1994
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
[FEE REQUIRED]
FOR THE FISCAL YEAR ENDED JULY 31, 1994 COMMISSION FILE NUMBER 1-6101
ROHR, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-1607455
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
850 LAGOON DRIVE, CHULA VISTA, CALIFORNIA 91910
(Address of principal executive offices)
(619) 691-4111
(Telephone No.)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common Stock, $1 par value New York Stock Exchange
Pacific Stock Exchange
The Stock Exchange, London
7% Convertible Subordinated Debentures New York Stock Exchange
due 2012 Pacific Stock Exchange
The Stock Exchange, London
7 3/4% Convertible Subordinated Notes due 2004 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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) 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]
AT SEPTEMBER 16, 1994, THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY
NONAFFILIATES OF THE REGISTRANT, BASED ON MARKET QUOTATIONS AS OF THAT DATE,
WAS APPROXIMATELY $183,623,707.
AS OF SEPTEMBER 16, 1994, THERE WERE 18,053,932 SHARES OF THE REGISTRANT'S
COMMON STOCK OUTSTANDING.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the following documents are incorporated into this report by
reference:
1. Part II Registrant's Annual Report to Shareholders for fiscal year
ended July 31, 1994.
2. Part III Registrant's definitive Proxy Statement to be filed with the
Securities and Exchange Commission within 120 days after the
close of the fiscal year.
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TABLE OF CONTENTS
PART I.
PAGE
----
Item 1. Business..................................................... 1
General..................................................... 1
Products.................................................... 1
Contracts................................................... 3
Subcontractors.............................................. 5
Program Funding............................................. 5
Principal Customers......................................... 6
Backlog..................................................... 6
Competition................................................. 6
Raw Materials and Suppliers................................. 7
Employees................................................... 8
Environmental Matters....................................... 8
Research and Development.................................... 8
Patents and Proprietary Information......................... 9
Manufacturing............................................... 9
Miscellaneous............................................... 9
Item 2. Properties................................................... 10
Item 3. Legal Proceedings............................................ 10
Item 4. Submission of Matters to a Vote of Security Holders.......... 14
Additional
Item Executive Officers of the Registrant......................... 14
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters...................................................... 15
Item 6. Selected Financial Data...................................... 16
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 16
Item 8. Financial Statements and Supplementary Data.................. 16
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................... 16
PART III.
Item 10. Directors and Executive Officers of the Registrant........... 16
Item 11. Executive Compensation....................................... 16
Security Ownership of Certain Beneficial Owners and
Item 12. Management................................................... 17
Item 13. Certain Relationships and Related Transactions............... 17
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K.......................................................... 17
SIGNATURES
Signature Page............................................... 29
PART 1
ITEM 1. BUSINESS
GENERAL
Rohr Inc., (the "Company"), incorporated in Delaware in 1969, is the
successor to a business originally established in 1940 under the name of Rohr
Aircraft Corporation. The Company, a leading aerospace supplier, provides
nacelle and pylon systems integration, design, development, manufacturing, and
support services to the aerospace industry worldwide. The Company focuses its
efforts on the market for commercial aircraft which seat 100 or more
passengers. Its principal products include nacelles, which are the aerodynamic
structures or pods that surround an aircraft's jet engines; thrust reversers,
which are part of the nacelle system and assist in the deceleration of jet
aircraft after landing; pylons (sometimes referred to as struts) which are the
structures that attach the jet engines or the propulsion system to the
aircraft; noise suppression systems; engine components; and structures for
high-temperature environments. The Company also manufactures solid rocket motor
casings and nozzles for the Titan space program. In addition, the Company
conducts product research and development in advanced composites and metals,
high-temperature materials, acoustics, and manufacturing processes for existing
and future applications.
The Company sells products and services to the three major commercial
airframe manufacturers (Boeing, Airbus, and McDonnell Douglas) and to the five
major jet engine manufacturers (General Electric, Rolls-Royce, Pratt & Whitney,
CFM International, and International Aero Engines). In addition, the Company
has the right to provide customer and product support directly to approximately
150 airline operators and service centers around the world, including on-site
field services and the sale of spare parts. The Company's commercial and
government (military and space) products represented 86% and 14%, respectively,
of its sales in the fiscal year ended July 31, 1994.
The Company has over 50 years of experience in the aerospace industry.
Originally, the Company operated as a subcontractor to the airframe
manufacturers, building parts to the customer's design. Later, it also began to
build to its own designs based on customer specifications. Eventually, the
Company also began operating as a subcontractor to the engine manufacturers.
Over the last decade, the Company significantly expanded its role in many newer
programs by becoming a systems integrator for nacelle systems with
responsibility for the integration and management of the design, tooling,
manufacture, and delivery of complete nacelle systems, directing the efforts of
international consortia in some cases. As a result of this range of experience,
the Company can provide many different levels of service to its customers
depending upon their needs. The Company can build to the customer's design,
assist in that design, or assume total responsibility for design, manufacture,
integration and product support. In addition, over the last several years, the
Company has expanded its services to the airlines through the direct sale of
spare parts, the provision of technical support and training, and the operation
of repair and overhaul facilities.
PRODUCTS
General. The Company designs and manufactures nacelle systems, nacelle
components, pylons or struts, non-rotating components for jet engines, and
other components for commercial and military aircraft. A nacelle system
generally includes the nose cowl or inlet, fan cowl, nozzle systems and thrust
reverser. The nacelle houses electrical, mechanical, fluid, and pneumatic
systems together with various panels, firewalls, and supporting structures; the
aircraft engine (which is provided by the customer); and purchased or customer-
furnished engine equipment such as electrical generators, starters, fuel pumps
and oil coolers. The Company also performs engine build-ups ("EBU") by
assembling nacelle systems and the related electrical, mechanical, fluid and
pneumatic systems onto core aircraft engines.
1
Commercial. The Company manufactures and/or is responsible for the design of
nacelle systems, including thrust reversers, for the McDonnell Douglas MD-80,
the Pratt & Whitney PW4000 series engine option for the McDonnell Douglas MD-11
and the Airbus A310 and A300-600. The Company manufactures the thrust reverser,
nozzle, pylons and fan cowl for Rolls-Royce engine options for the Boeing 757;
the nacelle without thrust reverser for the CF6-80C2, which is the General
Electric engine option for the Airbus A310 and A300-600 and McDonnell Douglas
MD-11, and nacelle components, including the nose cowl, fan cowl, and extension
ring, for the Boeing 737. The Company is completing the design and tooling for
the manufacture of the aft fan case nozzle and plug for the General Electric GE
90 engine option for the Boeing 777. Major components produced by the Company
for the General Electric CF6-80C2 nacelle are also used on the Boeing 747 and
767. The Company is in the development phase of the V2500 nacelle with thrust
reverser for the MD-90.
Programs for which the Company has become a systems integrator, with
responsibility for the integration and management of the design, tooling,
manufacture, and delivery of the complete nacelle or pylon system, include the
CFM International CFM56-5 and the International Aero Engines (an international
consortium) V2500 nacelle program, both of which engines are being
competitively marketed for the Airbus A319, A320 and A321; the pylon program
for the McDonnell Douglas MD-11 aircraft; the nacelle with thrust reverser for
the CFM International-powered Airbus A340; and the nacelle with thrust reverser
for the McDonnell Douglas MD-90 aircraft. The Company's enhanced role on these
programs broadens the Company's business base in the commercial aerospace
industry, but terms and conditions of these contracts require a substantial
investment in working capital and subject the Company to increased market risk
relative to the ultimate success of such programs. The Company, in turn, has
subcontracted the design and production of most components for the CFM56-5,
nacelle components on the V2500, and major components of the MD-11 and A340
contracts to foreign and domestic companies. This enables the Company to
improve its competitive position and to pass on some of the risks associated
with such programs to subcontractors. However, the Company's performance and
ultimate profitability on these programs is dependent on the performance of its
subcontractors, including the timeliness and quality of their work, as well as
the ability of the Company to monitor and manage its subcontractors. See
"Subcontractors".
Government (Military and Space). For military aircraft, the Company
manufactures nacelles for the Lockheed C-130 propjet transport aircraft and
nacelle components for re-engining of existing Boeing KC-135 military aerial
refueling tankers. For the U.S. space program, the Company is delivering solid
fuel rocket motor nozzles and insulated casings for boosters which are used on
the Titan Space Launch Vehicle. The Company is providing technical support in
designing the engine bay doors for the U.S. Air Force F-22 tactical fighter
aircraft. The Company's government business has declined in recent years and
the Company expects the percentage of its revenues attributable to government
sales to decline in future years. The production of the Titan rocket motor
casing program is expected to decline substantially in fiscal 1995 and may end.
The Company's military sales are primarily associated with older programs which
are being phased out of production. The Company expects to complete its
production of the C-130 program in 1996. The extent of future sales under
military and space programs is also dependent, among other things, upon
continued government funding.
Spare Parts. The Company sells spare parts for both military and commercial
aircraft, including those for aircraft in use but no longer in production. Such
sales from continuing operations were approximately $161.5 million in fiscal
1994, $166.9 million in fiscal 1993, and $191.8 million in fiscal 1992. The
Company generally attributes recent reductions in spares sales to the surplus
aircraft in the current marketplace. As a result of such surplus, aircraft
deliveries have declined and the initial spares sold to support newly delivered
aircraft have also declined. In addition, airlines are maintaining lower spares
levels; the existence of surplus aircraft has reduced the level of spare
supplies sufficient to keep an airline's entire fleet in operation. Also,
improved production quality appears to have reduced spares requirements.
2
Historically, the Company has sold spare parts for commercial programs to
airframe or engine manufacturers which then resold them to the end user.
However, in recent years, under certain programs, the Company has acquired the
right from its customers to sell spare parts directly to airlines (although on
certain programs royalty payments to its customers are required). The contracts
that grant these rights to the Company generally require that the Company
provide technical and product support directly to the airlines. Thus, the
Company has the right to provide customer and product support directly to
approximately 150 airline operators and service centers worldwide. The
Company's direct sales of spare parts to the airlines are expected to increase
in the future as nacelle programs on which the Company sells spare parts
directly to the airlines mature and as the aircraft using those nacelles age.
Generally, the Company earns a higher margin on the direct sale of spare parts
to airlines than it does on the sale of spare parts to prime contractors (for
resale to the airlines). Prices for direct spare part sales are higher than
prices for spare parts sold to prime contractors, in part, because of
additional costs related to the technical and customer support activities
provided to the airlines. The Company's direct sales of spare parts as a
percentage of total sales of spare parts were 33.2%, 35.2% and 27.5% in fiscal
1994, 1993 and 1992, respectively.
Business Jets. In the fourth quarter of fiscal 1994 the Company sold and
commenced the transfer to the buyer of its business jet line of business which
is accounted for as a discontinued operation. The purchase agreement requires
the Company, over the next several months, to manufacture and deliver certain
components and transfer program engineering and tooling. See "Notes to the
Consolidated Financial Statements, Note 11," contained in the Company's 1994
Annual Report to Shareholders.
Other Activities. The Company also manufactures other components for military
and commercial jet aircraft, including the nozzle and plug used on the Rolls-
Royce-powered versions of the Boeing 747 and 767 and the Airbus A330, the fan
exit duct for the Rolls-Royce engine used on the Boeing 757, the pylon or strut
assemblies for the Boeing 757 and the acoustical ducts and/or acoustic panels
for the Pratt & Whitney engine used on the McDonnell Douglas MD-80 and the
Boeing 757.
The Company has been performing nacelle integration services for Pratt &
Whitney, installing Boeing 757 nacelles under a Pratt & Whitney license, on the
PW2000 series engine for development program use on the former Soviet Union's
IL-96M/T transport aircraft. Pratt & Whitney is currently evaluating
competitive bids for the manufacture and integration of the nacelle system to
support a possible production program.
Recently, the Company signed an agreement to restructure the contract for the
supply of V2500 nacelles for use on the Airbus A319, A320, and A321 commercial
jet aircraft under which the Company will supply the thrust reverser, common
nozzle assembly, exhaust plug and engine mounts.
In June 1994, the Company signed an agreement with Boeing to commence work on
the design and tooling of the inlet and fan cowl for the Boeing 737-700
aircraft, a derivative of the 737-300. The contract price, schedule and terms
remain to be negotiated.
CONTRACTS
Most of the Company's major commercial contracts establish a firm unit price,
subject to cost escalation, over a number of years or, in certain cases, over
the life of the related program. Life-of-program agreements generally entitle
the Company to work as a subcontractor in the program during the entire period
the customer produces its aircraft or engine. While the customer retains the
right to terminate these long-term and life-of-program arrangements, there are
generally significant costs for doing so.
The Company's long-term contracts generally contain escalation clauses for
revising prices based on published indices which reflect increases in material
and labor costs. Furthermore, in almost all
3
cases, when a customer orders production schedule revisions (outside of a range
provided in the contract) or design changes, the contract price is subject to
adjustment. These long-term contracts provide the Company with an opportunity
to obtain increased profits if the Company can improve production efficiencies
over time, and the potential for significant losses if it cannot produce the
product for the agreed upon price.
The Company's other commercial contracts generally provide a fixed price for
a specified number of units which, in many cases, are to be delivered over a
specified period of time. Under these contracts, prices are re-negotiated for
each new order. As a result, the Company has the opportunity to negotiate price
increases for subsequent units ordered if production costs are higher than
expected. The Company's customers, however, may seek price reductions from the
Company in connection with any new orders they place.
On its longer-term contracts, the Company bases initial production prices on
estimates of the average cost for a portion of the units which it and its
customer believe will be ordered. Generally, production costs on initial units
are substantially higher during the early years of a new contract or program,
when the efficiencies resulting from learning are not yet fully realized, and
decline as the program matures. Learning typically occurs on a program as tasks
and production techniques become more efficient through repetition of the same
manufacturing operation and as management implements actions to simplify
product design and improve tooling and manufacturing techniques. If the
customer orders fewer than the expected number of units within a specified time
period, certain of the Company's contracts have repricing clauses which
increase the prices for units that have already been delivered. However, other
contracts do not include such repricing provisions and force the Company to
bear certain market risks. The Company analyzed the potential market for the
products under such contracts and agreed to prices based on its estimate of the
average estimated costs for the units it expected to deliver under the program.
Many of the Company's contracts have provided for the recovery of a specified
amount of nonrecurring, pre-production costs, consisting primarily of design
and tooling costs. In some cases, a significant portion of such pre-production
costs have been advanced by the customer. However, in negotiating some
contracts, the Company has agreed to defer recovery of pre-production costs and
instead to recover a certain amount of such costs with the sale of each
production unit over an agreed number of production units plus spares
equivalents. In addition, on some of these contracts, based on its analysis of
the potential market for the products covered by such contracts, the Company
agreed to amortize pre-production costs over a number of units which was larger
than the anticipated initial fabrication orders without the protection of a
repricing clause or guaranteed quantities of orders. On other commercial
contracts, the Company receives advance payments with orders, or other progress
or advance payments, which assist the Company in meeting its working capital
requirements for inventories. In government contracts, the Company receives
progress payments for both pre-production and inventory costs. To reduce such
funding requirements and market risks, the Company has subcontracted
substantial portions of several of its programs. See "Subcontractors".
In accordance with practices in the aircraft industry, most of the Company's
commercial orders and contracts are subject to termination at the convenience
of the customer and on many programs the tooling and design prepared by the
Company are either owned by the customer or may be purchased by it at a nominal
cost. The contracts generally provide, upon termination of firm orders, for
reimbursement of costs incurred by the Company, plus a reasonable profit on the
work performed. The costs of terminating an entire contract or program can be
significantly greater for the customer than the costs of terminating specific
firm orders. All of the Company's government contracts are subject to
termination at the convenience of the government. In such a situation, the
Company is entitled to recover the costs it incurred prior to termination, plus
a reasonable profit on the work performed.
4
Under all contracts, the Company may encounter, and on several programs from
time to time has encountered, preproduction and/or production cost overruns
caused by increased material, labor or overhead costs, design or production
difficulties, increased quality, redefined acceptance criteria on government
programs, and various other factors such as technical and manufacturing
complexity. The Company seeks recovery of such cost overruns from the customer
if they are caused by the action or inaction of the customer; otherwise, such
cost overruns will be, and in many cases have been, borne by the Company.
Incident to the manufacture and sale by the Company of its products, the
Company is subject to possible liability by reason of (i) warranties against
defects in design, material and workmanship; (ii) potential product liability
responsibility arising out of the use of its products; and (iii) strict
liability arising from the disposal of certain wastes covered by environmental
protection laws. The Company also has varying contractual obligations to
maintain the ability to produce and service spare parts as long as there are
specified numbers of aircraft still in operation. Provisions of the Company's
contracts provide remedies ranging from actual damages to specified daily
penalties for late deliveries of products.
SUBCONTRACTORS
The competitive market has required the Company to make substantial financial
investments in programs on which it participates. Both to reduce the burden and
risk of such financial investments, and also in some cases to participate in
foreign programs, the Company has further subcontracted the design, development
and production of substantial portions of several of its major contracts to
other foreign and domestic corporations. In return, those companies provided a
portion of the investment and assumed a portion of the risk associated with
various of the Company's contracts. Over the next several years, the Company
expects that the production from its key subcontractors to represent
approximately one-fourth of value of the products and services to be delivered
by the Company during such period. The Company's performance and ultimate
profitability on these programs is dependent on the performance of its
subcontractors, including the timeliness and quality of their work, as well as
the ability of the Company to monitor and manage its subcontractors.
PROGRAM FUNDING
The highly competitive nature of the aerospace market has required the
Company to commit substantial financial resources, largely for working capital,
to participate with its customers on certain long-term programs. Those working
capital requirements consist primarily of nonrecurring pre-production costs
such as design and tooling, recurring costs for inventories and accounts
receivables.
In some cases, a significant portion of the pre-production costs have been
advanced by the customer. However, in negotiating some contracts, the Company
has agreed to defer recovery of pre-production costs and instead to recover a
certain amount of such costs with the sale of each production unit over an
agreed number of production units plus spares equivalents. On some commercial
contracts, the Company receives advance payments with orders, or other progress
or advance payments, which assist the Company in meeting its working capital
requirements for inventories. In government contracts, the Company receives
progress payments for both pre-production and inventory costs. To reduce both
its pre-production funding requirements and the build-up of program
inventories, the Company has entered into agreements with subcontractors to
provide a portion of the program funding needs and has subcontracted to these
entities substantial portions of many of its programs. See "Subcontractors."
Advances and progress payments have varied in the past and are subject to
change in the future based on changes in both commercial and government
procurement practices and governmental regulations. Any future change could
affect the Company's need for program funding.
5
Accounts receivable balances vary in accordance with various payment terms
and other factors including the periodic receipt of large payments from
customers for reimbursement of non-recurring costs or for amounts which had
been deferred pending aircraft certification.
Given the large number of major commercial aircraft programs introduced since
1985, and the present industry environment, the Company expects few new
programs to be introduced within the next several years. With respect to those
new programs which are developed, the Company intends to team with partners, or
obtain financial commitments from one or more qualified subcontractors, prior
to entering bids for work.
The Company's primary sources of program funding have been funds generated
from operations and borrowings. See "Management's Discussion and Analysis of
Financial Condition and Results of Operation--Liquidity and Capital Resources"
in the Company's 1994 Annual Report to Shareholders.
PRINCIPAL CUSTOMERS
For a discussion of the Company's sales to its principal customers, see
"Notes to the Consolidated Financial Statements" in the Company's 1994 Annual
Report to Shareholders, Note 3--"Accounts Receivable--Sales."
BACKLOG
The Company's backlog is significant to its business because the production
of most Company products involves a long lead time from order to shipment date.
Firm backlog represents the sales price of all undelivered units for which the
Company has fabrication authorization. Firm backlog includes units ordered by a
customer although the Company and the customer have not yet agreed upon a sales
price. In such cases, the Company records in backlog an amount it believes
(based upon all available information) is a reasonable price estimate. The
Company also reports anticipated backlog, which represents the sales price of
units which the Company expects (based upon all available information) that its
customers will order under existing contracts and the Company will deliver
within the next seven years.
The Company's firm backlog at July 31, 1994, was approximately $1.2 billion,
compared to $1.4 billion at July 31, 1993. Of such backlog, approximately $0.7
billion is scheduled for delivery on or before July 31, 1995, with the balance
to be delivered in subsequent periods. A portion of the Company's expected
sales for FY95 is not included in firm backlog. Anticipated backlog
approximated $2.5 billion at July 31, 1994, and $2.6 billion at July 31, 1993.
All of the Company's firm and anticipated backlog is subject to termination
or rescheduling at the customer's convenience. The Company's contracts
generally provide for reimbursement of costs incurred, plus a reasonable profit
on such costs, with respect to any firm orders that are terminated.
Historically, it has been rare for a customer to cancel units in firm backlog
because of its obligations to the Company with respect to such units and its
obligations to suppliers of components other than nacelles and pylons, who
frequently are producing concurrently components for use with the units ordered
from the Company.
COMPETITION
The Company's principal competition is Boeing (which in addition to being a
Company customer also manufactures nacelle systems and pylons for its own
aircraft), other significant aerospace corporations who have development and
production experience with respect to portions of the nacelle system, and the
companies to whom the Company has subcontracted various components and who
could (and have) bid on contracts in competition with the Company. Military
aerospace contractors are
6
also potential competitors, as excess capacity created by reductions in defense
spending could cause some of these contractors to look to expand in commercial
markets.
Because of recent reductions in demand in the aircraft manufacturing
industry, excess production capacity exists in the market for a number of the
Company's principal products, which may result in increasingly intense price
competition for orders. While the Company believes it competes effectively,
there can be no assurance that the Company can maintain its share of the market
for these products. See "Management's Discussion and Analysis of Financial
Condition and Results of Operation--Company Outlook" in the Company's 1994
Annual Report to Shareholders.
The Company believes that its capabilities and technology, which range from
research and development through component design and testing, flight
certification assistance, component production and integration and airframe
production line assistance, contribute significantly to its market position.
The Company also believes that its contractual rights to participate on
programs for long periods of time or, in some cases, over the life of programs
also contribute to the maintenance of its market position.
Even with respect to its shorter term contracts, the Company is very likely
to continue working as a subcontractor for the prime contractors well beyond
the end of the existing shorter term contracts. The Company has long standing
relationships with all of its significant customers. The Company's continued
participation on existing programs provides cost advantages to the prime
contractors because it avoids the cost of disassembling, moving, reassembling
and recalibrating the customized tooling used to manufacture aerospace products
which would be necessary if a program were transferred to a new subcontractor
at the end of a short-term contract. In addition, the delays inherent in such a
transfer are likely to disrupt the prime contractor's own production schedule
as the flow of deliveries from the subcontractor is interrupted during the
transfer. It is also generally more expensive for a new subcontractor to begin
producing products in the middle of an existing program than it is for the
Company to continue producing the required products. A new subcontractor's
employees must learn program specific tasks with which the Company's employees
will already be familiar. As a result of all of these factors, it is very
unusual for a prime contractor to shift a major aerospace subcontract from one
manufacturer to another at the end of a short-term contract.
Competitive factors include price, quality of product, design and development
capability, ability to consistently achieve scheduled delivery dates,
manufacturing capabilities and capacity, technical expertise of employees, the
desire or lack thereof of airframe and engine manufacturers to produce certain
components in-house, and the willingness, and increasingly the ability, of the
Company and other nacelle manufacturers to accept financial and other risks in
connection with new programs.
RAW MATERIALS AND SUPPLIERS
The principal raw materials used by the Company are sheet, plate, rod, bar,
tubing, and extrusions made of aluminum, steel, Inconel and titanium;
electrical wire; rubber; adhesives; and advanced composite products. The
principal purchased components are aircraft engine equipment, custom machined
parts, sheet metal details, and castings and forgings. All of these items are
procured from commercial sources. Supplies of raw materials and purchased parts
historically have been adequate to meet the requirements of the Company.
However, from time to time, shortages have been encountered, particularly
during high industry production and demand. While the Company endeavors to
assure the availability of multiple sources of supply, there are many instances
in which, either because of a customer requirement or the complexity of the
item, the Company may rely on a single source. The failure of any of these
single source suppliers or subcontractors to meet the Company's needs could
seriously delay production on a program. The Company monitors the delivery
performance, product quality and financial health of its critical suppliers,
including all of its single source suppliers. Over the last ten years, which
includes the period from 1987 through 1991 when the Company's sales grew
7
rapidly, there have been occasions of periodic, short-term delays from
suppliers, but none of these delays has had a material adverse effect on the
Company or its ability to deliver products to its customers.
EMPLOYEES
At July 31, 1994, the Company had approximately 4,900 full-time employees, of
whom approximately 1,639 were represented by the International Association of
Machinists and Aerospace Workers under agreements which expire on February 11,
1996, and approximately 175 were represented by the International Union, United
Automobile, Aerospace and Agricultural Implement Workers of America under an
agreement which expires on October 29, 1995. The Company considers its
relationship with its employees generally to be satisfactory.
ENVIRONMENTAL MATTERS
As an international aerospace manufacturing corporation, the Company is
subject to foreign, federal, state and local laws and regulations that limit
the discharge of pollutants into the air, soil and water and establish
standards for the treatment, storage and disposal of hazardous wastes. If the
Company were to violate or otherwise to have liability pursuant to any of these
laws or regulations, it could be subject to judicial or administrative
enforcement proceedings requiring the Company to investigate the nature and
extent of any pollution it caused, to remediate such pollution, to install
control devices in its manufacturing facilities to reduce the amount of
pollutants entering the environment and to otherwise respond to orders and
requests of the courts and the various regulatory agencies. These proceedings
could result in the Company expending additional funds to satisfy judicial or
regulatory decisions. The Company does not believe that its environmental risks
are materially different from those of comparable manufacturing companies.
Nevertheless, the Company cannot provide assurances that environmental laws
will not adversely affect the Company's operations and financial condition in
the future. Environmental risks are generally excluded from coverage under the
Company's current insurance policies. See "Management's Discussion And Analysis
of Financial Condition and Results of Operation--Environmental Matters" and
"Notes to the Consolidated Financial Statements, Note 8, Commitments and
Contingencies," in the Company's 1994 Annual Report to Shareholders. See, also,
Item 3, "Legal Proceedings" in this report.
The Company is involved in several proceedings and investigations related to
waste disposal sites and other environmental matters. See Item 3. "Legal
Proceedings" for a discussion of these matters, and additional suits and
matters that are pending or have been threatened against the Company.
Based upon presently available information, the Company believes that
aggregate costs in relation to all environmental matters of the Company will
not have a material adverse effect on the Company's financial condition,
liquidity, results of operations or capital expenditures.
RESEARCH AND DEVELOPMENT
The Company's research and development activities are designed to improve its
existing products and manufacturing processes, to enhance the competitiveness
of its new products, and to broaden the Company's aerospace product base.
Most of its product development is funded through regular production
contracts. The Company developed the world's first all composite nacelle and
its large cascade thrust reverser under such contracts. The Company also
performs self-funded research and development through which it developed
proprietary products which control noise and prevent ice formation on nacelles.
The Company seeks research and development contracts from the U.S. government
and from commercial customers in targeted areas of interest such as composite
materials and advanced low-cost
8
processing and joining of new materials. From time to time, the Company also
enters into joint research and development programs with its customers.
PATENTS AND PROPRIETARY INFORMATION
The Company has obtained patents and developed proprietary information which
it believes provide it with a competitive advantage. For example, the Company
holds patents on the DynaRohr family of honeycomb sound attenuation structures,
the state-of-the-art RohrSwirl system which prevents ice formation on the
leading edges of nacelles, and bonding processes for titanium and other metals.
In addition, the Company has developed proprietary information covering such
matters as nacelle design, sound attenuation, bonding of metallic and advanced
composite structures, material specifications and manufacturing processes. The
Company protects this information through inventions and confidentiality
agreements with its employees and other third parties. Although the Company
believes that its patents and proprietary information allow it to produce
superior products, it also believes that the loss of any such patent or
disclosure of any item of proprietary information would not have a material
adverse effect on the Company.
MANUFACTURING
The Company's products are manufactured and assembled at its facilities in
the United States and Europe by an experienced workforce. The Company considers
its facilities and equipment generally to be in good operating condition and
adequate for the purpose for which they are being used. In addition, it has a
substantial number of raw material suppliers and numerous subcontractors to
produce components, and in some cases, major assemblies.
The Company's European final assembly sites, which are located adjacent to
the Company's major European customer, Airbus, allow the Company to respond
quickly to customer needs. The Company believes that these European sites
provide it with advantages in obtaining certain contracts with Airbus because
they allow the Company to perform a portion of the required work in Europe.
MISCELLANEOUS
No material portion of the Company's business is considered to be seasonal.
9
ITEM 2. PROPERTIES
All owned and leased properties of the Company are generally well maintained,
in good operating condition, and are generally adequate and sufficient for the
Company's business. The Company's properties are substantially utilized;
however, due to the downturn in the aerospace industry, the Company has excess
manufacturing capacity. All significant leases (except for leases associated
with industrial revenue bond financings) are renewable at the Company's option
on substantially similar terms, except for increases of rent which must be
negotiated in some cases.
The following table sets forth the location, principal use, approximate size
and acreage of the Company's major production facilities. Those which are owned
by the Company and its subsidiaries are owned free of material encumbrances,
except as noted below:
OWNED LEASED
----------------------- -----------------------
APPROXIMATE APPROXIMATE
SQUARE FEET SQUARE FEET
TYPE OF OF FACILITY APPROXIMATE OF FACILITY APPROXIMATE
FACILITY(1) (000) ACREAGE (000) ACREAGE
LOCATION ----------- ----------- ----------- ----------- -----------
ALABAMA
Fairhope(2)........... A,B 123 70.6 -- --
Foley(2).............. A,B 343 163.7 -- --
ARKANSAS
Arkadelphia(3)........ A,B 224 65.2 -- --
Heber Springs(2)...... A,B 153 70.5 -- --
Sheridan(2)........... A,B 149 78.0 -- --
CALIFORNIA
Chula Vista........... A,B,C,D 2,770 97.5 165 65.5
Moreno Valley......... A,B,C 247 37.5 -- --
Riverside............. A,B,C,D 1,162 75.3 140 15.1
FRANCE
Toulouse/St. Martin... A,B,C 132 7.0 18 3.2
Toulouse/Gramont(2)... A,B 170 23.0 -- --
GERMANY
Hamburg............... A,B 28 5.3 -- --
MARYLAND
Hagerstown............ A,B 423 56.8 -- --
TEXAS
San Marcos............ A,B 172 55.0 -- --
----- ----- --- ----
Approximate Totals.... 6,096 805.4 323 83.8
- - --------
(1) The letters indicated for each location describe the principal activities
conducted at that location:
A-Office
B-Manufacturing
C-Warehouse
D-Research and Testing
(2) Subject to a capital lease.
(3) The completion of construction of this facility has been deferred.
ITEM 3. LEGAL PROCEEDINGS
A. Accounts receivable and inventories include estimated recoveries on
constructive change claims that the Company has asserted with respect to costs
it incurred as a result of government imposed redefined acceptance criteria on
several government subcontracts. In connection with the
10
Grumman F-14 subcontract, the Company filed Appeal No. 47139 (filed February 7,
1994) before the Armed Service Board of Contract Appeals ("ASBCA"). In
connection with the Boeing E3/E6 subcontract, the Company filed Appeal No.
47430 (filed April 11, 1994) before the ASBCA. In the above Appeals, the
Company's customers are sponsors of the claims, the U.S. Navy is the defendant,
and the Company is claiming monetary damages. Management believes that the
amounts reflected in the financial statements are a reasonable estimates of the
amounts for which these matters will be resolved. The resolution of these
matters may take several years. See "Notes to the Consolidated Financial
Statements, Note 8", contained in the Company's 1994 Annual Report to
Shareholders.
B. In June 1987, the U.S. District Court of Los Angeles, in U.S. et al. vs.
Stringfellow (United States District Court for the Central District of
California, Civil Action No. 83-2501 (JMI)), granted partial summary judgment
against the Company and 14 other defendants on the issue of liability under the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"). This suit, along with related lawsuits, alleges that the defendants
are jointly and severally liable for all damage in connection with the
Stringfellow hazardous waste disposal site in Riverside County, California. In
June 1989, a federal jury and a special master appointed by the federal court
found the State of California also liable for the cleanup costs. On November
30, 1993, the special master released his "Findings of Fact, Conclusion of Law
and Reporting Recommendations of the Special Master Regarding the State Share
Fact Finding Hearing". In it, he allocated liability between the State of
California and other parties. As this hearing did not involve the valuation of
future tasks and responsibilities, the order did not specify dollar amounts of
liability. The order, phrased in percentages of liability, recommended
allocating liability on the CERCLA claims as follows: 65% to the State of
California and 10% to the Stringfellow entities, leaving 25% to the
generator/counterclaimants (including the Company) and other users of the site
(or a maximum of up to 28% depending on the allocation of any Stringfellow
entity orphan share). On the state law claims, the special master recommended a
95% share for the State of California, and 5% for the Stringfellow entities,
leaving 0% for the generator/counter claimants. The special master's
recommendation is subject to a final decision and appeal. The Company is the
second largest generator of wastes disposed at the site by volume, although it
and certain other generators have argued the final allocation among generators
of their shares of cleanup costs should not be determined solely by volume. The
largest generator of wastes disposed at the Stringfellow site, by volume, has
indicated it is significantly dependent on insurance to fund its share of any
cleanup costs, and that it is in litigation with certain of its insurers. The
Company and other generators of wastes disposed at the Stringfellow site, which
include numerous companies with assets and equity significantly greater than
the Company, are jointly and severally liable for the share of cleanup costs
for which the generators, as a group, ultimately are found to be responsible.
The Company intends to continue to defend vigorously these matters and
believes, based on currently available information, that the ultimate
resolutions of these matters will not have a material adverse effect on the
financial position or results of operations of the Company.
The Company has claims against its comprehensive general liability insurers
for reimbursement of its cleanup costs at the Stringfellow site. These claims
are the subject of separate litigation, United Pacific Insurance Co., et al.
vs. Rohr Industries, Inc., et al., No. C634195 in the Los Angeles Superior
Court, although the insurers nevertheless are paying substantially all of the
Company's costs of defense in the EPA and State action against the generators
of wastes disposed at the site. Certain of these insurance policies have
pollution exclusion clauses which are being argued as a defense and the
insurers are alleging various other defenses to coverage. The Company has
entered settlements with some of the insurance carriers and is engaged in
settlement discussions with certain others. The Company intends to continue to
vigorously defend this matter and believes, based upon currently available
information, that the ultimate resolution will not have a material adverse
effect on the financial position, liquidity or results of operations of the
Company.
C. In 1990, the Division of Enforcement of the Securities and Exchange
Commission (the "Enforcement Division") began conducting an informal inquiry
regarding various Company programs,
11
program and contract estimates at completion, and related accounting practices.
On August 17, 1993, the Company received a request for documents from the
Enforcement Division concerning its decision to change its accounting practices
relating to long-term programs and contracts, and its capitalizing of pre-
certification costs and general administrative costs. The staff of the
Commission has indicated in its correspondence with the Company that this
inquiry "should not be construed as an indication by the Commission or its
staff that any violation of the law has occurred; nor should it be considered a
reflection on any person, entity, or security." The Company is cooperating
fully with the Enforcement Division's requests and cannot predict the ultimate
result of the inquiry or its impact, if any, on the Company.
D. In December 1989, the Maryland Department of the Environment ("MDE")
served the Company with a Letter and Consent Order No. CO-90-093. The Consent
Order calls for investigation and remediation of chemicals detected in soil and
ground water at the Company's bonding facility in Hagerstown, Maryland. The
Company and MDE subsequently negotiated a mutually acceptable Consent Order
under which the Company has developed a work plan to determine the nature and
extent of the pollution at the bonding plant. The Company had acquired the
bonding plant from Fairchild Industries, Inc. ("Fairchild"), in September 1987
and Fairchild had agreed to retain responsibility for and to indemnify the
Company against any claims and fees in connection with any hazardous materials
or pollutants released into the environment at or near the bonding plant or any
other property before the closing date of the sale. On March 11, 1993, the
Company and Fairchild executed a settlement agreement pursuant to which
Fairchild substantially reimbursed the Company for past costs relating to
environmental investigations at the bonding plant. The parties also agreed on a
procedure to perform the work required under the MDE Consent Order. Based on
currently available information, the Company believes that the resolution of
this matter will not have a material adverse effect on the financial position
or results of operation of the Company.
E. On March 23, 1992, a Deputy Attorney General for the State of California
advised the Company that it may be subject to suit pursuant to Proposition 65
on the basis of data contained in a health risk assessment ("HRA") of the
Company's Chula Vista facility conducted pursuant to the Air Toxics Hot Spots
Act, also known as California Assembly Bill AB-2588. Proposition 65 requires
manufacturers who expose any person to a chemical resulting in an increased
risk of cancer to issue a clear and reasonable warning to such person and
imposes substantial penalties for non-compliance. AB-2588 requires
manufacturers to inventory their air emissions and to submit an HRA to assess
and quantify health risks associated with those emissions. On April 9, 1993,
representatives of the Company met with the Deputy Attorney General to discuss
this matter and agreed to supply certain requested data to the government. The
Company is presently working on the procedures required to produce this data.
Based on currently available information, the Company believes that the
resolution of this matter will not have a material adverse effect on the
financial position or results of operation of the Company.
F. On July 22, 1994, the Department of Toxic Substances Control of the State
of California Environmental Protection Agency ("DTSC") filed an action against
the Company and other individuals and companies in the U. S. District Court for
the Eastern District of California, Case No. CV-F-94-5683-GEB DLB, seeking,
among other things, recovery of response costs approximating $1.3 million plus
interest and attorney fees. The demand for payment, which is joint and several,
is for expenses allegedly incurred by DTSC personnel in the oversight of the
cleanup of the Rio Bravo deep injection well disposal site in Shafter,
California. The cleanup is currently being conducted by a group of cooperating
potentially responsible parties ("PRPs"), including the Company ("the
Cooperating PRPs"). In February 1993, the Cooperating PRP group wrote to DTSC
and advised them, among other things, of the Cooperating PRPs' continuing
efforts at the site and suggested that DTSC seek recovery of the oversight
funds from the non-cooperating PRPs. Since the demand of the DTSC was joint and
several, and would arguably cover all generators including the non-cooperating
PRPs, none of the $1.3 million demanded by the DTSC has been allocated to the
Cooperating PRPs. Some PRPs estimate the
12
potential cost of cleanup to be approximately $7 million. The Company and other
PRPs could face joint and several liability for the entire amount of cleanup
costs, regardless of Cooperating PRP or non-cooperating PRP status. The Company
intends to vigorously argue that such oversight costs should be recovered from
the non-cooperating PRPs. Based on currently available information, the Company
believes that the resolution of this matter will not have a material adverse
effect on the financial position or results of operation of the Company.
G. The Company previously reported that the DTSC informed the Company and
approximately 100 other individuals and companies that DTSC considered the
recipients to be potentially responsible parties liable for cleanup at the
Chatham Brothers Barrel Yard Site located in Escondido, California (the
"Chatham Site"). By letter dated April 13, 1993, DTSC again notified the
Company that it believed the Company was one of a number of companies who were
liable for the cleanup of the Chatham Site. DTSC further advised the Company
that unless a settlement could be reached with the Company, it intended to name
the Company as a defendant in a cost recovery action it proposed to file in
June 1993. The Company has no knowledge of the filing of any such suit. After a
thorough review of the Company's records and information possessed by DTSC, and
interviews of present and former Company employees, the Company remains
convinced that it has no relationship whatsoever with the Chatham Site and,
therefore, is not liable for the cleanup of that site. In addition, the Company
has discussed this matter with a group of PRPs for the Chatham Site and has
indicated its lack of involvement with the site. If the Company fails to
persuade DTSC that it is not a PRP with regard to the Chatham Site, the Company
could face joint and several liability for the amounts involved. The potential
cost of cleanup for the Chatham Site is estimated by some PRPs to be
approximately $30 million. If suit is filed against the Company, the Company
intends to defend vigorously this matter. Based on currently available
information, the Company believes that the resolution of this matter will not
have a material adverse effect on the financial position or results of
operation of the Company.
H. During the third quarter of fiscal year 1993, Region IX of the United
States Environmental Protection Agency ("EPA") named the Company as a first-
tier generator of hazardous wastes that were transported to the Casmalia
Resources Hazardous Waste Management Facility (the "Casmalia Site") in
Casmalia, California. First-tier generators are the top 82 generators by volume
of waste disposed of at the Casmalia Site. The size of this group was chosen by
the EPA. The EPA has given the first-tier generators a list of work-related
elements needing to be addressed in a good faith offer to investigate and
remediate the site. The first-tier generators believe a collaborative approach
early in the site cleanup and closure process offers all parties an opportunity
to help determine a technical course of action at this site before the EPA has
made final decisions on the matter. The Company has joined approximately 49
other companies in the Casmalia Resources Site Steering Committee which
recently made a good faith offer to the EPA. The Company could be found jointly
and severally liable for the total amount of cleanup cost. The Company does not
yet know the ability of all other PRPs at this site, which include companies of
substantial assets and equity, to fund their allocable share. Some PRPs have
made preliminary estimates of cleanup costs at this site of approximately $60
to $70 million and the Company's share (based on estimated, respective volumes
of discharge into such site by all generators, all of which cannot now be known
with certainty) could approximate $1.8 million. Based on currently available
information, the Company believes that the resolution of this matter will not
have a material adverse effect on the financial position or results of
operation of the Company.
I. By letter dated November 30, 1993, the Environmental Protection Agency of
the State of Ohio advised the Company that it is investigating potential
sources of contamination in the vicinity of property which was previously owned
by a wholly-owned subsidiary of the Company in the Village of Millersburg,
Ohio. This property was sold by the Company in December 1977 under a purchase
and sale agreement that transferred any such liability for contamination to the
purchaser. The Company intends to cooperate fully with the Ohio Environmental
Protection Agency. Based on currently available information, the Company
believes that the resolution of the matter will not have a material adverse
effect on the financial position or results of operation of the Company.
13
J. By letter dated July 14, 1994, the Company was notified by the State of
Washington's Department of Ecology that the Department believes that the
Company to be a "potentially liable person" ("PLP") under the Model Toxics
Control Act of the Revised Code of Washington. The Company is alleged to have
arranged for the disposal or treatment of a hazardous substance or arranged
with a transporter for disposal or treatment of a hazardous substance at a
facility in Washington known as the Yakima Railroad Area. The Department has
made a written determination that the Company is a PLP. Based on currently
available information, the Company believes that the resolution of this matter
will not have a material adverse effect on the financial position or results of
operation of the Company.
K. The Company previously reported that it had received an Enforcement Order
from the Department of Toxic Substances Control of the State of California
("DTSC"), docket HWCA 91/92-054, seeking a penalty in the amount of $151,791
for the Company's alleged failure to obtain a permit for the treatment of
hazardous waste and storage of hazardous wastes plus related housekeeping
violations. The Company and DTSC have executed a Consent Agreement and Order
effective July 29, 1994, which provides, among other things, for the Company to
pay $12,500.
L. From time to time, various environmental regulatory agencies request that
the Company conduct certain investigations on the nature and extent of
pollution, if any, at its various facilities. For example, such a request may
follow the spill of a reportable quantity of certain chemicals. At other times,
the request follows the removal, replacement or closure of an underground
storage tank pursuant to applicable regulations. At present, the Company's
Chula Vista facility is conducting certain investigations pursuant to
discussions with the San Diego County Department of Health Services, Hazardous
Materials Management Division and the San Diego Regional Water Quality Control
Board. The Company intends to cooperate fully with the various regulatory
agencies.
M. In addition to the litigation discussed above, from time to time the
Company is a defendant in lawsuits involving (i) claims based on the Company's
alleged negligence or strict liability as a manufacturer in the design or
manufacture of various products; (ii) claims based upon environmental
protection laws; and (iii) claims based on the alleged wrongful termination of
its employees due to, among other things, discrimination based on race, age,
sex, national origin, handicap status, sexual preference, etc. The Company
believes that in those types of cases now pending, or in claims known by the
Company to be asserted against it whether or not reduced to a legal proceeding,
it either has no material liability or any such liability is adequately covered
by its reserves or its liability insurance, subject to certain deductible
amounts. The Company is aware that various of its insurers may assert, and in
some such cases have asserted, that their insurance coverage does not provide
protection against punitive damages in any specific lawsuit. While there can be
no assurances that the Company will not ultimately be found liable for material
punitive damages, the Company does not now believe that it has an exposure to
any material liability for punitive damages.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There is no information required to be submitted by the Company under this
Item.
ADDITIONAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT
As of September 16, 1994, the executive officers of the Company, in addition
to R. H. Rau, President and Chief Executive Officer, referred to at Item 10,
Part III, were as follows:
LAURENCE A. CHAPMAN, Senior Vice President and Chief Financial Officer,
age 45, joined the Company in May 1994. Prior to that and since 1981, he
worked for Westinghouse Electric Company ("Westinghouse"). He had been the
Vice President and Treasurer of Westinghouse since January 1992. He was
previously the Chief Financial Officer of Westinghouse Financial Services,
Inc., a wholly-owned subsidiary of Westinghouse. Prior to that, Mr. Chapman
held positions in Corporate Finance and Corporate Planning with
Westinghouse.
14
JOHN R. JOHNSON, Senior Vice President, Programs, Technology, and Quality
Assurance, age 57, has served in his present position since January 1994.
Prior to that and since September 1979, he has served in other senior
management positions, including Senior Vice President, Programs and Support
from March 1993 to January 1994; Vice President, Government Business from
February 1990 to February 1993; Vice President, Planning from May 1989 to
February 1990; and Vice President, Manufacturing, Chula Vista, from April
1986 to May 1989. He joined the Company in September 1979.
RICHARD W. MADSEN, Vice President, General Counsel and Secretary, age 55,
has served in his present position since December 5, 1987. Prior to that
and since August 1979, he served as Secretary and Corporate Counsel and has
been an employee of the Company since 1974.
ALVIN L. MAJORS, Vice President and Controller (Chief Accounting
Officer), age 54, has served in his present position since May 1989. Prior
to that and since December 1987 he served as the Company's Controller.
Prior to that and since 1971, he has served in other senior management
positions. He has been an employee of the Company since 1971.
RONALD M. MILLER, Vice President and Treasurer, age 50, has served in his
present position since May 1989. Prior to that and since December 1987, he
served as the Company's Treasurer and has been an employee of the Company
since February 1969.
DAVID R. WATSON, Senior Vice President--Customer Support and Business
Development, age 43, has served in his present position since March 1994,
assuming the title of Senior Vice President in June 1994. Prior to that and
since May 1991, he served as Vice President, Commercial Programs. In May
1989, he assumed the position of Vice President and General Manager of the
Company's Riverside facility. He has been an employee since February 1988
when he joined the Company as Vice President, Quality Assurance.
GRAYDON A. WETZLER, Senior Vice President, Operations, age 52, has served
in his present position since January 1994. Prior to that and since July
1993, served as Vice President, Technical and Quality Assurance. From
November 1990 to July 1993, he served as Vice President Quality/Product
Assurance. From April 1987 to November 1990, he served as Vice President--
Management Information Systems. He has served in other senior management
positions. He has been an employee of the Company since 1979.
The terms of office of Messrs. Madsen and Miller expire on December 3, 1994.
The initial term of Mr. Rau's Employment Agreement terminates on July 31, 1996.
The other executive officers named above serve at the pleasure of the Chairman
of the Board.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
Although a cash dividend has not been paid since 1975, a 2-for 1 stock
dividend was paid in December 1985. Currently, under the terms of certain
covenants in several of the Company's principal financing agreements, the
Company may not pay cash dividends until after April 25, 1997. Thereafter, the
Company's ability to pay cash dividends is restricted substantially.
Other information required by this Item is set forth in the section headed
"Rohr Profile" in the Registrant's Annual Report to Shareholders for the fiscal
year ended July 31, 1994, and such information is incorporated herein by
reference.
15
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is set forth in the section headed
"Selected Financial Data" in the Company's Annual Report to Shareholders for
the fiscal year ended July 31, 1994, and such information is incorporated
herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this Item is set forth in the section headed
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's Annual Report to Shareholders for the fiscal year
ended July 31, 1994, and such information is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is set forth in the section headed
"Consolidated Balance Sheets," "Consolidated Statements of Operations,"
"Consolidated Statements of Shareholders' Equity," "Consolidated Statements of
Cash Flows," and "Notes to the Consolidated Financial Statements" in the
Company's Annual Report to Shareholders for the fiscal year ended July 31,
1994, and such information is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There is no information required to be submitted by the Company under this
Item.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10 percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC") and the New York Stock Exchange. Officers, directors and greater than
10-percent shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on its review of
the copies of such forms received by it, or written representations from
certain reporting persons that no such forms were required for those persons,
the Company believes that, during fiscal year 1994, all filing requirements
applicable to its officers, directors, and greater than 10-percent beneficial
owners were complied with.
The other information required under this Item is set forth in the section
headed "Election of Directors" in the Company's Proxy Statement for the 1994
Annual Meeting of Shareholders for fiscal year ended July 31, 1994, and such
information is incorporated herein by reference. See also "Additional Item" at
Part I of this report.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is set forth in the section headed
"Executive Compensation and Other Information" and in the section headed
"Directors' Beneficial Ownership and Compensation" in the Company's Proxy
Statement for the 1994 Annual Meeting of Shareholders for fiscal year ended
July 31, 1994, and such information is incorporated herein by reference.
16
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is set forth in the table headed
"Beneficial Ownership of Shares" in the Company's Proxy Statement for the 1994
Annual Meeting of Shareholders for fiscal year ended July 31, 1994, and such
information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is no information required to be submitted by the Company under this
Item.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
The following consolidated financial statements of the Company and
consolidated subsidiaries, included in the Company's 1994 Annual Report to
Shareholders, are incorporated by reference in Item 8:
(a) 1. Financial Statements
Consolidated Balance Sheets at July 31, 1994, and 1993
Consolidated Statements of Operations for Years Ended July 31, 1994,
1993, and 1992
Consolidated Statements of Shareholders' Equity for Years Ended July
31, 1994, 1993, and 1992
Consolidated Statements of Cash Flows for Years Ended July 31, 1994,
1993, and 1992
Notes to the Consolidated Financial Statements
(a) 2. Financial Statement Schedules
The following consolidated financial statement schedules of the
Company and subsidiaries are included in Part IV of this report.
Schedule VIII--Valuation and Qualifying Accounts
Schedule IX --Short-Term Borrowings
Schedule X --Supplementary Income Statement Information
All other schedules are omitted because they are not applicable, not
required under the instructions or the information is included in the
financial statements or notes thereto.
(a) 3. Index to exhibits
3.1 Restated Certificate of Incorporation of Rohr Industries, Inc.,
dated December 7, 1985, incorporated herein by reference to Exhibit
3.1 filed with Form 10-K for fiscal year ended July 31, 1986.
3.2 Certificate of Designations of Series C Junior Participating
Cumulative Preferred Stock $1.00 Par Value of Rohr Industries, Inc.,
dated August 15, 1986, incorporated herein by reference to Exhibit
3.2 filed with Form 10-K for fiscal year ended July 31, 1986.
17
3.3 Certificate of Amendment to Restated Certificate of
Incorporation, dated December 9, 1986, incorporated herein
by reference to Exhibit 3.3 filed with Form 10-K for
fiscal year ended July 31, 1987.
3.4 Certificate of Amendment to Restated Certificate of
Incorporation, dated December 10, 1991, incorporated
herein by reference to Exhibit II filed with Form 8-K
dated as of December 7, 1991.
3.5 Bylaws, as amended January 7, 1993, incorporated herein by
reference to Exhibit 3.8 filed with Form 10-Q for period
ended January 31, 1993.
4.1 Indenture, dated as of March 1, 1987, between Rohr
Industries, Inc., and Bankers Trust Company, trustee,
relating to 9 1/4% subordinated debentures, incorporated
herein by reference to Exhibit 4.1 filed with Form 10-Q
for period ended May 2, 1993.
4.2 Indenture, dated as of October 15, 1987, between Rohr
Industries, Inc., and Bankers Trust Company, trustee,
relating to 7% convertible subordinated debentures,
incorporated herein by reference to Exhibit 4.2 filed with
Form 10-Q for period ended May 2, 1993.
4.3 Indenture, dated as of May 15, 1994, between Rohr, Inc.,
and IBJ Schroder Bank and Trust Company, trustee, relating
to 11 5/8% senior notes, incorporated herein by reference
to Exhibit 4.5 filed with Form 10-Q for period ended May
1, 1994.
4.4 Indenture, dated as of May 15, 1994, between Rohr, Inc.,
and The Bank of New York, trustee, relating to 7 3/4%
convertible subordinated notes, incorporated herein by
reference to Exhibit 4.6 filed with Form 10-Q for period
ended May 1, 1994.
*4.5 Rohr, Inc. Amended and Restated Note Agreement dated as of
May 10, 1994, for 9.35% Senior Notes due January 29, 2000.
*4.6 Rohr, Inc. Amended and Restated Note Agreement dated as of
May 10, 1994, for 9.33% Senior Notes due December 15,
2002.
4.7 Amended and Restated Rights Agreement, dated as of April
6, 1990, incorporated herein by reference to Item 7 of
Form 8-K dated as of April 6, 1990.
10.1 Rohr Industries, Inc., Directors Retirement Plan,
incorporated herein by reference to Exhibit 10.4 filed
with Form 10-K for fiscal year ended July 31, 1985.
10.1.1 First Amendment to Rohr Industries, Inc., Directors
Retirement Plan, incorporated herein by reference to
Exhibit 10.4.1 filed with Form 10-K for fiscal year ended
July 31, 1985.
10.1.2 Second Amendment to Rohr Industries, Inc., Directors
Retirement Plan, incorporated herein by reference to
Exhibit 10.4.2 filed with Form 10K for fiscal year ended
July 31, 1985.
10.1.3 Third Amendment to Rohr Industries, Inc., Directors
Retirement Plan, incorporated herein by reference to
Exhibit 10.3.3 filed with Form 10-K for fiscal year ended
July 31, 1990.
18
10.1.4 Fourth Amendment to Rohr Industries, Inc., Directors
Retirement Plan, incorporated herein by reference to
Exhibit 10.3.4 filed with Form 10-K for fiscal year ended
July 31, 1990.
10.1.5 Fifth Amendment to Rohr Industries, Inc., Directors
Retirement Plan, incorporated herein by reference to
Exhibit 10.3 filed with Form 10-K for fiscal year ended
July 31, 1992.
10.1.6 Sixth Amendment to Rohr Industries, Inc., Directors
Retirement Plan, incorporated herein by reference to
Exhibit 10.1.6, filed with Form 10-Q for period ended
May 2, 1993.
10.1.7 Seventh Amendment to Rohr Industries, Inc., Directors
Retirement Plan, incorporated herein by reference to
Exhibit 10.1.7, filed with Form 10-Q for period ended
May 2, 1993.
10.2 Rohr Industries, Inc., Supplemental Retirement Plan
(Restated 1983), incorporated herein by reference to
Exhibit 10.4 filed with Form 10-K for fiscal year ended
July 31, 1983.
10.2.1 First Amendment to Rohr Industries, Inc., Supplemental
Retirement Plan (Restated 1983), incorporated herein by
reference to Exhibit 10.4.1 filed with Form 10-K for
fiscal year ended July 31, 1984.
10.2.2 Second Amendment to Rohr Industries, Inc., Supplemental
Retirement Plan (Restated 1983), incorporated herein by
reference to Exhibit 10.4.2 filed with Form 10-K for
fiscal year ended July 31, 1984.
10.2.3 Third Amendment to Rohr Industries, Inc., Supplemental
Retirement Plan (Restated 1983), incorporated herein by
reference to Exhibit 10.5.3 filed with Form 10-K for
fiscal year ended July 31, 1985.
10.2.4 Fourth Amendment to Rohr Industries, Inc., Supplemental
Retirement Plan (Restated 1983), incorporated herein by
reference to Exhibit 10.5.4 filed with Form 10-K for
fiscal year ended July 31, 1985.
10.2.5 Fifth Amendment to Rohr Industries, Inc., Supplemental
Retirement Plan (Restated 1983), incorporated herein by
reference to Exhibit 10.5.6 filed with Form 10-K for
fiscal year ended July 31, 1986.
10.2.6 Sixth Amendment to Rohr Industries, Inc., Supplemental
Retirement Plan (Restated 1983), incorporated herein by
reference to Exhibit 10.5.7 filed with Form 10-K for
fiscal year ended July 31, 1986.
10.2.7 Seventh Amendment to Rohr Industries, Inc., Supplemental
Retirement Plan (Restated 1983), incorporated herein by
reference to Exhibit 10.5.8 filed with Form 10-K for
fiscal year ended July 31, 1986.
10.2.8 Eighth Amendment to Rohr Industries, Inc., Supplemental
Retirement Plan (Restated 1983), incorporated herein by
reference to Exhibit 10.5.9 filed with Form 10-K for
fiscal year ended July 31, 1987.
10.2.9 Ninth Amendment to Rohr Industries, Inc., Supplemental
Retirement Plan (Restated 1983), incorporated herein by
reference to Exhibit 10.5.10 filed with Form 10-K for
fiscal year ended July 31, 1987.
19
10.2.10 Tenth Amendment to Rohr Industries, Inc., Supplemental
Retirement Plan (Restated 1983), incorporated herein by
reference to Exhibit 10.4.11 filed with Form 10-K for
fiscal year ended July 31, 1988.
10.2.11 Eleventh Amendment to Rohr Industries, Inc., Supplemental
Retirement Plan (Restated 1983), incorporated herein by
reference to Exhibit 10.4.12 filed with Form 10-K for
fiscal year ended July 31, 1988.
10.2.12 Twelfth Amendment to Rohr Industries, Inc., Supplemental
Retirement Plan (Restated 1983), incorporated herein by
reference to Exhibit 10.4.13 filed with Form 10-K for
fiscal year ended July 31, 1988.
10.2.13 Thirteenth Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983),
incorporated herein by reference to Exhibit 10.4.14 filed
with Form 10-K for fiscal year ended July 31, 1988.
10.2.14 Fourteenth Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983),
incorporated herein by reference to Exhibit 10.4.15 filed
with Form 10-K for fiscal year ended July 31, 1989.
10.2.15 Fifteenth Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983),
incorporated herein by reference to Exhibit 10.4.16 filed
with Form 10-K for fiscal year ended July 31, 1990.
10.2.16 Sixteenth Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983),
incorporated herein by reference to Exhibit 10.4.17 filed
with Form 10-K for fiscal year ended July 31, 1990.
10.2.17 Seventeenth Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983),
incorporated herein by reference to Exhibit 10.4.18 filed
with Form 10-K for fiscal year ended July 31, 1990.
10.2.18 Eighteenth Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983),
incorporated herein by reference to Exhibit 10.4.19 filed
with Form 10-K for fiscal year ended July 31, 1991.
10.2.19 Nineteenth Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983),
incorporated herein by reference to Exhibit 10.4.20 filed
with Form 10-K for fiscal year ended July 31, 1991.
10.2.20 Twentieth Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983),
incorporated herein by reference to Exhibit 10.4.21 filed
with Form 10-K for fiscal year ended July 31, 1992.
10.2.21 Twenty-first Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983),
incorporated herein by reference to Exhibit 10.2.21,
filed with Form 10-Q for period ended May 2, 1993.
10.2.22 Twenty-second Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983),
incorporated herein by reference to Exhibit 10.2.22,
filed with Form 10-Q for period ended May 2, 1993.
*10.2.23 Twenty-third Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983), dated
September 23, 1993.
*10.2.24 Twenty-fourth Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983), dated
December 3, 1993.
*10.2.25 Twenty-fifth Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983), dated May
5, 1994.
20
*10.2.26 Twenty-sixth Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983), dated June
3, 1994.
*10.2.27 Twenty-seventh Amendment to Rohr Industries, Inc.,
Supplemental Retirement Plan (Restated 1983), dated
August 19, 1994.
10.3 Rohr, Inc. 1991 Stock Compensation for Non-Employee
Directors, incorporated by reference to Exhibit 10.5
filed with Form 10-K for fiscal year ended July 31, 1992.
10.4 Rohr Industries, Inc., Management Incentive Plan
(Restated 1982), incorporated herein by reference to
Exhibit 10.8 filed with Form 10-K for fiscal year ended
July 31, 1982.
10.4.1 First Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.1 filed with Form 10-K for
fiscal year ended July 31, 1983.
10.4.2 Second Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.2 filed with Form 10-K for
fiscal year ended July 31, 1984.
10.4.3 Third Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.3 filed with Form 10-K for
fiscal year ended July 31, 1984.
10.4.4 Fourth Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.4 filed with Form 10-K for
fiscal year ended July 31, 1984.
10.4.5 Fifth Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.7.5 filed with Form 10-K for
fiscal year ended July 31, 1986.
10.4.6 Sixth Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.6 filed with Form 10-K for
fiscal year ended July 31, 1989.
10.4.7 Seventh Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.7 filed with Form 10-K for
fiscal year ended July 31, 1989.
10.4.8 Eighth Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.8 filed with Form 10-K for
fiscal year ended July 31, 1990.
10.4.9 Ninth Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.9 filed with Form 10-K for
fiscal year ended July 31, 1990.
10.4.10 Tenth Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.10 filed with Form 10-K for
fiscal year ended July 31, 1990.
10.4.11 Eleventh Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.11 filed with Form 10-K for
fiscal year ended July 31, 1990.
21
10.4.12 Twelfth Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.12 filed with Form 10-K for
fiscal year ended July 31, 1991.
10.4.13 Thirteenth Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.13 filed with Form 10-K for
fiscal year ended July 31, 1991.
10.4.14 Fourteenth Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.6.14 filed with Form 10-K for
fiscal year ended July 31, 1992.
10.4.15 Fifteenth Amendment to Rohr Industries, Inc., Management
Incentive Plan (Restated 1982), incorporated herein by
reference to Exhibit 10.4.15, filed with Form 10-Q for
period ended May 2, 1993.
10.5 Rohr Industries, Inc., 1988 Non-Employee Director Stock
Option Plan, incorporated herein by reference to Exhibit
10.17 filed with Form 10-K for fiscal year ended
July 31, 1989.
10.6 Performance Unit Plan as amended through January 7, 1993,
incorporated herein by reference to Exhibit 10.13, filed
with Form 10-Q for period ended May 2, 1993.
10.7 Employment Agreement with Robert H. Rau, incorporated
herein by reference to Exhibit 10.12, filed with Form 10-
Q for period ended May 2, 1993.
10.8 Consulting Agreement with Robert H. Goldsmith,
incorporated herein by reference to Exhibit 10.8 filed
with Form 10-K for fiscal year ended July 31, 1993.
10.9 Severance Agreement and Release with Alek A. Mikolajczak,
incorporated herein by reference to Exhibit 10.9 filed
with Form 10-K for fiscal year ended July 31, 1993.
10.10 Service Agreement with Don Purdy, incorporated herein by
reference to Exhibit 10.10 filed with Form 10-K for
fiscal year ended July 31, 1993.
10.11 None.
*10.12 Employment Agreement with L. A. Chapman.
10.13 Credit Agreement, dated as April 26, 1989, among Rohr
Industries, Inc., as Borrower, and Citibank, N. A.,
Bankers Trust Company, The First National Bank of Chicago
and Wells Fargo Bank, N. A., and Citibank, N.A., as
Agent, incorporated herein by reference to Exhibit
10.6.13 filed with Form 10-Q for quarter ended April 30,
1989.
10.13.1 First Amendment to Credit Agreement, dated as of July 21,
1989, incorporated herein by reference to Exhibit 10.16.1
filed with Form 10-K for fiscal year ended July 31, 1989.
10.13.2 Second Amendment to Credit Agreement, dated January 25,
1990, incorporated herein by reference to Exhibit 10.16.2
filed with Form 10-K for fiscal year ended
July 31, 1990.
10.13.3 Third Amendment to Credit Agreement, dated as of April
30, 1990, incorporated herein by reference to Exhibit
10.16.3 filed with Form 10-K for fiscal year ended
July 31, 1990.
22
10.13.4 Letter Amendment (fourth amendment) to Credit Agreement,
dated October 31, 1992, incorporated herein by reference
to Exhibit 10.6.4, filed with Form 10-Q for period ended
May 2, 1993.
10.13.5 Fifth Amendment to Bank Credit Agreement dated July 9,
1993, incorporated herein by reference to Exhibit 10.1,
filed with Registration Statement 33-65432.
10.13.6 Sixth Amendment to Bank Credit Agreement, dated as of
September 24, 1993, incorporated herein by reference to
Exhibit 10.11.6 filed with Form 10-Q for period ended May
1, 1994.
10.13.7 Seventh Amendment to Bank Credit Agreement, dated as of
May 10, 1994, incorporated herein by reference to Exhibit
10.11.7 filed with Form 10-Q for period ended May 1,
1994.
10.14 Lease Agreements, dated as of September 14, 1992, by and
between Rohr, Inc., as lessor, and State Street Bank and
Trust Company of California, National Association and W.
Jeffrey Kramer, Trustees, as lessee, incorporated herein
by reference to Exhibit 10.22 filed with Form 10-K for
fiscal year ended July 31, 1992.
10.15 Sublease Agreements, dated as of September 14, 1992, by
and between State Street Bank and Trust Company of
California, National Association and W. Jeffrey Kramer,
Trustees, as sublessor, and Rohr, Inc., as sublessee,
incorporated herein by reference to Exhibit 10.23 filed
with Form 10-K for fiscal year ended July 31, 1992.
10.15.1 Waiver and Modification Agreement dated as of July 9,
1993, incorporated herein by reference to Exhibit 10.2,
filed with Registration Statement 33-65432.
10.15.2 Security Agreement dated as of July 9, 1993, incorporated
herein by reference to Exhibit 10.3, filed with
Registration Statement 33-65432.
10.15.3 Amendment Agreement dated as of September 24, 1993 to
Sublease Agreement, dated as of September 14, 1992,
incorporated herein by reference to Exhibit 10.13.3 filed
with Form 10-Q for period ended May 1, 1994.
10.15.4 Amendment Agreement dated as of May 10, 1994 to Sublease
Agreement, dated September 14, 1992, incorporated herein
by reference to Exhibit 10.13.4 filed with Form 10-Q for
period ended May 1, 1994.
10.16 Promissory Note, dated October 10, 1990, executed by Rohr
Industries, Inc., in favor of Security Pacific National
Bank, incorporated herein by reference to Exhibit 10.9,
filed with Form 10-Q for period ended May 2, 1993.
10.17 Pooling and Servicing Agreement, dated as of December 23,
1992, among Rohr, Inc., RI Receivables, Inc., and Bankers
Trust Company, as Trustee, incorporated herein by
reference to Exhibit 10.10, filed with Form 10-Q for
period ended May 2, 1993.
*10.17.1 First Amendment to Pooling and Servicing Agreement, dated
as of October 7, 1993.
*10.17.2 Second Amendment to Pooling and Servicing Agreement,
dated as of April 25, 1994.
10.18 Receivables Purchase Agreement, dated as of December 23,
1992, among Rohr, Inc., and RI Receivables, Inc.,
incorporated herein by reference to Exhibit 10.11, filed
with Form 10-Q for period ended May 2, 1993.
23
*11.1 Calculation of Primary Earnings per Share.
*11.2 Calculation of Fully Diluted Earnings per Share.
*13 Annual Report to Shareholders for fiscal year ended July 31,
1994. (The Annual Report, except for these portions thereof
which are expressly incorporated by reference in the Form
10-K, is being furnished for the information of the
Commission and is not to be deemed "filed" as part of the
Form 10-K.)
*23. Consent of Deloitte & Touche.
*27. Financial Data Schedule.
(b) Reports on Form 8-K for Fourth Quarter of Fiscal 1994
A report on Form 8-K, dated May 2, 1994, was filed by the Company under
Item 5, "Other Events," discussing the settlement of all its contractual
disputes with the U. S. Air Force and the settlement of the civil claims
aspects of an investigation by the Los Angeles Office of the U. S.
Attorney.
(c) Exhibits required by Item 601 of Regulation S-K
See Subparagraph (a) above.
(d) Financial Statements required by Regulation S-X
See Subparagraph (a) and (b) above.
- - --------
* Exhibits filed with this report.
24
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of Rohr, Inc.:
We have audited the consolidated financial statements of Rohr, Inc. as of July
31, 1994 and 1993, and for each of the three years in the period ended July 31,
1994, and have issued our report thereon dated September 12, 1994; such
consolidated financial statements and report are included in your 1994 Annual
Report to Shareholders and are incorporated herein by reference. Our audits
also included the financial statement schedules of Rohr, Inc., listed in Item
14(a)(2). These financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
Deloitte & Touche L L P
San Diego, California
September 12, 1994
25
ROHR, INC., AND SUBSIDIARIES
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JULY 31, 1994, 1993, AND 1992
(DOLLARS IN THOUSANDS)
BALANCE AT CHARGED TO BALANCE AT
BEGINNING OF COSTS AND ACCOUNTS END OF
PERIOD EXPENSES WRITTEN-OFF PERIOD
------------ ---------- ----------- ----------
Reserve for bad debts:
1994........................... $11,122 $10,100 $ -- $21,222
1993........................... 11,122 -- -- 11,122
1992........................... 931 11,000 (809) 11,122
26
ROHR, INC., AND SUBSIDIARIES
SCHEDULE IX--SHORT-TERM BORROWINGS
(DOLLARS IN THOUSANDS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------- ---------- -------------- ----------- ----------- -------------
WEIGHTED MAXIMUM AVERAGE WEIGHTED
AVERAGE AMOUNT AMOUNT AVERAGE
BALANCE AT INTEREST RATE OUTSTANDING OUTSTANDING INTEREST RATE
CATEGORY OF AGGREGATE END OF OF OUTSTANDING DURING THE DURING THE DURING THE
SHORT-TERM BORROWINGS(1) PERIOD BALANCE PERIOD PERIOD(2) PERIOD(3)
- - ------------------------ ---------- -------------- ----------- ----------- -------------
Payable to bank for bor-
rowing:
at July 31, 1994...... $ -- -- % $ -- $ -- -- %
at July 31, 1993...... -- -- 65,000 20,074 4.10
at July 31, 1992...... 20,000 3.75 100,000 73,254 5.27
- - --------
(1) The borrowings are from uncommitted short-term lines of credit. Amounts are
borrowed periodically with interest rates and maturity dates fixed at the
time of borrowing.
(2) Computed as the balance outstanding weighted by the days outstanding
divided by 365.
(3) Computed as total interest charges divided by the weighted average debt
outstanding for the period.
27
ROHR, INC., AND SUBSIDIARIES
SCHEDULE X--SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED JULY 31, 1994, 1993, AND 1992
(DOLLARS IN THOUSANDS)
1994 1993 1992
------- ------- -------
Maintenance and repairs............................. $ 8,329 $12,135 $16,503
Rent................................................ 13,077 15,923 15,271
Depreciation and amortization of intangible assets, taxes other than payroll
and income taxes, royalties, and advertising cost were less than one percent of
sales and are not required to be shown.
28
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
Rohr, Inc. (Registrant)
By: /s/ R. H. Rau
----------------------------------
R. H. Rau
President and Chief Executive
Officer
By: /s/ L. A. Chapman
----------------------------------
L. A. Chapman
Senior Vice President and Chief
Financial Officer
By: /s/ A. L. Majors
----------------------------------
A. L. Majors
Vice President and Controller
(Chief Accounting Officer)
Date: September 22, 1994
29
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES ON THE DATES INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ W. Barnes Director September 22, 1994
____________________________________
W. BARNES
/s/ W. W. Booth Director September 22, 1994
____________________________________
W. W. BOOTH
/s/ E. E. Covert Director September 22, 1994
____________________________________
E. E. COVERT
/s/ W. M. Hoffman Director September 22, 1994
____________________________________
W. M. HOFFMAN
/s/ J. J. Kerley Director September 22, 1994
____________________________________
J. J. KERLEY
/s/ D. Larry Moore Director September 22, 1994
____________________________________
D. LARRY MOORE
/s/ R. M. Price Director September 22, 1994
____________________________________
R. M. PRICE
/s/ R. H. Rau Director September 22, 1994
____________________________________
R. H. RAU
/s/ W. P. Sommers Director September 22, 1994
____________________________________
W. P. SOMMERS
/s/ J. D. Steele Director September 22, 1994
____________________________________
J. D. STEELE
30