<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                               ------------------

                                    FORM 10-K
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1998       Commission File Number 1-4368

                               ------------------

                               THE LTV CORPORATION
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                              <C>       
                  Delaware                                     75-1070950
(State or other jurisdiction of incorporation)   (I.R.S. Employer Identification Number)
             200 Public Square
               Cleveland, Ohio                                 44114-2308
(Address of principal executive office)                        (Zip Code)
</TABLE>

        Registrant's telephone number, including area code (216) 622-5000
                           ---------------------------

           Securities registered pursuant to Section 12(b) of the Act:

                                                      NAME OF EACH EXCHANGE
       TITLE OF EACH CLASS                             ON WHICH REGISTERED
       -------------------                            ---------------------

Common Stock, par value $0.50                        New York Stock Exchange

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 whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
                                                       Yes  |X|   No ___

State the aggregate market value of the voting stock held by non-affiliates of
the registrant.
                                             Approximately $633.9 Million
                                                 (As of February 16, 1999)

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
                                             99,793,666 shares of Common Stock
                                                     (As of February 16, 1999)

Documents Incorporated by Reference: Annual Report to Shareholders for fiscal
year 1998 (Part II); Annual Proxy Statement for 1999 Annual Meeting (Part III)

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


<PAGE>   2

                                     PART I

ITEM 1.  BUSINESS.

FORWARD LOOKING STATEMENTS

         "Item 1. Business," "Item 2. Properties" and "Item 3. Legal
Proceedings" of this report include forward-looking statements. The use of the
words "outlook," "anticipates," "believes," "estimate," "expect" and similar
words are intended to identify these statements as forward-looking. These
statements represent the Company's current judgment on what the future holds.
While the Company believes them to be reasonable, a number of important factors
could cause actual results to differ materially from those projected. These
factors include relatively small changes in market price or market demand;
changes in domestic capacity; changes in raw material costs; increased operating
costs; loss of business from major customers, especially for high value-added
product; unanticipated expenses; substantial changes in financial markets; labor
unrest; unfair foreign competition; major equipment failure; unanticipated
results in pending legal proceedings or difficulties in implementing information
technology, including Year 2000 compliant systems.

INTRODUCTION

         The LTV Corporation ("LTV") was organized as a Delaware corporation in
November 1958 as a successor to a California corporation organized in 1953.
LTV's principal office is located at 200 Public Square, Cleveland, Ohio
44114-2308 and its telephone number is (216) 622-5000. LTV and its subsidiaries
are collectively referred to herein as "LTV" or the "Company" unless the context
otherwise requires.

         LTV is a leading domestic integrated steel producer and has recently
acquired interests in metal fabrication and leading steel technologies. For
financial reporting purposes, LTV has disaggregated the results of its
operations and certain other financial information into three segments:
Integrated Steel, Metal Fabrication and Corporate and Other which includes
leading steel technologies. The notes to Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operation set forth certain financial information relating to LTV's business
segments. The table below shows the percentage contribution to LTV's net sales
of each segment for the periods indicated.

<TABLE>
<CAPTION>
                                    1998              1997               1996
                                    ----              ----               ----

<S>                                  <C>               <C>                <C>
Integrated Steel                     84%               88%                92%

Metal Fabrication                    16%               12%                 8%

Corporate and Other                  --                --                 --
</TABLE>

         Integrated Steel. LTV's integrated steel segment manufactures and sells
a diversified line of coated sheet and cold rolled and hot rolled sheet and
strip and tin mill products. Coated sheet and cold rolled, hot rolled sheet and
strip are used to make products such as automobile bodies, appliances and other
consumer durable goods, farm equipment, industrial machinery, office equipment,
machine parts and tubular products. Tin mill products are used by the container
industry in the manufacture of cans and closures. LTV is engaged in such
operations primarily through its subsidiary, LTV Steel Company, Inc. ("LTV
Steel").



                                     - 1 -
<PAGE>   3

         Based on 1998 shipments (as compiled by LTV based primarily on publicly
filed data), LTV believes it is the third largest domestic integrated steel
producer, the second largest producer of flat rolled steel and a leading
supplier of quality-critical, flat rolled steel to the transportation, appliance
and electrical equipment industries in the United States.

         In its integrated steel operation, LTV operates two domestic integrated
steel mills (Cleveland Works and Indiana Harbor Works) and various finishing,
galvanizing and processing facilities, as well as tin mill operations. Also
included in LTV's integrated steel operation are iron ore and limestone
operations (which provide raw materials to its steelmaking facilities) and short
line railroad operations (which primarily transport raw materials and steel
products to support the manufacturing operations). See Item 2. Properties for a
description of these assets and operations.

         Metal Fabrication. LTV's metal fabrication segment (i) manufactures
pipe, conduit and other tubular products for use in transportation, agriculture,
construction and oil and gas industries (ii) manufactures preengineered, metal
buildings for low rise commercial and industrial applications ("VP Buildings")
and (iii) includes interests in a steel tailor welded blank operation for
automotive applications ("TWB") and a steel processing and blanking operation in
Puebla, Mexico and a similar operation to be built in Silao, Mexico
("Lagermex").

         Corporate and Other. LTV's corporate and other segment includes (i) a
50% interest in a steel minimill operation ("Trico Steel") which began
production in April 1997, (ii) a 46.5% interest in a reduced iron plant in the
Republic of Trinidad and Tobago ("CAL") which began commissioning procedures in
the first quarter of 1999 and (iii) corporate investments and related income and
other expense.

SIGNIFICANT DEVELOPMENTS

         Steel Imports. During 1998, imports of flat rolled product (excluding
slabs) surged to record levels, averaging on an annual basis an estimated 25% of
total domestic shipments. The Company believes that a significant portion of the
recent imports have been unfairly traded and that this unfair trade has injured
the Company by reducing its production, shipping rates and average steel selling
prices. In response to this surge, the Company cut back raw steel production at
its Cleveland Works and Indiana Harbor Works, idling certain facilities and
announcing the closing of others, reduced iron ore pellet production and reduced
its workforce through layoffs.

         Trade Cases. In September 1998, LTV joined with eleven other domestic
steel companies, the United Steelworkers of America ("USWA") and the Independent
Steelworkers Union in filing unfair trade cases covering certain hot rolled
steel products against Japan, Russia and Brazil. The Company is continuing to
monitor the surge in unfairly traded imports and its effects on the Company's
operations and anticipates that additional unfair trade cases may be filed. See
"Trade Cases."

         Trico Steel. LTV's joint venture steel minimill operation, Trico Steel,
has experienced equipment problems that have prevented Trico Steel from
achieving its rated capacity of 2.2 millions tons and product mix. Such
equipment problems are continuing into 1999, although efforts are ongoing to
correct such problems. However, transformer outages at the minimill will likely
result in substantially reduced production into the second quarter of 1999. The
recent surge in steel imports has also negatively affected sales which in turn
has negatively affected production levels at Trico Steel. Due to the low
production levels experienced by Trico Steel, LTV and its other two partners
have entered into a credit commitment to lend to Trico Steel on a junior
subordinated basis up to an additional $50 million. LTV's portion of such
commitment is $25 million. The $50 million commitment is in addition to a $30
million loan 



                                     - 2 -
<PAGE>   4

commitment (LTV's share of which is $15 million) made in mid-1998 ($24 million
of which was loaned in 1998).

         PBGC Agreement. The agreement executed between LTV and the Pension
Benefit Guaranty Corporation (the "PBGC") at the time of LTV's reorganization
was substantially restructured in 1998. Prospectively, the restated agreement
normalizes funding requirements under Employee Retirement Income Security Act 
of 1974 for LTV's major defined benefit plans, and deletes or modifies 
restrictive financial covenants to make them no more restrictive than those in
the Company's existing senior note securities. In connection with the 
restructuring, the Company prepaid a promissory note payable to PBGC in the 
amount of $62 million, including accumulated interest.

                                INTEGRATED STEEL

STEEL MILL PRODUCTS

         During the years 1998, 1997 and 1996, LTV's integrated steel operation
accounted for 7.1%, 7.3% and 7.6%, respectively, of total domestic industry
shipments of steel mill products, based on American Iron and Steel Institute
("AISI") reports. The net tons of steel mill products shipped by LTV's
integrated steel operations during these periods were: 1998--7,238,000;
1997--7,655,000 and 1996--7,605,000.

         LTV's integrated steel mill product mix is reflected in the following
table which shows the revenue dollars for the periods indicated:

<TABLE>
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,         
                                                     ---------------------------------------------
                                                                  (DOLLARS IN MILLIONS)

                                                      1998                1997             1996
                                                     REVENUE*           REVENUE*          REVENUE*
                                                     --------           --------          --------

<S>                                                   <C>                <C>               <C>   
         Hot and cold flat rolled products            $1,861             $2,036            $2,017
         Galvanized products                           1,213              1,230             1,203
         Tin mill products                               395                502               453
         Other                                           121                137               140
                                                         ---                ---               ---
                  Total                               $3,590             $3,905            $3,813
                                                      ======             ======            ======
</TABLE>

*   Excludes intersegment steel shipments to the Company's metal fabrication 
    operation.

         Hot and cold flat rolled and galvanized product are used in the
manufacture of automobile bodies, appliances and other consumer durable goods,
farm equipment, industrial machinery, office equipment, machine parts and
tubular products. Tin mill products are used by the container industry in the
manufacture of cans and closures.

         Sales in 1998 decreased from 1997 due to a surge in unfairly traded
imports which resulted in lower average steel selling prices and lower shipments
at the Company.

STEEL PRODUCTION

         The following table sets forth raw steel production and estimated
capability information for both LTV and the domestic steel industry during the
periods indicated:



                                     - 3 -
<PAGE>   5

<TABLE>
<CAPTION>
                                                                         YEAR ENDED DECEMBER 31, 
                                                                 ---------------------------------------
                                                                 1998               1997            1996
                                                                 ----               ----            ----

<S>                                                           <C>                <C>               <C>    
         Capability (net tons in thousands)
                  LTV-Integrated Steel                          8,600              8,400             8,400
                  Industry(b)                                 125,000            121,400           116,100
                  Percent of industry                            6.8%               6.9%              7.2%
         Production (net tons in thousands)
                  LTV-Integrated Steel                          8,100              8,900             8,800
                  Industry(b)                                 107,600            107,500           104,400
                  Percent of industry                            7.6%               8.3%              8.4%
         Production as a percentage of capability
                  LTV-Integrated Steel(a)                       95.0%             106.0%            105.0%
                  Industry(b)                                   85.9%              88.5%             89.9%
</TABLE>

(a)      The Company follows industry standards in calculating its maximum
         operating rate which is based on 95% of blast furnace capacity, which
         recognizes the average effect of blast furnace relines. LTV re-rated
         its capacity in 1998 which resulted in a 2.3% increase in AISI rated
         capacity.

(b)      The information relating to the domestic steel industry is as reported
         by or is derived from data reported by the AISI and is preliminary for
         1998. A net ton is 2,000 pounds.

         In its integrated steel operation, LTV produces its steel using the
basic oxygen furnace process at its Cleveland Works and Indiana Harbor Works.
With three continuous casters, LTV continuously casts 100% of its steel
production. LTV has supplemented its own steel production in recent years with
purchases of semi-finished steel. In 1998, 1997 and 1996, LTV purchased
approximately 36,000 tons, 322,000 tons and 168,000 tons, respectively, of
semi-finished slabs from other domestic and foreign steel producers.

         Individual facilities are operated at rates that best serve LTV's
overall need at the time and can be significantly higher or lower than LTV's
average operating rate. LTV does not believe data regarding the utilization of
individual facilities is necessarily meaningful.

CUSTOMERS

         The following table sets forth the percentage of integrated steel
shipments by tonnage distributed among LTV's various markets for the periods
indicated:




                                     - 4 -
<PAGE>   6



<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31,        
                                                                   --------------------------------------        
                                                                   1998            1997              1996
                                                                   ----            ----              ----

<S>                                                                 <C>            <C>               <C> 
         Steel service centers                                       25%            26%               32%
         Transportation                                              27             25                23
         Converters and processors                                   18             19                17
         Electrical, agricultural and other machinery                 8              8                 8
         Household appliances and office equipment                    7              6                 6
         Containers and packaging                                     7              8                 7
         Construction                                                 6              6                 5
         Exports                                                      2              2                 2
         All other                                                  ---            ---               ---
                                                                  -----          -----             -----
                  Total                                             100%           100%              100%
</TABLE>

         Direct sales to General Motors, the Company's largest customer,
accounted for approximately 9%, 11% and 11% of the Company's consolidated
revenues in 1998, 1997 and 1996, respectively. In September 1999, the principal
labor agreements are scheduled to expire at GM and the two other largest
domestic automotive manufacturers.

SALES AND MARKET DISTRIBUTION

         Approximately 60% of LTV's integrated steel products are sold under
sales arrangements, most of which are negotiated on an annual basis. Almost all
of LTV's integrated steel sales to its larger customers in the transportation,
appliance, electrical equipment and food and beverage can markets are made
pursuant to such sales arrangements. LTV's sales arrangements generally provide
for set prices for the products ordered during the period they are in effect. As
a result, LTV may experience a delay in realizing price changes related to its
long-term integrated steel business. Much of the remainder of LTV's integrated
steel product is sold under contracts covering shorter periods at the then
prevailing market prices for such product.

         The Company's integrated steel sales organization is located at LTV's
headquarters. Employees performing commercial, marketing and customer service
functions are organized along market lines. LTV also maintains regional offices
for integrated steel sales functions.

         LTV's export sales of integrated steel product were 2.2% of total
dollar steel sales in 1998, 2.0% in 1997 and 2.1% in 1996.

COMPETITION

         LTV competes directly with domestic and foreign flat rolled carbon
steel producers and indirectly with producers of plastics, aluminum and other
materials such as ceramics and wood which sometimes can be substituted for flat
rolled carbon steel in manufactured products. The primary factors that have
affected competition include price, quality, delivery performance and customer
service. LTV targets quality-critical, value-added applications and believes it
is able to differentiate certain of its products from those of its competitors
on the basis of product quality, technology, modern facilities and customer
product and technical support.

Foreign

         Domestic steel producers have faced significant and intense competition
from foreign producers. The intensity of foreign competition is affected by the
relative strength of foreign economies and 



                                     - 5 -
<PAGE>   7

fluctuations in the value of the U.S. dollar against foreign currencies. During
1998, steel imports increased significantly due to a surge of unfairly traded
steel, a rise in the value of the dollar in relation to certain foreign
currencies, some of which were significantly devalued, and a weakening of
certain economies particularly in Eastern Europe, Asia and Pacific Rim
countries. Many foreign steel producers are owned, controlled or subsidized by
their governments. Decisions by such foreign producers with respect to
production and sales are often influenced to a greater degree by political and
economic policy considerations than by prevailing market conditions.

         For a description of the recent trade cases filed against Japan, Russia
and Brazil in 1998 as well as final dumping and subsidy decisions issued in
1992, some of which are still the subject of pending appeals, see "Trade Cases"
below.

         Based on preliminary AISI reports, imports of flat rolled products
increased significantly during each of the last two years, surging to record
levels during 1998. Based on AISI reports, during the three years 1998, 1997 and
1996, imports of flat rolled products (excluding semi finished steel) totaled
approximately 20 million, 14 million and 12 million net tons, respectively, or
approximately 25% of total domestic steel consumption in 1998, approximately 19%
in 1997 and 17% in 1996.

Domestic

         LTV also competes with other domestic integrated producers, some of
which have greater resources than the Company, and with mini-mills which are
relatively efficient, low-cost producers that generally produce steel from scrap
in electric furnaces, have lower employment and environmental costs and
generally target regional markets. Recently developed thin slab casting
technologies have allowed some mini-mill producers to enter certain sectors of
the flat rolled market, which have traditionally been supplied by integrated
producers, and others have announced their intention to do the same. Because of
their technology, mini-mills are currently highly dependent upon scrap and
susceptible to fluctuating scrap prices. In weak markets, minimills benefit from
falling scrap prices, their principal raw material. See "Corporate and Other"
for information regarding LTV's 50% participation in Trico Steel, a mini-mill
joint venture.

TRADE CASES

United States Trade Cases

         1998 Cases - In September 1998, LTV Steel joined with eleven other
domestic steel producers, the USWA and the Independent Steelworkers Union in
filing antidumping and/or countervailing duty petitions against Japan, Russia
and Brazil alleging injury resulting from subsidies and dumping in the
importation of certain hot rolled carbon steel products.

         On November 13, 1998, the International Trade Commission ("ITC")
determined that there is a reasonable indication that the U.S. steel industry is
threatened with material injury from such imports. Further, on November 23,
1998, the Department of Commerce ("DOC") found that "critical circumstances"
exist with respect to such imports from Russia and Japan (i.e., that there were
massive imports from these two countries over a relatively short period of time
with knowledge that the trade cases were imminent). The critical circumstances
determination means that steelmakers from such countries could be liable for
antidumping duties on such steel imported into the U.S. since mid-November 1998.
In February 1999, DOC issued preliminary determinations that set substantial
dumping margins on hot rolled steel product from Japan, Russia and Brazil and
countervailing duty margins on such product from Brazil. The preliminary
findings mean that importers from the three countries must file bonds to cover
the preliminary dumping margins on such imports. With respect to Japan and
Russia, such bonds 



                                     - 6 -
<PAGE>   8

must cover imports dating back to mid-November 1998. Ultimately, liability for
dumping duties will depend on affirmative final determinations of injury and
dumping by the ITC and DOC in mid-1999.

         On February 22, l999, the DOC announced that the U.S. government had
reached a tentative agreement with the Russian Federation that, if finalized,
would preclude the imposition of dumping duties in the pending trade cases
against Russia and would roll back Russia's recent 700% increase in hot rolled
steel product imports (from 508,000 metric tons in 1995 to 3,468,000 metric tons
in 1998) to 1996 import levels (750,000 metric tons). The suspension agreement
would also impose a six month moratorium on any future hot rolled product import
from Russia and would establish a minimum price of $255 per metric ton at which
such product could thereafter be sold in the United States. LTV has announced
that it intends to oppose the suspension agreement and will likely prosecute to
conclusion its trade case pending against Russia. If the suspension agreement is
not finalized, a successful prosecution of LTV's trade case would allow Russia
full access to the U.S. market (i.e. no quota would be imposed) but would no
longer allow importers of product from Russia to import such product at dumped
prices without incurring substantial dumping duties.

         The DOC also announced that a tentative comprehensive agreement had
been negotiated with the Russian Federation, covering all other steel product,
which, if finalized, would reduce the level of imports of such other steel
product to 1997 levels.

         1992 Cases - As a result of the 1992 filing of numerous anti-dumping
and countervailing duty cases by U.S. steel producers, including LTV Steel,
there are orders imposing dumping and countervailing duties on imports of cold
rolled steel coils from three countries and on coated steel coils from six
countries. For the most part, these additional duties have reduced the volume of
imports of the dutiable products from these countries. The orders under which
these additional duties have been imposed will remain in effect until changed as
a result of a periodic "Administrative Review," which would consider the
appropriateness of the existing duty margin, or by an order following a "Sunset
Review." Sunset Reviews of the orders will begin in 1999. Under the Sunset
Review provisions, dumping and countervailing duties will be eliminated unless
it is determined that revocation of the order is likely to lead to a
continuation or recurrence of dumping or countervailable subsidies and a
continuation or recurrence of injury to United States steel producers.

Canada and Mexico Trade Cases

         In Canada, dumping duties have been imposed on LTV Steel exports of hot
dipped galvanized steel coils, except for hot dipped galvanized steel used for
exterior auto bodies that are sold to Canadian customers. Canadian
administrative reviews have established "normal values" for the dutiable LTV
Steel products exported to Canada. "Normal value" is the price at which goods
can be sold without incurring dumping penalties. Dumping duties formerly imposed
on LTV Steel exports of cold rolled steel coils were rescinded by the Canadian
International Trade Tribunal in 1998. The rescission has been appealed to a
bi-national review panel pursuant to the North American Free Trade Agreement. If
the decision is reversed, the former dumping duties would be assessed on a
retroactive basis to the date of the rescission.

         In Mexico, dumping duties were established for LTV Steel on hot rolled
steel and plate-in-coil exports. However, the Mexican courts have found that
these dumping duties were imposed illegally. The decisions voiding the dumping
duties have been appealed by the Mexican government, and LTV Steel and other
importers of record must continue to post a bond to cover possible dumping
duties in the event these decisions are reversed by an appellate court.

         Because the total LTV Steel shipments of these products to Canada and
Mexico are relatively small, these duties should have an insignificant effect on
the Company's results of operations.



                                     - 7 -
<PAGE>   9

                                METAL FABRICATION

     LTV's metal fabrication segment (i) manufactures pipe, conduit and other
tubular products for use in oil and gas, transportation, agriculture and
construction industries through its tubular division, (ii) manufactures
pre-engineered, metal buildings for low rise commercial and industrial
applications (VP Buildings) and (iii) includes interests in a steel tailor
welded blank operation for automotive applications (TWB) and steel processing
and blanking operations in Puebla, Mexico (Lagermex) and a similar operation to
be built in Silao, Mexico.

         Tubular. LTV's tubular products include standard, line and oil country
pipe used primarily in the oil and gas, and construction industries and a
variety of tubing products such as electrical conduit, conveyor tubing, axle
tubing, prop shaft tubing, condenser and pressure tubing and drawn tubing used
in the automotive, agriculture and construction industries.

         Tubular products are sold through a separate sales organization divided
into four regions and through independent sales representatives.

         The U.S. market for tubular products is heavily affected by imports;
foreign products accounted for 49% of the market in 1998, 37% in 1997 and 34% in
1996.

         LTV recently completed construction and began commissioning a new
technologically advanced tubing manufacturing facility in Marion, Ohio. The
facility, which is expected to begin shipments in the first quarter of 1999,
will manufacture high-quality tubing for the automotive mechanical tubing
market, including for the manufacture of hydroformed parts. The automotive
mechanical tubing market is expected to grow as automobile manufacturers
increase their use of tubular products in order to reduce the weight of vehicles
and the cost of vehicle construction. The facility has a rated processing
capacity of 146,000 tons of steel annually.

         In the fourth quarter of 1998, the Company announced that it would shut
down its electricweld tubular operations at its Cleveland tubular products
plant. In 1998, the Company processed 36,000 tons of electricweld tubular
product at such plant.

         Metal Buildings. VP Buildings was acquired on July 2, 1997. VP
Buildings' metal buildings are typically custom designed or pre-engineered,
one-to-two story metal buildings for commercial and industrial uses, such as
office buildings, aircraft hangars, manufacturing facilities, warehouses,
schools, shopping centers and churches. Principal metal building systems
components are primary structural members, secondary structural components and a
variety of wall and roof components. The components are fabricated according to
specifications and shipped to building sites for assembly by independent
builders.

         In April 1998, VP Buildings acquired United Panel, Inc. ("UPI") which
manufactures fiberglass panels with imbedded aggregate for commercial buildings.

         LTV believes, based on Metal Building Manufacturers Association
("MBMA") data, that VP Buildings has the second largest market share in the
domestic industry. VP Buildings designs and manufactures metal building systems
at eight domestic locations and markets them through approximately 1,000
builders and distributors in the United States and Canada, and directly to large
national and international accounts. VP Buildings also has metal building
systems production joint ventures or licensing arrangements in Argentina,
Brazil, Chile, China, Egypt, Japan, Mexico, South Korea, and Spain.



                                     - 8 -
<PAGE>   10

         VP Buildings is a major user of flat rolled steel, but is not currently
a significant customer of LTV's integrated steel operations. VP Buildings has
developed a proprietary software system intended to significantly improve the
ability of customers to develop engineering designs, obtain immediate pricing
and order various building design configurations.

         Metal buildings compete with conventional forms of non-residential
building construction, with competition primarily based on cost, construction
time, appearance, thermal efficiency and other customer requirements. VP
Buildings also competes with numerous other metal building systems
manufacturers. The largest five such manufacturers (including VP Buildings)
account for approximately 70% of industry sales, according to MBMA. Competition
among metal building systems companies is based primarily on price, service,
product design and performance, and marketing capabilities.

         Other. LTV's metal fabrication operation also includes an approximate
11% interest in a tailor welded blanking operation (TWB) in Monroe, Michigan
(acquired in 1997) which adds value to product sold to domestic automotive
customers. Other partners in the joint venture are Worthington Industries, Inc.,
Thyssen Krupp A.G. and two domestic steel producers. The operation in Michigan
uses new technology to weld together two or more steel blanks which may be of
different grade or thickness for automotive stamping operations. Automotive
parts currently being made with laser tailor welded blanks, which have recently
experienced growing acceptance for their ability to reduce cost and weight,
include body side frames, wheel house panels, center pillars, pillar
reinforcements, motor compartment rails, floor panels and front and rear door
panels.

         LTV also owns a 25% interest in Lagermex (acquired in 1997), a joint
venture which operates automotive steel processing and blanking operations in
Puebla, Mexico and a second to be built in Silao, Mexico. The venture in Puebla,
Mexico supplies to Volkswagen de Mexico and its parts suppliers in Puebla
inventory management, slitting and blanking products and services required to
produce the Volkswagen plant's steel stampings. Partners in the joint venture
are Krupp Hoesch Stahlexport GmbH and local plant management. The operation to
be built in Silao, Mexico will supply blanks and offer warehouse services to a
local supplier of a General Motors plant.

                               CORPORATE AND OTHER

         LTV's corporate and other segment includes leading steel technology
operations which consist of interests in a steel minimill and a foreign reduced
iron facility (which produces a substitute for steel scrap for use in electric
furnace steel manufacturing operations) and corporate investments and related
income and other expense.

         Steel Minimill. LTV's joint venture steel minimill operation, Trico
Steel, is located in Decatur, Alabama, and began commercial operations in the
second quarter of 1997. Trico Steel, which is owned 50% by a subsidiary of LTV
and 25% each by subsidiaries of Sumitomo Metal Industries, Ltd. ("Sumitomo") and
British Steel plc ("British Steel"), produces commercial and higher quality hot
rolled steel. Trico Steel has a rated annual capacity of 2.2 million tons. The
steel produced by Trico Steel is sold by a sales force of a wholly owned
subsidiary of LTV which is dedicated solely to the sale of Trico Steel product.
The Trico Steel investment is expected to provide LTV and its partners with a
modern facility and improved market access to the southeastern portion of the
United States.

         Trico Steel has experienced equipment problems that have prevented
Trico Steel from achieving its rated capacity of 2.2 million tons. Such
equipment problems continue, although efforts to correct such problems are
ongoing. The recent surge in steel imports has also negatively affected
production levels at Trico Steel. See "Significant Developments."



                                     - 9 -
<PAGE>   11

         Reduced Iron Facility. LTV's reduced iron joint venture with
Cleveland-Cliffs Inc and Lurgi AG, Cliffs and Associates ("CAL"), is
constructing a facility in the Republic of Trinidad and Tobago to produce
reduced iron briquettes (a substitute for steel scrap) for use in electric
furnace steelmaking operations. The joint venture, CAL, which began
commissioning procedures in the first quarter of 1999, is 46.5% owned by a
subsidiary of LTV with the remainder owned by subsidiaries of Cleveland-Cliffs
Inc (46.5%) and Lurgi AG (7%). The project utilizes the new CIRCORED(R) process
and is expected to have an annual rated capacity of 500,000 metric tons.
Operation of the facility is managed by Cliffs Reduced Iron Management Company,
a subsidiary of Cleveland-Cliffs Inc.

         Headquarters and Other. Headquarters and other expense includes
corporate investments and related income and expenses.

EMPLOYEES AND LABOR MATTERS

         As of December 31, 1998, LTV and its consolidated subsidiaries had
approximately 14,800 active employees. Of these employees, approximately 12,100
employees are employed in the integrated steel segment and approximately 2,700
employees are employed in the metal fabrication segment. Approximately 10,500
active employees, primarily hourly workers, are represented by unions. Of the
union represented employees, approximately 9,600 are represented by the USWA
(primarily in the integrated steel segment and in the tubular operations
included in metal fabrication segment) and approximately 900 are represented by
either the teamsters union or by the sheet metal workers union (in the metal
fabrication segment).

         LTV's current steel labor agreements with the USWA covering
approximately 9,500 active employees expires on August 1, 1999. The USWA's labor
agreements with several other domestic integrated steel producers also expire on
August 1, 1999. LTV is unable to predict whether, or on what terms, it will be
able to negotiate new steel labor contracts in 1999, or what the effects on LTV
might be. A prolonged work stoppage by USWA represented employees would have a
material adverse effect on LTV.

         LTV also has other labor agreements covering approximately 145
USWA-represented employees at LTV's two electro-galvanizing joint ventures which
expire on August 1, 1999. Additionally, four of twenty-three union contracts
covering LTV's railroads are currently being renegotiated. The Company's labor
agreement with the teamsters union is scheduled to expire at year-end 1999, and
the Company's two labor agreements with the sheet metal workers union are
scheduled to expire in April 1999 and January 2000, respectively. VP Buildings'
labor contract with the USWA at its Wisconsin plant is scheduled to expire on
April 1, 2001.

                              OTHER ASPECTS OF LTV

RESEARCH AND DEVELOPMENT

         LTV's research and development efforts focus on developing new
production processes to improve the quality and reduce the cost of LTV's product
lines, provide product and technical support to customers and create new steel
products.

         LTV operates a research and development facility and customer technical
center in Cleveland to develop new steel products, improve existing steel
products and develop more efficient operating procedures to meet the continually
increasing demands of the transportation, appliance, electrical equipment and
container markets. The employees of LTV's research and development facilities
include chemists, metallurgists and engineers.



                                     - 10 -
<PAGE>   12

         LTV also has a product application office in Detroit that works closely
with customers in identifying optimum steel and manufacturing methods,
evaluating steel product performance and solving customer manufacturing
problems.

         Expenditures for research and development totaled $14 million in 1998
and 1997 and $15 million in 1996. These expenditures do not include the efforts
of sales and manufacturing employees in working to meet customer technical
demands.

ENVIRONMENTAL LIABILITIES

         LTV is subject to changing and increasingly stringent environmental
laws and regulations concerning air emissions, water discharges and waste
disposal.

         The Company spent approximately $14 million in 1998 and $32 million in
1997 for compliance-related capital expenditures, primarily in connection with
its integrated steel operations, and expects to spend an average of
approximately $30 million annually in capital expenditures for the next
five-year period, primarily in connection with its integrated steel operation,
to meet environmental standards (including requirements of the 1990 Clean Air
Act Amendments). Estimates for future capital expenditures and operating costs
required for environmental compliance are difficult to determine, however, due
to numerous uncertainties, including the evolving nature of the regulations, the
possible imposition of more stringent requirements and the availability of new
technologies.

         Also, the Company spent approximately $24 million in 1998 and $16
million during 1997 for environmental clean-up and related matters at operating
and idled facilities and had a recorded liability of $136 million at December
31, 1998 (including costs related to the demolition, closure and clean-up of
closed facilities) and $154 million at December 31, 1997 for known and
identifiable environmental clean-up and related matters that are probable to
occur, based on current law and existing technology. Most of these expenditures
are expected to be incurred by the Company over the next five-year period,
primarily in connection with its integrated steel operation. Other requirements
for environmental matters, which could increase these costs, may arise in the
future. See the discussion of "Environmental Liabilities and Related Costs"
included in Management's Discussion and Analysis included in the Company's 1998
Annual Report to Shareholders which is incorporated herein by reference.




                                     - 11 -
<PAGE>   13



YEAR 2000 READINESS DISCLOSURE

         Although LTV does not currently manufacture any products containing
embedded chips or any computerized products, LTV (like most companies) has been
faced with the task of addressing the Year 2000 issue, which is the result of
computer programs being written using two digits rather than four to define the
applicable year. Any of the Company's computer programs or any hardware that
have date-sensitive software or embedded chips may recognize a date using "00"
as the year 1900 rather than the year 2000.

         Since the commencement of its Year 2000 readiness effort in late 1996,
LTV has been engaged in a company-wide effort to achieve Year 2000 readiness for
both information technology (IT) and non-information technology (Non-IT)
systems. The Company expects to achieve company-wide Year 2000 readiness mid
1999. LTV has formed a Steering Committee for Year 2000 issues, which meets
regularly and is comprised of high level executives and other management
personnel and Year 2000 consultants. LTV is primarily using its own employees to
achieve readiness in most of its manufacturing and operations systems, augmented
by outside expertise related to specific systems. LTV has contracted with its
principal Year 2000 outside contractor (the "Outside Contractor") to achieve
Year 2000 readiness with respect to its business and related information
technology infrastructure systems ("Business Systems"). In addition to the
Company's Year 2000 program described above, LTV is continuing to implement a
business reengineering project, which began in 1994 and which includes, among
other activities, replacing certain information systems with systems that are
Year 2000 ready. As a result, those systems scheduled for replacement during
1999 under the business reengineering project have been excluded from the Year
2000 readiness program and costs which are disclosed below.

         LTV's Year 2000 readiness program involves several stages, including
(l) an inventory stage to locate programs and devices that may have date
sensitivities, (2) a risk assessment and prioritization stage to determine the
degree of noncompliance and the potential impact on LTV's business, (3) a
remediation stage for affected systems and devices, (4) a test stage to
determine if the repaired program or device is ready, and (5) an implementation
stage to return the program or device back into operation.

         Management believes that the Company has made, and continues to make,
significant progress toward Year 2000 readiness; such progress and the
appropriateness of the Company's approach have both been confirmed by a major
automotive customer and an outside professional firm.

         Currently, the Company's systems are at various stages of readiness.
The inventory stage has been completed for manufacturing and operations systems,
which include Non-IT systems such as smart sensors, logic controllers,
distributed control systems and embedded microprocessors. Remediation, testing
and implementation for these systems is approximately 90% complete with the
remainder scheduled to be completed by the end of the first quarter of 1999. The
Outside Contractor has completed remediation, testing and implementation of
mission critical Business Systems.

         In the event the Company and material third parties such as critical
suppliers and/or customers fail to become Year 2000 compliant, a most reasonably
likely worst case scenario could result in a system failure or miscalculations
causing disruptions of operations, including, among other things, production
difficulties, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities which could result in a material
adverse effect on the Company's business and results of operations.

         In addition, the Company is in the process of developing a strategy to
address the additional potential consequences that may result from unresolved
Year 2000 issues, which will include the development of one or more contingency
plans by mid 1999. LTV has been querying material third 



                                     - 12 -
<PAGE>   14

parties, including suppliers, utility and other resource providers and customers
to assess their Year 2000 readiness efforts. Positive statements of readiness
have been received from 70% of the Company's suppliers. The Company has assumed
that any nonresponsive third party will be noncompliant for the purpose of risk
assessment. The Company is implementing a supply chain plan for most sole source
and mission critical suppliers and customers. This plan includes telephone
interviews and on-site visits.

         The Company has budgeted approximately $55 million for its Year 2000
readiness efforts, with $8 million designated for remediation of manufacturing
and operation systems and $47 million allocated for Business Systems. These
expenses include replacing some outdated, noncompliant hardware and noncompliant
software as well as identifying and remediating known Year 2000 problems. LTV
expensed $8 million of Year 2000 costs in 1997, and $35 million in 1998. The
funds expensed for Year 2000 are outside of the normal information technology
budget. Because LTV's readiness program is not yet fully implemented and is
subject to certain risks and uncertainties, including the readiness efforts of
material third parties, there can be no assurance that LTV will not incur
material costs beyond the anticipated costs described above.

         The cost of the Year 2000 project and the dates by which LTV believes
it will be Year 2000 ready are based on management's current best estimates,
which were derived based on numerous assumptions of future events, including the
continued availability of certain resources, third party modification plans and
other factors. There can be no guarantee, however, that these estimates will be
achieved, and actual results could differ materially from those anticipated.
Specific factors that might cause such differences include, but are not limited
to, the availability and cost of personnel trained in this area, the ability to
locate and correct all relevant computer codes and imbedded computer technology
in a timely manner and the ability of LTV's suppliers and customers to become
Year 2000 compliant in a timely manner.

         NOTE: THE DISCLOSURE ABOVE IS DESIGNATED AS YEAR 2000 READINESS
DISCLOSURE UNDER THE YEAR 2000 INFORMATION AND READINESS DISCLOSURE ACT.


                      EXECUTIVE OFFICERS OF THE REGISTRANT

         The following table sets forth certain information with respect to the
executive officers of LTV.

<TABLE>
<CAPTION>
NAME                      AGE*      OFFICE
<S>                       <C>       <C>                                       
Peter Kelly               57        Chairman of the Board, President and Chief Executive Officer
James F. Haeck            52        Executive Vice President
Richard J. Hipple         46        Executive Vice President
Arthur W. Huge            53        Executive Vice President and Chief Financial Officer
Jeffrey A. Saxon          50        Executive Vice President
Glenn J. Moran            51        Senior Vice President, General Counsel and Secretary
George T. Henning         57        Vice President and Controller
John C. Skurek            54        Vice President and Treasurer
</TABLE>

*  As of December 31, 1998.




                                     - 13 -
<PAGE>   15



OFFICERS

         The only employee of LTV and its subsidiaries who is a director of LTV
is Mr. Kelly, the Chairman of the Board, President and Chief Executive Officer
of LTV. Mr. David H. Hoag, who had been Chairman of the Board, retired as
Chairman of the Board and as a director of LTV effective January 31, 1999.

         All officers, except Messrs. Henning and Saxon, have been employed by
LTV or its subsidiaries for more than the last five years.

         Mr. Kelly became Chairman of the Board of LTV in February 1999, and
Chief Executive Officer of LTV in September 1998. He has been a director of LTV
since July 1997. Additionally, since July 1997, he has been President and Chief
Operating Officer of LTV. Prior thereto, since February 1991, he was a Group
Vice President of LTV. He has been President and a director of LTV Steel since
February 1991. He also serves as a director of National City Bank.

         Mr. Haeck was elected an Executive Vice President of LTV in February
1998. Prior thereto, since January 1996, he served as Senior Vice
President-Commercial of LTV. During the last five years, Mr. Haeck has also
served as Senior Vice President-Commercial and Senior Vice President-Flat Rolled
Operations at LTV Steel, Vice President and General Manager of Cleveland Works
and Vice President and General Manager of Tubular Products at LTV Steel.

         Mr. Hipple was elected an Executive Vice President of LTV in February
1998. Prior thereto, since February 1997 he served as Senior Vice
President-Purchasing, Engineering and Strategic Planning of LTV. During the last
five years, Mr. Hipple has also served in a variety of officer positions at LTV
Steel with responsibilities in the purchasing, engineering, environmental and
strategic planning areas.

         Mr. Huge was elected Executive Vice President in February 1998 and has
served as Chief Financial Officer of LTV since June 1993. Prior to his election
as an Executive Vice President, Mr. Huge served as a Senior Vice President of
LTV. Mr. Huge has also served as Vice President and Chief Financial Officer of
LTV Steel for more than the past five years.

         Mr. Saxon joined the Company as an Executive Vice President in February
1998. Prior thereto, since 1994, Mr. Saxon served as Group Vice
President-Specialty Plastics of The BFGoodrich Company.

         Mr. Moran has been Senior Vice President and General Counsel of LTV
since September 1992 and Secretary since July 1993. He has also served for the
last five years as Vice President and Group Counsel of LTV Steel.

         Mr. Henning was elected Vice President and Controller of LTV in
September 1995. Prior thereto, Mr. Henning was Vice President and Chief
Financial Officer of Pioneer Companies, Inc., a manufacturer of chlorine,
caustic soda and related products.

         Mr. Skurek has been Vice President and Treasurer of LTV since February
1993. Mr. Skurek has also served as Vice President and Treasurer of LTV Steel
since September 1992.

ITEM 2.  PROPERTIES.

CORPORATE HEADQUARTERS

         LTV's corporate headquarters is in Cleveland, Ohio and occupies 238,000
square feet under a lease expiring in 2011. The lease provides LTV three
consecutive five-year renewal options to extend the lease term through 2026.




                                     - 14 -
<PAGE>   16



INTEGRATED STEEL PRODUCING FACILITIES

         The Company has two integrated steel mills, Cleveland Works and Indiana
Harbor Works, and various finishing, galvanizing and processing facilities as
well as stand alone tin mill operations. During the last five years, the Company
has spent approximately $1.3 billion to modernize and upgrade these core
integrated steel facilities. In November 1998, the Company announced the
permanent closure of certain finishing operations at LTV's Cleveland Works.

         The Cleveland Works at Cleveland, Ohio produces a variety of flat
rolled products. Major facilities include three blast furnaces, two basic oxygen
furnaces, two continuous slab casters, one vacuum degassing and two ladle
metallurgy systems, two hot strip mills, two cold reducing mills, a continuous
anneal line, sheet finishing facilities and an electroplate line. In November
1998, the Company announced the closing in 1999 of certain finishing facilities
at the Cleveland Works.

         The Indiana Harbor Works at East Chicago, Indiana produces a variety of
flat rolled products. Major facilities include two blast furnaces, a basic
oxygen furnace, a continuous slab caster, a vacuum degassing and ladle reheating
system, a hot strip mill, a cold reducing mill, two sheet finishing facilities,
two hot dipped galvanizing lines and a tin mill.

         Responding to the recent surge in unfairly traded steel imports, the
Company curtailed operations at its Cleveland and Indiana Harbor Works beginning
in the fourth quarter of 1998, including idling certain facilities for a two
week period at the Cleveland Works.

         LTV also operates a tin mill in Aliquippa, Pennsylvania. The Company's
two tin mills (which includes one at Indiana Harbor Works as described above)
have a combined operating capacity aggregating 840,000 tons and operated at a
combined rate of 88% of capacity during 1998.

         LTV also operates finishing operations in Hennepin, Illinois. The
Hennepin facilities, which receive semi-finished products from the steel
producing facilities, include a cold reducing mill, a sheet finishing mill and a
hot dipped galvanizing line. LTV also currently operates coke batteries in
Chicago, Illinois and Warren, Ohio.

         Electro-Galvanizing Lines. LTV owns interests in two
electro-galvanizing lines. The first, involving a joint venture owned 60% by a
subsidiary of LTV and 40% by a subsidiary of Sumitomo, is located at LTV's
Cleveland Works. The line produces one-sided and two-sided zinc-coated flat
rolled steel products and has an annual capacity of approximately 420,000 tons
of coated products. The second line, located in Columbus, Ohio and involving a
joint venture that is owned equally by subsidiaries of LTV and Sumitomo,
produces zinc, nickel/zinc and nickel/zinc/organic coated products and has an
annual capacity of approximately 360,000 tons of coated product. Substantially
all of the cold rolled steel that is coated at these facilities is produced by
LTV, and LTV is responsible for all sales and marketing of coated products
processed by the joint venture. The two electro-galvanizing lines operated at a
combined rate of 80% of capacity during 1998.

         In January 1999, the partnership entered into a new operating lease
covering the equipment at the Cleveland electro-galvanizing line, extending the
lease term until 2009. The partnership has an option to renew the lease or
purchase the equipment at the end of the lease.

         The Company is considering the feasibility of entering into a joint
venture with a third party for the purpose of converting the Columbus facility
to a hot dipped galvanizing line capable of producing 500,000 tons of hot dip
galvanize product annually.



                                     - 15 -
<PAGE>   17

         Railroads. LTV owns all of the capital stock of the following six
terminal switching railroad companies: Aliquippa and Southern Railroad Company,
serving the Aliquippa tin mill; The Cuyahoga Valley Railway Company and The
River Terminal Railway Company, serving the Cleveland Works; The Mahoning Valley
Railway Company, serving the Youngstown electric weld pipe mill; The Monongahela
Connecting Railroad Company in Pittsburgh; and the Chicago Short Line Railway
Company, serving the Indiana Harbor Works. All are common carriers subject to
regulation by the Surface Transportation Board and are used primarily by LTV.

Suitability

         LTV's steel-related facilities are well maintained, considered adequate
for their intended purposes and being utilized for their intended purposes.

USWA Collateral Arrangement

         LTV has agreed with the USWA to grant liens on property used in the
Company's flat rolled steel operations with an appraised value of $500 million
to secure payment of (i) certain retiree health benefits to salaried and hourly
employees and retirees and (ii) certain employer contributions under a defined
contribution plan for hourly employees (collectively, the "Secured
Obligations"). The maximum amount recoverable to pay the Secured Obligations
upon foreclosure of the collateral is $250 million. Pursuant to such agreement,
LTV has granted liens on certain plant, property and equipment at its Cleveland
Works and a royalty free license or sublicense with respect to intellectual
properties used in connection with the manufacture of products at such
facilities.

RAW MATERIALS-LTV'S INTEGRATED STEEL OPERATIONS

Iron Ore

         LTV owns interests in two iron ore mining operations which are used in
LTV's flat rolled steel operations. LTV's share of production at these mines
during 1998 was sufficient to meet 100% of its iron ore requirements. LTV's
share of reserves at these mines is sufficient to meet its anticipated iron ore
requirements in the near term.

         LTV estimates that as of January 1, 1999, the total of its proven crude
ore reserves and of its proportionate share of such reserves of the companies in
which it has an ownership interest was such that, when mined and beneficiated,
there could be produced for use by LTV approximately 447 million gross tons (a
gross ton is equivalent to 2,240 pounds) of iron pellets averaging approximately
64% iron content. These ore reserves at the end of 1998, and 1998 activity, were
as follows:




                                     - 16 -
<PAGE>   18



<TABLE>
<CAPTION>
                                               PROVEN                                                    1998
                                                NET                     ANNUAL          SHARE OF      DELIVERIES
                                             INTEREST IN    IRON         ORE              1998         TO STEEL
                                             RESERVES(a)   CONTENT    ENTITLEMENT      PRODUCTION      PLANTS(b)
                                             -----------   -------    -----------      ----------      ---------
                                                                    (GROSS TONS IN THOUSANDS)
<S>                                           <C>           <C>         <C>               <C>            <C>  
Properties:
  LTV Steel Mining Company(c).............    407,000       64%         7,500(c)          7,109          7,436
  Empire Iron Mining Partnership(d).......     39,500       64%         2,000             1,967          1,884
                                               ------                   -----             -----          -----
Total Properties..........................    446,500                   9,500             9,076          9,320
</TABLE>

(a)      LTV's ownership interest in reserves is stated in gross tons of
         pellets.
(b)      "1998 Deliveries to Steel Plants" does not include the sale of ore
         products to third parties.
(c)      LTV owns 100% of LTV Steel Mining Company located in Minnesota. The
         entitlement is based on normal annual plant capacity, and the
         production level can be reduced at LTV's discretion.
(d)      LTV holds a 25% interest in Empire Iron Mining Partnership which
         operates an iron ore mine and pellet facility in Michigan. LTV can
         reduce its annual ore purchase requirements. Minimum ore purchase
         requirements in 1998 totaled 1,333,333 gross tons.

         Ore reserves are expected to be exhausted prior to the expiration dates
of the various leases associated with LTV's mining properties. LTV is committed
to pay its share of the annual cost of the Empire Iron Mining operations either
through cash advances or purchases of ore at market prices.

         During 1998, the average blast furnace charge consisted of
approximately 92% pellets and 8% sinter. During 1998, 98% of LTV's pellet and
sinter requirements came from affiliated sources.

Metallurgical Coal and Coke

         Metallurgical coal is used to make coke which is used in blast furnaces
in LTV's integrated steel operations to make iron in the raw steelmaking
process. All LTV's metallurgical coal requirements are purchased from
unaffiliated third parties under a number of short and intermediate term
contracts.

          LTV produced 45% of its coke requirements for its integrated steel
operations during 1998 and expects to produce 40% of its anticipated
requirements for 1999 at its owned coke batteries. The operational life of LTV's
batteries located at Warren, Ohio and Chicago, Illinois could be adversely
affected by increasingly stringent environmental regulations or their inability
to continue to meet existing environmental standards. LTV shut down its coke
plant in Pittsburgh, Pennsylvania in 1998. LTV anticipates, however, that its
internal coke supply, together with coke purchased from third parties
(approximately 60%), will meet substantially all of its near-term coke
requirements. See "Item 1. Business--Significant Developments" and "Item 3.
Legal Proceedings" for information relating to existing and threatened
environmental proceedings involving the Company's coke batteries.

Other Raw Materials

         LTV has a 53.5% interest in Presque Isle Corporation which operates a
limestone quarry located in Michigan for use in LTV's integrated steel
operations. LTV's share of Presque Isle Corporation's proven limestone reserves
was approximately 123,900,000 gross tons as of December 31, 1998. In 1998, LTV
used approximately 433,000 gross tons of limestone from Presque Isle and other
sources in its steelmaking operations. LTV owns a burnt lime processing plant at
Grand River, Ohio, which processes limestone from Presque Isle and other sources
into burnt lime. In 1998, approximately 44% of the 311,000 net tons of high
calcite burnt lime consumed by LTV's flat rolled steel operations came from
these sources.



                                     - 17 -
<PAGE>   19

         Substantially all other raw materials for use in LTV's integrated steel
operations are purchased in the open market from domestic and foreign sources.
Most of such raw materials, including scrap, nickel, tin, zinc and ferroalloys,
are expected to continue to be in sufficient supply, although market prices have
historically been subject to wide fluctuations.

         During the past three years, the Company has purchased a significant
amount of semi-finished slabs from other steel producers to supplement its own
production. The availability of such slabs, and the prices at which they can be
purchased, may vary, especially during periods of peak production in the steel
industry. See "Steel Production" above.

Energy

         The Company uses substantial amounts of electricity, natural gas, fuel
oil and coal, particularly in its flat rolled steel operations, all of which are
purchased at competitive or prevailing market prices. Adequate sources of supply
exist for all the Company's requirements.

METAL FABRICATION FACILITIES

         The Company's tubular products facilities are located in Ferndale,
Michigan; Cleveland, Marion, Youngstown and Elyria, Ohio; Counce, Tennessee; and
Cedar Springs, Georgia and manufacture electric weld pipe and welded tubing
(pressure tubing, mechanical tubing, cold drawn tubing and electrical metallic
conduit).

         VP Building's headquarters is located in Memphis, Tennessee and
occupies 40,800 square feet of office space. Metal building systems components
are manufactured by VP Buildings at plants located in Alabama, Arkansas,
California, Missouri, North Carolina, Ohio, Texas and Wisconsin. UPI's plant is
located in Mt. Bethel, Pennsylvania.

CORPORATE AND OTHER FACILITIES

         The Trico Steel minimill operation, in which the Company owns an
interest, is located in Decatur, Alabama. The CAL facility, in which the Company
owns an interest, is located in the Republic of Trinidad and Tobago.

                   PROPERTY ADDITIONS AND CAPITAL EXPENDITURES

         Capital expenditures and depreciation and amortization for the periods
indicated are as follows:




                                     - 18 -
<PAGE>   20



<TABLE>
<CAPTION>
                                                              1998         1997           1996
                                                              ----         ----           ----
                                                                        (IN MILLIONS)

<S>                                                           <C>          <C>            <C>
      Capital Expenditures.......................
           Integrated Steel....................                310           310             240
           Metal Fabrication...................                 52            16               3
           Corporate and Other.................                 --            --              --
                                                              ----          ----            ----
           Total...............................                362           326             243

      Depreciation and Amortization..............
           Integrated Steel....................                247           255             263
           Metal Fabrication...................                 12             8               3
           Corporate and Other.................                 --            --              --
                                                              ----          ----            ----
           Total...............................                259           263             266
</TABLE>

         The expenditures for integrated steel operations during 1998, 1997 and
1996 were mainly to refurbish blast furnaces and for equipment and facilities
which are designed to reduce cost, increase production efficiency and improve
quality and for environmental control projects. During this three year period,
the Company also made substantial expenditures for the development of a new
information systems project to support the Company's business processes. LTV is
currently engaged in the implementation phase of the project. All existing and
future information systems supporting these business processes are being
maintained principally by outside information systems providers under long-term
contracts. Included in the above under Metal Fabrication are capital
expenditures for the construction of the new Marion, Ohio tubular plant. Capital
spending for environmental control projects, primarily for the Integrated Steel
operations, during 1998, 1997 and 1996 was $14 million, $32 million and $27
million, respectively.

         Capital expenditures in 1999 are expected to aggregate approximately
$300 million, which include the cost of a blast furnace reline at the Cleveland
Works.

         Additionally, LTV's investment in its leading steel technologies
operations totaled $80 million in 1998 and $101 million in 1997 primarily for
Trico Steel and the construction of the direct reduced iron plant in the
Republic of Trinidad and Tobago.

ITEM 3.  LEGAL PROCEEDINGS.

         In addition to matters specifically discussed below, LTV is involved in
various legal proceedings occurring in the normal course of its business. LTV
cannot predict with certainty the outcome of any legal proceedings to which it
is subject. However, in the opinion of LTV's management, adequate provision has
been made for losses for which management can make a reasonable estimate of the
range of possible outcomes that are likely to result from these actions. To the
extent that such reserves prove to be inadequate, LTV would incur a charge to
earnings, which could have a material adverse effect on LTV's results of
operations for the applicable period. The outcome of these proceedings, however,
is not currently expected to have a material adverse effect on the financial
position of LTV.

Trade Cases

         For information concerning trade cases covering flat rolled steel
products and other steel products, see "Business-Trade Cases."



                                     - 19 -
<PAGE>   21

Environmental Proceedings

         Legal and administrative actions have been taken or are being
threatened against LTV and its subsidiaries, as discussed below, by the EPA and
the States of Indiana, Illinois and Ohio or their environmental agencies for
alleged violations of various federal and state environmental laws and
regulations. The Company has accrued for losses and costs associated with these
actions that are probable and estimable or otherwise provided for studies which
will provide a basis for estimation.

         In December 1998, the U.S. Department of Justice, representing the U.S.
EPA, filed a complaint against LTV Steel in the United States District Court for
the Northern District of Ohio. The complaint charges that LTV Steel allegedly
violated applicable opacity standards at the C-5 blast furnace top and cast
house, the C-6 blast furnace cast house and the No. 1 BOF shop precipitator
stacks at the Cleveland Works and applicable sulfur oxide emission standards at
the C-1 blast furnace stoves and a boiler at the Cleveland Works at various
times over a period of several years. The complaint also charges that LTV Steel
discharged pollutants into the Mahoning River without authorization pursuant to
or in violation of the terms of its NPDES permit at its Warren coke plant and
alleges violations of applicable regulations relating to hazardous waste
materials at the Warren coke plant. The complaint seeks to enjoin LTV Steel from
further violations of the Clean Air Act, Clean Water Act and the Resource
Conservation and Recovery Act and civil penalties of up to $25,000 or $27,500
per violation, depending on the date of the violation, for each day of violation
of these Acts.

         In March 1998, the U.S. Department of Justice filed a civil action on
behalf of the U.S. EPA in the United States District Court for the Western
District of Pennsylvania alleging LTV Steel violated applicable pushing and
combustion stack opacity emission standards in connection with the operation of
its Pittsburgh coke plant in and after October 1996. In January 1999, the United
States amended its complaint to allege that violations had occurred as early as
November 1994. The complaint seeks civil penalties not to exceed $25,000 per day
per violation for alleged violations occurring on or before January 30, 1997 and
$27,500 per day per violation for alleged violations that occurred after January
30, 1997. In April 1998, the Allegheny County Health Department filed a motion
to intervene and a separate complaint in the case. The complaint seeks penalties
for alleged violations in the amount of $25,000 per day. The Group Against Smog
and Pollution and Allegheny County have been granted intervenor status in the
action. Operations at the coke plant, which has been permanently closed, ceased
February 28, 1998.

         In January 1999, the U.S. EPA issued a Notice of Violation with respect
to LTV Steel's Grand River, Ohio lime plant. The Notice of Violation alleges
that violations of the opacity standards applicable to the kiln precipitators
have occurred at various times over the past several years and constitute
violations of the Clean Air Act subject to the remedies provided therein.

         State of Indiana. In April 1995, LTV Steel received a NOV issued by the
Indiana Department of Environmental Management ("IDEM") which alleges that
releases of contaminants onto and beneath the ground have occurred at the
Indiana Harbor Works in violation of applicable environmental regulations. IDEM
is seeking to have the Company undertake a comprehensive remediation program to
clean up the alleged on-ground and below-ground contamination at the facility.
The NOV is broad-based and, depending upon the nature of the remediation program
that might be imposed upon the subsidiary and IDEM's authority to require a
comprehensive clean-up, the cost of such work could be substantial.

         In May 1998, LTV Steel received a Notice of Violation from the IDEM
alleging that LTV Steel exceeded applicable opacity standards at the H-3 blast
furnace cast house at its Indiana Harbor Works on certain days in May, June and
November 1997. IDEM is seeking civil penalties of up to $25,000 for each day of
violation of the applicable standards and the installation of additional
pollution control equipment 



                                     - 20 -
<PAGE>   22

at the H-3 blast furnace cast house. LTV Steel and IDEM are engaged in
discussions in an effort to settle the Notice of Violation.

         IDEM had also issued NOVs to LTV Steel relating to basic oxygen furnace
("BOF") precipitator stack emissions and fugitive emissions from the BOF roof
monitors at the Indiana Harbor Works. The NOVs were resolved pursuant to an
Agreed Order entered into between LTV Steel and IDEM which has now terminated.
The Order provided for a civil penalty of $426,750, all but $85,350 of which has
been satisfied by the construction of certain environmental projects. In
addition, LTV Steel was required to demonstrate compliance through July 1, 1998
with applicable air quality standards at the BOF roof monitors or install
further controls if compliance is not demonstrated. The compliance demonstration
was made as required.

         In November 1996, IDEM and the United States Department of Interior
informed the Company and 15 other companies of their intent to perform a
National Resource Damage Assessment ("NRDA") of the Grand Calumet River System.
Each of the 16 entities was asked to contribute an unspecified amount of funding
for the study, which will cover a significant area that has been used for
industrial purposes for over a century. No cost estimate or schedule for
implementation of the study has been provided. IDEM also indicated that the
Company has been identified as a potentially responsible party in connection
with the release of hazardous substances and oil and the subsequent damages
resulting from natural resource injury. Because of the preliminary nature of
this matter, the Company is unable to predict whether any action might be
recommended or required as a result of this study or the potential cost to the
Company of any such action. In addition, the Army Corps of Engineers (the
"Corps") has issued a feasibility report concerning dredging of the federal
channel within the Indiana Harbor and Indiana Harbor Ship Canal. Preliminary
estimates of the cost of the dredging are approximately $135 million. According
to the Corps' report, if dredging occurs, it will be funded primarily by the
federal government. However, the Corps also indicated that some non-federal
funding may be necessary. No claims have been filed against the Company with
respect to the dredging project, and the Company has not been asked to
contribute to the cost of the project.

         State of Illinois. After notifying the Illinois EPA ("IEPA") of two
separate deposits of hazardous wastes discovered at LTV Steel's Chicago plant,
LTV submitted to IEPA remediation plans for clean-up at both sites. The Company
and the IEPA have reached an agreement on one of the remediation plans, which is
expected to cost less than $3 million, and clean-up work is nearing completion.
The cost of the other plan, now being reviewed by IEPA, is expected to be
immaterial.

         State of Ohio. On July 8, 1998, the Ohio Attorney General filed a
complaint in the Cuyahoga County Court of Common Pleas alleging various
instances of noncompliance with LTV Steel's NPDES permit at its Cleveland Works
over an approximate five year period. Concurrent with this filing, a consent
agreement was filed with the court resolving the allegations in the complaint.
The agreement requires a payment of $419,000 in civil penalties and the
implementation of a number of water pollution control studies at the plant. LTV
Steel may or may not be required to install modifications to its water pollution
control facilities depending upon the results of these studies.

Patent Litigation

         In July 1991, Inland Steel Company ("Inland") filed an action against
LTV Steel and another domestic steel producer in the U.S. District Court for the
Northern District of Illinois, Eastern Division, alleging defendants infringed
two of Inland's steel-related patents. Inland seeks monetary damages of up to
approximately $600 million and an injunction against future infringement. LTV
Steel in its answer and counterclaim alleges the patents are invalid and not
infringed and seeks a declaratory judgment to such effect. In May 1993, at a
jury trial, LTV Steel was found to have infringed the patents. The District



                                     - 21 -
<PAGE>   23

Court proceeding on the validity of the patents has been stayed informally
pending the conclusion of proceedings in the U.S. Patent Office described below,
and the decision on infringement is not appealable until the validity issue is
tried. In July 1993, the U.S. Patent Office rejected the claims of the two
Inland patents upon a reexamination at the request of LTV Steel and another
domestic steel producer, in essence concluding that the patents should not have
been granted and are invalid. Inland filed a response which sought to have the
U.S. Patent Office reverse its decision; however, in July 1994, the U.S. Patent
Office affirmed its decision. Inland's appeal to the Patent Office Board of
Appeals has been heard, and a decision by the Board of Appeals is pending.

Other

         In 1996, LTV Steel filed an action in the U.S. Court of Federal Claims
seeking recovery of approximately $25 million in Federal Insurance Contribution
Act ("FICA") and Federal Unemployment Tax Act ("FUTA") taxes which were paid by
LTV Steel to the U.S. government during the period 1987 through 1993 in
connection with certain pension make-up payments made to certain hourly and
salaried retirees. The Company's position is that these pension payments are not
subject to FICA and FUTA taxes. On October 19, 1998, the U.S. Court of Federal
Claims granted LTV Steel summary judgment. The parties have stipulated the
amount of the judgment, which is still subject to appeal, to be approximately
$24.6 million, plus statutory interest which the Company estimates to be
approximately $25 million. The judgment will cover taxes collected by the U.S.
Internal Revenue Service on certain pension payments for the tax years 1987
through 1993. Approximately one-third of the total amount recovered by LTV will
be refunded to eligible retirees.

         In January 1999, the Illinois Circuit Court (Tenth Judicial Circuit)
dismissed the purported class action filed on behalf of retirees described in
the Company's Report on Form 10-Q for the Second Quarter of 1998 after the
Company sent the notice to retirees sought by plaintiffs and offered to such
retirees the requested retiree benefits. In connection with the dismissal, the
Company agreed to pay plaintiffs' attorneys fees.

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

                                 Not applicable.

                                     PART II

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

         "Shareholders' Information" on the inside back cover, "Five-Year
Financial Summary" on page 30, "Quarterly Financial Information" on page 31 and
"Liquidity and Financial Resources" on page 6 of the 1998 Annual Report to
Shareholders are incorporated herein by reference.

BY-LAW AMENDMENTS:

ADVANCE STOCKHOLDER NOTICE REQUIREMENTS AND OTHER PROVISIONS

         LTV has provisions in its By-Laws intended to promote the efficient
functioning of its annual meetings. The provisions describe LTV's right to
determine the time, place and conduct of stockholder meetings, require advance
notice by mail or delivery to LTV of stockholder proposals or director
nominations for annual meetings and require persons wishing to conduct a
solicitation of written consents of stockholders or to call a special meeting of
stockholders to apply to the Board of Directors to set a 



                                     - 22 -
<PAGE>   24

record date for the consent solicitation or to determine whether the requisite
number of stockholders desire to call a special meeting.

         Under the By-Laws, stockholders must provide LTV with at least 60 days,
but no more than 90 days, notice prior to the announced Tentative Meeting Date
of (i) business the stockholder is proposing for consideration at that meeting
and (ii) persons the stockholder intends to nominate for election as directors
at that meeting.

         The LTV Board of Directors has selected April 28, 2000 as the Tentative
Meeting Date for the Annual Meeting of Stockholders in 2000. Accordingly,
stockholders who intend to propose business for consideration, or to nominate
persons for election as directors at the 2000 Annual Meeting, will be required
to provide notice and the required information to the Company no earlier than
January 29, 2000 and no later than February 28, 2000.

REQUIRED APPROVAL FOR CERTAIN PURCHASES OF
COMMON STOCK

         For the purpose of preserving LTV's ability to utilize certain
favorable tax attributes, Article Ninth of LTV's Restated Certificate of
Incorporation prohibits, with certain limited exceptions, any unapproved
acquisition of Common Stock that would cause the ownership interest percentage
of the acquirer or any other person to increase to 4.5% or above. A person's
ownership interest percentage for purposes of Article Ninth is determined by
reference to specified federal income tax principles, including attribution of
shares from certain related parties, deemed exercise of rights to acquire stock
and aggregation of shares purchased by persons acting in concert. PURCHASES OF
COMMON STOCK FROM ANY PERSON OTHER THAN THE COMPANY ARE SUBJECT TO THE
LIMITATIONS IMPOSED BY ARTICLE NINTH, AND ANY UNAPPROVED PURCHASE IN EXCESS OF
THE AMOUNTS PERMITTED BY ARTICLE NINTH WILL BE VOID AB INITIO. A PROSPECTIVE
PURCHASER OF COMMON STOCK WHO BELIEVES THAT IT MAY BE SUBJECT TO THE LIMITATIONS
IMPOSED BY ARTICLE NINTH SHOULD CONSULT WITH THEIR ADVISORS OR LTV IN ADVANCE OF
ACQUIRING SUCH SECURITIES TO DETERMINE IF ADVANCE APPROVAL MUST BE OBTAINED FROM
LTV'S BOARD OF DIRECTORS.

         LTV's Board of Directors was required by Article Ninth of LTV's
Restated Certificate of Incorporation to consider during 1996 whether to waive
the transfer restrictions in Article Ninth with respect to all future transfers
of securities. At its October 1996 meeting, the Board of Directors, after
considering all relevant factors, determined not to waive Article Ninth at that
time.

ITEM 6.       SELECTED FINANCIAL DATA.

         "Five-Year Financial Summary" on page 30 of the 1998 Annual Report to
Shareholders is incorporated herein by reference.





                                     - 23 -
<PAGE>   25



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

         "Management's Discussion and Analysis" on pages 4 through 9 of the 1998
Annual Report to Shareholders is incorporated herein by reference.

ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         "Quantitative and Qualitative Disclosure About Market Risk on page 8 of
the 1998 Annual Report to Shareholders is incorporated by reference.

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The listing on page F-1 lists all financial statements which are filed
as a part of this Report and which are incorporated herein by reference.

         "Quarterly Financial Information" on page 31 of the 1998 Annual Report
to Shareholders is incorporated herein by reference.

ITEM 9.       DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

         Not applicable.

                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         Information relating to the directors of LTV to be included in LTV's
Annual Proxy Statement for the 1999 Annual Meeting of Stockholders, which LTV
plans to file with the Commission in final form in early 1999, is incorporated
herein by reference. Information relating to the executive officers of LTV is
included in "Item 1. Business-Executive Officers of the Registrant."

ITEM 11.      EXECUTIVE COMPENSATION.

         Information relating to management remuneration and transactions
included in LTV's Annual Proxy Statement for the 1999 Annual Meeting of
Stockholders, which LTV plans to file with the Commission in final form in early
1999, is incorporated herein by reference.

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

         Information relating to ownership of LTV stock by the directors and
officers of LTV and owners of more than 5% of any class of LTV stock to be
included in LTV's Annual Proxy Statement for the 1999 Annual Meeting of
Stockholders, which LTV plans to file with the Commission in final form in early
1999, is incorporated herein by reference.

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Information relating to certain relationships and related transactions
to be included in LTV's Annual Proxy Statement for the 1999 Annual Meeting of
Stockholders, which LTV plans to file with the Commission in final form in early
1999, is incorporated herein by reference.



                                     - 24 -
<PAGE>   26

                                     PART IV

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

         (a)(1) and (2) List of Financial Statements and Financial Statement
Schedules.

         Reference is made to the listing preceding the financial statements and
financial statement schedules attached hereto on page F-1 for a list of all
financial statements and financial statement schedules filed as exhibits and
part of this Report including the Financial Statements of Trico Steel Company,
L.L.C. filed as part of this Annual Report pursuant to Rule 3.09 of Regulation
S-X.

         (a)(3)   List of Exhibits.

         Reference is made to the listing in (c) below for a list of all other
exhibits filed as part of this Report.

         (b)      Reports on Form 8-K.

                  None to report.

         (c)      Exhibits.

         Certain of the exhibits to this Report are hereby incorporated by
reference, as specified below, to other documents filed with the Commission by
LTV. Exhibit designations below correspond to the numbers assigned to exhibit
classifications in Regulation S-K.

         (d)      Financial Statement Schedules.

         The response to this portion of Item 14 is submitted as a separate
section of this Report on page F-1.

<TABLE>
<S>                             <C> <C>                                                     
         (2)-(1)                -   The LTV Second Modified Joint Plan of Reorganization (incorporated herein by
                                    reference to Exhibit (28)(a)-(3) to LTV's Annual Report on Form 10-K for the
                                    Fiscal Year ended December 31, 1992, filed with the Commission (File No. 1-4368)
                                    on March 31, 1993)

         (2)-(2)                -   Confirmation Order of the United States Bankruptcy Court for the Southern        
                                    District of New York entered on May 27, 1993, confirming the LTV Second Modified 
                                    Joint Plan of Reorganization (which includes, as Exhibit C to the Confirmation   
                                    Order, amendments to the LTV Second Modified Joint Plan of Reorganization)       
                                    (incorporated herein by reference to Exhibit 2(2) to LTV's Current Report on     
                                    Form 8-K, filed with the Commission (File No. 1-4368) on June 7, 1993)           
                                    
         (3)-(1)                -   Restated Certificate of Incorporation of LTV dated June 28, 1993 (incorporated 
                                    herein by reference to Exhibit 3.1 to LTV's Registration Statement on Form S-1 
                                    [Registration No. 33-50217])                                                   
</TABLE>



                                     - 25 -
<PAGE>   27
                                   
<TABLE>
<S>                             <C> <C>                                                                   
         (3)-(2)                -   Certificate of Designations for Series B Preferred Stock (incorporated herein by 
                                    reference to Exhibit 4 to SMI America, Inc.'s 13D Filing)                        
                                    
         (3)-(3)                -   Amendments to LTV's By-Laws adopted on October 25, 1996 (incorporated herein by 
                                    reference to Exhibit (3)-(1) to LTV's Report on Form 10-Q for the quarter ended 
                                    September 30, 1996)                                                             
                                    
         (10)-(1)               -   LTV Executive Benefit Plan as amended and restated effective January 1, 1985    
                                    (incorporated herein by reference to Exhibit (10)(c)-(2) to LTV's Report on Form
                                    10-K for the year ended December 31, 1985)                                      
                                    
         (10)-(2)               -   Amendment to LTV Executive Benefit Plan adopted November 20, 1987 (incorporated 
                                    herein by reference to Exhibit (10)(c)-(3) to LTV's Report on Form 10-K for the 
                                    year ended December 31, 1987)                                                   
                                    
         (10)-(3)               -   LTV Excess Benefit Plan dated as of January 1, 1985 (incorporated herein by     
                                    reference to Exhibit (10)(c)-(5) to LTV's Report on Form 10-K for the year ended
                                    December 31, 1984)                                                              
                                    
         (10)-(4)               -   Securities Purchase Agreement dated as of May 26, 1993 by and among LTV, LTV   
                                    Steel Company, Inc. and SMI America, Inc. (incorporated herein by reference to 
                                    Exhibit 2 to SMI America, Inc.'s 13D Filing)                                   
                                    
         (10)-(5)               -   Common Stock Registration Rights Agreement dated as of June 28, 1993 by and     
                                    between LTV and SMI America, Inc. (incorporated herein by reference to Exhibit 5
                                    to SMI America, Inc.'s 13D Filing)                                              
                                    
         (10)-(6)               -   Consultation and Management Participation Agreement dated as of June 28, 1993 
                                    between LTV and Sumitomo Metal Industries, Ltd. (incorporated herein by       
                                    reference to Exhibit 6 to SMI America, Inc.'s 13D Filing)                     
                                    
         (10)-(7)               -   L-S Exchange Right and Security Agreement dated as of June 28, 1993 by and among 
                                    LTV/EGL Holding Company, Sumikin EGL Corp., LTV, SMI America Inc., and Sumitomo  
                                    Metal USA Corporation (incorporated herein by reference to Exhibit 7 to SMI      
                                    America, Inc.'s 13D Filing)                                                      
                                    
         (10)-(8)               -   Amendments Nos. 1 and 2 to the Securities Purchase Agreement dated as of May 26, 
                                    1993 among LTV, LTV Steel Company, Inc. and SMI America, Inc. (incorporated      
                                    herein by reference to Exhibit (10)-(20) to LTV's Report on Form 10-Q for the    
                                    quarter ended September 30, 1994)                                                
                                    
         (10)-(9)               -   Revolving Credit Agreement dated as of October 12, 1994 among LTV Sales Finance  
                                    Company, the financial institutions parties thereto as banks, the issuing banks, 
                                    the facility agent and collateral agent (incorporated herein by reference to     
                                    Exhibit (10)-(22) to LTV's Report on Form 10-Q for the quarter ended September   
                                    30, 1994)                                                                        
</TABLE>
                                    



                                     - 26 -
<PAGE>   28



<TABLE>
<S>                             <C> <C>                                                          
         (10)-(10)              -   Receivables Purchase and Sale Agreement dated as of October 12, 1994 among LTV, 
                                    LTV Steel Company, Inc., Continental Emsco Company, LTV Steel Tubular Products  
                                    Company, Georgia Tubing Corporation and LTV Sales Finance Company (incorporated 
                                    herein by reference to Exhibit (10)-(23) to LTV's Report on Form 10-Q for the   
                                    quarter ended September 30, 1994)                                               
                                    
         (10)-(11)              -   Accession Agreement dated as of October 12, 1994 among LTV Sales Finance         
                                    Company, the financial institutions listed on the signature pages thereof, the   
                                    issuing bank named thereon, and Bankers Trust Company as facility agent and      
                                    collateral agent (incorporated herein by reference to Exhibit (10)-(24) to LTV's 
                                    Report on Form 10-Q for the quarter ended September 30, 1994)                    
                                    
         (10)-(12)              -   Trust Termination Acknowledgment and Agreement, dated October 12, 1994, between 
                                    LTV Sales Finance Company and Wilmington Trust Company (incorporated herein by  
                                    reference to Exhibit (10)-(25) to LTV's Report on Form 10-Q for the quarter     
                                    ended September 30, 1994)                                                       
                                    
         (10)-(13)              -   Assignment and Transfer Agreement, dated as of October 12, 1994, by and between 
                                    LTV Master Receivables Trust and LTV Sales Finance Company (incorporated herein 
                                    by reference to Exhibit (10)-(26) to LTV's Report on Form 10-Q for the quarter  
                                    ended September 30, 1994)                                                       
                                    
         (10)-(14)              -   Collateral Trust Agreement dated as of May 25, 1993 among LTV, LTV Steel        
                                    Company, Inc., United Steelworkers of America and Bank One Ohio Trust Company,  
                                    NA, as Collateral Trustee (incorporated herein by reference to Exhibit 10.33 to 
                                    LTV's Report on Form 10-Q for the quarter ended June 30, 1993)                  
                                    


         (10)-(15)              -   Open-End Mortgage, Security Agreement and Fixture Filing dated as of June 28,   
                                    1993 by LTV Steel Company, Inc. to Bank One Ohio Trust Company, N.A.            
                                    (incorporated herein by reference to Exhibit 10.34 to LTV's Report on Form 10-Q 
                                    for the quarter ended June 30, 1993)                                            
                                    
         (10)-(16)              -   License Agreement dated as of June 28, 1993 between LTV Steel Company, Inc. and
                                    Bank One Ohio Trust Company, N.A. (incorporated herein by reference to Exhibit 
                                    10.35 to LTV's Report on Form 10-Q for the quarter ended June 30, 1993)        
                                    
         (10)-(17)              -   Settlement Agreement and Stipulated Order on behalf of the United States of     
                                    America on behalf of the United States Environmental Protection Agency approved 
                                    by the United States Bankruptcy Court Southern District of New York (the        
                                    "Court") on April 15, 1993 and supplemented by Exhibit 10.38 below (incorporated
                                    herein by reference to Exhibit 10.38 to LTV's Report on Form 10-Q for the       
                                    quarter ended June 30, 1993)                                                    
</TABLE>
                                    





                                     - 27 -
<PAGE>   29



<TABLE>
<S>                             <C> <C>                       
         (10)-(18)              -   Second Settlement Agreement and Stipulated Order supplementing 10.36 above and  
                                    approved by the Court on May 19, 1993 (incorporated by reference to Exhibit     
                                    10.39 to LTV's Registration Statement on Form S-1 [Registration No. 33-50217])  
                                    
         (10)-(19)              -   Settlement Agreement and Stipulated Order on behalf of the State of Minnesota  
                                    approved by the Court on May 19, 1993 (incorporated herein by reference to     
                                    Exhibit 10.39 to LTV's Report on Form 10-Q for the quarter ended June 30, 1993)
                                    
         (10)-(20)              -   Settlement Agreement and Stipulated Order on behalf of the State of Indiana on 
                                    behalf of the Indiana Department of Environmental Management approved by the   
                                    Court on May 24, 1993 (incorporated herein by reference to Exhibit 10.40 to    
                                    LTV's Report on Form 10-Q for the quarter ended June 30, 1993)                 
                                    
         (10)-(21)              -   Settlement Agreement and Stipulated Order on behalf of the State of New York and
                                    approved by the Court on May 24, 1993 (incorporated herein by reference to      
                                    Exhibit 10.42 to LTV's Report on Form 10-Q for the quarter ended June 30, 1993) 
                                    
         (10)-(22)              -   Settlement Agreement and Stipulated Order on behalf of the State of Connecticut 
                                    and approved by the Court on May 19, 1993 (incorporated herein by reference to  
                                    Exhibit 10.43 to LTV's Report on Form 10-Q for the quarter ended June 30, 1993) 
                                    
         (10)-(23)              -   Settlement Agreement and Stipulated Order on behalf of the Commonwealth of     
                                    Pennsylvania and approved by the Court on May 24, 1993 (incorporated herein by 
                                    reference to Exhibit 10.44 to LTV's Report on Form 10-Q for the quarter ended  
                                    June 30, 1993)                                                                 
                                    
         (10)-(24)              -   Settlement Agreement and Stipulated Order on behalf of the State of Ohio on    
                                    behalf of the Ohio Environmental Protection Agency and approved by the Court on
                                    May 24, 1993 (incorporated herein by reference to Exhibit 10.45 to LTV's Report
                                    on Form 10-Q for the quarter ended June 30, 1993)                              
                                    
         (10)-(25)              -   Settlement Agreement and Stipulated Order on behalf of the State of Georgia and 
                                    approved by the Court on May 24, 1993 (incorporated herein by reference to      
                                    Exhibit 10.46 to LTV's Report on Form 10-Q for the quarter ended June 30, 1993) 
                                    
         (10)-(26)              -   Closing Agreement Between LTV, its subsidiaries and the Commissioner of Internal
                                    Revenue as filed with the United States Bankruptcy Court for the Southern       
                                    District of New York on May 14, 1993 (incorporated herein by reference to       
                                    Exhibit 10.47 to LTV's Report on Form 10-Q for the quarter ended June 30, 1993) 
</TABLE>




                                     - 28 -
<PAGE>   30



<TABLE>
<S>                             <C> <C>                                                             
         (10)-(27)              -   The LTV Corporation Non-Employee Directors Stock Option Plan adopted on October 
                                    22, 1993 (incorporated herein by reference to Exhibit 10.49 to Amendment No. 2  
                                    to LTV's Registration Statement on Form S-1 [Registration No. 33-50217])        
                                    
         (10)-(28)              -   Amendment to LTV Executive Benefit Plan adopted October 22, 1993 (incorporated 
                                    herein by reference to Exhibit 10.50 to Amendment No. 2 to LTV's Registration  
                                    Statement on Form S-1 [Registration No. 33-50217])                             
                                    
         (10)-(29)              -   LTV Executive Benefit Trust Agreement approved on October 22, 1993 (incorporated 
                                    herein by reference to Exhibit 10.51 to Amendment No. 2 to LTV's Registration    
                                    Statement on Form S-1 [Registration No. 33-50217])                               
                                    
         (10)-(30)              -   The LTV Corporation Supplemental Management Retirement Plan adopted on October 
                                    22, 1993 (incorporated herein by reference to Exhibit 10.52 to Amendment No. 2 
                                    to LTV's Registration Statement on Form S-1 [Registration No. 33-50217])       
                                    
         (10)-(31)              -   The LTV Corporation Supplemental Management Retirement Trust Agreement approved
                                    on October 22, 1993 (incorporated herein by reference to Exhibit 10.53 to      
                                    Amendment No. 2 to LTV's Registration Statement on Form S-1 [Registration No.  
                                    33-50217])                                                                     
                                    
         (10)-(32)              -   The LTV Corporation Management Incentive Program as amended on January 28, 1994  
                                    (incorporated by reference to Exhibit (10)-(53) to LTV's Report on Form 10-K for 
                                    the year ended December 31, 1993)                                                
                                    
         (10)-(33)              -   Amendment to The LTV Corporation Supplemental Management Retirement Plan adopted
                                    on January 28, 1994 (incorporated by reference to Exhibit (10)-(54) to LTV's    
                                    Report on Form 10-K for the year ended December 31, 1993)                       
                                    
         (10)-(34)              -   Amendment to LTV Executive Benefit Plan adopted October 28, 1994 (incorporated 
                                    herein by reference to Exhibit (10)-(48) to LTV's Report on Form 10-Q for the  
                                    quarter ended September 30, 1994)                                              
                                    
         (10)-(35)              -   Amendment to The LTV Corporation Management Incentive Program adopted October  
                                    28, 1994 (incorporated herein by reference to Exhibit (10)-(49) to LTV's Report
                                    on Form 10-Q for the quarter ended September 30, 1994)                         
                                    
         (10)-(36)              -   Amendment to The LTV Corporation Supplemental Management Retirement Plan adopted 
                                    on October 28, 1994 (incorporated herein by reference to Exhibit (10)-(51) to    
                                    LTV's Report on Form 10-Q for the quarter ended September 30, 1994)              
                                    
         (10)-(37)              -   The Hourly Employee Stock Payment Alternative Plan (incorporated herein by
                                    reference to Exhibit 4.3 to LTV's Registration Statement on Form S-8      
                                    [Registration No. 33-56861])                                              
</TABLE>
                                    



                                     - 29 -
<PAGE>   31

<TABLE>
<S>                             <C> <C>                                                               
         (10)-(38)              -   Amendment No. 1 to the Receivables Purchase and Sale Agreement dated as of      
                                    October 12, 1994 among LTV, LTV Steel Company, Inc., Continental Emsco Company, 
                                    LTV Steel Tubular Products Company, Georgia Tubing Corporation and LTV Sales    
                                    Finance Company (incorporated herein by reference to Exhibit (10)-(57) to LTV's 
                                    Report on Form 10-Q for the quarter ended September 30, 1995)                   
                                    
         (10)-(39)              -   The LTV Corporation Amended and Restated Non-Employee Directors' Equity         
                                    Compensation Plan adopted on November 22, 1996 (incorporated herein by reference
                                    to Exhibit (10)-(58) to LTV's Report on Form 10-K for the year ended December   
                                    31, 1996)                                                                       
                                    
         (10)-(40)              -   The LTV Corporation Amended and Restated Non-Employee Directors' Deferred       
                                    Compensation Plan adopted on November 22, 1996 (incorporated herein by reference
                                    to Exhibit (10)-(59) to LTV's Report on Form 10-K for the year ended December   
                                    31, 1996)                                                                       
                                    
         (10)-(41)              -   The LTV Corporation Amended and Restated Executive Deferred Compensation Plan
                                    adopted on October 25, 1996 (incorporated herein by reference to Exhibit     
                                    (10)-(60) to LTV's Report on Form 10-K for the year ended December 31, 1996) 
                                    
         (10)-(42)              -   Indenture between LTV and The Chase Manhattan Bank, as Trustee, (incorporated by
                                    reference to Exhibit 4.1 to LTV's Registration Statement on Form S-4            
                                    [Registration No. 333-40425])                                                   
                                    
         (10)-(43)              -   The LTV Change in Control and Severance Pay Plan I (filed as Exhibit 10.1 to  
                                    Amendment No. 1 to LTV's Registration Statement on Form S-4 [Registration No. 
                                    333-40425])                                                                   
                                    
         (10)-(44)              -   Note Purchase and Letter of Credit Agreement dated as of February 26, 1998 among 
                                    LTV Steel Company, Inc., various financial institutions (as defined therein),    
                                    Chase Securities, Inc., as placement agent, The Chase Manhattan Bank, as         
                                    administrative agent and The Chase Manhattan Bank, as collateral agent           
                                    (incorporated by reference to Exhibit (10)-(52) to LTV's Report on Form 10-Q for 
                                    the quarter ended June 30, 1998)                                                 
                                    
         (10)-(45)              -   Guaranty made as of February 26, 1998 by LTV Steel Products, LLC given in       
                                    connection with the Note Purchase and Letter of Credit Agreement dated as of    
                                    February 26, 1998 among LTV Steel Company, Inc., various financial institutions 
                                    (as defined therein), Chase Securities, Inc., as placement agent, The Chase     
                                    Manhattan Bank, as administrative agent and The Chase Manhattan Bank, as        
                                    collateral agent (incorporated by reference to Exhibit (10)-(53) to LTV's Report
                                    on Form 10-Q for the quarter ended June 30, 1998)                               
</TABLE>




                                     - 30 -
<PAGE>   32



<TABLE>
<S>                             <C> <C>                                                           
         (10)-(46)              -   Contribution and Sale Agreement dated as of February 26, 1998 among LTV Steel    
                                    Products, LLC, as purchaser, LTV Steel Company, Inc., as servicer, and LTV Steel 
                                    Company, Inc. and Georgia Tubing Corporation, as initial sellers (incorporated   
                                    by reference to Exhibit (10)-(54) to LTV's Report on Form 10-Q for the quarter   
                                    ended June 30, 1998)                                                             
                                    
         (10)-(47)              -   Inventory Processing and Servicing Agreement dated as of February 26, 1998 by 
                                    and among LTV Steel Products, LLC, LTV Steel Company, Inc., as processor and  
                                    servicer, and The Chase Manhattan Bank, as collateral agent (incorporated by  
                                    reference to Exhibit (10)-(55) to LTV's Report on Form 10-Q for the quarter   
                                    ended June 30, 1998)                                                          
                                    
         (10)-(48)              -   Trust Agreement dated as of February 26, 1998 among LTV Steel Products, LLC, as 
                                    issuer, and The Chase Manhattan Bank as collateral agent (incorporated by       
                                    reference to Exhibit (10)-(56) to LTV's Report on Form 10-Q for the quarter     
                                    ended June 30, 1998)                                                            
                                    
         (10)-(49)              -   Amendment No. 2 dated as of March 1, 1998 to the Receivables Purchase and Sale   
                                    Agreement dated as of October 12, 1994 among LTV, LTV Steel Company, Inc.,       
                                    Continental Emsco Company, LTV Steel Tubular Products Company, Georgia Tubing    
                                    Corporation and LTV Sales Finance Company and Amendment No. 1 to Revolving       
                                    Credit Agreement dated as of October 12, 1994 among LTV Sales Finance Company,   
                                    the financial institutions parties thereto as banks, the issuing banks, the      
                                    facility agent and collateral agent, both dated as of March 1, 1998              
                                    (incorporated by reference to Exhibit (10)-(57) to LTV's Report on Form 10-Q for 
                                    the quarter ended June 30, 1998)                                                 
                                    
         (10)-(50)              -   Agreement dated as of December 2, 1998 between LTV, the PBGC, the Initial LTV
                                    Group (as defined in the Agreement) and LTV, as Administrator of the Restored
                                    Plans (filed herewith)                                                       
                                    
         (10)-(51)              -   Employment, Retirement and Non-Competition Agreement dated as of December 28, 
                                    1998 between LTV and David H. Hoag (filed herewith).                          
                                    
         (11)                   -   Statement re Computation of Per Share Earnings (filed herewith)

         (13)                   -   Portions of the 1998 Annual Report to Shareholders incorporated into this Report
                                    by reference (filed herewith)                                                   
                                    
         (21)                   -   List of subsidiaries (filed herewith)

         (23)                   -   Consent of Ernst & Young LLP (filed herewith)

         (27)                   -   Financial Data Schedule (filed herewith)
</TABLE>




                                     - 31 -
<PAGE>   33



                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, as of the
26th day of February 1999.

                                              THE LTV CORPORATION


                                              By  /s/ Glenn J. Moran    
                                                  ---------------------
                                                     (Glenn J. Moran)



      Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the date indicated.

<TABLE>
<CAPTION>
     Signature                                Title                                  Date
     ---------                                -----                                  ----


<S>                                 <C>                                              <C> 
/s/ J. PETER KELLY                  Chairman of the Board, President,                February 26 , 1999
--------------------------          Chief Executive Officer and a Director
   (J. Peter Kelly)


/s/ ARTHUR W. HUGE                  Executive Vice President and                     February 26, 1999
--------------------------          Chief Financial Officer
   (Arthur W. Huge)                 (Principal Financial Officer and
                                    Principal Accounting Officer)



/s/ GEORGE T. HENNING               Vice President and Controller                    February 26, 1999
--------------------------
   (George T. Henning)



/s/ EDGAR L. BALL                   Director                                         February 26, 1999
--------------------------
    (Edgar L. Ball)
</TABLE>






                                     - 32 -
<PAGE>   34


<TABLE>
<S>                                 <C>                                              <C> 
/s/ COLIN C. BLAYDON                Director                                         February 26, 1999
--------------------------
   (Colin C. Blaydon)



/s/ WILLIAM H. BRICKER              Director                                         February 26, 1999
--------------------------
    (William H. Bricker)



/s/ JOHN E. JACOB                   Director                                         February 26, 1999
--------------------------
    (John E. Jacob)



/s/ EDWARD C. JOULLIAN III          Director                                         February 26, 1999
--------------------------
  (Edward C. Joullian III)



/s/ M. THOMAS MOORE                 Director                                         February 26, 1999
--------------------------
   (M. Thomas Moore)



/s/ VINCENT A. SARNI                Director                                         February 26, 1999
--------------------------
   (Vincent A. Sarni)



/s/ SAMUEL K. SKINNER               Director                                         February 26, 1999
--------------------------
   (Samuel K. Skinner)



/s/ STEPHEN B. TIMBERS              Director                                         February 26, 1999
--------------------------
  (Stephen B. Timbers)



/s/ FARAH M. WALTERS                Director                                         February 26, 1999
--------------------------
   (Farah M. Walters)
</TABLE>




                                     - 33 -
<PAGE>   35





                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, as of the
26th day of February 1999.

                                        THE LTV CORPORATION


                                        By _________________________   
                                              (Glenn J. Moran)



      Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the date indicated.

<TABLE>
<CAPTION>
         Signature                          Title                                 Date
         ---------                          -----                                 ----

<S>                              <C>                                              <C> 
____________________________     Chairman of the Board, President,                February 26, 1999
    (J. Peter Kelly)             Chief Executive Officer and a Director



____________________________     Executive Vice President and                     February 26, 1999
    (Arthur W. Huge)             Chief Financial Officer
                                 (Principal Financial Officer and
                                 Principal Accounting Officer)



____________________________     Vice President and Controller                    February 26, 1999
    (George T. Henning)



____________________________     Director                                         February 26, 1999
    (Edgar L. Ball)
</TABLE>






<PAGE>   36



<TABLE>
<S>                              <C>                                              <C> 
____________________________     Director                                         February 26, 1999
    (Colin C. Blaydon)



____________________________     Director                                         February 26, 1999
    (William H. Bricker)



____________________________     Director                                         February 26, 1999
    (John E. Jacob)



____________________________     Director                                         February 26, 1999
 (Edward C. Joullian III)



____________________________     Director                                         February 26, 1999
    (M. Thomas Moore)



____________________________     Director                                         February 26, 1999
    (Vincent A. Sarni)



____________________________     Director                                         February 26, 1999
    (Samuel K. Skinner)



____________________________     Director                                         February 26, 1999
    (Stephen B. Timbers)



____________________________     Director                                         February 26, 1999
     (Farah M. Walters)
</TABLE>
<PAGE>   37


                               THE LTV CORPORATION

                       FORM 10-K - ITEM 14 (a)(1) and (2)
                    LIST OF CONSOLIDATED FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULES


         The following is a listing of the consolidated financial statements
which are incorporated herein by reference. The consolidated financial
statements of LTV and subsidiaries and Ernst & Young LLP's report thereon,
included in the 1998 Annual Report to Shareholders, are incorporated herein by
reference in Item 8. With the exception of the pages listed in this index and
the pages listed in Items 5, 6, 7 and 8, the 1998 Annual Report to Shareholders
is not deemed to be filed as part of this Form 10-K.

<TABLE>
<CAPTION>
                                                                                          Reference Page  
                                                                                          --------------  
                                                                                            1998 Annual
                                                                                             Report to
                                                                                           Shareholders
                                                                                           Incorporated
                                                                                           by Reference   
                                                                                          --------------  
The LTV Corporation
<S>                                                                                            <C>
Report of Ernst & Young LLP, Independent Auditors...................................           29
At December 31, 1998 and 1997:
     Consolidated balance sheet.....................................................           11
For the years ended December 31, 1998, 1997 and 1996:
     Consolidated statement of operations...........................................           10
     Consolidated statement of cash flows...........................................           12
     Consolidated statement of changes in equity....................................           13
Notes to consolidated financial statements..........................................           14-28
</TABLE>

         The following is a listing of financial statements of Trico Steel
Company, L.L.C. which are included as part of this Report.

<TABLE>
<CAPTION>
<S>                                                                                            <C>
Report of Ernst & Young LLP, Independent Auditors...................................           T-1
At December 31, 1998 and 1997:
     Balance sheet..................................................................           T-2
For the years ended December 31, 1998 and 1997:
     Statement of operations........................................................           T-3
For the years ended December 31, 1998, 1997 and 1996:
     Statements of cash flows.......................................................           T-4
     Statements of changes in members' equity.......................................           T-5
Notes to financial statements.......................................................           T-6-T-12
</TABLE>



         All schedules for which provision is made in the applicable regulation
of the Securities and Exchange Commission have been omitted as the schedules are
not required under the related instructions, are inapplicable, or the
information required thereby is set forth in the financial statements or the
notes thereto.




                                       F-1
<PAGE>   38


               Report of Ernst & Young LLP, Independent Auditors


The Members
Trico Steel Company, L.L.C.


We have audited the accompanying balance sheets of Trico Steel Company, L.L.C.
as of December 31, 1998 and 1997, and the related statement of operations for
each of the two years then ended, and the related statements of changes in
Members' equity and cash flows for each of the three years in the period ended
December 31, 1998. 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 in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Trico Steel Company, L.L.C. at
December 31, 1998 and 1997 and the results of its operations for each of the two
years ended December 31, 1998 and its cash flows for each of the three years in
the period ended December 31, 1998 in conformity with generally accepted
accounting principles.

As discussed in Note 2 to the financial statements, in 1997 the Company changed
its method of accounting for start-up costs.

                                                           /s/ Ernst & Young LLP

January 22, 1999



                                      T-1
<PAGE>   39

                           Trico Steel Company, L.L.C.
                                 Balance Sheets
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                            December 31,
ASSETS                                                   1998         1997
                                                      ---------    ---------
<S>                                                   <C>          <C>      
Current assets:
      Cash and cash equivalents                       $   9,936    $  15,763
      Related party receivables, less allowances of
          $1,483 in 1998, and $1,626 in 1997             18,195       25,252
      Other receivables                                     925          904
      Inventories (Note 3)                               24,774       26,471
      Prepaid expenses and other                            520          588
                                                      ---------    ---------
Total current assets                                     54,350       68,978

Property, plant and equipment (Note 1):
      Land and land improvements                         29,769       28,666
      Buildings                                         135,812      125,121
      Machinery and equipment                           400,323      370,103
      Construction in progress                            1,919       18,039
                                                      ---------    ---------
                                                        567,823      541,929
      Less accumulated depreciation                      45,875       18,149
                                                      ---------    ---------
Net property, plant and equipment                       521,948      523,780

Debt issuance costs (Note 1)                              8,342        8,118
Other assets                                               --            928
                                                      ---------    ---------

TOTAL ASSETS                                          $ 584,640    $ 601,804
                                                      =========    =========

LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
      Note payable                                    $    --      $   2,500
      Accounts payable                                   24,187       32,042
      Accrued liabilities                                 1,376        2,013
      Accrued interest payable                            1,675        1,574
                                                      ---------    ---------
Total current liabilities                                27,238       38,129

Long-term debt (Note 4)                                 284,175      261,260

Deferred income (Note 1)                                 11,133       11,384

Members' equity:
      Paid-in capital                                   464,876      393,410
      Retained deficit                                 (202,782)    (102,379)
                                                      ---------    ---------
Total members' equity                                   262,094      291,031
                                                      ---------    ---------

TOTAL LIABILITIES AND MEMBERS' EQUITY                 $ 584,640    $ 601,804
                                                      =========    =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      T-2
<PAGE>   40

                           Trico Steel Company, L.L.C.
                             Statement of Operations
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                         Year Ended December 31,
                                                            1998        1997
                                                         ---------    ---------

<S>                                                      <C>          <C>      
Sales to Trico Steel Company, Inc.                       $ 258,264    $  98,396

Costs and expenses:
     Cost of products sold                                 298,971      139,777
     Depreciation and amortization                          28,020       18,355
     Selling, general and administrative                    14,864       17,620
     Net interest expense                                   17,949       17,096
     Other income                                           (1,137)      (6,973)
                                                         ---------    ---------
Total                                                      358,667      185,875
                                                         ---------    ---------

Net loss before cumulative effect of accounting change    (100,403)     (87,479)

Cumulative effect of accounting change for
     start-up costs (Note 3)                                  --        (14,900)
                                                         ---------    ---------

NET LOSS ALLOCABLE TO MEMBERS                            $(100,403)   $(102,379)
                                                         =========    =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      T-3
<PAGE>   41

                           Trico Steel Company, L.L.C.
                            Statements of Cash Flows
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
                                                                1998         1997        1996
                                                             ---------    ---------    ---------
<S>                                                          <C>          <C>          <C>
OPERATING ACTIVITIES
Net loss allocable to Members                                $(100,403)   $(102,379)
Adjustments to reconcile net loss to net cash
      used in operating activities:
        Depreciation and amortization                           28,020       18,355
        Cumulative effect of accounting change                    --         14,900
        Allowance for doubtful accounts and sales returns         (143)       1,626
        Changes in operating assets and liabilities:
            Related party receivables                            7,200      (26,878)
            Other receivables                                      (21)        (904)
            Inventories                                          1,697      (22,862)   $  (3,609)
            Prepaid expenses and other assets                      996         --         (9,439)
            Accounts payable and other accrued liabilities      (8,391)      22,124       10,186
                                                             ---------    ---------    ---------
Net cash used in operating activities                          (71,045)     (96,018)      (2,862)

INVESTING ACTIVITIES
Additions to property, plant and equipment                     (25,894)     (93,207)    (280,362)
                                                             ---------    ---------    ---------
Net cash used in investing activities                          (25,894)     (93,207)    (280,362)

FINANCING ACTIVITIES
Payments on note payable                                        (2,500)        --           --
Increase in notes payable                                         --          2,500         --
Payments on long-term debt                                      (1,085)        --           --
Proceeds from issuance of long-term debt                          --         98,260      163,000
Proceeds from Members' borrowing                                24,000         --           --
Proceeds from Members' contributions                            71,466       92,200      121,046
Debt issuance costs                                             (1,135)        (517)      (2,626)
Proceeds from grants                                               366           75        5,114
                                                             ---------    ---------    ---------
Net cash provided by financing activities                       91,112      192,518      286,534
                                                             ---------    ---------    ---------
(Decrease) increase in cash and cash equivalents                (5,827)       3,293        3,310
Cash and cash equivalents at beginning of year                  15,763       12,470        9,160
                                                             ---------    ---------    ---------

CASH AND CASH EQUIVALENTS AT END OF YEAR                     $   9,936    $  15,763    $  12,470
                                                             =========    =========    =========

CASH PAID FOR INTEREST                                       $  18,080    $  16,590    $   1,932
                                                             =========    =========    =========
</TABLE>


The accompanying notes are an integral part of these financial statements.



                                      T-4
<PAGE>   42

                           Trico Steel Company, L.L.C.
                    Statements of Changes in Members' Equity
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                           Total
                                 Paid-In     Retained     Members'
                                 Capital     Deficit      Equity
                                ---------   ---------    ---------
<S>                             <C>         <C>          <C>
Balance at January 1, 1996      $ 180,164                $ 180,164
Members' contributions            121,046                  121,046
                                ---------   ---------    ---------
Balance at December 31, 1996      301,210                  301,210
Net loss allocable to Members        --     $(102,379)    (102,379)
Members' contributions             92,200        --         92,200
                                ---------   ---------    ---------
Balance at December 31, 1997      393,410    (102,379)     291,031
Net loss allocable to Members        --      (100,403)    (100,403)
Members' contributions             71,466        --         71,466
                                ---------   ---------    ---------

BALANCE AT DECEMBER 31, 1998    $ 464,876   $(202,782)   $ 262,094
                                =========   =========    =========
</TABLE>


The accompanying notes are an integral part of these financial statements.

                                      T-5
<PAGE>   43
                           Trico Steel Company, L.L.C.

                          Notes to Financial Statements

                               December 31, 1998

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND OPERATIONS

Trico Steel Company, L.L.C. (the "Company"), formed on December 22, 1994,
operates a steel mini-mill that utilizes an electric arc/thin slab casting
process and pickle line facility in Decatur, Alabama. Steel production began in
April 1997 with an expected annual capacity of 2.2 million tons. Prior to
beginning steel production in 1997, the Company was in a development stage, and
capitalized all start-up costs (see Note 2).

The Company is a Delaware limited liability company owned by three entities
(referred to as Members) that are wholly-owned subsidiaries of: The LTV
Corporation (50%), Sumitomo Metal USA Corporation (25%), and British Steel plc
(25%). The Members have contributed to the Company their respective ownership
portion of $464.9 million as paid-in capital as of December 31, 1998.

The Company operates in one industry segment. All sales are to Trico Steel
Company, Inc. (a wholly-owned subsidiary of The LTV Corporation), its sole and
exclusive distributor of product for resale. The Company records sales at time
of shipment. All credit risks are borne by the Company. The Company extends
credit on normal terms and management does not believe it has a significant
concentration of credit risk in any one geographic area or market segment.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents. Cash and cash equivalents
as of December 31, 1998 and 1997 principally include cash and amounts invested
in money market certificates.

INVENTORIES

Inventories are stated at lower of cost or market value. The Company's cost is
based on the first-in, first-out (FIFO) method.


                                      T-6
<PAGE>   44
                           Trico Steel Company, L.L.C.

                     Notes to Financial Statements--Continued

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--CONTINUED

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Depreciation is provided using
the straight-line method. Estimated useful lives range from fifteen to
twenty-five years for buildings and three to twenty years for machinery and
equipment. Land is stated at estimated fair value as of the date of the grant.
Interest associated with construction in progress was capitalized in the amount
of $.6 million, $5.9 million and $3.0 million, in 1998, 1997 and 1996,
respectively.

DEBT ISSUANCE COSTS

Costs related to debt issuance are deferred and amortized over the term of the
related debt. Accumulated amortization was approximately $1.6 million at
December 31, 1998 and $.7 million at December 31, 1997.

INCOME TAXES

For income tax purposes, the Members have elected to be taxed as a partnership.
Consequently, no federal or state income tax provision or benefit is recorded by
the Company.

DEFERRED INCOME

The Company recorded the fair value of donated land and proceeds received from
various grants as deferred income. Such deferred amounts are accreted to income
based on the lives of the assets to which they relate. Accumulated accretion was
$1.1 million at December 31, 1998 and $.5 million at December 31, 1997.

USE OF ESTIMATES

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

RECLASSIFICATIONS

Certain prior period amounts have been reclassified to conform with the current
period presentation.



                                      T-7
<PAGE>   45
                           Trico Steel Company, L.L.C.

                     Notes to Financial Statements--Continued

2.     CHANGE IN ACCOUNTING PRINCIPLE

In December 1997, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants cleared its Statement of Position,
"Reporting on the Costs of Start-up Activities", and on April 3, 1998, formally
issued Statement of Position 98-5 which requires the costs of start-up
activities to be expensed as incurred. The Company elected early adoption of
this statement. The cumulative effect of this change as of January 1, 1997 was a
charge of $14.9 million.

3.     INVENTORIES

Inventories are as follows (in thousands):
<TABLE>
<CAPTION>
                                                                1998       1997
                                                              --------   --------

<S>                                                           <C>        <C>     
Raw Materials and mill supplies                               $ 19,228   $ 17,671
Products                                                         5,546      8,800
                                                              --------   --------

                                                              $ 24,774   $ 26,471
                                                              ========   ========
</TABLE>

4.     FINANCING ARRANGEMENTS AND LONG-TERM DEBT

Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
                                                                1998       1997
                                                              --------   --------
<S>                                                           <C>        <C>
Tax-Exempt Bonds, variable interest rate, approximately
     4.20% at December 31, 1998, due 2026 and 2027            $ 75,000   $ 50,000

Taxable Bonds, variable interest rates, approximate
     effective interest rate of 7.27% at December 31, 1998,
     due from 2000 through 2027                                174,175    211,260

Taxable Bonds, variable interest rates, approximate
     effective interest rate of 6.8% at December 31, 1998,
     due 2027                                                   11,000       --

Members' debt, variable interest rates, approximate
     effective interest rate of 6.50% at December 31, 1998,
     unsecured, due 2008                                        24,000       --
                                                              --------   --------

                                                              $284,175   $261,260
                                                              ========   ========
</TABLE>

Substantially all assets of the Company collateralize the tax-exempt and taxable
bonds.

                                      T-8
<PAGE>   46
                           Trico Steel Company, L.L.C.

                     Notes to Financial Statements--Continued

4.     FINANCING ARRANGEMENTS AND LONG-TERM DEBT--CONTINUED

In November, 1995 the Company entered into a $285 million credit and
reimbursement agreement (the facility) with a syndicate bank group. The facility
was structured to support tax-exempt and taxable bonds. As of December 31,1998,
$260 million was outstanding of which $75 million is in tax-exempt bonds. The
tax-exempt bonds (for the purchase and construction of various solid waste
disposal components of the project) are supported by a direct pay letter of
credit issued by Chase Manhattan Bank. Until certain production capability
criteria are met, as defined in the agreement, the maximum draw allowable under
a $75 million revolving credit portion of the facility, is $52 million. The $52
million of borrowings are due in 2008.

The facility contains covenants that include requirements to meet certain
financial ratios, maintain restricted working capital and certain other
restrictions and limitations.

In July 1998, an agreement was made with the Members and the syndicated bank
group that permitted the Company to borrow $30 million from its Members. In
connection with this change, the date on which to compute the debt ratio
covenant was changed from December 31, 1998 to December 31, 1999. An aggregate
of $24 million was outstanding at December 31, 1998 under this agreement.

On December 18, 1998, the Company and the syndicated bank group amended the debt
agreements to allow for junior subordinated debt from its Members. The Company
has executed an agreement to borrow up to $50 million at a rate of LIBOR plus a
specified margin rate under a junior subordinated debt arrangement from the
Members. The termination date for this facility is April 11, 2008 and there was
no amount outstanding under this agreement at December 31, 1998.

The Company has a credit agreement for letters of credit with an aggregate face
amount not to exceed $1.5 million. At December 31, 1998, $.8 million was
outstanding in letters of credit.

As of January 22, 1999, the Company had borrowed the remaining $6 million
available under the $30 million Members' debt arrangement and borrowed $3
million under the $50 million junior subordinated debt arrangement with the
Members.


                                      T-9
<PAGE>   47
                           Trico Steel Company, L.L.C.

                     Notes to Financial Statements--Continued

4.     FINANCING ARRANGEMENTS AND LONG-TERM DEBT--CONTINUED

Future maturities of long-term debt as of December 31, 1998 are as follows (in
thousands):
<TABLE>
<CAPTION>
           Year Ending:
<S>                                            <C>
                 1999                          $        --
                 2000                                 10,611
                 2001                                 11,491
                 2002                                 12,434
                 2003                                 13,475
                 Thereafter                          236,164
                                             -----------------

                                               $     284,175
                                             =================
</TABLE>

5.     COMMITMENTS AND CONTINGENCIES

The Company leases certain equipment under cancelable and non-cancelable leases
that expire at various dates. Minimum future operating lease obligations in
effect at December 31, 1998 are as follows (in thousands):
<TABLE>
<CAPTION>
           Year Ending:
<S>                                            <C>
                 1999                          $       1,532
                 2000                                  1,532
                 2001                                  1,529
                 2002                                  1,118
                 2003                                    343
                                             -----------------

                                               $       6,054
                                             =================
</TABLE>

Rental expense on operating leases was $3.2 million for the year ended December
31, 1998 and $1.7 million for the year ended December 31, 1997.

                                      T-10
<PAGE>   48
                           Trico Steel Company, L.L.C.

                     Notes to Financial Statements--Continued


6.     DEFERRED COMPENSATION AND EMPLOYEE BENEFITS PLANS

Effective August 1, 1996, the Company adopted a 401(k) plan covering all
employees. The Company provided a 25% match for the first 6% of the employee's
qualified compensation contributed to the plan. Effective May 3, 1998, the
Company increased the match to 50% for the first 6% of the employee's qualified
compensation contributed to the plan. The amount of expense recorded by the
Company with respect to these plans for the year ended December 31, 1998 and
1997 was $.3 million and $.1 million, respectively.

7.     RELATED PARTY TRANSACTIONS

The Company paid $15.3 million in 1998, $3.7 million in 1997 and $1.7 million in
1996 to related parties for goods and services.

8.     SUBSEQUENT TRANSFORMER FAILURE (UNAUDITED)

The Company experienced a failure of a second of three transformers for incoming
power to the facility on January 27, 1999. The first transformer failure
occurred in November, 1998. The Company's engineers and operators are
reconfiguring and/or installing alternative sources of power supply. Management
is currently investigating the causes of these failures. Management believes the
property damage and business interruption caused by the failures should be
substantially covered by insurance.

9.     YEAR 2000 (UNAUDITED)

The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define an applicable year. Any of the Company's
computer programs that have time sensitive software or embedded chips may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in system failures or miscalculations causing disruptions of
operations, including, among other things, production difficulties, a temporary
inability to process transactions, send invoices or engage in similar normal
business activities. Failure by the Company and or significant third parties
such as power utility providers and other critical suppliers and major
customers, to complete Year 2000 readiness activities in a timely manner could
have an adverse effect on the Company's business.

Since many of the Company's computer and operating systems have been purchased
and installed subsequent to the discovery of the Year 2000 issue, testing was
accomplished during installation and problems were resolved as discovered.



                                      T-11
<PAGE>   49

                           Trico Steel Company, L.L.C.

                     Notes to Financial Statements--Continued

9.     YEAR 2000 (UNAUDITED)--CONTINUED

The Company has formed a Steering Committee for Year 2000 issues, which meets
regularly and is comprised of high-level executives and other management
personnel to assess the readiness of the Company on this issue. The Committee
believes that adapting systems to reflect the year 2000 will not have a material
adverse effect on the results of operations. Costs associated with this issue
have not been material to date and are not expected to have a material impact on
the Company in the future.

Management has begun a program of querying significant third parties, including
suppliers, utility and other resource providers and customers to assess their
Year 2000 readiness. Management is not presently aware of any known significant
third parties which are not expected to be Year 2000 compliant.





                                      T-12