    30 WEST MONROE STREET, CHICAGO, ILLINOIS                              60603
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                            (ZIP CODE)
</TABLE>
 
       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (312) 346-0300
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
 
<TABLE>
<CAPTION>
                                                                  NAME OF EACH EXCHANGE
            TITLE OF EACH CLASS                                    ON WHICH REGISTERED
--------------------------------------------               ------------------------------------
<S>                                                        <C>
     COMMON STOCK ($1.00 PAR VALUE),
       INCLUDING                                           NEW YORK STOCK EXCHANGE, INC.
       PREFERRED STOCK PURCHASE RIGHTS

     SERIES A $2.40 CUMULATIVE CONVERTIBLE                 CHICAGO STOCK EXCHANGE, INCORPORATED
       PREFERRED STOCK ($1.00 PAR VALUE)
</TABLE>
 
          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. / /
 
     AS OF MARCH 12, 1996 THE AGGREGATE MARKET VALUE OF THE VOTING STOCK OF THE
REGISTRANT HELD BY NON-AFFILIATES OF THE REGISTRANT WAS $1,236,438,207.(1)
 
     THE NUMBER OF SHARES OF COMMON STOCK ($1.00 PAR VALUE) OF THE REGISTRANT
OUTSTANDING AS OF MARCH 12, 1996 WAS 48,778,146.
 
     (1)EXCLUDING STOCK HELD BY DIRECTORS AND 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 FROM THE ANNUAL REPORT TO STOCKHOLDERS FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1995. 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 22, 1996.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>   2
 
                                     PART I
 
ITEM 1. BUSINESS.
 
     Inland Steel Industries, Inc. (the "Company"), a Delaware corporation, is
the sole stockholder of Inland Steel Company and Inland Materials Distribution
Group, Inc. ("Distribution"). Inland Steel Company is a fully 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. Distribution 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, 1995, information relating to net sales,
operating profit, identifiable assets, depreciation and capital expenditures for
both business segments of the Company appears in Note 16 of Notes to
Consolidated Financial Statements in the Company's Annual Report to Stockholders
for the fiscal year ended December 31, 1995. Such information is hereby
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 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 and 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. The Bar division closed its 28-inch structural mill in
early 1991, completing Inland Steel Company's withdrawal from the structural
steel manufacturing business.
 
     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 that achieved operation at its design capacity in
1992. 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
that achieved operation at their design capacity in 1993. Inland Steel Company
is also a participant, through a subsidiary, in another galvanizing joint
venture located near Walbridge, Ohio.
 
                                        1
<PAGE>   3
 
  Raw Steel Production and Mill Shipments
 
     The following table shows, for the five years indicated, Inland Steel
Company's production of raw steel and, based upon American Iron and Steel
Institute data, its share of total domestic raw steel production:
 
<TABLE>
<CAPTION>
                                                                      RAW STEEL PRODUCTION
                                                                ---------------------------------
                                                                                  INLAND STEEL
                                                                INLAND STEEL    COMPANY AS A % OF
                                                                  COMPANY           U.S STEEL
                                                                (000 TONS*)         INDUSTRY
                                                                ------------    -----------------
    <S>                                                         <C>                <C>   
    1995.....................................................       5,419               5.3 %**
    1994.....................................................       5,309               5.3
    1993.....................................................       5,003               5.2
    1992.....................................................       4,740               5.2
    1991.....................................................       4,677               5.3
</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 was reduced to
6.0 million net tons from 6.5 million net tons effective September 1, 1991, as
Inland Steel Company ceased making ingots. The basic oxygen process accounted
for 91% and 94% of raw steel production of Inland Steel Company in 1995 and
1994, respectively. 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 1991 through 1995 was 5.1 million tons in 1995; 5.2
million tons in 1994; 4.8 million tons in 1993; 4.3 million tons in 1992; and
4.2 million tons in 1991. In 1995, sheet, strip, plate and certain related
semi-finished products accounted for 84% of the total tonnage of steel mill
products shipped from the Indiana Harbor Works, and bar and certain related
semi-finished products accounted for 16%.
 
     In 1995 and 1994, approximately 93% and 95% respectively of the shipments
of the Flat Products division and 93% in both years 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 84% of the shipments of the Bar
division in 1995 were to customers in a five-state area comprised of Illinois,
Indiana, Ohio, Michigan and Wisconsin, compared to 77% and 84% in 1994. 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 21.4% of the domestic market in 1995, below the 1984
peak of 26.4%, and 24.7% in 1994. 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 certain product lines,
primarily structural shapes, bars and rods. 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, including coated products. 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. The 28-inch structural
mill was closed in early 1991, reflecting a decision to withdraw from the
structural steel markets. In late 1991 the mold foundry, No. 8 Coke Oven
Battery, and selected other facilities were closed either as part of a program
to permanently reduce costs through the closure of uneconomic facilities or for
environmental reasons. Provisions with respect to the shutdown of the
 
                                        2
<PAGE>   4
 
structural mill were taken in 1987. Provisions for estimated costs incurred in
connection with the closure of the mold foundry, No. 8 Coke Oven Battery, and
selected other facilities were made in 1991. Included in such provisions were
costs associated with Inland Steel Company's closure of its No. 11 Coke Oven
Battery in June 1992. All remaining coke batteries were closed by year-end 1993,
a year earlier than previously 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 five 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 the 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. The Bar
division shipped more than 54% of its products to the steel
converters/processors market over the five-year period shown in the table.
 
<TABLE>
<CAPTION>
                                                                PERCENTAGE OF TOTAL TONNAGE
                                                                     OF STEEL SHIPMENTS
                                                          ----------------------------------------
                                                          1995     1994     1993     1992     1991
                                                          ----     ----     ----     ----     ----
    <S>                                                   <C>      <C>      <C>      <C>      <C>
    Steel Service Centers:
      Affiliates.......................................     9%       9%       9%       7%       8%
      Non-Affiliates...................................    23       20       22       22       24
                                                          ---      ---      ---      ---      ---
                                                           32       29       31       29       32
    Automotive.........................................    30       32       30       28       25
    Steel Converters/Processors........................    14       12       13       18       12
    Appliance..........................................     8        9        9        9        8
    Industrial, Electrical and Farm Machinery..........     7        8        7        8        9
    Construction and Contractors' Products.............     2        2        3        3        4
    Other..............................................     7        8        7        5       10
                                                          ---      ---      ---      ---      ---
                                                          100%     100%     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 1995, approximately 32% of the products produced by Inland Steel
Company were processed further through value-added services such as
electrogalvanizing, painting and slitting, excluding products processed further
by affiliates.
 
     Approximately 78% of the total tonnage of shipments by Inland Steel Company
during 1995 from the Indiana Harbor Works 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
15% of the total tonnage of products transported by truck from the Indiana
Harbor Works in 1995.
 
     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; 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 three iron ore
properties, located in the United States and Canada, in which subsidiaries of
Inland Steel Company have varying interests -- the Empire Mine in Michigan, the
Minorca Mine in Minnesota and the Wabush Mine in Labrador and Quebec, Canada.
Inland Steel Company has closed or terminated certain less cost-efficient iron
ore mining operations.
 
                                        3
<PAGE>   5
 
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.
 
     The following table shows (1) the iron ore pellets available to Inland
Steel Company, as of December 31, 1995, from properties of its subsidiaries and
through interests in raw materials ventures; (2) 1995 and 1994 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 1995 and 1994.
 
<TABLE>
<CAPTION>
                                                              IRON ORE
                                                        TONNAGES IN THOUSANDS
                                                       (GROSS TONS OF PELLETS)
                                                  ---------------------------------        % OF
                                                  AVAILABLE AS OF      PRODUCTION      REQUIREMENTS(1)
                                                   DECEMBER 31,      --------------    -------------
                                                      1995(2)        1995     1994     1995     1994
                                                  ---------------    -----    -----    ----     ----
        <S>                                       <C>                <C>      <C>      <C>      <C>
        INLAND STEEL MINING COMPANY PROPERTY
          Minorca -- Virginia, MN..............        62,000        2,769    2,717     38%      39%
        IRON ORE VENTURES AND LONG-TERM
          PURCHASE CONTRACTS
          Empire (40% owned) -- Palmer, MI;
          Wabush (15.09% owned) -- Wabush,
             Labrador and Pointe Noire, Quebec,
             Canada............................       124,000        3,961    3,625     55       52
                                                      -------        -----    -----     --       --
             Total Iron Ore....................       186,000        6,730    6,342     93%      91%
                                                      =======        =====    =====     ==       ==
</TABLE>
 
---------------
(1) Requirements in excess of production are purchased or taken from stockpile.
 
(2) Net interest in proven reserves.
 
     All of Inland Steel Company's coal requirements are satisfied from
independent sources, with a portion of such requirements being met under a
significant purchase contract. The contract requires Inland Steel Company to
purchase (subject to force majeure provisions) a total of 1,270,000 tons of
metallurgical and/or steam coal at prices (intended to approximate market)
determined with respect to certain cost factors. The term of the contract has
been extended through April 1996, with the extension covering solely steam coal
due to the shutdown of Inland Steel Company's coke batteries in December 1993.
During 1995, Inland Steel Company purchased 25% of its coal requirements under
such contract, representing 66% of its steam coal requirements. It is
anticipated that steam coal purchases will be made under short-term contracts
and through spot-market purchases.
 
     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. Inland Steel Company had entered into a contract
(subject to force majeure provisions) to purchase 95% of the PCI facility's
requirements for injection-quality coal through the term of the contract (which
expired at the end of 1995). Early in 1994, Inland Steel Company suspended its
purchases under the contract's force majeure provisions and coal was not
purchased under this contract during 1995. As a result, the PCI facility's coal
requirements are satisfied under short-term purchase contracts.
 
     In December 1993, the last of Inland Steel Company's coke-making facilities
was permanently shut down. Inland Steel Company has entered into two long-term
purchase contracts, one of which requires the purchase of 1,400,000 tons of coke
and extends through July 1999 subject to force majeure provisions and may be
extended by mutual agreement of the parties. The second contract requires the
purchase of 350,000 tons of coke for the period January 1, 1996 through December
31, 2000 on a take or pay basis, with a provision allowing Inland 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 1995,
Inland Steel Company satisfied 70% of its total coke needs under such
arrangements. The remainder of its purchased coke requirements was obtained
through contracts with independent domestic and foreign sources.
 
                                        4
<PAGE>   6
 
     Inland Steel Company sold all of its limestone and dolomite properties in
September 1990. Inland Steel Company has 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 its annual limestone needs
through 2002, with a required minimum annual purchase of one million gross tons
through 1996.
 
     Approximately 80% of the iron ore pellets and all of the limestone received
by Inland Steel Company at its Indiana Harbor Works in 1995 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 1995. The remainder of Inland Steel Company's coal
requirements was transported in independent carrier-owned equipment or leased
equipment. Approximately 23% of Inland Steel Company's coke requirements in 1995
were transported in its own hopper cars, 47% in leased hopper cars, 17% in
independent carrier-owned hopper cars, and 13% 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.
 
Materials Distribution Operations
 
     The Company's materials distribution operations in the United States are
conducted by its wholly owned materials distribution subsidiary, Inland
Materials Distribution Group, Inc., through its operating subsidiaries -- Joseph
T. Ryerson & Son, Inc. and J. M. Tull Metals Company, Inc. Ryerson, Tull and
Ryerson Coil Processing, a specialized processing unit, are organized into five
business units along regional and product lines. Ryerson, on a nationwide basis,
and Tull, in the southeastern and south-central United States, each compete with
a large number of steel service centers, some of which are affiliated with
foreign steelmakers. Competition is primarily on the basis of service, quality
and price. The ability to meet just-in-time delivery requirements of customers
depends on maintaining adequate inventories and processing capacity and highly
trained personnel.
 
     Depending on location, the Company's materials distribution operations are
engaged in the sale of carbon, alloy and stainless steel; aluminum and aluminum
alloys; nickel and nickel alloys; copper; brass; specialty metals; and
industrial plastics. The materials distribution centers sell products in various
forms, including, again depending on location, plate, sheet, coil, wire, rod,
bar, tubing, pipe, structural, and expanded metal and grating. During 1995, the
Materials Distribution segment shipped approximately 38% of its product (by
sales revenue) to machinery manufacturers, 25% to metal producers and
fabricators, 10% to transportation equipment producers, 9% to electrical
machinery producers, 3% to wholesale distributors, 3% to construction-related
purchasers, 3% to metal mills and foundries, and 9% to other customers.
Approximately 17% of the tons of product purchased in 1995 by the Materials
Distribution segment were from affiliates.
 
  Joseph T. Ryerson & Son, Inc.
 
     Ryerson, with business unit headquarters in Philadelphia, Chicago, and
Seattle is a leading materials distribution organization. With full-line service
centers in 30 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
Processing Company division, headquartered in Chicago, 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., operate
19 service centers and two processing facilities located throughout the
southeastern and south-central United States. Tull produces a variety of metal
products with
 
                                        5
<PAGE>   7
 
value-added processing, including welded steel tubing and roll-formed shapes.
Tull's products are sold principally through its own sales staff.
 
PRODUCT CLASSES
 
     The following table sets forth the percentage of consolidated net sales,
for the five years indicated, contributed by each class of similar products in
the Steel Manufacturing segment that accounted for 10% or more of consolidated
net sales in such time period. The Materials Distribution segment of the Company
did not have any class of similar products that accounted for 10% or more of
such sales in any of such years.
 
<TABLE>
<CAPTION>
                                                     1995      1994      1993      1992      1991
                                                     ----      ----      ----      ----      ----
    <S>                                              <C>       <C>       <C>       <C>       <C>
    Steel Manufacturing Operations
      Sheet, Strip and Plate......................    40%       43%       45%       45%       45%
      Bar and Structural..........................     9         8         7         6         6
                                                     ---       ---       ---       ---       ---
    Total Steel Manufacturing Operations..........    49        51        52        51        51
    Materials Distribution Products...............    51        49        48        49        49
                                                     ---       ---       ---       ---       ---
                                                     100%      100%      100%      100%      100%
                                                     ===       ===       ===       ===       ===
</TABLE>
 
CAPITAL EXPENDITURES AND INVESTMENTS IN JOINT VENTURES
 
     In recent years, the 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 the Company
and its subsidiaries to property, plant and equipment, together with retirements
and adjustments, for the five years ended December 31, 1995, are set forth
below. Net capital additions during such period aggregated $267.6 million.
 
<TABLE>
<CAPTION>
                                                               DOLLARS IN MILLIONS
                                           ------------------------------------------------------------
                                                          RETIREMENTS                       NET CAPITAL
                                           ADDITIONS       OR SALES        ADJUSTMENTS       ADDITIONS
                                           ---------      -----------      -----------      -----------
    <S>                                    <C>            <C>              <C>              <C>
    1995................................    $ 134.6         $  41.3           $ 1.5           $  94.8
    1994................................      245.3            61.9             2.1             185.5
    1993................................      105.6           143.4            (1.3)            (39.1)
    1992................................       64.4            74.9            (7.4)            (17.9)
    1991................................      140.2            95.3             (.6)             44.3
</TABLE>
 
     In recent years, the 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. In 1995, the Company and its
subsidiaries made capital expenditures of $135 million. Approximately $114
million was spent for Steel Manufacturing capital projects in 1995, including
replacements and renewals. Capital expenditures of $245 million in 1994 included
$146 million related to the purchase of the No. 2 Basic Oxygen Furnace Shop
caster facility which had previously been leased, including $83 million for the
purchase of the equity interest plus assumption of $63 million of caster-related
debt.
 
     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 one-third is cold-rolled
substrate for I/N Kote (described below). The I/N Tek facility, located near New
Carlisle, Indiana, achieved operation at its design capacity in 1992. 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%
 
                                        6
<PAGE>   8
 
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. The facility achieved operation at its design capacity in 1993. 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 in connection with the Annual Meeting
scheduled to be held on May 22, 1996, and is incorporated by reference into Item
13 of this Report.
 
     The amount budgeted for 1996 capital expenditures by the Company and its
subsidiaries is approximately $200 million. It is anticipated that capital
expenditures will be funded from cash generated by operations, cash on hand at
year-end 1995, plus possible funding from third-party financing. (See
"Environment" below for a discussion of capital expenditures for pollution
control purposes.)
 
EMPLOYEES
 
     The monthly average number of active employees of the Company and its
subsidiaries receiving pay during 1995 was approximately 15,400, of whom
approximately 10,200 were employed at Inland Steel Company. The majority of the
remaining employees were employed at the Company's materials distribution
operations. At year-end, approximately 7,900 of the Company's employees,
including 7,400 at Inland Steel Company, were represented by the United
Steelworkers of America, of whom approximately 600 at Inland Steel Company were
on furlough or indefinite layoff. Approximately 1,100 employees were represented
by other unions during 1995. Total employment costs decreased from $950 million
in 1994 to $941 million in 1995, as lower costs for pensions and other
postretirement benefits were almost entirely offset by higher direct
compensation expense, including profit sharing provisions.
 
     Beginning in 1991, the 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 both the Company and
Inland Steel Company. With the closure of the plate operations at year-end 1995,
the Company has 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 receive
an additional week of vacation in 1994 and in 1996. The agreement provides for a
reopener on wages and certain benefits in 1996 with an arbitration provision to
resolve unsettled issues, thereby precluding a work stoppage during the six-year
term of the contract. The agreement also provides for election of a Union
designee acceptable to the Company 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.
 
     As of December 31, 1995, the number of active employees at Ryerson was
approximately 4,000, of whom approximately 1,100 were covered by collective
bargaining agreements. Of those employees covered by collective bargaining
agreements, approximately 500 production, maintenance, and transportation
employees were represented by the United Steelworkers of America and
approximately 300 such employees were represented by the International
Brotherhood of Teamsters. The current agreement with the United Steelworkers
will expire on July 31, 1996. During 1995, Ryerson reached agreement at three
separate plants (Los Angeles, Spokane and Seattle) represented by various unions
covering 86 employees. These agreements
 
                                        7
<PAGE>   9
 
expire on various dates from April 30, 1997 through April 30, 1999. The
agreements, as well as the current agreement with the United Steelworkers of
America, provide for modest wage increases, lump sum bonuses, pension
improvements, and increased employee sharing of health care costs. Ryerson
maintains agreements with the Teamsters covering 10 facilities. Teamster
agreements expire on various dates during the period beginning June 30, 1996,
and ending May 15, 1999. In addition, Ryerson contracts with independent third
parties to provide approximately 170 drivers on a leased basis to ten Ryerson
facilities. These leased drivers are covered by agreements between the Teamsters
and such independent third parties, which agreements expire on March 31, 1998.
 
FOREIGN OPERATIONS
 
     In 1994, the Company formed Inland International, Inc. to conduct the
Company's international operations, consisting of supporting its domestic
strategic customers' foreign operations, providing materials management and
technical services, selling products of the Company and its affiliates and
purchasing certain of their requirements, in each instance, outside of the
United States. In 1994, Inland International, Inc. organized Inland
International Trading, Inc. to sell products and services of the Company and its
affiliates and to purchase materials abroad. In order to implement such
purposes, in 1995 Inland International Trading, Inc. entered into a joint
venture to organize I.M.F. Steel International Limited, a Hong Kong company (in
which it holds a 50% interest), with the Hong Kong-based trading company
subsidiary of the MacSteel Group (South Africa) and Russel Metals, Inc.
(Canada). In 1994, an Inland International, Inc. subsidiary and Altos Hornos de
Mexico, S.A. de C.V., formed Ryerson de Mexico, S.A. de C.V. to provide
materials management and technical services to the Mexican market through 19
distribution locations in Mexico. In the People's Republic of China, the Company
has entered into a joint venture agreement with Baoshan Iron & Steel
Corporation, which is subject to certain government approvals. Other foreign
joint ventures are in the negotiation or planning stage. Substantially all of
the Company's operations are located in the United States and at year-end 1995,
investments in foreign operations and foreign sales were not material.
 
ENVIRONMENT
 
     The 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.
 
     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. After payment of the fine,
the Company's reserve for environmental liabilities totalled $19 million. In
1995 such reserve was increased to $26 million primarily to cover the costs of
assessing environmental contamination, discussed below. 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, evaluation of
corrective measures for remediating the site, and implementation of the
remediation plan according to the
 
                                        8
<PAGE>   10
 
agreed-upon procedures. The Company is presently assessing the extent of
environmental contamination. The Company anticipates that this assessment will
cost approximately $1 million to $2 million per year and take another two to
four years to complete. 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, the 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 the Company.
Insurance coverage with respect to such corrective actions is not significant.
 
     By year-end 1993, the last of Inland Steel Company's coke-making facilities
was permanently shut down. All coke battery closures were necessitated by the
inability of the facilities to meet environmental regulations and their
deteriorating condition and performance. The Company had anticipated the closure
of such remaining coke-making facilities at year-end 1994. The October 1993
decision to close these facilities early necessitated a fourth-quarter 1993
pre-tax charge of $22.3 million that included the write-off of property, plant
and equipment costs which were to be depreciated in 1994 and additional costs
related to the earlier-than-anticipated displacement of personnel. Inland Steel
Company has entered into two long-term contracts to satisfy the majority of its
coke needs. (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%. The facility achieved
operation at its design capacity in 1994.
 
     Capital spending for pollution control projects totaled $19 million in
1995, up from $18 million in 1994. Another $39 million was spent in 1995 to
operate and maintain such equipment, versus $41 million a year earlier. During
the five years ended December 31, 1995, the Company has spent $274 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 $23 million in 1996. It is anticipated that the Company will make
annual capital expenditures of $10 million to $15 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, the 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.
 
     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 71% of the energy consumed by Inland Steel
Company at the Indiana Harbor Works in 1995. See "Environment" above for a
discussion of coke-making by Inland Steel Company.
 
     Natural gas and fuel oil supplied approximately 26% of the energy
requirements of the Indiana Harbor Works in 1995 and are used extensively by the
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.
 
     The Company both purchases and, through Inland Steel Company, generates
electricity to satisfy electrical energy requirements at the Indiana Harbor
Works. In 1995, Inland Steel Company produced approximately 58% of its
requirements at the Indiana Harbor Works. The purchase of electricity at the
 
                                        9
<PAGE>   11
 
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 Industries, Inc. ("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 is expected to generate electricity for
use by Inland Steel Company utilizing steam produced by burning waste blast
furnace gas. It is anticipated that the facility will become operational in the
first half of 1996 and that it will fulfill approximately 75% of the purchased
electricity requirements of the Indiana Harbor Works at prices below those
currently available to Inland Steel Company.
 
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 and assumed caster-related debt in March 1994, which debt was repaid by
year-end 1994. Substantially all of the remaining property, plant and equipment
at the Indiana Harbor Works, other than such caster facility and the leased
equipment, is subject to the lien of the First Mortgage of Inland Steel Company
dated April 1, 1928, as amended and supplemented. See "Business Segments --
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.
 
     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 facility is adequate to serve the present
and anticipated needs of Inland Steel Company planned for such facility.
 
     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 "Business Segments -- Steel
Manufacturing Operations -- Raw Materials" in Item 1 above for further
information relating to utilization of
 
                                       10
<PAGE>   12
 
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 "Business
Segments -- 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
Wabush Mine...............................   Wabush, Labrador and              5,700
                                             Pointe Noire, Quebec,
                                             Canada
</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. The Wabush Mine
is a taconite project in which Inland Steel Company owns an approximately 15%
interest. Inland Steel Company also owns a 38% interest in the Butler Taconite
project (permanently closed in 1985) in Nashwauk, Minnesota.
 
     The reserves at the Empire Mine, the Minorca Mine and the Wabush 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. During 1992, the Minorca Mine's original ore body was
depleted and production shifted to a new major iron ore body, the Laurentian
Reserve, acquired by lease in 1990.
 
  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.
 
PROPERTIES OF MATERIALS DISTRIBUTION SEGMENT
 
Joseph T. Ryerson & Son, Inc.
 
     Ryerson owns its regional business unit headquarters offices in Chicago and
leases regional headquarters offices in West Chester (PA) and Renton (WA).
Ryerson/East division maintains materials distribution centers at Buffalo,
Carnegie (PA), Charlotte, Chattanooga, Cleveland, Philadelphia, and Wallingford
(CT).
 
                                       11
<PAGE>   13
 
Ryerson/Central's service centers are in Chicago, Cincinnati, Dallas, Des
Moines, Detroit, Houston, Indianapolis, Kansas City, Milwaukee, Omaha, Plymouth
(MN), St. Louis, and Tulsa. Ryerson/West's service centers are in Commerce City
(CO), Emeryville (CA), Los Angeles, Phoenix, Portland (OR), Renton (WA),
Spokane, and Salt Lake City. Ryerson Coil Processing division's processing
facilities are located in Chicago, Marshalltown (IA), Plymouth (MN) and New Hope
(MN).
 
     All of Ryerson's operating facilities are held in fee with the exception of
a portion of the property at St. Louis (held under long-term lease), a portion
of the property in Portland (held under short-term lease), a satellite facility
at Omaha (held under short-term lease), one facility in Chicago (held under
short-term lease), two facilities in New Hope (MN) (one partly held in fee and
partly under short-term lease, the other held under short-term lease), one
facility in Marshalltown (IA) (held under an installment purchase contract) and
one facility in Salt Lake City (held under short-term lease). In addition,
Ryerson holds in fee approximately 44 acres of unimproved property in Powder
Springs (GA), and the approximately 11-acre site of a former operating facility
in Allston (MA). Ryerson's properties are adequate to serve its present and
anticipated needs.
 
J. M. Tull Metals Company, Inc.
 
     Tull maintains service centers in Birmingham, Columbia (SC), Jacksonville,
Miami, Tampa, Baton Rouge, New Orleans, Charlotte, Greensboro (NC), Greenville
(SC), Richmond, 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. Tull's AFCO Metals, Inc. subsidiary
operates service centers in Fort Smith (AR), Oklahoma City, Shreveport, West
Memphis (AR), Wichita, Jackson (MS) and Little Rock. AFCO's headquarters are
located in 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.
 
OTHER PROPERTIES
 
     The Company and certain of its subsidiaries lease, under a long-term
arrangement, approximately 63% 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 33% of such space is
under sublease to other parties.
 
     Magnetics International, Inc., a subsidiary of the Company, owns
approximately 63 acres in northern Indiana, on which site it has constructed an
iron oxide plant that began operation in April 1991. Such facility is adequate
to serve the present and anticipated needs of Magnetics International, Inc.
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 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. I R Construction Products Company, Inc. (formerly Inryco,
Inc.), a subsidiary of Inland Steel Company and the Company's former
Construction Products business segment, owns, in fee, a combination office
building and warehouse in Hoffman Estates (IL), which is 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 the lawsuit
filed by the EPA in 1990. The consent decree includes 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. After payment of the fine,
the Company's reserve for environmental liabilities totalled $19 million. In
1995 such reserve was increased to $26 million primarily to cover the costs of
assessing environmental contamination discussed below. The consent decree
 
                                       12
<PAGE>   14
 
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, evaluation of
corrective measures for remediating the site, and implementation of the
remediation plan according to the agreed-upon procedures. The Company is
presently assessing the extent of environmental contamination. The Company
anticipates that this assessment will cost approximately $1 million to $2
million per year and take another two to four years to complete. 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, the 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 the 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.
 
     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 circumstances. It
is not possible to predict whether further proceedings will be instituted
against the 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 Notice of Violation from the Indiana
Department of Environmental Management ("IDEM") dated March 3, 1989 alleging
violations of Inland Steel Company's National Pollutant Discharge Elimination
System ("NPDES") permit regarding water discharges. IDEM advised Inland Steel
Company by letter dated November 22, 1995 that this Notice of Violation was
withdrawn inasmuch as the consent decree discussed in the first paragraph of
this section adequately addressed all of the violations noted in said Notice of
Violation.
 
     By letter dated March 12, 1996, Inland Steel Company was informed that, at
the request of the EPA, the Department of Justice is preparing to bring civil
claims against Inland Steel Company for alleged violations of effluent limits
contained in its NPDES permit and for the alleged discharge of pollutants
without the authorization of an NPDES permit. While it is not possible at this
time to predict the amount of Inland Steel Company's potential liability, this
matter is not 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.
 
     Inland Steel Company received a Special Notice of Potential Liability
("Special Notice") from 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
 
                                       13
<PAGE>   15
 
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. Those
costs which Inland Steel Company has agreed to assume under the Agreed Order are
not currently anticipated to exceed $250,000. 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.
 
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 Earl L. Mason, Maurice
S. Nelson, Jr., 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.
 
                                       14
<PAGE>   16
 
     Set forth below are the executive officers of the Company as of March 1,
1996 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.
 
<TABLE>
<CAPTION>
           NAME, AGE AND                             POSITIONS AND OFFICES HELD
 PRESENT POSITION WITH REGISTRANT                    DURING THE PAST FIVE YEARS
-----------------------------------   --------------------------------------------------------
<S>                                   <C>
Robert J. Darnall, 57..............   Mr. Darnall has been Chairman, President and Chief
  Chairman, President, Chief          Executive Officer of the Company since September 1,
  Executive Officer and Director      1992. A Director of the Company since April 23, 1986, he
                                      became Chairman of the Executive Committee on January 1,
                                      1993. He has been Chairman of Inland Materials
                                      Distribution Group, Inc. and Chairman and Chief
                                      Executive Officer of Joseph T. Ryerson & Son, Inc. since
                                      April 1995. He has also been Chairman of Inland Steel
                                      Company since September 1992 and a Director of Inland
                                      Steel Company since April 1983. He was President and
                                      Chief Operating Officer of the Company from April 1986
                                      to September 1992. Mr. Darnall was also Chief Executive
                                      Officer of Inland Steel Company from September 1992 to
                                      January 1995, and was also its President from November
                                      1987 to September 1992, and was Chairman of Inland
                                      Materials Distribution Group, Inc. from November 1990 to
                                      June 1994.
Maurice S. Nelson, Jr., 58.........   Mr. Nelson has been Executive Vice President and
  Executive Vice President and        Director of the Company and President and Chief
  Director                            Executive Officer of Inland Steel Company since January
                                      25, 1995. He was Senior Vice President of the Company
                                      and President and Chief Operating Officer of Inland
                                      Steel Company from September 1992 to January 1995. He
                                      also holds the position of President of the Inland Steel
                                      Flat Products Company division of Inland Steel Company,
                                      which he assumed on joining the Company on November 1,
                                      1991. Prior to joining Inland Steel Company, he was
                                      President, Sheet and Plate Division, Aluminum Company of
                                      America ("ALCOA"), from August 1991 to October 1991 and
                                      Vice President, Sheet and Plate Division, ALCOA, from
                                      October 1986 to July 1991. Mr. Nelson has elected to
                                      retire April 1, 1996. Mr. Darnall will assume his
                                      responsibilities.
Neil S. Novich, 41.................   Mr. Novich has been Senior Vice President of the Company
  Senior Vice President               since January 25, 1995, and President and Chief
                                      Operating Officer of Inland Materials Distribution
                                      Group, Inc., Chairman and President of Joseph T. Ryerson
                                      & Son, Inc., and Chairman of J.M. Tull Metals Company,
                                      Inc. since June 15, 1994. He also was Vice President of
                                      the Company from June 15, 1994 to January 25, 1995.
                                      Prior to joining the Company, he led the Distribution
                                      and Logistics Practice at Bain & Company, an
                                      international management consulting firm, from 1987 and
                                      was employed by Bain since 1981.
</TABLE>
 
                                       15
<PAGE>   17
 
<TABLE>
<CAPTION>
           NAME, AGE AND                             POSITIONS AND OFFICES HELD
 PRESENT POSITION WITH REGISTRANT                    DURING THE PAST FIVE YEARS
-----------------------------------   --------------------------------------------------------
<S>                                   <C>
Earl L. Mason, 48..................   Mr. Mason has been Senior Vice President of the Company
  Senior Vice President and Chief     since January 25, 1995, and has been its Chief Financial
  Financial Officer                   Officer and President of Inland International, Inc.
                                      since January 24, 1994. He was Vice President of the
                                      Company from January 1994 to January 25, 1995, and was
                                      Vice President -- Finance and Principal Financial
                                      Officer of the Company from June 1991 to January 1994.
                                      Prior to joining the Company, he was Group Executive --
                                      Logistics and Asset Management of Digital Equipment
                                      Corporation (a manufacturer of data processing
                                      equipment) from July 1990 until joining the Company in
                                      June 1991.
George A. Ranney, Jr., 55..........   Mr. Ranney has been Vice President and General Counsel
  Vice President and General          of the Company since July 26, 1995. He is also a partner
  Counsel                             of the law firm of Mayer, Brown & Platt, counsel to the
                                      Company. He has been a partner with such firm since
                                      1986.
Judd R. Cool, 60...................   Mr. Cool has been Vice President -- Human Resources of
  Vice President -- Human Resources   the Company since September 21, 1987 and Vice President
                                      -- Human Resources of Inland Steel Company since May 24,
                                      1995. He was Vice President-Human Resources of Inland
                                      Steel Flat Products Company division from January 1993
                                      to May 1995.
H. William Howard, 61..............   Mr. Howard has been Vice President -- Information
  Vice President -- Information       Technology of the Company since September 1, 1990 and
  Technology                          Vice President -- Automation and Information Technology
                                      of Inland Steel Company since May 24, 1995. He was Vice
                                      President-Automation and Information Technology of
                                      Inland Steel Flat Products Company division from January
                                      1993 to May 1995.
Vicki L. Avril, 41.................   Ms. Avril has been Treasurer of the Company and of
  Treasurer and Director --           Inland Steel Company since January 24, 1994, and
  Corporate Planning                  Treasurer of Inland Materials Distribution Group, Inc.,
                                      Joseph T. Ryerson & Son, Inc. and J.M. Tull Metals
                                      Company, Inc. since February 1994. She also has been
                                      Director -- Corporate Planning since January 25, 1995.
                                      In addition, she was Director of Pension Investments and
                                      Administration from June 1991 to January 1995, Assistant
                                      Treasurer of the Company from May 1993 to January 1994,
                                      and Manager of Distribution Business
                                      Development-Corporate Planning and Development from
                                      February 1990 to June 1991.
James M. Hemphill, 52..............   Mr. Hemphill has been Controller of the Company since
  Controller                          September 15, 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, 47............   Mr. Salowitz has been Secretary of the Company since
  Secretary and Associate General     September 27, 1995 and Associate General Counsel since
  Counsel                             January 22, 1995. 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.
</TABLE>
 
                                       16
<PAGE>   18
 
                                    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 March 12, 1996, the number of holders of record of common stock
of the Company was 14,843.
 
     The remaining information called for by this Item 5 is set forth under the
caption "Summary by Quarter" in the Company's Annual Report to Stockholders for
the fiscal year ended December 31, 1995, and is hereby 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 the Company's Annual Report to
Stockholders for the fiscal year ended December 31, 1995, and is hereby
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 in the Financial
Review section of the Company's Annual Report to Stockholders for the fiscal
year ended December 31, 1995, and, excluding the tables entitled "Inland Steel
Company -- Steel Shipments by Market" and "Inland Materials Distribution Group
-- Shipments by Market" and the bar charts entitled "Inland Steel Industries --
Earnings Before Interest, Taxes, and Depreciation," "Inland Steel Company
Productivity," "Inland Materials Distribution Group -- Quarterly Improvement in
Operating Profit," and "Inland Steel Industries -- Debt to Total
Capitalization," contained therein, is hereby 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 19, 1996, 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 the Company's Annual Report to
Stockholders for the fiscal year ended December 31, 1995, and are hereby
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 19, 1996, 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. Separate consolidated financial
statements for Inland Steel Company are set forth in Inland Steel Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995. Separate
consolidated financial statements for Inland Materials Distribution Group, Inc.
are set forth in Appendix A to this Report.
 
     Consolidated quarterly sales, earnings and per share common stock
information for 1994 and 1995 are set forth under the caption "Summary by
Quarter" in the Company's Annual Report to Stockholders for the fiscal year
ended December 31, 1995, and are hereby incorporated by reference herein.
 
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
 
     None.
 
                                       17
<PAGE>   19
 
                                    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 22, 1996, 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 22, 1996, 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 Note 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 22, 1996, and is hereby incorporated by reference herein.
 
     The following beneficial owners of Series A $2.40 Cumulative Convertible
Preferred Stock, neither of whom owns shares of Series A Preferred Stock having
more than one percent of the combined voting power of the Company's outstanding
voting securities, are the only persons known to the Company to be the
beneficial owners (as defined by the Securities and Exchange Commission), as of
March 12, 1996, 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>
    Janice F. McCollough..............................................    7,200         7.65
    5778 Lake Breeze Court
    Sarasota, FL 34233
    Donald F. Reinhardt...............................................    5,181         5.50
    24638 Elmhurst Drive
    Elkhart, IN 46517
</TABLE>
 
     (b) 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 22, 1996, and is hereby
incorporated by reference herein.
 
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 22, 1996, and is hereby
incorporated by reference herein.
 
                                       18
<PAGE>   20
 
                                    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 the Company's Annual
        Report to Stockholders for the fiscal year ended December 31, 1995, and
        are incorporated by reference in Item 8 of this Annual Report on Form
        10-K.
 
           Report of Independent Accountants dated February 19, 1996.
 
           Statement of Accounting and Financial Policies.
 
           Consolidated Statements of Operations and Reinvested Earnings for the
           three years ended December 31, 1995.
 
           Consolidated Statement of Cash Flows for the three years ended
           December 31, 1995.
 
           Consolidated Balance Sheet at December 31, 1995 and 1994.
 
           Schedules to Consolidated Financial Statements at December 31, 1995
           and 1994, 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 19, 1996. (Included on page 26 of this Report)
 
           Consent of Independent Accountants. (Included on page 26 of this
           Report)
 
           For the years ended December 31, 1995, 1994 and 1993:
 
               Schedule I -- Condensed Financial Information (Parent Company
               Only). (Included on pages 27 to 29, inclusive, of this Report)
 
               Schedule II -- Reserves. (Included on page 30 of this Report)
 
        3. CONSOLIDATED FINANCIAL STATEMENTS OF INLAND MATERIALS DISTRIBUTION
        GROUP, INC.
 
           The consolidated financial statements listed below are set forth in
           Appendix A on pages A-1 to A-14 inclusive, of this Report.
 
           Report of Independent Accountants dated February 19, 1996. (Page A-2)
 
           Consolidated Statements of Operations and Reinvested Earnings for the
           three years ended December 31, 1995. (Page A-3)
 
           Consolidated Statement of Cash Flows for the three years ended
           December 31, 1995.
           (Page A-4)
 
           Consolidated Balance Sheet at December 31, 1995 and 1994. (Page A-5)
 
           Statement of Accounting and Financial Policies. (Pages A-6 to A-7)
 
           Notes to Consolidated Financial Statements. (Pages A-8 to A-14,
           inclusive)
 
                                       19
<PAGE>   21
 
        4. EXHIBITS. The exhibits required to be filed by Item 601 of Regulation
        S-K are listed under the caption "Exhibits" below.
 
     (B) REPORTS ON FORM 8-K.
 
        No reports on Form 8-K were filed by the Company during the quarter
        ended December 31, 1995.
 
     (C) EXHIBITS.
 
<TABLE>
<S>                 <C>
    3.(i)           Copy of Certificate of Incorporation, as amended, of the Company.
   3.(ii)           Copy of By-laws, as amended, of the Company. (Filed as Exhibit 3.(ii) to
                    the Company's Quarterly Report on Form 10-Q for the quarter ended
                    September 30, 1995, and incorporated by reference herein.)
      4.A           Copy of Certificate of Designations, Preferences and Rights of Series A
                    $2.40 Cumulative Convertible Preferred Stock of the Company. (Filed as
                    part of Exhibit B to the definitive Proxy Statement of Inland Steel
                    Company dated March 21, 1986 that was furnished to stockholders in
                    connection with the annual meeting held April 23, 1986, and incorporated
                    by reference herein.)
      4.B           Copy of Certificate of Designation, Preferences and Rights of Series D
                    Junior Participating Preferred Stock of the Company. (Filed as Exhibit
                    4-D to the Company's Annual Report on Form 10-K for the fiscal year ended
                    December 31, 1987, and incorporated by reference herein.)
      4.C           Copy of Rights Agreement, dated as of November 25, 1987, as amended and
                    restated as of May 24, 1989, between the Company and The First National
                    Bank of Chicago, as Rights Agent (Harris Trust and Savings Bank, as
                    successor Rights Agent). (Filed as Exhibit 1 to the Company's Current
                    Report on Form 8-K filed on May 24, 1989, and incorporated by reference
                    herein.)
      4.D           Copy of Certificate of Designations, Preferences and Rights of Series E
                    ESOP Convertible Preferred Stock of the Company. (Filed as Exhibit 4-F to
                    the Company's Quarterly Report on Form 10-Q for the quarter ended June
                    30, 1989, and incorporated by reference herein.)
      4.E           Copy of Subordinated Voting Note due December 17, 1999 in the amount of
                    $185,000,000 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 Indenture dated as of December 15, 1992, between the Company and
                    Harris Trust and Savings Bank, as Trustee, respecting the Company's
                    $150,000,000 12 3/4% Notes due December 15, 2002. (Filed as Exhibit 4-G
                    to the Company's Annual Report on Form 10-K for the fiscal year ended
                    December 31, 1992, and incorporated by reference herein.)
      4.G           Copy of First Mortgage Indenture, dated April 1, 1928, between Inland
                    Steel Company (the "Steel Company") and First Trust and Savings Bank and
                    Melvin A. Traylor, as Trustees, and of supplemental indentures thereto,
                    to and including the Thirty-Fourth Supplemental Indenture, incorporated
                    by reference from the following Exhibits: (i) Exhibits B-1(a), B-1(b),
                    B-1(c), B-1(d) and B-1(e), filed with Steel Company's Registration
                    Statement on Form A-2 (No. 2-1855); (ii) Exhibits D-1(f) and D-1(g),
                    filed with Steel Company's Registration Statement on Form E-1 (No.
                    2-2182); (iii) Exhibit B-1(h), filed with Steel Company's Current Report
                    on Form 8-K dated January 18, 1937; (iv) Exhibit B-1(i), filed with Steel
                    Company's Current Report on Form 8-K, dated February 8, 1937; (v)
                    Exhibits B-1(j) and B-1(k), filed with Steel Company's Current Report on
                    Form 8-K for the month of April, 1940; (vi) Exhibit B-2, filed with Steel
                    Company's Registration Statement on Form A-2 (No. 2-4357); (vii) Exhibit
                    B-1(l), filed with Steel Company's Current Report on
</TABLE>
 
                                       20
<PAGE>   22
<TABLE>
<S>                 <C>
                    Form 8-K for the month of January, 1945; (viii) Exhibit 1, filed with
                    Steel Company's Current Report on Form 8-K for the month of November,
                    1946; (ix) Exhibit 1, filed with Steel Company's Current Report on Form
                    8-K for the months of July and August, 1948; (x) Exhibits B and C, filed
                    with Steel Company's Current Report on Form 8-K for the month of March,
                    1952; (xi) Exhibit A, filed with Steel Company's Current Report on Form
                    8-K for the month of July, 1956; (xii) Exhibit A, filed with Steel
                    Company's Current Report on Form 8-K for the month of July, 1957; (xiii)
                    Exhibit B, filed with Steel Company's Current Report on Form 8-K for the
                    month of January, 1959; (xiv) the Exhibit filed with Steel Company's
                    Current Report on Form 8-K for the month of December, 1967; (xv) the
                    Exhibit filed with Steel Company's Current Report on Form 8-K for the
                    month of April, 1969; (xvi) the Exhibit filed with Steel Company's
                    Current Report on Form 8-K for the month of July, 1970; (xvii) the
                    Exhibit filed with the amendment on Form 8 to Steel Company's Current
                    Report on Form 8-K for the month of April, 1974; (xviii) Exhibit B, filed
                    with Steel Company's Current Report on Form 8-K for the month of
                    September, 1975; (xix) Exhibit B, filed with Steel Company's Current
                    Report on Form 8-K for the month of January, 1977; (xx) Exhibit C, filed
                    with Steel Company's Current Report on Form 8-K for the month of
                    February, 1977; (xxi) Exhibit B, filed with Steel Company's Quarterly
                    Report on Form 10-Q for the quarter ended June 30, 1978; (xxii) Exhibit
                    B, filed with Steel Company's Quarterly Report on Form 10-Q for the
                    quarter ended June 30, 1980; (xxiii) Exhibit 4-D, filed with Steel
                    Company's Annual Report on Form 10-K for the fiscal year ended December
                    31, 1980; (xxiv) Exhibit 4-D, filed with Steel Company's Annual Report on
                    Form 10-K for the fiscal year ended December 31, 1982; (xxv) Exhibit 4-E,
                    filed with Steel Company's Annual Report on Form 10-K for the fiscal year
                    ended December 31, 1983; (xxvi) Exhibit 4(i) filed with the Steel
                    Company's Registration Statement on Form S-2 (No. 33-43393); (xxvii)
                    Exhibit 4 filed with Steel Company's Current Report on Form 8-K dated
                    June 23, 1993; (xxviii) Exhibit 4.H filed with the Steel Company's
                    Quarterly Report on Form 10-Q for the quarter ended June 30, 1995; and
                    (xxix) Exhibit 4.H filed with the Steel Company's Quarterly Report on
                    Form 10-Q for the quarter ended September 30, 1995.
      4.H           Copy of consolidated reprint of First Mortgage Indenture, dated April 1,
                    1928, between Inland Steel Company and First Trust and Savings Bank and
                    Melvin A. Traylor, as Trustees, as amended and supplemented by all
                    supplemental indentures thereto, to and including the Thirteenth
                    Supplemental Indenture. (Filed as Exhibit 4-E to Form S-1 Registration
                    Statement No. 2-9443, and incorporated by reference herein.)
                    [The registrant hereby agrees to provide a copy of any other agreement
                    relating to long-term debt at the request 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 Inland Steel Industries, Inc. Special Achievement 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 reference
                    herein.)
    10.C*           Copy of Inland 1995 Incentive Stock Plan. (Filed as Exhibit A to the
                    Company's definitive Proxy Statement dated April 17, 1995 that was
                    furnished to stockholders in connection with the annual meeting held May
                    24, 1995, 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.
 
                                       21
<PAGE>   23
<TABLE>
<S>                 <C>
    10.D*           Copy of Inland 1984 Incentive Stock Plan, as amended. (Filed as Exhibit
                    10.A to the Company's Quarterly Report on Form 10-Q for the quarter ended
                    June 30, 1995, and incorporated by reference herein.)
    10.E*           Copy of Inland 1988 Incentive Stock Plan, as amended. (Filed as Exhibit
                    10.B to the Company's Quarterly Report on Form 10-Q for the quarter ended
                    June 30, 1995, and incorporated by reference herein.)
    10.F*           Copy of Inland 1992 Incentive Stock Plan, as amended. (Filed as Exhibit
                    10.C to the Company's Quarterly Report on Form 10-Q for the quarter ended
                    June 30, 1995, and incorporated by reference herein.)
    10.G*           Copy of Inland Steel Industries Non-Qualified Thrift Plan, as amended.
                    (Filed as Exhibit 10.D to the Company's Quarterly Report on Form 10-Q for
                    the quarter ended June 30, 1995, and incorporated by reference herein.)
    10.H*           Copy of Inland 1992 Stock Plan for Non-Employee Directors, 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.I*           Copy of Inland Steel Industries Supplemental Retirement Benefit Plan for
                    Covered Employees, as amended. (Filed as Exhibit 10.I to the Company's
                    Annual Report on Form 10-K for the fiscal year ended December 31, 1993,
                    and incorporated by reference herein.)
    10.J*           Copy of Inland Steel Industries Special Retirement Benefit Plan for
                    Covered 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, 1993,
                    and incorporated by reference herein.)
    10.K*           Copy of the Inland Steel Industries Deferred Compensation 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 incorporated by reference herein.)
    10.L*           Copy of Inland Steel Industries Deferred Compensation 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 incorporated by
                    reference herein.)
    10.M*           Copy of Inland Steel Industries Terminated Retirement Plan for
                    Non-Employee Directors.
    10.N*           Copy of Inland Steel Industries, Inc. Deferred Phantom Stock Unit Plan
                    for Non-Employee Directors.
    10.O*           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.P.(1)*           Copy of form of Severance Agreement dated June 28, 1989 between the
                    Company and each of the seven executive officers of the Company
                    identified on the exhibit relating to terms and conditions of termination
                    of employment following a change in control of the Company. (Filed as
                    Exhibit 10-0-(1) to the Company's Annual Report or Form 10-K for the
                    fiscal year ended December 31, 1989, and incorporated by reference
                    herein.)
10.P.(2)*           Amended listing of executive officers of the Company who are parties to
                    the form of Severance Agreement dated June 28, 1989 in Exhibit 10.P.(1)
                    hereof. (Filed as Exhibit 10.N.(2) to the Company's Annual Report on Form
                    10-K for the fiscal year ended December 31, 1994, 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.
 
                                       22
<PAGE>   24
<TABLE>
<S>                 <C>
10.P.(3)*           Copy of Severance Agreement dated June 28, 1989 between the Company and
                    Judd R. Cool. (Filed as Exhibit 10-O-(2) to the Company's Annual Report
                    on Form 10-K for the fiscal year ended December 31, 1989, and
                    incorporated by reference herein.)
10.P.(4)*           Copy of Severance Agreement dated June 26, 1991 between the Company and
                    Earl L. Mason. (Filed as Exhibit 10-X to the Company's Quarterly Report
                    on Form 10-Q for the quarter ended June 30, 1991, and incorporated by
                    reference herein.)
10.P.(5)*           Copy of Severance Agreement dated November 27, 1991 between the Company
                    and Maurice S. Nelson, Jr. (Filed as Exhibit 10-O-(6) to the Company's
                    Annual Report on Form 10-K for the fiscal year ended December 31, 1992,
                    and incorporated by reference herein.)
10.P.(6)*           Copy of Employment Agreement dated as of April 8, 1994 between the
                    Company and Neil S. Novich. (Filed as Exhibit 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.P.(7)*           Copy of Severance Agreement dated as of April 8, 1994 between the Company
                    and Neil S. Novich. (Filed as Exhibit 10.N.(9) to the Company's Annual
                    Report on Form 10-K for the fiscal year ended December 31, 1994, and
                    incorporated by reference herein.)
10.Q.(1)*           Copy of letter to Judd R. Cool dated September 2, 1987 relating to terms
                    and conditions of employment. (Filed as Exhibit 10-K to the Company's
                    Annual Report on Form 10-K for the fiscal year ended December 31, 1987,
                    and incorporated by reference herein.)
10.Q.(2)*           Copy of letter agreement dated November 23, 1987 between the Company and
                    Judd R. Cool. (Filed as Exhibit 10-L to the Company's Annual Report on
                    Form 10-K for the fiscal year ended December 31, 1987, and incorporated
                    by reference herein.)
10.Q.(3)*           Copy of letter agreement dated December 10, 1993 between the Company and
                    Judd R. Cool restating certain provisions of the September 2, 1987 and
                    November 23, 1987 letters in Exhibits 10.P.(1) and (2). (Filed as Exhibit
                    10.P.(3) to the Company's Annual Report on Form 10-K for the fiscal year
                    ended December 31, 1993, and incorporated by reference herein.)
10.R*               Copy of letter to Earl L. Mason dated May 17, 1991 relating to terms and
                    conditions of employment. (Filed as Exhibit 10-W to the Company's
                    Quarterly Report on Form 10-Q for the quarter ended June 30, 1991, and
                    incorporated by reference herein.)
10.S*               Copy of letter to Maurice S. Nelson, Jr. dated March 26, 1993 relating to
                    supplemental pension arrangement. (Filed as Exhibit 10-S to the Company's
                    Annual Report on Form 10-K for the fiscal year ended December 31, 1992,
                    and incorporated by reference herein.)
10.T                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.)
10.U.(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
                    Finance III, Inc. of 185,000 shares of Series F Exchangeable Preferred
                    Stock of the Company. (Filed as Exhibit 4(b) to the Company's Current
                    Report on Form 8-K filed on December 18, 1989, and incorporated by
                    reference herein.)
</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.
 
                                       23
<PAGE>   25
<TABLE>
<S>                 <C>
 10.U.(2)           Copy of Steel Technology Agreement dated as of July 14, 1989 between
                    Inland Steel Company and Nippon Steel Corporation relating to technology
                    sharing between the signatories. (Filed as Exhibit 10-S-(2) to the
                    Company's Annual Report on Form 10-K for the fiscal year ended December
                    31, 1989, and incorporated by reference herein.)
 10.U.(3)           Copy of Basic Agreement dated as of July 21, 1987 between 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.U.(4)           Copy of Partnership Agreement dated as of July 21, 1987 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 the I/N Tek joint venture. (Filed as Exhibit 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.U.(5)           Copy of Basic Agreement dated as of September 12, 1989 between the
                    Company and Nippon Steel Corporation relating 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 incorporated
                    by reference herein.)
 10.U.(6)           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 indirectly wholly owned subsidiary of Nippon Steel
                    Corporation) 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.U.(7)           Copy of Substrate Supply Agreement dated as of September 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.U.(8)           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 Report on
                    Form 10-K for the fiscal year ended December 31, 1990, and incorporated
                    by reference herein.)
 10.U.(9)           Letter Agreement dated as of May 1, 1990 among I/N Kote, the Company and
                    Nippon Steel Corporation relating 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 reference herein.)
10.U.(10)           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 venture. (Filed as Exhibit 10-R-(10) to the Company's Annual Report
                    on Form 10-K for the fiscal year ended December 31, 1990, and
                    incorporated by reference herein.)
10.U.(11)           Letter Agreement dated as of April 19, 1990 between the Company and
                    Nippon Steel Corporation relating to capital contributions to I/N Tek.
                    (Filed as Exhibit 10-R-(11) to Company's Annual Report on Form 10-K for
                    the fiscal year ended December 31, 1990, and incorporated by reference
                    herein.)
10.U.(12)           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 Report on Form 10-K for the fiscal year
                    ended December 31, 1990, and incorporated by reference herein.)
</TABLE>
 
                                       24
<PAGE>   26
<TABLE>
<S>                 <C>
10.U.(13)           CCM Override Amendment dated as of April 20, 1990 among the Company;
                    Nippon Steel Corporation; Inland 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.V                Copy of ESOP Stock Purchase Agreement, dated May 30, 1990, between the
                    Company and Harris Trust and Savings Bank, as ESOP Trustee. (Filed as
                    Exhibit 10-T to the Company's Quarterly Report on Form 10-Q for the
                    quarter ended September 30, 1990, and incorporated by reference herein.
10.W                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 Exhibit 10-P to the Company's Quarterly Report on Form
                    10-Q for the quarter ended June 30, 1989, and incorporated by reference
                    herein.)
10.X                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 reference herein.)
10.Y                Letter Agreement dated May 10, 1991 by and between Nippon Steel
                    Corporation and Inland Steel Industries, Inc. relating to Letter
                    Agreement dated December 18, 1989. (Filed as Exhibit 10-V to the
                    Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
                    1991, and incorporated by reference herein.)
11                  Statement of Earnings per Share of Common Stock.
13                  Information incorporated by reference from Annual Report to Stockholders
                    for the fiscal year ended December 31, 1995.
21                  List of certain subsidiaries of the Company.
23                  Consent of Independent Accountants, appearing on page 26 of this Annual
                    Report on Form 10-K.
24                  Powers of attorney.
27                  Financial Data Schedules.
99                  Letter to stockholders of common stock of the Company dated December 22,
                    1987 explaining Stockholder Rights Plan adopted by Board of Directors on
                    November 25, 1987. (Filed as Exhibit 3 to the Company's Current Report on
                    Form 8-K filed on December 18, 1987, and incorporated by reference
                    herein.)
</TABLE>
 
                                       25
<PAGE>   27
 
       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 19, 1996 appearing on page 32 of the 1995 Annual Report to
Stockholders of Inland Steel Industries, Inc. (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 19, 1996
 
                       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), 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 19, 1996, appearing on page 32 of the 1995 Annual Report to
Stockholders of Inland Steel Industries, Inc. which is incorporated in this
Annual Report on Form 10-K. 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 28, 1996
 
                                       26
<PAGE>   28
                         INLAND STEEL INDUSTRIES, INC.
                 Schedule I -- Condensed Financial Information
                             (Parent Company Only)
 
                            STATEMENT OF OPERATIONS
                  YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
                             (DOLLARS IN MILLIONS)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                  1995         1994         1993
                                                                 -------      -------      -------
<S>                                                              <C>          <C>          <C>
Income:
  Intercompany interest income................................   $  16.3      $  10.0      $  18.5
  Equity in income (losses) of subsidiaries...................     157.8        109.6        (34.4)
  Interest income and other revenue...........................       1.6          4.4          1.2
                                                                 -------      -------      -------
                                                                   175.7        124.0        (14.7)
Expenses:
  Interest and other expenses.................................      31.0         22.9         22.6
  Intercompany interest expense...............................       5.7          2.1          2.4
                                                                 -------      -------      -------
                                                                    36.7         25.0         25.0
Income (loss) before income taxes.............................     139.0         99.0        (39.7)
Provision for income taxes....................................       7.8Cr.       8.4Cr.       2.1Cr.
                                                                 -------      -------      -------
Net income (loss).............................................   $ 146.8      $ 107.4      $ (37.6)
                                                                 =======      =======      =======
</TABLE>
 
---------------
Cr. = Credit
 
           See Notes to Consolidated Financial Statements in Item 8.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                       27
<PAGE>   29
 
                         INLAND STEEL INDUSTRIES, INC.
                 Schedule I -- Condensed Financial Information
                             (Parent Company Only)
 
                            STATEMENT OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
                             (DOLLARS IN MILLIONS)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                   1995        1994        1993
                                                                  -------     -------     -------
<S>                                                               <C>         <C>         <C>
OPERATING ACTIVITIES
Net income (loss)..............................................   $ 146.8     $ 107.4     $ (37.6)
Adjustments to reconcile net income to net cash provided from
  operating activities:
     Equity in undistributed earnings of subsidiaries..........    (157.8)     (109.6)       34.4
     Depreciation..............................................        .6          .6          .6
     Deferred income taxes.....................................       4.5         3.2        11.5
     Deferred employee benefit cost............................        .3         2.3          .1
     Stock issued for coverage of employee benefit plans.......      23.9        35.0        19.1
     Change in: Intercompany accounts..........................      16.0        (7.8)      183.6
                Notes receivable...............................       (.3)        (.3)         .2
                Accounts payable...............................      (2.9)       (1.8)       (1.9)
                Accrued liabilities............................       4.9        (3.2)         .3
     Other deferred items......................................       8.3        (1.4)       (3.0)
                                                                  -------     -------     -------
       Net adjustments.........................................    (102.5)      (83.0)      244.9
                                                                  -------     -------     -------
       Net cash provided from operating activities.............      44.3        24.4       207.3
                                                                  -------     -------     -------
INVESTING ACTIVITIES
Net investments in subsidiaries................................     (10.2)     (120.5)     (312.1)
Dividends received from subsidiaries...........................      25.9        25.8        25.8
Capital expenditures...........................................        --         (.2)         --
                                                                  -------     -------     -------
          Net cash provided from (used for) investing
            activities.........................................      15.7       (94.9)     (286.3)
                                                                  -------     -------     -------
FINANCING ACTIVITIES
Issuance of common stock.......................................      99.1          --       178.7
Long-term debt retired.........................................      (8.3)       (7.8)       (7.1)
Dividends paid.................................................     (31.6)      (32.2)      (35.7)
Acquisition of treasury stock..................................      (4.0)       (4.0)       (9.5)
                                                                  -------     -------     -------
          Net cash provided from (used for) financing
            activities.........................................      55.2       (44.0)      126.4
                                                                  -------     -------     -------
Net increase (decrease) in cash and cash equivalents...........     115.2      (114.5)       47.4
Cash and cash equivalents -- beginning of year.................      90.3       204.8       157.4
                                                                  -------     -------     -------
Cash and cash equivalents -- end of year.......................   $ 205.5     $  90.3     $ 204.8
                                                                  =======     =======     =======
</TABLE>
 
           See Notes to Consolidated Financial Statements in Item 8.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                       28
<PAGE>   30
 
                         INLAND STEEL INDUSTRIES, INC.
                 Schedule I -- Condensed Financial Information
                             (Parent Company Only)
 
                                 BALANCE SHEET
                         AT DECEMBER 31, 1995 AND 1994
                             (DOLLARS IN MILLIONS)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                             1995         1994
                                                                           --------     --------
<S>                                                                        <C>          <C>
ASSETS
Current Assets:
     Cash and cash equivalents..........................................   $  205.5     $   90.3
     Receivables from subsidiary companies..............................       91.1        107.1
     Deferred income taxes..............................................         .3           .3
     Notes receivable...................................................         .6           .3
                                                                           --------     --------
       Total current assets.............................................      297.5        198.0
Investment in subsidiary companies......................................      958.1        817.7
Intangible pension asset................................................      102.6           --
Investment in Nippon Steel Corporation, net of valuation allowances of
  $4.0 and $3.5, respectively...........................................       10.6         11.1
Property, net of accumulated depreciation of $7.3 and $6.7,
  respectively..........................................................        1.8          2.4
Deferred income taxes...................................................       13.7         15.8
Deferred charges and other assets.......................................        6.5          7.4
                                                                           --------     --------
       Total assets.....................................................   $1,390.8     $1,052.4
                                                                            =======      =======
LIABILITIES
Current Liabilities:
     Accounts payable...................................................   $    4.3     $    7.2
     Accrued liabilities................................................       19.5         14.6
     Long-term debt due within one year.................................       94.0          8.3
                                                                           --------     --------
       Total current liabilities........................................      117.8         30.1
Long-term debt..........................................................      356.2        265.2
Deferred employee benefits..............................................      121.5         18.6
Deferred income and other deferred credits..............................       12.2          6.4
                                                                           --------     --------
       Total liabilities................................................      607.7        320.3
                                                                           --------     --------
TEMPORARY EQUITY
Redeemable preferred stock, Series F, $1.00 par value, 185,000 shares
  issued and outstanding in 1994........................................         --        185.0
Common stock repurchase commitment......................................       34.5         37.9
                                                                           --------     --------
STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value, 15,000,000 shares authorized for all
  series, aggregate liquidation value $155.7 in 1995 and $154.9 in
  1994..................................................................        3.2          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..........................................    1,045.7      1,088.0
Accumulated deficit.....................................................     (172.8)      (292.4)
Unearned compensation -- ESOP...........................................      (89.9)      (100.5)
Common stock repurchase commitment......................................      (34.5)       (37.9)
Treasury stock at cost -- common stock of 1,814,516 shares in 1995 and
  6,006,122 shares in 1994..............................................      (51.1)      (200.9)
Cumulative translation adjustment.......................................       (2.6)         (.9)
                                                                           --------     --------
       Total stockholders' equity.......................................      748.6        509.2
                                                                           --------     --------
       Total liabilities, temporary equity, and stockholders' equity....   $1,390.8     $1,052.4
                                                                            =======      =======
</TABLE>
 
     Maturities of Long-Term Debt due within five years are: $94.0 million in
1996, $9.7 million in 1997, $10.5 million in 1998, $111.5 million in 1999, and
$12.5 million in 2000.
 
           See Notes to Consolidated Financial Statements in Item 8.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                       29
<PAGE>   31
 
             INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
 
                            SCHEDULE II -- RESERVES
 
             FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
                             (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>
    1995          $ 24.9         $11.8         $ (1.1)(A)     $ 29.9
                                                 (5.7)(B)
    1994          $ 28.2         $ 5.8         $ (2.4)(A)     $ 24.9
                                                 (6.7)(B)
    1993          $ 23.2         $14.4         $ (3.7)(A)     $ 28.2
                                                 (5.7)(B)
</TABLE>
 
---------------
NOTES:
(A) Bad debts written off during year.
(B) Allowances granted during year.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                       30
<PAGE>   32
                                   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 28, 1996                        By:         ROBERT J. DARNALL
                                                -------------------------------
                                                       Robert J. Darnall
                                                    Chairman, President and
                                                    Chief 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 Chief       March 28, 1996
----------------------------------        Executive Officer and
         Robert J. Darnall                      Director

        EARL L. MASON                    Senior Vice President and         March 28, 1996
----------------------------------        Chief Financial Officer
           Earl L. Mason                (Principal Financial Officer)

       JAMES M. HEMPHILL                 Controller and Principal          March 28, 1996
----------------------------------        Accounting Officer
 
         James M. Hemphill                       Director
          A. Robert Abboud                       Director
           James W. Cozad                        Director
         James A. Henderson                      Director                By:    GEORGE A. RANNEY, JR.                          
         Robert B. McKersie                      Director                 ---------------------------
       Maurice S. Nelson, Jr.                    Director                    George A. Ranney, Jr.     
         Donald S. Perkins                       Director                       Attorney-in-fact        
         Jean-Pierre Rosso                       Director                        March 28, 1996         
          Joshua I. Smith                        Director           
          Nancy H. Teeters                       Director                                         
          Arnold R. Weber                        Director

</TABLE>
                                                     
                                                     
                                                     
                                                     
                                      31
                                                     
<PAGE>   33
 
                                                                      APPENDIX A
 
                                     INDEX
                                       TO
                       CONSOLIDATED FINANCIAL STATEMENTS
                                       OF
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
<TABLE>
<CAPTION>
                                        ITEM                                            PAGE
-------------------------------------------------------------------------------------   ----
<S>                                                                                     <C>
Report of Independent Accountants....................................................   A-2
Consolidated Statements of Operations and Reinvested Earnings for the three years
  ended December 31, 1995............................................................   A-3
Consolidated Statement of Cash Flows for the three years ended December 31, 1995.....   A-4
Consolidated Balance Sheet at December 31, 1995 and 1994.............................   A-5
Statement of Accounting and Financial Policies.......................................   A-6
Notes to Consolidated Financial Statements...........................................   A-8
</TABLE>
 
                                       A-1
<PAGE>   34
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholder of
Inland Materials Distribution Group, Inc.
 
     In our opinion, the consolidated financial statements listed in the index
appearing on page A-1 present fairly, in all material respects, the financial
position of Inland Materials Distribution Group, Inc. (a wholly owned subsidiary
of Inland Steel Industries, Inc.) and Subsidiary Companies at December 31, 1995
and 1994, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
 
                                          PRICE WATERHOUSE LLP
 
Chicago, Illinois
February 19, 1996
 
                                       A-2
<PAGE>   35
 
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
         CONSOLIDATED STATEMENTS OF OPERATIONS AND REINVESTED EARNINGS
                              DOLLARS IN MILLIONS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                      YEARS ENDED DECEMBER 31
                                                                  --------------------------------
                                                                    1995        1994        1993
                                                                  --------    --------    --------
<S>                                                               <C>         <C>         <C>
CONSOLIDATED STATEMENT OF OPERATIONS
  Net Sales....................................................   $2,450.1    $2,197.5    $1,893.3
                                                                  --------    --------    --------
  Operating costs and expenses:
     Cost of goods sold (excluding depreciation)...............    2,118.1     1,927.7     1,663.8
     Selling, general and administrative expenses..............      153.2       142.1       144.4
     Depreciation and amortization.............................       21.8        21.2        20.6
     State, local and miscellaneous taxes......................        8.3         8.4         8.1
                                                                  --------    --------    --------
       Total...................................................    2,301.4     2,099.4     1,836.9
                                                                  --------    --------    --------
  Operating profit.............................................      148.7        98.1        56.4
  Other expense:
     General corporate expense, net of income items............         .7         6.9         7.4
     Interest and other expense on debt........................        2.6         2.9        10.9
                                                                  --------    --------    --------
  Income before income taxes...................................      145.4        88.3        38.1
  Provision for income taxes (Note 6)..........................       56.9        35.0        11.4
                                                                  --------    --------    --------
  Net income...................................................   $   88.5    $   53.3    $   26.7
                                                                  ========    ========    ========
CONSOLIDATED STATEMENT OF REINVESTED EARNINGS
  Balance at beginning of year.................................   $   85.4    $   32.1    $    5.4
  Net income for the year......................................       88.5        53.3        26.7
                                                                  --------    --------    --------
  Reinvested earnings at end of year...........................   $  173.9    $   85.4    $   32.1
                                                                  ========    ========    ========
</TABLE>
 
        The accompanying notes are an integral part of these statements.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                       A-3
<PAGE>   36
 
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                              DOLLARS IN MILLIONS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                          INCREASE (DECREASE)
                                                                                IN CASH
                                                                        YEARS ENDED DECEMBER 31
                                                                       --------------------------
                                                                        1995      1994      1993
                                                                       ------    ------    ------
<S>                                                                    <C>       <C>       <C>
OPERATING ACTIVITIES
  Net income........................................................   $ 88.5    $ 53.3    $ 26.7
                                                                       ------    ------    ------
  Adjustments to reconcile net income to net cash provided from
     (used for) operating activities:
       Depreciation and amortization................................     21.8      21.2      20.6
       Net gain on sales of assets..................................      (.2)      (.5)      (.1)
       Deferred employee benefit cost...............................    (14.4)      3.9       3.9
       Deferred income taxes........................................       .5        .7      (8.3)
       Change in:
          Receivables...............................................    (16.7)    (31.1)    (22.8)
          Inventories...............................................     10.4       5.7     (18.2)
          Other assets..............................................     (2.3)     (1.6)       --
          Accounts payable..........................................     (7.0)     22.6     (31.5)
          Payables to related companies.............................      (.4)      5.8       1.7
          Accrued liabilities.......................................      4.2       (.3)      2.7
                                                                       ------    ------    ------
       Net adjustments..............................................     (4.1)     26.4     (52.0)
                                                                       ------    ------    ------
       Net cash provided from (used for) operating activities.......     84.4      79.7     (25.3)
                                                                       ------    ------    ------
INVESTING ACTIVITIES
  Capital expenditures..............................................    (19.3)    (20.4)    (19.3)
  Proceeds from sales of assets.....................................      1.9       5.8        .9
                                                                       ------    ------    ------
          Net cash used for investing activities....................    (17.4)    (14.6)    (18.4)
                                                                       ------    ------    ------
FINANCING ACTIVITIES
  Long-term debt issued.............................................       --        --       7.5
  Long-term debt retired............................................     (4.7)     (4.9)     (5.3)
  Capital contribution from Inland Steel Industries.................       --        --     150.0
  Change in notes to and from related companies.....................    (11.2)    (87.2)    (79.0)
                                                                       ------    ------    ------
          Net cash provided from (used for) financing activities....    (15.9)    (92.1)     73.2
                                                                       ------    ------    ------
  Net increase (decrease) in cash and cash equivalents..............     51.1     (27.0)     29.5
  Cash and cash equivalents -- beginning of year....................      2.5      29.5        --
                                                                       ------    ------    ------
  Cash and cash equivalents -- end of year..........................   $ 53.6    $  2.5    $ 29.5
                                                                       ======    ======    ======
SUPPLEMENTAL DISCLOSURES
  Cash paid during the year for:
     Interest, net of amount capitalized............................   $  3.0    $  2.9    $ 11.3
     Income taxes, net..............................................     56.4      30.5      22.6
</TABLE>
 
        The accompanying notes are an integral part of these statements.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                       A-4
<PAGE>   37
 
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
                           CONSOLIDATED BALANCE SHEET
                              DOLLARS IN MILLIONS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                              AT DECEMBER 31
                                                                             -----------------
                                                                              1995       1994
                                                                             ------     ------
<S>                                                                          <C>        <C>
ASSETS
Current assets:
  Cash and cash equivalents...............................................   $ 53.6     $  2.5
  Receivables less provision for allowances, claims and doubtful accounts
     of $6.4 and $6.3, respectively.......................................    243.8      227.1
  Inventories (Note 1)....................................................    262.8      273.2
  Notes receivable from related companies.................................     68.8       57.6
  Deferred income taxes (Note 6)..........................................     15.6       13.0
                                                                             ------     ------
     Total current assets.................................................    644.6      573.4
                                                                             ------     ------
Property, plant and equipment, at cost:
  Buildings, machinery and equipment......................................    448.2      433.9
  Land and land improvements..............................................     28.0       27.7
                                                                             ------     ------
                                                                              476.2      461.6
  Less accumulated depreciation...........................................    226.5      209.1
                                                                             ------     ------
                                                                              249.7      252.5
                                                                             ------     ------
Prepaid pension costs (Note 5)............................................     27.3       12.2
Excess of cost over net assets acquired, net of accumulated
  amortization............................................................     23.6       25.0
Deferred income taxes (Note 6)............................................     23.5       26.6
Other assets..............................................................      3.9        1.6
                                                                             ------     ------
     Total assets.........................................................   $972.6     $891.3
                                                                             ======     ======
LIABILITIES
Current liabilities:
  Accounts payable........................................................   $ 92.8     $ 99.8
  Payables to related companies...........................................     14.4       14.8
  Accrued Liabilities:
     Salaries and wages...................................................     20.0       17.6
     Taxes other than federal income taxes................................      8.9        7.4
     Other................................................................      3.6        3.3
  Long-term debt due within one year......................................      4.7        4.7
                                                                             ------     ------
          Total current liabilities.......................................    144.4      147.6
                                                                             ------     ------
Long-term debt (Note 3)...................................................     18.9       23.6
Deferred employee benefits and other liabilities (Note 5).................    140.8      140.1
                                                                             ------     ------
          Total liabilities...............................................    304.1      311.3
                                                                             ------     ------
STOCKHOLDER'S EQUITY
  Common stock, par value $1.00; 3,000 shares authorized; one share
     issued...............................................................       --         --
  Additional paid-in capital (Note 7).....................................    494.6      494.6
  Earnings reinvested in the business.....................................    173.9       85.4
                                                                             ------     ------
     Total stockholder's equity...........................................    668.5      580.0
                                                                             ------     ------
     Total liabilities and stockholder's equity...........................   $972.6     $891.3
                                                                             ======     ======
</TABLE>
 
        The accompanying notes are an integral part of these statements.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                       A-5
<PAGE>   38
 
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
                 STATEMENT OF ACCOUNTING AND FINANCIAL POLICIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
     The following briefly describes the Company's principal accounting and
financial policies.
 
Principles of Consolidation
 
     The accompanying consolidated financial statements include the accounts of
Joseph T. Ryerson & Son, Inc., and J. M. Tull Metals Company, Inc., which are
wholly owned subsidiaries of the Company. The accounts of J. M. Tull Metals
Company, Inc. are consolidated with its wholly owned subsidiary, AFCO Metals,
Inc.
 
Inventory valuation
 
     Inventories are valued at cost which is not in excess of market. Cost is
determined principally by the last-in, first-out (LIFO) method.
 
Property, plant and equipment
 
     Property, plant and equipment is depreciated, for financial reporting
purposes, using the straight-line method over the estimated useful lives of the
assets. Expenditures for normal repair and maintenance are charged against
income in the period incurred.
 
Excess of cost over net assets acquired
 
     The excess of cost over fair value of net assets of businesses acquired
(goodwill) is amortized on the straight-line method over a 25-year period.
Accumulated amortization of goodwill totaled $10.2 million at December 31, 1995
and $8.8 million at December 31, 1994.
 
Benefits for retired employees
 
     Pension benefits are provided by the Company to substantially all employees
under a trusteed noncontributory plan of Inland Steel Industries, Inc.
("Industries"). Life insurance and certain medical benefits are provided for
substantially all retired employees.
 
     The estimated costs of pension, medical, and life insurance benefits are
determined annually by consulting actuaries. The cost of these benefits for
retirees is accrued during their term of employment (see Note 5). Pensions are
funded in accordance with ERISA requirements in a trust established under the
plan. Costs for retired employee medical benefits are funded when claims are
submitted.
 
Cash equivalents
 
     Cash equivalents are highly liquid, short-term investments with maturities
of three months or less.
 
Use of estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the consolidated financial
statements and related notes to financial statements. Changes in such estimates
may affect amounts reported in future periods.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                       A-6
<PAGE>   39
 
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
           STATEMENT OF ACCOUNTING AND FINANCIAL POLICIES (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
Accounting for the Impairment of Long-lived Assets
 
     In 1995, the Company adopted Financial Accounting Standards Board ("FASB")
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." Adoption of this Statement had no material
impact on the results of operations or financial position of the Company.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                       A-7
<PAGE>   40
 
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
NOTE 1. INVENTORIES
 
     The Company's inventories consist principally of finished steel, nonferrous
metals and industrial plastic products for sale at service center locations.
 
     The difference between LIFO values and approximate replacement costs for
the LIFO inventories was $146.4 million at December 31, 1995 and $132.6 million
at December 31, 1994.
 
     During 1995 and 1994, various inventory quantities were reduced resulting
in liquidations of LIFO inventory quantities carried at costs prevailing in
prior years that were different from current year costs. The effect on cost of
goods sold of LIFO liquidations in 1995, 1994 and 1993 was not material.
 
NOTE 2. BORROWING ARRANGEMENTS
 
     At December 31, 1995, the Company's subsidiaries had available two unused
credit facilities totaling $225 million. Each facility, as well as the Inland
Steel Industries Thrift Plan ESOP notes guarantee, requires compliance with
various financial covenants including minimum net worth and leverage ratio
tests. The covenants also limit the amount of cash that the subsidiaries can
transfer to the Company and to Industries in the form of dividends and other
advances.
 
     A $200 million unsecured credit agreement between Joseph T. Ryerson & Son,
Inc. and a group of banks provides a revolving credit facility to March 31,
2000.
 
     J. M. Tull Metals Company, Inc. has a $25 million unsecured revolving
credit agreement with other banks, which extends to December 15, 1997.
 
NOTE 3. LONG-TERM DEBT
 
The Company's long-term debt is as follows:
 
<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                         -----------------
                                                                         1995        1994
                                                                         -----       -----
                                                                            DOLLARS IN
                                                                             MILLIONS
    <S>                                                                  <C>         <C>
    JOSEPH T. RYERSON & SON, INC.
      Industrial Revenue Bond, floating interest rate set weekly based
         on 13-week Treasury bills, due November 1, 2007...............  $ 7.0       $ 7.0
      Other long-term debt, 10.25%, due through November 30, 1997......    1.6         1.8
    J. M. TULL METALS COMPANY, INC.
      Senior Notes, 9.43%, due through July 29, 1997...................    7.1        10.7
      Term note, LIBOR plus 62.5 basis points per annum, due through
         August 17, 1998...............................................    6.8         7.1
      Industrial Revenue Bonds, interest rates ranging from 6.5% to 65%
         of the prime rate, due through January 1, 1997................     .9         1.4
      Other............................................................     .2          .3
                                                                         -----       -----
                                                                          23.6        28.3
      Less maturities due within one year..............................    4.7         4.7
                                                                         -----       -----
         Long-term debt................................................  $18.9       $23.6
                                                                         =====       =====
</TABLE>
 
     Maturities of long-term debt are: $4.7 million in 1996, $5.6 million in
1997, $6.3 million in 1998, and $7.0 million in 2007.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                       A-8
<PAGE>   41
 
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
     Under the provisions of certain loan agreements, the Company is required to
maintain specified amounts of working capital and net worth, as outlined in the
agreements, and is restricted as to dividends that may be paid to Industries.
 
     Property with a net recorded carrying value of approximately $13.5 million
at December 31, 1995 is pledged as collateral on the industrial revenue bonds
and mortgage loans.
 
NOTE 4. DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
 
     The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value.
 
Derivatives
 
     The Company has only limited involvement with derivative financial
instruments, none of which are used for trading purposes. The Company has
entered into an interest rate swap agreement to reduce the impact of changes in
LIBOR on its $6.8 million term note. At December 31, 1995 the Company had
outstanding an interest rate swap agreement with the bank having a notional
principal amount equal to the outstanding principal of the related term note.
This agreement effectively changes the Company's interest rate exposure on its
term note to a fixed rate of 5.925%. The interest rate swap matures August 17,
1998. Gains and losses associated with this hedging transaction become part of
the interest expense of the related debt. The Company is exposed to potential
credit loss in the event of nonperformance by the bank; however, the Company
does not anticipate such nonperformance.
 
Cash and Cash Equivalents
 
     The carrying amount of cash equivalents approximates fair value because of
the short maturity of those instruments.
 
Long-term Debt
 
     The estimated fair value of the Company's long-term debt (including current
portions thereof) using quoted market prices of Company debt securities recently
traded and market-based prices of similar securities for those securities not
recently traded was $23.6 million at December 31, 1995 and $27.4 million at
December 31, 1994 as compared with the carrying value of $23.6 million and $28.3
million included in the balance sheet at year-end 1995 and 1994, respectively.
 
NOTE 5. RETIREMENT BENEFITS
 
     In 1995, the measurement date for pensions and benefits other than pensions
was changed from December 31 to September 30 in order to provide for more timely
information and to achieve administrative efficiencies in the collection of
data. The change in the measurement date had no effect on 1995 expense and had
an immaterial impact on the 1995 funded status of the pension plan.
 
Pensions
 
     The Inland Steel Industries Pension Plan and Pension Trust (the "Plan")
covers certain employees, retirees and their beneficiaries of Industries and its
subsidiaries, including the Company. The Plan is a noncontributory defined
benefit plan that provides benefits based on final pay and years of service for
all salaried employees and certain wage employees, and years of service and a
fixed rate (in most instances based
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                       A-9
<PAGE>   42
 
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
on frozen pay level or on job class) for all other wage employees, including
employees under collective bargaining agreements. Because the fair value of
pension plan assets pertains to all participants in the Plan, no separate
determination of the fair value of such assets is made solely with respect to
the Company.
 
     The actuarial present value of benefits for service rendered to date and
the fair value of plan assets available for benefits for the Industries
consolidated group were as follows:
 
<TABLE>
<CAPTION>
                                                                        SEPT. 30,     DEC. 31,
                                                                          1995          1994
                                                                        ---------     --------
                                                                         DOLLARS IN MILLIONS
    <S>                                                                 <C>           <C>
    Fair value of plan assets.........................................   $ 1,919       $1,652
                                                                          ------       ------
    Actuarial present value of benefits for service rendered to date:
      Accumulated Benefit Obligation based on compensation to date....     1,956        1,641
      Additional benefits based on estimated future compensation
         levels.......................................................        90           98
                                                                          ------       ------
      Projected Benefit Obligation....................................     2,046        1,739
                                                                          ------       ------
    Plan asset shortfall to Projected Benefit Obligation..............   $  (127)      $  (87)
                                                                          ======       ======
</TABLE>
 
     In 1995, Industries recorded an additional minimum pension liability of
$102.6 million representing the excess of the unfunded Accumulated Benefit
Obligation over previously accrued pension costs. A corresponding intangible
asset was recorded as an offset to this additional liability as prescribed.
Neither was required in 1994.
 
     The calculation of benefit obligations was based on a discount (settlement)
rate of 7.75% in 1995 and 8.8% in 1994; a rate of compensation increase of 4.0%
in 1995 and 5.0% in 1994; and a rate of return on plan assets of 9.5% in both
1995 and 1994.
 
     The Company recorded a pension credit of $2.3 million in 1995, and a charge
of $1.8 million in 1994 and $.1 million in 1993. In 1995, the Company paid $13.1
million to Industries for its share of a contribution to the Industries Plan
trust.
 
     The cost of other industry welfare and retirement funds, for bargaining
unit employees, was $3.3 million in 1995, $2.6 million in 1994, and $2.9 million
in 1993.
 
Benefits Other Than Pensions
 
     Substantially all of the Company's employees are covered under
postretirement life insurance and medical benefit plans that involve deductible
and co-insurance requirements. The postretirement life insurance benefit formula
used in the determination of postretirement benefit cost is primarily based on
applicable annual earnings at retirement for salaried employees and specific
amounts for hourly employees. The Company does not prefund any of these
postretirement benefits.
 
     The amount of net periodic postretirement benefit cost for 1995, 1994 and
1993 is composed of the following:
 
<TABLE>
<CAPTION>
                                                                  1995      1994      1993
                                                                  -----     -----     -----
                                                                     DOLLARS IN MILLIONS
    <S>                                                           <C>       <C>       <C>
    Service cost................................................  $ 2.2     $ 2.7     $ 3.2
    Interest cost...............................................    8.4       7.3       8.0
    Net amortization and deferral...............................   (3.4)     (2.0)     (1.9)
                                                                  -----     -----     -----
         Total net periodic postretirement benefit cost.........  $ 7.2     $ 8.0     $ 9.3
                                                                  =====     =====     =====
</TABLE>
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                      A-10
<PAGE>   43
 
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
     The following table sets forth components of the accumulated postretirement
benefit obligation:
 
<TABLE>
<CAPTION>
                                                                        SEPT. 30,     DEC. 31,
                                                                          1995          1994
                                                                        ---------     --------
                                                                         DOLLARS IN MILLIONS
    <S>                                                                 <C>           <C>
    Accumulated postretirement benefit obligation attributable to:
      Retirees........................................................   $  59.5       $ 44.4
      Fully eligible plan participants................................      17.6         15.9
      Other active plan participants..................................      28.2         24.9
                                                                          ------       ------
    Accumulated postretirement benefit obligation.....................     105.3         85.2
      Unrecognized net gain...........................................      16.7         33.7
      Unrecognized prior service credit...............................      18.9         20.3
                                                                          ------       ------
    Accrued postretirement benefit obligation.........................     140.9       $139.2
                                                                                       ======
    Expense net of benefits provided, October through December 1995...        .2
                                                                          ------
    Accrued postretirement benefit obligation at December 31, 1995....   $ 141.1
                                                                          ======
</TABLE>
 
     Any net gain or loss in excess of 10 percent of the accumulated
postretirement benefit obligation is amortized over the remaining service period
of active plan participants.
 
     The assumptions used to determine the plan's accumulated postretirement
obligation are as follows:
 
<TABLE>
<CAPTION>
                                                                       SEPT. 30,     DEC. 31,
                                                                         1995          1994
                                                                       ---------     --------
    <S>                                                                <C>           <C>
    Discount Rate....................................................   7.75%        8.8%
    Rate of compensation increase....................................   4.0%         5.0%
    Medical cost trend rate..........................................   4.5%         6%-5%
    Year ultimate rate reached.......................................   1996         1996
</TABLE>
 
     A one percentage point increase in the assumed health care cost trend rates
for each future year increases annual periodic postretirement benefit cost and
the accumulated postretirement benefit obligation as of September 30, 1995 by
$2.7 million and $12.2 million, respectively.
 
NOTE 6. TAXES ON INCOME
 
     The Company participates in a tax-sharing agreement under which current and
deferred income tax provisions are determined for each company in the Industries
group on a stand-alone basis. Any current liability is paid to Industries. If
the Company is unable to use all of its allocated tax attributes (net operating
loss and tax credit carryforwards) in a given year but other companies in the
consolidated group are able to utilize them, then the Company will be paid for
the use of its attributes. NOL and tax credit carryforwards are allocated to
each company in accordance with applicable tax regulations as if a company were
to leave the consolidated group. Companies with taxable losses record current
income tax credits not to exceed current income tax charges recorded by
profitable companies. If Industries uses NOL carryforwards, the Company will use
the appropriate portion of that year's carryforward previously allocated to it,
if any.
 
     A state tax sharing agreement, similar to the federal agreement, also
exists with Industries for those states in which the consolidated group is
charged state taxes on a unitary or combined basis.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                      A-11
<PAGE>   44
 
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
     The elements of the provision for income taxes for the three years
indicated below are as follows:
 
<TABLE>
<CAPTION>
                                                                   1995      1994      1993
                                                                   -----     -----     -----
                                                                      DOLLARS IN MILLIONS
    <S>                                                            <C>       <C>       <C>
    Current income taxes:
      Federal...................................................   $49.7     $30.4     $17.3
      State and local...........................................     6.7       3.9       2.6
                                                                   -----     -----     -----
                                                                    56.4      34.3      19.9
    Deferred income taxes.......................................      .5        .7       8.5Cr.
                                                                   -----     -----     -----
      Total provision for income taxes..........................   $56.9     $35.0     $11.4
                                                                   =====     =====     =====
</TABLE>
 
------------------
Cr. = Credit
 
     In accordance with FASB Statement No. 109, the Company adjusted its
deferred tax assets and liabilities for the effect of the change in the
corporate federal income tax rate from 34 percent to 35 percent, effective
January 1, 1993. A credit to income of $.6 million, which includes the effect of
the rate change on deferred tax asset and liability balances as of January 1,
1993 as well as the effect on 1993 tax benefits recorded by the Company prior to
the enactment date of August 10, 1993, was recorded in the third quarter of
1993.
 
     The components of the deferred income tax assets and liabilities arising
under FASB Statement No. 109 were as follows:
 
<TABLE>
<CAPTION>
                                                                            DECEMBER 31
                                                                         -----------------
                                                                          1995       1994
                                                                         ------     ------
                                                                            DOLLARS IN
                                                                             MILLIONS
    <S>                                                                  <C>        <C>
    Deferred tax assets (excluding postretirement benefits other than
      pensions):
      Net operating loss and tax credit carryforwards.................   $ 16.2     $ 15.1
      Other deductible temporary differences..........................     27.9       29.0
                                                                         ------     ------
                                                                           44.1       44.1
                                                                         ------     ------
    Deferred tax liabilities:
      Fixed asset basis difference....................................     37.2       39.7
      Other taxable temporary differences.............................     17.2       14.0
                                                                         ------     ------
                                                                           54.4       53.7
                                                                         ------     ------
    Net deferred tax liability (excluding postretirement benefits
      other than pensions)............................................    (10.3)      (9.6)
    FASB Statement No. 106 impact (post retirement benefits other than
      pensions).......................................................     49.4       49.2
                                                                         ------     ------
    Net deferred tax asset............................................   $ 39.1     $ 39.6
                                                                         ======     ======
</TABLE>
 
     For tax purposes, the Company had available, at December 31, 1995,
approximately $43 million of net operating loss ("NOL") carryforwards available
for regular federal income tax purposes, expiring as follows: $8 million in
2005, $21 million in 2006, $7 million in 2007, $6 million in 2008, and $1
million in 2009. Additionally, in conjunction with the Alternative Minimum Tax
("AMT") rules, the Company had available AMT credit carryforwards for tax
purposes of approximately $1.1 million, which may be used indefinitely to reduce
regular federal income taxes.
 
     The Company believes that it is more likely than not that all of the NOL
carryforwards will be utilized prior to their expiration. This belief is based
upon the factors discussed below.
 
     The NOL carryforwards and existing deductible temporary differences
(excluding those relating to FASB Statement No. 106) are offset by existing
taxable temporary differences reversing within the
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                      A-12
<PAGE>   45
 
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
carryforward period. Furthermore, any such recorded tax benefits which would not
be so offset are expected to be realized by continuing to achieve future
profitable operations.
 
     Subsequent to the adoption of FASB Statement No. 109, the Company adopted
FASB Statement No. 106 and recognized the entire transition obligation at
January 1, 1992, as a cumulative effect charge in 1992. At December 31, 1995,
the deferred tax asset related to the Company's FASB Statement No. 106
obligation was $49.4 million. To the extent that future annual charges under
FASB Statement No. 106 continue to exceed deductible amounts, this deferred tax
asset will continue to grow. Thereafter, even if the Company should have a tax
loss in any year in which the deductible amount would exceed the financial
statement expense, the tax law provides for a 15-year carryforward period of
that loss. Because of the extremely long period that is available to realize
these future tax benefits, a valuation allowance for this deferred tax asset is
not necessary.
 
     Total income taxes reflected in the Consolidated Statement of Operations
differ from the amounts computed by applying the federal tax rate as follows:
 
<TABLE>
<CAPTION>
                                                                   YEARS ENDED DECEMBER 31
                                                                  -------------------------
                                                                  1995      1994      1993
                                                                  -----     -----     -----
                                                                  DOLLARS IN MILLIONS
    <S>                                                           <C>       <C>       <C>
    Federal income tax provision computed at statutory tax rate
      of 35%....................................................  $50.9     $30.9     $13.4
    Additional taxes or credits from:
      State and local income taxes, net of federal income tax
         effect.................................................    4.5       2.5       1.7
      Change in federal statutory rate..........................     --        --        .6Cr.
      All other, net............................................    1.5       1.6       3.1Cr.
                                                                  -----     -----     -----
         Total income tax provision.............................  $56.9     $35.0     $11.4
                                                                  =====     =====     =====
</TABLE>
 
---------------
Cr. = Credit
 
NOTE 7. RELATED PARTY TRANSACTIONS
 
     The Company sells products to and purchases products from related companies
at prevailing market prices. These transactions were as follows:
 
<TABLE>
<CAPTION>
                                                                  YEARS ENDED DECEMBER 31
                                                                 --------------------------
                                                                  1995      1994      1993
                                                                 ------    ------    ------
                                                                 DOLLARS IN MILLIONS
    <S>                                                          <C>       <C>       <C>
    Net product sales..........................................  $ 15.7    $ 10.7    $ 10.7
    Net product purchases......................................  $176.6    $184.1    $174.2
</TABLE>
 
     Administrative expenses covering management, financial and legal services
provided to the Company were charged to the Company by Industries. Such charges
totaled $6.8 million in 1995 and $7.4 million in 1994 and 1993.
 
     Cash management activities are performed by Industries and cash is
periodically transferred to Industries. Funds transferred to Industries are
supported by interest-bearing notes receivable. Interest, at prevailing prime
market rates, is charged on all intercompany loans within the Industries
consolidated group. There was $3.9 million of net intercompany interest income
in 1995, no net intercompany interest expense in 1994 and $7.7 million of net
intercompany interest expense in 1993.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                      A-13
<PAGE>   46
 
       INLAND MATERIALS DISTRIBUTION GROUP, INC. AND SUBSIDIARY COMPANIES
          (A WHOLLY OWNED SUBSIDIARY OF INLAND STEEL INDUSTRIES, INC.)
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
     In December 1993, Industries made a capital contribution of $150 million to
the Company. The capital contribution has been recorded as "additional paid-in
capital."
 
NOTE 8. COMMITMENTS AND CONTINGENCIES
 
     The Company has noncancellable operating leases for which future minimum
rental commitments are estimated to total $38.3 million, including approximately
$8.6 million in 1996, $8.0 million in 1997, $7.0 million in 1998, $6.1 million
in 1999, $4.8 million in 2000, and $3.8 million thereafter.
 
     Rental expense under operating leases totaled $15.9 million in 1995 and
1994, and $16.8 million in 1993.
 
     Ryerson is the guarantor of $115.2 million of the Inland Steel Industries
Thrift Plan ESOP notes. The notes are payable in installments through July 2004.
 
     There are various claims and pending actions against the Company. The
amount of liability, if any, for these claims and actions at December 31, 1995
is not determinable but, in the opinion of management, such liability, if any,
will not have a materially adverse effect on the Company's financial position or
results of operations.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                      A-14
<PAGE>   47
 
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
 EXHIBIT                                                                               SEQUENTIAL
 NUMBER                                   DESCRIPTION                                   PAGE NO.
---------   ------------------------------------------------------------------------   ----------
<C>         <S>                                                                        <C>
 3.(i)      Copy of Certificate of Incorporation, as amended, of the Company........
 3.(ii)     Copy of By-laws, as amended, of the Company. (Filed as Exhibit 3.(ii) to
            the Company's Quarterly Report on Form 10-Q for the quarter ended
            September 30, 1995, and incorporated by reference herein.)                     --
 4.A        Copy of Certificate of Designations, Preferences and Rights of Series A
            $2.40 Cumulative Convertible Preferred Stock of the Company. (Filed as
            part of Exhibit B to the definitive Proxy Statement of Inland Steel
            Company dated March 21, 1986 that was furnished to stockholders in
            connection with the annual meeting held April 23, 1986, and incorporated
            by reference herein.)                                                          --
 4.B        Copy of Certificate of Designation, Preferences and Rights of Series D
            Junior Participating Preferred Stock of the Company. (Filed as Exhibit
            4-D to the Company's Annual Report on Form 10-K for the fiscal year
            ended December 31, 1987, and incorporated by reference herein.)                --
 4.C        Copy of Rights Agreement, dated as of November 25, 1987, as amended and
            restated as of May 24, 1989, between the Company and The First National
            Bank of Chicago, as Rights Agent (Harris Trust and Savings Bank, as
            successor Rights Agent). (Filed as Exhibit 1 to the Company's Current
            Report on Form 8-K filed on May 24, 1989, and incorporated by reference
            herein.)                                                                       --
 4.D        Copy of Certificate of Designations, Preferences and Rights of Series E
            ESOP Convertible Preferred Stock of the Company. (Filed as Exhibit 4-F
            to the Company's Quarterly Report on Form 10-Q for the quarter ended
            June 30, 1989, and incorporated by reference herein.)                          --
 4.E        Copy of Subordinated Voting Note due December 17, 1999 in the amount of
            $185,000,000 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 Indenture dated as of December 15, 1992, between the Company and
            Harris Trust and Savings Bank, as Trustee, respecting the Company's
            $150,000,000 121- 3/4% Notes due December 15, 2002. (Filed as Exhibit
            4-G to the Company's Annual Report on Form 10-K for the fiscal year
            ended December 31, 1992, and incorporated by reference herein.)                --
 4.G        Copy of First Mortgage Indenture, dated April 1, 1928, between Inland
            Steel Company (the "Steel Company") and First Trust and Savings Bank and
            Melvin A. Traylor, as Trustees, and of supplemental indentures thereto,
            to and including the Thirty-Fourth Supplemental Indenture, incorporated
            by reference from the following Exhibits: (i) Exhibits B-1(a), B-1(b),
            B-1(c), B-1(d) and B-1(e), filed with Steel Company's Registration
            Statement on Form A-2 (No. 2-1855); (ii) Exhibits D-1(f) and D-1(g),
            filed with Steel Company's Registration Statement on Form E-1 (No.
            2-2182); (iii) Exhibit B-1(h), filed with Steel Company's Current Report
            on Form 8-K dated January 18, 1937; (iv) Exhibit B-1(i), filed with
            Steel Company's Current Report on Form 8-K, dated February 8, 1937; (v)
            Exhibits B-1(j) and B-1(k), filed with Steel Company's Current Report on
            Form 8-K for the month of April, 1940; (vi) Exhibit B-2, filed with
            Steel Company's Registration Statement on Form A-2 (No. 2-4357); (vii)
            Exhibit B-1(l), filed with Steel Company's Current Report on Form 8-K
            for the month of January, 1945; (viii) Exhibit 1, filed with Steel
            Company's Current Report on Form 8-K for the month of November, 1946;
            (ix) Exhibit 1, filed with Steel Company's Current Report on Form 8-K
            for the
</TABLE>
 
                                       (i)
<PAGE>   48
 
<TABLE>
<CAPTION>
 EXHIBIT                                                                               SEQUENTIAL
 NUMBER                                   DESCRIPTION                                   PAGE NO.
---------   ------------------------------------------------------------------------   ----------
<C>         <S>                                                                        <C>
            months of July and August, 1948; (x) Exhibits B and C, filed with Steel
            Company's Current Report on Form 8-K for the month of March, 1952; (xi)
            Exhibit A, filed with Steel Company's Current Report on Form 8-K for the
            month of July, 1956; (xii) Exhibit A, filed with Steel Company's Current
            Report on Form 8-K for the month of July, 1957; (xiii) Exhibit B, filed
            with Steel Company's Current Report on Form 8-K for the month of
            January, 1959; (xiv) the Exhibit filed with Steel Company's Current
            Report on Form 8-K for the month of December, 1967; (xv) the Exhibit
            filed with Steel Company's Current Report on Form 8-K for the month of
            April, 1969; (xvi) the Exhibit filed with Steel Company's Current Report
            on Form 8-K for the month of July, 1970; (xvii) the Exhibit filed with
            the amendment on Form 8 to Steel Company's Current Report on Form 8-K
            for the month of April, 1974; (xviii) Exhibit B, filed with Steel
            Company's Current Report on Form 8-K for the month of September, 1975;
            (xix) Exhibit B, filed with Steel Company's Current Report on Form 8-K
            for the month of January, 1977; (xx) Exhibit C, filed with Steel
            Company's Current Report on Form 8-K for the month of February, 1977;
            (xxi) Exhibit B, filed with Steel Company's Quarterly Report on Form
            10-Q for the quarter ended June 30, 1978; (xxii) Exhibit B, filed with
            Steel Company's Quarterly Report on Form 10-Q for the quarter ended June
            30, 1980; (xxiii) Exhibit 4-D, filed with Steel Company's Annual Report
            on Form 10-K for the fiscal year ended December 31, 1980; (xxiv) Exhibit
            4-D, filed with Steel Company's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1982; (xxv) Exhibit 4-E, filed with Steel
            Company's Annual Report on Form 10-K for the fiscal year ended December
            31, 1983; (xxvi) Exhibit 4(i) filed with the Steel Company's
            Registration Statement on Form S-2 (No. 33-43393); (xxvii) Exhibit 4
            filed with Steel Company's Current Report on Form 8-K dated June 23,
            1993; (xxviii) Exhibit 4.H filed with the Steel Company's Quarterly
            Report on Form 10-Q for the quarter ended June 30, 1995; and (xxix)
            Exhibit 4.H filed with the Steel Company's Quarterly Report on Form 10-Q
            for the quarter ended September 30, 1995.                                      --
 4.H        Copy of consolidated reprint of First Mortgage Indenture, dated April 1,
            1928, between Inland Steel Company and First Trust and Savings Bank and
            Melvin A. Traylor, as Trustees, as amended and supplemented by all
            supplemental indentures thereto, to and including the Thirteenth
            Supplemental Indenture. (Filed as Exhibit 4-E to Form S-1 Registration
            Statement No. 2-9443, and incorporated by reference herein.)                   --
            [The registrant hereby agrees to provide a copy of any other agreement
            relating to long-term debt at the request of the Commission.]
10A*        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 Inland Steel Industries, Inc. Special Achievement 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 reference
            herein.)                                                                       --
10.C*       Copy of Inland 1995 Incentive Stock Plan. (Filed as Exhibit A to the
            Company's definitive Proxy Statement dated April 17, 1995 that was
            furnished to stockholders in connection with the annual meeting held May
            24, 1995, 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.
 
                                      (ii)
<PAGE>   49
 
<TABLE>
<CAPTION>
 EXHIBIT                                                                               SEQUENTIAL
 NUMBER                                   DESCRIPTION                                   PAGE NO.
---------   ------------------------------------------------------------------------   ----------
<C>         <S>                                                                        <C>
10D*        Copy of Inland 1984 Incentive Stock Plan, as amended. (Filed as Exhibit
            10.A to the Company's Quarterly Report on Form 10-Q for the quarter
            ended June 30, 1995, and incorporated by reference herein.)                    --
10.E*       Copy of Inland 1988 Incentive Stock Plan, as amended. (Filed as Exhibit
            10.B to the Company's Quarterly Report on Form 10-Q for the quarter
            ended June 30, 1995, and incorporated by reference herein.)                    --
10.F*       Copy of Inland 1992 Incentive Stock Plan, as amended. (Filed as Exhibit
            10.C to the Company's Quarterly Report Form on 10-Q for the quarter
            ended June 30, 1995, and incorporated by reference herein.)                    --
10.G*       Copy of Inland Steel Industries Non-Qualified Thrift Plan, as amended.
            (Filed as Exhibit 10.D to the Company's Quarterly Report on Form 10-Q
            for the quarter ended June 30, 1995, and incorporated by reference
            herein.)                                                                       --
10.H*       Copy of Inland 1992 Stock Plan for Non-Employee Directors, 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.I*       Copy of Inland Steel Industries Supplemental Retirement Benefit Plan for
            Covered Employees, as amended. (Filed as Exhibit 10.I to the Company's
            Annual Report on Form 10-K for the fiscal year ended December 31, 1993,
            and incorporated by reference herein.)                                         --
10.J*       Copy of Inland Steel Industries Special Retirement Benefit Plan for
            Covered 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, 1993,
            and incorporated by reference herein.)                                         --
10.K*       Copy of the Inland Steel Industries Deferred Compensation 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 incorporated by reference herein.)                                         --
10.L*       Copy of Inland Steel Industries Deferred Compensation 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
            incorporated by reference herein.)                                             --
10.M*       Copy of Inland Steel Industries Terminated Retirement Plan for
            Non-Employee Directors..................................................
10.N*       Copy of Inland Steel Industries, Inc. Deferred Phantom Stock Unit Plan
            for Non-Employee Directors..............................................
10.O*       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.P.(1)*   Copy of form of Severance Agreement dated June 28, 1989 between the
            Company and each of the seven executive officers of the Company
            identified on the exhibit relating to terms and conditions of
            termination of employment following a change in control of the Company.
            (Filed as Exhibit 10-0-(1) to the Company's Annual Report or Form 10-K
            for the fiscal year ended December 31, 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.
 
                                      (iii)
<PAGE>   50
 
<TABLE>
<CAPTION>
 EXHIBIT                                                                               SEQUENTIAL
 NUMBER                                   DESCRIPTION                                   PAGE NO.
---------   ------------------------------------------------------------------------   ----------
<C>         <S>                                                                        <C>
10.P.(2)*   Amended listing of executive officers of the Company who are parties to
            the form of Severance Agreement dated June 28, 1989 in Exhibit 10.P.(1)
            hereof. (Filed as Exhibit 10.N.(2) to the Company's Annual Report on
            Form 10-K for the fiscal year ended December 31, 1994, and incorporated
            by reference herein.)                                                          --
10.P.(3)*   Copy of Severance Agreement dated June 28, 1989 between the Company and
            Judd R. Cool. (Filed as Exhibit 10-O-(2) to the Company's Annual Report
            on Form 10-K for the fiscal year ended December 31, 1989, and
            incorporated by reference herein.)                                             --
10P.(4)*    Copy of Severance Agreement dated June 26, 1991 between the Company and
            Earl L. Mason. (Filed as Exhibit 10-X to the Company's Quarterly Report
            on Form 10-Q for the quarter ended June 30, 1991, and incorporated by
            reference herein.)                                                             --
10.P.(5)*   Copy of Severance Agreement dated November 27, 1991 between the Company
            and Maurice S. Nelson, Jr. (Filed as Exhibit 10-O-(6) to the Company's
            Annual Report on Form 10-K for the fiscal year ended December 31, 1992,
            and incorporated by reference herein.)                                         --
10.P.(6)*   Copy of Employment Agreement dated as of April 8, 1994 between the
            Company and Neil S. Novich. (Filed as Exhibit 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.P.(7)*   Copy of Severance Agreement dated as of April 8, 1994 between the
            Company and Neil S. Novich. (Filed as Exhibit 10.N.(9) to the Company's
            Annual Report on Form 10-K for the fiscal year ended December 31, 1994,
            and incorporated by reference herein.)                                         --
10.Q.(1)*   Copy of letter to Judd R. Cool dated September 2, 1987 relating to terms
            and conditions of employment. (Filed as Exhibit 10-K to the Company's
            Annual Report on Form 10-K for the fiscal year ended December 31, 1987,
            and incorporated by reference herein.)                                         --
10.Q.(2)*   Copy of letter agreement dated November 23, 1987 between the Company and
            Judd R. Cool. (Filed as Exhibit 10-L to the Company's Annual Report on
            Form 10-K for the fiscal year ended December 31, 1987, and incorporated
            by reference herein.)                                                          --
10.Q.(3)*   Copy of letter agreement dated December 10, 1993 between the Company and
            Judd R. Cool restating certain provisions of the September 2, 1987 and
            November 23, 1987 letters in Exhibits 10.P.(1) and (2). (Filed as
            Exhibit 10.P.(3) to the Company's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1993, and incorporated by reference
            herein.)                                                                       --
10.R*       Copy of letter to Earl L. Mason dated May 17, 1991 relating to terms and
            conditions of employment. (Filed as Exhibit 10-W to the Company's
            Quarterly Report on Form 10-Q for the quarter ended June 30, 1991, and
            incorporated by reference herein.)                                             --
10.S*       Copy of letter to Maurice S. Nelson, Jr. dated March 26, 1993 relating
            to supplemental pension arrangement. (Filed as Exhibit 10-S to the
            Company's Annual Report on Form 10-K for the fiscal year ended December
            31, 1992, 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>   51
 
<TABLE>
<CAPTION>
 EXHIBIT                                                                               SEQUENTIAL
 NUMBER                                   DESCRIPTION                                   PAGE NO.
---------   ------------------------------------------------------------------------   ----------
<C>         <S>                                                                        <C>
10.T        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.)            --
10.U.(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
            Finance III, Inc. of 185,000 shares of Series F Exchangeable Preferred
            Stock of the Company. (Filed as Exhibit 4(b) to the Company's Current
            Report on Form 8-K filed on December 18, 1989, and incorporated by
            reference herein.)                                                             --
10.U.(2)    Copy of Steel Technology Agreement dated as of July 14, 1989 between
            Inland Steel Company and Nippon Steel Corporation relating to technology
            sharing between the signatories. (Filed as Exhibit 10-S-(2) to the
            Company's Annual Report on Form 10-K for the fiscal year ended December
            31, 1989, and incorporated by reference herein.)                               --
10.U.(3)    Copy of Basic Agreement dated as of July 21, 1987 between 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.U.(4)    Copy of Partnership Agreement dated as of July 21, 1987 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 the I/N Tek joint venture. (Filed as Exhibit 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.U.(5)    Copy of Basic Agreement dated as of September 12, 1989 between the
            Company and Nippon Steel Corporation relating 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 incorporated
            by reference herein.)                                                          --
10.U.(6)    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 indirectly wholly owned subsidiary of Nippon Steel
            Corporation) 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.U.(7)    Copy of Substrate Supply Agreement dated as of September 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.U.(8)    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 Report on
            Form 10-K for the fiscal year ended December 31, 1990, and incorporated
            by reference herein.)                                                          --
10.U.(9)    Letter Agreement dated as of May 1, 1990 among I/N Kote, the Company and
            Nippon Steel Corporation relating 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 reference herein.)                --
</TABLE>
 
                                       (v)
<PAGE>   52
 
<TABLE>
<CAPTION>
 EXHIBIT                                                                               SEQUENTIAL
 NUMBER                                   DESCRIPTION                                   PAGE NO.
---------   ------------------------------------------------------------------------   ----------
<C>         <S>                                                                        <C>
10.U.(10)   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 venture. (Filed as Exhibit 10-R-(10) to the Company's Annual
            Report on Form 10-K for the fiscal year ended December 31, 1990, and
            incorporated by reference herein.)                                             --
10.U.(11)   Letter Agreement dated as of April 19, 1990 between the Company and
            Nippon Steel Corporation relating to capital contributions to I/N Tek.
            (Filed as Exhibit 10-R-(11) to Company's Annual Report on Form 10-K for
            the fiscal year ended December 31, 1990, and incorporated by reference
            herein.)                                                                       --
10.U.(12)   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 Report on Form 10-K for the fiscal
            year ended December 31, 1990, and incorporated by reference herein.)           --
10.U.(13)   CCM Override Amendment dated as of April 20, 1990 among the Company;
            Nippon Steel Corporation; Inland 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.V        Copy of ESOP Stock Purchase Agreement, dated May 30, 1990, between the
            Company and Harris Trust and Savings Bank, as ESOP Trustee. (Filed as
            Exhibit 10-T to the Company's Quarterly Report on Form 10-Q for the
            quarter ended September 30, 1990, and incorporated by reference herein.)       --
10.W        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 Exhibit 10-P to the Company's Quarterly Report on
            Form 10-Q for the quarter ended June 30, 1989, and incorporated by
            reference herein.)                                                             --
10.X        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 reference
            herein.)                                                                       --
10.Y        Letter Agreement dated May 10, 1991 by and between Nippon Steel
            Corporation and Inland Steel Industries, Inc. relating to Letter
            Agreement dated December 18, 1989. (Filed as Exhibit 10-V to the
            Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
            1991, and incorporated by reference herein.)                                   --
11          Statement of Earnings per Share of Common Stock.........................
13          Information incorporated by reference from Annual Report to Stockholders
            for the fiscal year ended December 31, 1995. ...........................
21          List of certain subsidiaries of the Company.............................
23.         Consent of Independent Accountants, appearing on page 26 of this Annual
            Report on Form 10-K.                                                           --
24          Powers of attorney......................................................
27          Financial Data Schedules................................................
99          Letter to stockholders of common stock of the Company dated December 22,
            1987 explaining Stockholder Rights Plan adopted by Board of Directors on
            November 25, 1987. (Filed as Exhibit 3 to the Company's Current Report
            on Form 8-K filed on December 18, 1987, and incorporated by reference
            herein.)                                                                       --
</TABLE>
 
                                      (vi)