PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this Form 10-K:
Pages
1. All financial statements.
See Table of Contents
2. Financial statement Schedules.
Schedule I - Condensed Financial Information of Registrant
DynCorp (Parent Company)
Balance Sheets
Assets
Liabilities and Stockholders' Equity
Statements of Operations
Statements of Cash Flows
Notes to Condensed Financial Statements
Schedule II - Valuation and Qualifying Accounts for the
Years Ended December 31, 1994, 1993, and 1992.
All other financial schedules not listed have been omitted
since the required information is included in the Consolidated
Financial Statements or the notes thereto, or is not applicable
or required.
3. Exhibits
Exhibit 3
(1) Certificate of Incorporation, as currently in effect,
consisting of Restated Certification of Incorporation
(incorporated by reference to Registrant's Form 10-K
for 1992, File No. 1-3879)
(2) Registrant's By-laws (incorporated by reference to
Registrant's Form 10-K for 1993, File No. 1-3879)
Exhibit 4
(1) Specimen 16% Pay-in-Kind Junior
Subordinated Debentures due 2003 Certificate.
(incorporated by reference to Registrant's
Form 10-K for 1988, File No. 1-3879)
(2) Indenture for $100,000,000 of 8.54% Contract Receivables
Collateralized Notes, Series 1992-1, Due 1997, dated
as of January 1, 1992, between Dyn Funding Corporation
(wholly owned subsidiary of the Registrant) and Bankers
Trust Company, as trustee (incorporated by reference to
Registrant's Form 8-K filed February 7, 1992, File No. 1-3879)
(3) Specimen 18% Class C Preferred Stock Certificate.
(incorporated by reference to Registrant's
Form 10-K for 1988, File No. 1-3879)
(4) Specimen Common Stock Certificate.
(incorporated by reference to Registrant's
Form 10-K for 1988, File No. 1-3879)
(5) Specimen Class A Common Stock Warrant Certificate.
(incorporated by reference to Registrant's
Form 10-K for 1988, File No. 1-3879)
(6) Specimen Class B Common Stock Warrant Certificate.
(incorporated by reference to Registrant's
Form 10-K for 1988, File No. 1-3879)
(7) Indenture Agreement for 16% Pay-in-kind Junior Subordinated
Debenture (incorporated by reference to Exhibit 4.1 to
Form S-4 filed July 27, 1988)
(8) Statement Respecting Warrants and Lapse of Certain Restrictions
(incorporated by reference to Registrant's
Form 10-K for 1988, File No. 1-3879)
(9) Amendment (effective March 26, 1991) to Statement Respecting
Warrants and Lapse of Certain Restrictions (incorporated by
reference to Registrant's Form 10-K for 1990, File No. 1-3879)
(10) Article Four of the Restated Certificate of Incorporation
(incorporated by reference to Registrant's Form 10-K for 1992,
File No. 1-3879)
The Registrant, by signing this Report, agrees to furnish the Securities
and Exchange Commission, upon its request, a copy of any instrument which
defines the rights of holders of long-term debt of the Registrant.
Exhibit 10
(1) Deferred Compensation Plan.
(incorporated by reference to Registrant's Form 10-K for 1987,
File No. 1-3879)
(2) Management Incentive Plan (MIP)
(incorporated by reference to Registrant's Form 10-K for 1993,
File No. 1-3879)
(3) DynCorp Executive Incentive Plan (EIP)
(incorporated by reference to Registrant's Form 10-K for 1994,
File No. 1-3879)
(4) Management Severance Agreements.
(incorporated by reference to Exhibits (c)(4) through (c)(12)
to Schedule 14D-9 filed by Registrant January 25, 1988.
(5) Employment agreement of Richard L. Webb, Vice President,
Aviation Services, dated June 24, 1992 (incorporated by
reference to Registrant's Form 10-K for 1992, File No. 1-3879)
(6) Employment agreement of Paul V. Lombardi,
Vice President, Government Services Group
(incorporated by reference to Registrant's Form 10-K for 1993,
File No. 1-3879)
(7) Restricted Stock Plan.
(incorporated by reference to Registrant's Form 10-K for 1993,
File No. 1-3879)
Exhibit 11
(1) Computations of Earnings Per Common Share for the
Years Ended December 31, 1994, 1993, and 1992
Exhibit 21
(1) Subsidiaries of the Registrant
Exhibit 24
(1) Consent of Independent Public Accountants
(b) Reports on Form 8-K
None filed during the fourth quarter
ended December 31, 1994
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
DYNCORP
March 31, 1995 By: D. R. Bannister
D. R. Bannister
President and Chief
Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report is signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
D. R. Bannister President and Director March 31, 1995
D. R. Bannister (Principal Executive Officer)
J. H. Duggan Executive Vice President- March 31, 1995
J. H. Duggan and Director
P. V. Lombardi Executive Vice President- March 31, 1995
P. V. Lombardi and Director
T. E. Blanchard Senior Vice President- March 31, 1995
T. E. Blanchard Chief Financial Officer
and Director
D. L. Reichardt Senior Vice President- March 31, 1995
D. L. Reichardt General Counsel and Director
G. A. Dunn Vice President March 31, 1995
G. A. Dunn and Controller
(Principal Accounting Officer)
D. C. Mecum II Director March 31, 1995
D. C. Mecum II
H. S. Winokur, Jr. Director March 31, 1995
H. S. Winokur, Jr.
DynCorp (Parent Company)
SCHEDULE I - Condensed Financial Information of Registrant
Balance Sheets
(Dollars in Thousands)
ASSETS
December 31,
1994 1993
Current Assets:
Cash and short-term investments $ 8,937 $ 6,894
Accounts receivable and contracts in process,
net of allowance for doubtful accounts (Note 3) 35,689 20,723
Inventories of purchased products and supplies 977 513
Other current assets 5,027 3,718
Total current assets 50,630 31,848
Investment in and advances to subsidiaries and affiliates
affiliates 74,278 70,277
Property and Equipment, net of accumulated depreciation
and amortization 8,126 9,836
Intangible Assets, net of accumulated amortization 78,377 86,811
Other Assets 4,559 6,040
Total Assets $215,970 $204,812
The "Notes to Consolidated Financial Statements" of DynCorp and Subsidiaries
are an integral part of these statements.
See accompanying "Notes to Condensed Financial Statements"
DynCorp (Parent Company)
SCHEDULE I - Condensed Financial Information of Registrant
Balance Sheets
(Dollars in Thousands)
LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY
December 31,
1994 1993
Current Liabilities:
Notes payable and current portion of long-term
debt (Note 2) $ 2,919 $ 3,392
Accounts payable 13,068 11,594
Advances on contracts in process 2,711 864
Accrued liabilities 64,303 71,855
Total current liabilities 83,001 87,705
Long-Term Debt (Note 2) 108,508 93,150
Other Liabilities and Deferred Credits 14,923 15,591
Total Liabilities 206,432 196,446
Commitments, Contingencies and Litigation - -
Redeemable Common Stock redemption value per share
of $18.20 in 1994 and $17.50 in 1993, 125,714 shares
issued and outstanding 2,288 2,200
Stockholders' Equity:
Capital stock, $0.10 par value:
Preferred stock, Class C 3,000 3,000
Common stock 789 502
Common stock warrants 11,486 15,119
Unissued common stock under restricted stock plan 9,923 10,395
Paid-in surplus 118,068 95,983
Deficit (118,256) (105,425)
Common stock held in treasury (8,817) (5,840)
Cummings Point Industries, Inc. note receivable (8,943) (7,568)
Total Stockholders' Equity 7,250 6,166
Total Liabilities, Redeemable Common Stock
and Stockholders' Equity $215,970 $204,812
The "Notes to Consolidated Financial Statements" of DynCorp and Subsidiaries
are an integral part of these statements.
See accompanying "Notes to Condensed Financial Statements."
DynCorp (Parent Company)
SCHEDULE I - Condensed Financial Information of Registrant
Statements of Operations
(Dollars in Thousands)
For the Years Ended December 31,
1994 1993 1992
Revenues $545,581 $552,662 $557,675
Costs and Expenses:
Cost of services 523,029 528,776 542,901
Selling and corporate administrative 10,654 10,994 12,534
Interest expense 15,243 14,950 14,608
Interest income (1,946) (1,969) (1,693)
Other (Note 3) 36,842 23,902 23,490
583,822 576,653 591,840
Loss before income taxes, equity
in net income of subsidiaries
and extraordinary item (38,241) (23,991) (34,165)
Benefit for income taxes (14,593) (1,561) (3,900)
Loss before equity in net income of subsidiaries
and extraordinary item (23,648) (22,430) (30,265)
Equity in net income of subsidiaries (10,817) (9,016) (9,449)
Loss before extraordinary item (12,831) (13,414) (20,816)
Extraordinary loss from early retirement
of debt - - 2,526
Net Loss (12,831) (13,414) (23,342)
Preferred Stock Class A dividends declared
and paid and accretion of discount - - 959
Net Loss for Common Stockholders $(12,831) $(13,414) $(24,301)
The "Notes to Consolidated Financial Statements" of DynCorp and Subsidiaries
are an integral part of these statements.
See accompanying "Notes to Condensed Financial Statements."
DynCorp (Parent Company)
SCHEDULE I - Condensed Financial Information of Registrant
Statements of Cash Flows
(Dollars in Thousands)
For the Years Ended December 31,
1994 1993 1992
Cash Flows from Operating Activities:
Net loss $(12,831) $(13,414) $(23,342)
Adjustments to reconcile net loss from operations
to net cash provided by operating activities:
Depreciation and amortization 12,575 7,834 9,510
Pay-in-kind interest on Junior Subordinated
Debentures 15,329 13,142 6,590
Loss on purchase of Junior Subordinated Debentures - - 2,526
Deferred income taxes (59) 521 (666)
Accrued compensation under Restricted Stock Plan (329) 2,047 2,354
Noncash interest income (1,375) (1,158) (910)
Other (665) (1,936) (4,363)
Change in assets and liabilities, net of acquisitions
and dispositions and sale of accounts receivable in 1993:
Increase in accounts receivable and contracts
in process (14,966) (2,570) (10,173)
Increase in inventories (465) (93) (72)
(Increase) decrease in other current assets (1,309) 1,992 986
Increase (decrease) in current liabilities except notes
payable and current portion of long-term debt(4,097) (976) 6,690
Cash provided (used) by operating activities(8,192) 5,389 (10,870)
Cash Flows from Investing Activities:
Sale of property and equipment 660 829 130
Proceeds received from notes receivable - - 1,346
Purchase of property and equipment, net of
capitalized leases 1,734 (928) (2,381)
Increase in notes receivable - - (5,500)
Increase in investments in affiliates 1,500 - (1,888)
Other (1,334) 345 (221)
Cash provided (used) from investing activities 2,560 246 (8,514)
Cash Flows from Financing Activities:
Purchase of Preferred Stock Class A and
Junior Subordinated Debentures - - (42,466)
Treasury stock purchased (3,182) (1,979) (3,448)
Payment on indebtedness (3,914) (4,725) (41,010)
Accounts receivable sold (Note 3) - - 63,682
Dividends paid on Class A Preferred Stock - - (861)
Treasury stock sold 159 46 108
Reduction in loan to Employee Stock Ownership Plan - 16,116 16,099
Sale of stock to Employee Stock Ownership Plan 17,100 - -
Other financing transactions (38) - -
Change in intercompany balances, net (2,450) (14,021) 14,050
Cash provided (used) from financing activities 7,675 (4,563) 6,154
Net Increase (Decrease) in Cash and Short-term
Investments 2,043 1,072 (13,230)
Cash and Short-term Investments at Beginning
of the Year 6,894 5,822 19,052
Cash and Short-term Investments at End of the
Year 8,937 6,894 5,822
The "Notes to Consolidated Financial Statements" of DynCorp and
Subsidiaries are an integral part of these statements.
See accompanying "Notes to Condensed Financial Statements."
DynCorp (Parent Company)
Schedule I - Notes to Condensed Financial Statements
December 31, 1994
1. Basis of Presentation
Pursuant to the rules and regulations of the Securities and Exchange
Commission, the Condensed Financial Statements of the Registrant do not
include all of the information and notes normally included with financial
statements prepared in accordance with generally accepted accounting
principles. It is, therefore, suggested that these Condensed Financial
Statements be read in conjunction with the Consolidated Financial Statements
and Notes included elsewhere in this Annual Report on Form 10-K.
2. Long-term Debt
At December 31, 1994 and 1993, long-term debt consisted of (in
thousands):
1994 1993
Junior Subordinated Debentures, net of unamortized
discount of $4,793 and $5,175 $102,659 $86,947
Notes payable, due in installments through 1999,
9.98% weighted average interest rate 6,966 6,643
Capitalized equipment leases 1,802 2,952
111,427 96,542
Less current portion 2,919 3,392
$108,508 $93,150
Maturities of long-term debt as of December 31, 1994, were as follows (in
thousands):
1995 $ 2,919
1996 2,593
1997 1,907
1998 956
1999 185
Thereafter 102,867
$111,427
3. Accounts Receivable
At December 31, 1992, the Company had sold $63,682,000 of its accounts
receivable to Dyn Funding Corporation (DFC), a wholly owned subsidiary of the
Company. DFC was established in January, 1992 to issue $100,000,000 of
Contract Receivable Collateralized Notes (Notes) and to purchase eligible
accounts receivable from the Company and its subsidiaries. On an ongoing
basis, the cash received by DFC from collection of the receivables is used to
make interest payments on the Notes, pay a servicing fee to the Company and
purchase additional receivables from the Company (see Note 5 to Consolidated
Financial Statements included elsewhere in this Form 10-K).
The Company receives 97% of the face value of the accounts receivable sold
to DFC. The 3% discount from the face value of the accounts receivable is
recorded as an expense by the Company at the time of sale. In 1994 and 1993,
the Company recorded as expense $16,032,000 and $16,298,000 which is reflected
in "Other" in the accompanying "Statements of Operations" (in the
"Consolidated Statements of Operations" of DynCorp and Subsidiaries this
expense is offset by the gain recognized by DFC).
DynCorp and Subsidiaries
SCHEDULE II - Valuation and Qualifying Accounts
For the Years Ended December 31, 1994, 1993, and 1992
(Dollars in Thousands)
Balance at Charged to Charged Balance
Beginning Costs and to other Deduct- at End of
Description of period Expenses Accounts (1) ions Period
Year Ended December 31, 1994
Allowance for doubtful
accounts $1,469 $2,503 $ 367 $ 347 $3,992
Year Ended December 31, 1993
Allowance for doubtful
accounts $3,415 $1,141 $ 79 $3,166 $1,469
Year Ended December 31, 1992
Allowance for doubtful
accounts $2,532 $ 965 $ 254 $ 336 $3,415
(1) Includes recovery of prior year write-offs.
(2) Write-off of uncollectible accounts.