EXHIBIT 99.2
FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
X Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934 [Fee Required]
For the Fiscal Year Ended December 31, 1996
___ Transition Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the Transition Period From ___________ To __________
Commission File Number 1-5502
ZURN/NEPCO RETIREMENT SAVINGS PLAN
(Full title of the Plan)
ZURN INDUSTRIES, INC.
One Zurn Place, Erie, Pennsylvania 16505
(Name and address of issuer of securities held pursuant to the Plan)
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Pension Committee
Zurn Industries, Inc.
Erie, Pennsylvania
We have audited the accompanying statements of net assets available for
benefits of the Zurn/NEPCO Retirement Savings Plan as of December 31, 1996 and
1995, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's administrator. 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 the administrator, 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 net assets available for benefits of the Zurn/NEPCO
Retirement Savings Plan as of December 31, 1996 and 1995, and the changes in
its net assets available for benefits for the years then ended, in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of expressing an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes at December 31, 1996, and loans or fixed income
obligations for the year then ended, are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules have been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Pashke Twargowski & Lee
Erie, Pennsylvania
June 26, 1997
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STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
ZURN/NEPCO RETIREMENT SAVINGS PLAN
December 31
1996 1995
ASSETS
Investments in T. Rowe Price Funds:
U.S. Treasury Money $1,097,515 $1,034,694
U.S. Treasury Intermediate 59,212 29,088
New Income 391,234 329,704
Balanced 206,872 156,206
Capital Appreciation 2,992,055 2,549,859
Equity Index 2,731,746 2,019,045
International Stock 768,724 514,214
Small-Cap Stock 491,591 201,807
Zurn Stock Fund 48,676
8,787,625 6,834,617
Participants' loans 352,036 373,881
Contributions receivable:
Participants' 40,779 41,905
Employers' 10,366 10,171
TOTAL ASSETS 9,190,806 7,260,574
FORFEITED EMPLOYERS' CONTRIBUTIONS 70,043 24,151
NET ASSETS AVAILABLE FOR BENEFITS $9,120,763 $7,236,423
See notes to financial statements.
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
ZURN/NEPCO RETIREMENT SAVINGS PLAN
Year Ended December 31, 1996
T. Rowe Price Funds
U.S. Treasury New Capital
Money Intermediate Income Balanced Appreciation
ADDITIONS
Investment income:
Dividends $ 50,081 $ 2,897 $ 23,249 $ 9,074 $ 280,414
Net appreciation (depreciation)
in value of investments (1,405) (14,584) 18,522 152,518
50,081 1,492 8,665 27,596 432,932
Contributions:
Participants' 164,317 17,258 83,278 70,588 419,462
Employers' 41,852 2,911 19,835 13,042 88,590
Participants' loan interest 3,939 44 991 1,258 6,397
TOTAL ADDITIONS 260,189 21,705 112,769 112,484 947,381
DEDUCTIONS
Benefits paid to participants 203,155 3,113 20,870 47,233 242,645
Forfeited employers' contributions (32,101) 1,053 7,529 1,915 22,767
TOTAL DEDUCTIONS 171,054 4,166 28,399 49,148 265.412
NET ADDITIONS 89,135 17,539 84,370 63,336 681,969
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 1,034,694 29,088 329,704 156,206 2,549,859
Transfers (26,314) 12,585 (22,840) (12,670) (239,773)
End of year $1,097,515 $59,212 $391,234 $206,872 $2,992,055
See notes to financial statements.
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/TABLE
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - Continued
ZURN/NEPCO RETIREMENT SAVINGS PLAN
Year Ended December 31, 1996
T. Rowe Price Funds Zurn
Equity International Small-Cap Stock
Index Stock Stock Fund Other Total
ADDITIONS
Investment income:
Dividends $ 91,593 $ 20,401 $ 41,555 $ 519,264
Net appreciation in
value of investments 397,387 76,109 19,417 $ 1,916 649,880
488,980 96,510 60,972 1,916 1,169,144
Contributions:
Participants' 321,986 138,597 98,944 704 $ (1,126) 1,314,008
Employers' 76,201 30,997 20,302 71 195 293,996
Participants' loan interest 8,154 2,252 1,220 24,255
TOTAL ADDITIONS 895,321 268,356 181,438 2,691 (931) 2,801,403
DEDUCTIONS
Benefits paid to participants 242,550 29,558 7,864 46,075 843,063
Forfeited employers' contributions 20,984 4,355 1,607 45,891 74,000
TOTAL DEDUCTIONS 263,534 33,913 9,471 91,966 917,063
NET ADDITIONS (DEDUCTIONS) 631,787 234,443 171,967 2,691 (92,897) 1,884,340
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 2,019,045 514,214 201,807 401,806 7,236,423
Transfers 80,914 20,067 117,817 45,985 24,229
End of year $2,731,746 $768,724 $491,591 $48,676 $333,138 $9,120,763
See notes to financial statements.
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/TABLE
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
ZURN/NEPCO RETIREMENT SAVINGS PLAN
Year Ended December 31, 1995
T. Rowe Price Funds
U.S. Treasury New Capital
Money Intermediate Income Balanced Appreciation
ADDITIONS
Investment income:
Dividends $ 52,207 $ 1,620 $ 19,015 $ 6,319 $ 199,497
Net appreciation in
value of investments 2,014 27,427 18,772 239,574
52,207 3,634 46,442 25,091 439,071
Contributions:
Participants' 194,690 14,071 94,624 53,638 468,247
Employers' 53,980 2,633 20,382 8,441 99,679
Participants' loan interest 4,004 27 533 583 5,991
TOTAL ADDITIONS 304,881 20,365 161,981 87,753 1,012,988
DEDUCTIONS
Benefits paid to participants 153,935 607 36,475 5,179 175,464
Forfeited employers' contributions 3,244 12 4,416 397 8,261
TOTAL DEDUCTIONS 157,179 619 40,891 5,576 183,725
NET ADDITIONS 147,702 19,746 121,090 82,177 829,263
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 960,357 14,646 219,579 77,858 1,757,743
Transfers (73,365) (5,304) (10,965) (3,829) (37,147)
End of year $1,034,694 $29,088 $329,704 $156,206 $2,549,859
See notes to financial statements.
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/TABLE
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - Continued
ZURN/NEPCO RETIREMENT SAVINGS PLAN
Year Ended December 31, 1995
T. Rowe Price Funds
Equity International Small-Cap
Index Stock Stock Other Total
ADDITIONS
Investment income:
Dividends $ 78,000 $ 15,496 $ 23,271 $ 395,425
Net appreciation in
value of investments 430,321 32,551 11,687 762,346
508,321 48,047 34,958 1,157,771
Contributions:
Participants' 348,541 164,940 69,919 $ 3,721 1,412,391
Employers' 71,042 33,642 11,256 (300) 300,755
Participants' loan interest 7,267 1,776 326 20,507
TOTAL ADDITIONS 935,171 248,405 116,459 3,421 2,891,424
DEDUCTIONS
Benefits paid to participants 141,596 13,080 7,141 15,613 549,090
Forfeited employers' contributions 4,052 2,569 1,834 589 25,374
TOTAL DEDUCTIONS 145,648 15,649 8,975 16,202 574,464
NET ADDITIONS (DEDUCTIONS) 789,523 232,756 107,484 (12,781) 2,316,960
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 1,226,294 360,970 55,369 246,647 4,919,463
Transfers 3,228 (79,512) 38,954 167,940
End of year $2,019,045 $514,214 $201,807 $401,806 $7,236,423
See notes to financial statements.
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/TABLE
NOTES TO FINANCIAL STATEMENTS
ZURN/NEPCO RETIREMENT SAVINGS PLAN
December 31, 1996
PLAN DESCRIPTION
The Zurn/NEPCO Retirement Savings Plan is a defined contribution plan
providing retirement benefits through participant-directed investments to
participants in the National Energy Production Corporation Pension Plan. It
is subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
The Company has agreed to contribute participants' elective deferrals of up to
18% of eligible compensation plus one-half of such amounts up to 2% of
eligible compensation. Participants also may contribute non-taxed
distributions from other employers' qualified plans and they may borrow from
their accounts subject to specified limitations.
Information about the Plan agreement and the benefit provisions is contained
in the "Summary Plan Description" which may be obtained from Zurn Industries,
Inc., the Plan Administrator.
SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Investments The investments are stated at market value as
determined by the funds.
Zurn Stock Fund Zurn Industries, Inc. common stock (1,817 shares) is stated
at its quoted market value. A percentage of the Fund is invested in the T.
Rowe Price Prime Reserve Fund ($1,032) for investment diversification
liquidity. Dividend income from these investments is included in investment
income as a component of the net appreciation in the value of investments.
Investment Transactions Investment transactions are recorded as of the date
the order to buy or sell is executed with realized gains and losses being
included in investment income as a component of the net appreciation
(depreciation) in the value of investments.
Participants' Loans Participants' loans are stated at the principal amount
due from the participants.
Dividends Dividend income is recognized on the ex-dividend date.
Expenses Administrative expenses are paid by the Plan Administrator.
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INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under Section
401(a) of the Internal Revenue Code and is, therefore, not subject to tax
under present income tax law. Once qualified, the Plan is required to operate
in conformity with the Code to maintain its qualification. The Plan
Administrator is not aware of any course of action or series of events that
might adversely affect the Plan's qualified status.
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SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
ZURN/NEPCO RETIREMENT SAVINGS PLAN
December 31, 1996
ASSETS OWNED AT YEAR-END
Cost Current Value
T. Rowe Price Funds:
U.S. Treasury Money $1,097,515 $1,097,515
U.S. Treasury Intermediate 59,667 59,212
New Income 393,057 391,234
Balanced 184,211 206,872
Capital Appreciation 2,718,449 2,992,055
Equity Index 1,986,108 2,731,746
International Stock 691,930 768,724
Small-Cap Stock 473,762 491,591
Zurn Stock Fund 46,761 48,676
Participants' loans - 7% to 10% interest -0- 352,036
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SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
ZURN/NEPCO RETIREMENT SAVINGS PLAN
Year Ended December 31, 1995
Amount Received
Original During The Year Unpaid Amount Overdue
Amount Principal Interest Balance Principal Interest
Oscar E. Daubenspeck $7,447 $-0- $-0- $-0- $7,336 $-0-
P.O. Box 471 Participant loan - 10%
Wallingford, VT 05773 Distributed to participant
Charles W. Nelson 8,000 -0- -0- -0- 7,881 -0-
17490 Olinda Road Participant loan - 10%
Anderson, CA 96007 Distributed to participant
William F. Walker 2,000 -0- -0- -0- 1,889 -0-
2440 Lawndale Road Participant loan - 8.75%
Lakeland, FL 33803 Distributed to participant
David T. Wolford 7,500 -0- -0- -0- 6,889 -0-
1713 Arbogast #O-D Participant loan - 8.75%
Griffith, IN 46319 Distributed to participant
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Pension Committee of Zurn Industries, Inc. has duly caused this
annual report to be signed on its behalf by the undersigned thereunto duly
authorized.
ZURN/NEPCO RETIREMENT SAVINGS PLAN
(Plan)
June 26, 1997 /s/ James A. Zurn
James A. Zurn, Chairman
Pension Committee of
Zurn Industries, Inc.
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CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 No. 333-00813 pertaining to the Zurn/NEPCO Retirement Savings Plan of
our report dated June 26, 1997 with respect to the financial statements and
supplemental schedules included in the Annual Report on Form 11-K of the
Zurn/NEPCO Retirement Savings Plan.
/s/ Pashke Twargowski & Lee
Erie, Pennsylvania
June 27, 1997
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