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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-7568
COLTEC INDUSTRIES INC
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 13-1846375
(State of Incorporation) (I.R.S. Employer
Identification No.)
430 PARK AVENUE,
NEW YORK, N.Y. 10022
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (212) 940-0400
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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, par value $.01 per share....................... New York Stock Exchange
Pacific Stock Exchange
11- 1/4% Debentures Due December 1, 2015..................... Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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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 ______
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by referenced in Part III of this Form 10-K or any amendment to
this Form 10-K. __X__
On March 1, 1995, there were outstanding 69,917,522 shares of the
registrant's Common Stock, par value $.01 per share. On March 1, 1995, the
aggregate market value of the registrant's voting stock (based on a closing
price of $17 per share as reported by the Composite Tape Association) held by
non-affiliates was $1,167,386,700. For purposes of the foregoing calculation,
all directors and officers of the registrant have been deemed to be affiliates,
but the registrant disclaims that any of such directors or officers is an
affiliate.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's 1994 Annual Report to its shareholders are
incorporated by reference into Part I (Item 1), Part II (Items 6, 7 and 8) and
Part IV (Item 14) hereof.
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PART 1
ITEM 1. BUSINESS.
Coltec Industries Inc and its consolidated subsidiaries (together referred
to as "Coltec") manufacture and sell a diversified range of highly-engineered
aerospace, automotive and industrial products in the United States and, to a
lesser extent, abroad. Coltec's operations are conducted through three principal
segments: Aerospace/Government, Automotive and Industrial. Set forth below is a
description of the business conducted by the respective divisions within
Coltec's three industry segments. The tabular five-year presentation of
financial information in respect of each industry segment under the caption
"Industry Segment Information" of Coltec's 1994 Annual Report to its
shareholders and the information in Note 11 of the Notes to Financial Statements
of Coltec's 1994 Annual Report to its shareholders are incorporated herein by
reference.
AEROSPACE/GOVERNMENT
Through its Aerospace/Government segment, Coltec is a leading manufacturer
of landing gear systems, engine fuel controls, turbine blades, fuel injectors,
nozzles and related components for commercial and military aircraft, and also
produces high-horsepower diesel engines for naval ships and diesel, gas and
dual-fuel engines for electric power plants. The operating units, principal
products and principal markets of the Aerospace/Government segment are as
follows:
OPERATING UNITS PRINCIPAL PRODUCTS PRINCIPAL MARKETS
- ----------------------------- ----------------------------- -----------------------------
Menasco Aircraft landing gear systems Aircraft manufacturers
and components, flight Domestic and foreign
control actuation systems, airlines
other aircraft components
and repair and overhaul
Chandler Evans Control Fuel pumps and control Aircraft engine manufacturers
Systems systems for aircraft engines
Walbar Blades, vanes and discs for Aircraft engine manufacturers
jet and other gas turbine
engines; protective coatings
for gas turbine engines
Delavan Gas Turbine Products Fuel injectors, spraybars and Aircraft engine manufacturers
other components for gas
turbine engines
Lewis Engineering Cockpit instrumentation and Commercial and military
sensors aircraft and engine
manufacturers
Fairbanks Morse Engine Large engines powered by U.S. Navy, electric utilities
diesel fuel or natural gas
1
With reductions in domestic military spending, Coltec has placed an
increasing emphasis on sales by its Aerospace/Government segment to commercial
aircraft manufacturers. In addition to producing landing gear for various
Boeing, McDonnell Douglas, Fokker and other aircraft, Coltec has been awarded a
contract to supply a completely integrated landing gear system for the Boeing
737-700 aircraft and derivatives. In addition, Coltec successfully began
deliveries of the main landing gear for the Fokker 70 and Fokker 100 aircrafts
in 1994. Coltec has also been successful in increasing its penetration of the
commercial aircraft engine market, including the commuter aircraft and general
aviation markets, through its Chandler Evans Control Systems Division, Walbar
and Delavan subsidiaries. See "Aerospace Controls", "Aircraft Engine Components"
and "Gas Turbine Products" below.
In most of the operating units in this segment, Coltec is a leading
manufacturer in the markets it services and has focused its efforts on
manufacturing quality products involving a high engineering content or
proprietary technology. In many cases in which Coltec developed components for
use in a specific aircraft, Coltec has become the primary source for replacement
parts and, in some cases, service for these products in the aftermarket. Many of
the programs for which Coltec has been awarded a contract or for which Coltec
has been selected as a manufacturer are subject to termination or modification.
See "--Contract Risks".
LANDING GEAR SYSTEMS
Coltec, through its Menasco Aerosystems Division and its Canadian
subsidiaries, Menasco Aerospace Ltd. and Menasco Aviation Services Ltd.
(collectively referred to as "Menasco"), designs, manufactures and markets
landing gear systems, parts and components for medium-to-heavy commercial
aircraft and for military aircraft and provides spare parts and overhaul
services for these products. Menasco is one of the leading suppliers of landing
gear for medium-to-heavy commercial and military aircraft. It also designs and
manufactures aircraft flight control actuation systems. Landing gear, including
components, parts, and overhaul services for landing gear, accounted for
approximately 89% of Menasco's sales and 11% of Coltec's sales during 1994. For
the years 1994, 1993 and 1992, commercial sales accounted for 64%, 62% and 73%,
respectively, of Menasco's total sales.
Menasco has been awarded contracts to supply the main and nose landing gear
for the Boeing 777 aircraft and as of December 31, 1994, 16 shipsets have been
delivered on schedule to The Boeing Company ("Boeing"). Delivery of landing gear
for the Boeing 777 aircraft commenced in 1993. Boeing has announced that 147
firm orders and options for an additional 108 of its 777 aircraft have been
placed as of December 31, 1994 and commenced with full scale production in 1994.
Menasco has been selected to replace a competitor as the supplier of the main
landing gear for the Fokker 100 aircraft as well as to supply the main landing
gear and flight controls for the Fokker 70. Menasco has supplied most of the
flight controls for the Fokker 100 since this aircraft was introduced. Other
commercial programs for which Menasco is currently producing landing gear and
flight controls include the main and nose landing gear for the Boeing 757
aircraft, the main landing gear for the existing Boeing 737 aircraft and the new
737-700 and 737-800 aircraft, the nose landing gear for the Boeing 767 aircraft,
the main landing gear for the McDonnell Douglas MD-80/90 aircraft, the flight
controls for the Canadair RJ-601 aircraft and landing gear components for the
Airbus Industrie A-330/340 aircraft.
Menasco is supplying the main and nose landing gear for the Taiwanese
Indigenous Defense Fighter being built for the Taiwanese government and is
developing the main and nose landing gear for the Lockheed F-22 Air Superiority
Fighter. In addition, Menasco is supplying the nose landing gear and drag brace
for the Bell/Boeing V-22 Osprey including engineering and test support. Other
military programs for which Menasco is currently producing landing gear and
2
flight controls include the main and tail landing gear for the McDonnell Douglas
AH-64 Apache helicopter, the nose landing gear and flight controls for the
McDonnell Douglas C-17 military transport, the main and nose landing gear for
the F-16 aircraft produced by Lockheed Corp. ("Lockheed") and the Lockheed C-130
military transport.
Landing gear and flight controls are designed for specific aircraft and
produced by a single manufacturer. Menasco has been the sole production supplier
of this equipment for each program it has been awarded. The price of landing
gear constitutes approximately 2% of the total cost of an aircraft.
In addition to manufacturing and marketing aircraft landing gear and flight
controls, Menasco provides complete overhaul services on a worldwide basis for
landing gear and actuation systems through its overhaul facilities.
In view of the relatively small number of medium-to-heavy aircraft
manufacturers, Menasco's commercial sales of landing gear have historically been
concentrated among a limited number of purchasers, primarily Boeing, McDonnell
Douglas and Lockheed in the United States and Fokker in Europe.
The market for landing gear is highly competitive, with a small number of
airframe manufacturers evaluating potential suppliers based on design, price and
record of past performance. Menasco has made significant investments in
long-term marketing to promote working relationships with customers and to
enhance Menasco's engineering department's understanding of customer
requirements. Menasco believes it is this engineering expertise, together with
its record of on-time delivery, quality and price, which has made Menasco one of
the leading producers of medium-to heavy-aircraft landing gear worldwide.
Menasco's primary domestic competitors are Cleveland Pneumatic Division of The
B.F. Goodrich Company and Bendix Brake and Strut Division of AlliedSignal Inc.
("AlliedSignal"). The principal foreign competitor is Messier-Dowty of France,
England and Canada. The overhaul business has become increasingly competitive.
Menasco believes its competitive strengths in the overhaul business include its
name, which carries a reputation for quality and service.
Raw materials and finished products essential to Menasco's manufacturing
operations are available in sufficient quantity from a reliable supplier base.
AEROSPACE CONTROLS
Coltec, through its Chandler Evans Control Systems Division ("Chandler
Evans"), manufactures a variety of aircraft engine fuel control systems, fuel
pumps and engine and aircraft components for the aerospace industry. Chandler
Evans' products are highly engineered and contain proprietary technology.
Principal customers for the products include gas turbine engine manufacturers,
aircraft manufacturers, domestic and foreign airlines, commercial fleet
operators and the military services. For the years 1994, 1993 and 1992,
commercial sales accounted for 74%, 67% and 71%, respectively, of Chandler
Evans' total sales.
For sale to the commercial aircraft engine market, Chandler Evans produces
the main fuel pump for certain models of the General Electric CF-6 and CF-34
engines, both used on various commercial aircraft, and the Full Authority
Digital Electronic Fuel Control System ("FADEC") for the AlliedSignal Engines
LF507 engine used on the British Aerospace BAE 146 aircraft. Chandler Evans was
selected to develop and manufacture a FADEC for the Allison 250 engine. Delivery
of this system is scheduled to begin in early 1995. Also, Chandler Evans has
developed a
3
FADEC for the LHTEC T800 helicopter engine, a joint venture of Allison Engine
Company and AlliedSignal Garrett and was selected to develop the FADEC for the
Allison LTS- 800 commercial engine.
For sale to the military aircraft engine market, Chandler Evans produces the
main and afterburner fuel pumps for the General Electric F-404 engine used on
the McDonnell Douglas F-18 aircraft. The main fuel pump for the General Electric
F-414 engine is currently in development. FADEC systems are produced for
AlliedSignal Engine's T-55 engines for the Boeing Chinook helicopters in service
with the U.S. Army, the UK Royal Air Force and the Royal Netherlands Air Force.
The Hydromechanical Fuel Control Systems for AlliedSignal Engine's T-53 engine
continues in service on the Bell UH-1, Cobra and Kaman K-MAX helicopters.
Chandler Evans is the sole source for the pumps and fuel systems described
above and supports these products with aftermarket sales of spare units, parts
and overhaul service. For the year 1994, approximately one-half of Chandler
Evans revenues were attributable to the aftermarket. Aftermarket sales are very
significant, because proprietary programs allow Chandler Evans to realize
favorable operating margins.
Chandler Evans competes with Argo-Tech and the Aviation Division of
Sundstrand Corporation in fuel pumps and with the AlliedSignal Bendix Division
of AlliedSignal and the Hamilton Standard Division of United Technologies
Corporation in fuel controls.
AIRCRAFT ENGINE COMPONENTS
Coltec, through its Walbar Inc subsidiary and its Canadian subsidiary,
Walbar Canada Inc. (together referred to as "Walbar"), manufactures turbine
components, compressor airfoils, and turbine and compressor rotating parts
primarily for aircraft gas turbine engines and, to a lesser extent, for
land-based, marine and industrial gas turbine applications, and performs
services including repairs and protective coatings for these products. During
1994, a new coating service center in South Carolina became operational for
coatings applied to land based turbine engine blades. Coltec believes that
Walbar is one of the leading independent manufacturers of blades, turbine vanes
and nozzle segments, impellers and rotating components for jet engines.
Walbar manufactures products for commercial engines including the Pratt &
Whitney 100 used on the deHavilland Dash 8, Alenia ATR 40 and Alenia ATR 72
aircraft, the Pratt & Whitney 200 used on the McDonnell Douglas Helicopter MDX,
the Pratt & Whitney 300 used on the British Aerospace BAE 1000 aircraft, the
Pratt & Whitney PT6 used on various commercial and military aircraft, the TPE
331 AlliedSignal engine used in the Jetstream Aircraft and the AlliedSignal
Auxiliary Power Units used on various commercial aircraft. Walbar's original
equipment and replacement components are also utilized in a number of other
commercial aircraft, including the Boeing 727, 737, 747, 757 and 767; the Airbus
A300, A310 and A320; and the McDonnell Douglas DC-8, DC-9, DC-10 and MD-80.
Walbar's blades, vanes and discs are employed on many of the leading models of
turboprop, business jet and commuter aircraft currently in service. Walbar
supplies a number of different compressor and turbine blades for the new Allison
3007/2100/T406 engine family. These engines are designed for use on several
business and regional commuter aircraft and also have military applications.
Targeting the commuter aircraft market is part of Walbar's strategy of
emphasizing the production of turbine engine components for commercial aircraft
applications. Turbine blades for Rolls Royce engines are produced for commercial
and military aircraft. For the years 1994, 1993 and 1992, commercial sales
accounted for approximately 78%, 85% and 74%, respectively, of Walbar's total
sales.
Walbar manufactures products for military engines, including the General
Electric F-404 used on the McDonnell Douglas F-18 aircraft, the General Electric
F-110 used on the Grumman
4
F-14 aircraft, the McDonnell Douglas F-15 aircraft and the Lockheed F-16
aircraft, the GE LM 2500 used on the U.S. Navy's Spruance class destroyers,
AlliedSignal Engine's AGT 1500 used on the U.S. Army M-1 Abrams main battle
tank, the Volvo RM12 engine for the SAAB JAS39 aircraft and Turbo Union RB199
engine for the Panavia Tornado aircraft.
Walbar's market has become increasingly competitive over the past several
years as airlines have sought to limit parts inventories and defense procurement
has been reduced. Although Walbar does not typically design its own products,
management believes that its highly sophisticated applied manufacturing
technology, responsive production capabilities and focus on cost reduction have
made Walbar one of the leading independent manufacturers of blades, impellers
and rotating components for jet engines. Chromalloy American Corporation and
Howmet Turbine Components Corporation provide competition in all aspects of this
industry. In addition, Walbar's principal customers possess, in varying degrees,
integrated production capacity for producing and servicing the components that
Walbar supplies.
GAS TURBINE PRODUCTS
Coltec, through its Delavan Inc subsidiary operating as the Delavan Gas
Turbine Products Division ("Delavan"), manufactures custom engineered fuel
injectors, afterburner spraybars and other fuel distribution accessories for
commercial and military gas turbine engines. The primary market niche is
injection equipment for the commuter and regional airline engine market, and
Delavan has a sole or dual source position on all of the top ten commuter
aircraft as measured by 1993 available seat capacity.
Delavan's products are designed and developed to customer specifications
using computer-aided design and manufacturing processes and are marketed
directly to engine manufacturers pursuant to production orders. Principal
customers for this business segment include the General Electric Company,
AlliedSignal Engine, Pratt & Whitney Canada and the Allison Engine Company.
Delavan supports these products with aftermarket sales of spare parts and
overhaul services, both to the engine manufacturers and the airline users, and
this is the fastest growing segment of the business. A third business segment
involves the sale of fuel injection components and spare parts directly to
military logistics commands in support of gas turbine engines currently in the
Defense Department inventory such as the Allison T56 and the General Electric
F-404. For the years 1994, 1993 and 1992, commercial sales accounted for 78%,
69% and 58%, respectively, of Delavan's total sales.
Delavan competes worldwide with Parker-Hannifin Corporation and Fuel Systems
Textron. Competitive pressure is focused on price in the original equipment
manufacturer ("OEM") segment of the business and on price and delivery in the
aftermarket segment. While not a major factor in the large, commercial airline
engine market, Delavan has, by far, the leading market share position in the
commuter and regional airline engine fuel injection market segment. This
position is being strengthened through negotiation of long term partnering and
price agreements with the manufacturers who supply the engines for this segment
of the market.
AIRCRAFT INSTRUMENTATION
Coltec, through its Lewis Engineering Company, designs, develops and
produces electro-mechanical and electronic instrumentation for aircraft cockpits
and temperature sensors for aircraft and engine systems. The products are used
in commercial, general aviation and military markets. Lewis competes with
several manufacturers of aircraft instruments.
ENGINES
Coltec, through its Fairbanks Morse Engine Division ("Fairbanks Morse"),
manufactures and markets large, heavy-duty diesel, gas and dual-fuel engines and
parts for such engines.
5
Fairbanks Morse manufactures engines in conventional "V" and in-line opposed
piston configurations which are used as power drives for compressors, large
pumps and other industrial machinery, for marine propulsion and for stationary
and marine power generation. Engines are offered from 4 to 18 cylinders, ranging
from 640 to 29,320 horsepower. Such products are sold in the domestic market
primarily through regional sales offices and field sales engineers and in
foreign markets through the domestic sales network and foreign sales
representatives. Parts are sold primarily through factory and regional sales
offices. In 1994, 73% of Fairbanks Morse's sales were for replacement parts and
service for Fairbanks Morse engines.
Large heavy-duty diesel engines are sold to shipbuilders for the U.S. Navy
and Coast Guard and to electric utilities, municipal power plants, oil and gas
producers, firms engaged in commercial marine, offshore drilling activities and
local, state and federal governments.
Under a license agreement with Societe d'Etudes de Machines Thermiques, S.A.
groupe Alsthom, a French company, Fairbanks Morse has the right to manufacture
the Colt-Pielstick PC2 and PC4 lines of large diesel engines, which operate on
oil fuel (including heavy oil) and, in the case of the PC2, dual-fuel, and range
in size from 4,400 to 29,320 horsepower. Engines manufactured under this license
are used for primary power by electric utilities, standby power for nuclear
electric generating plants and ship propulsion.
Over the last several years, Fairbanks Morse has supplied each of the ships
in the U.S. Navy Landing Ship Dock ("LSD") program with four 16-cylinder PC2.5
engines, each delivering 8,500 horsepower for main propulsion, and four
12-cylinder opposed piston engines for shipboard power generation. The LSD ships
hold amphibious craft and troops for deployment in emergencies. Engines for 11
LSD and LSD Cargo Variant ships have been delivered and engines for one
additional ship are scheduled for delivery in 1995. Fairbanks Morse has received
a firm order to produce twelve 10- cylinder PC4.2 engines for the first three
ships in the U.S. Navy's Sealift Program with options for an additional three to
five ships. Three of the four engines for the first ship are scheduled to be
delivered in 1995 with succeeding engines currently scheduled to be shipped
through 1997.
Contracts are awarded in the heavy-duty diesel engine market based on price
and successful operation in similar applications. Coltec attributes its strong
position in this market to its history as a supplier to the U.S. Navy in a
variety of propulsion and generator set applications and its ability to meet the
U.S. Navy's military specification requirements. Management believes that
Fairbanks Morse and its primary competitor, the Cooper-Bessemer Reciprocating
Products Division of Cooper Industries, Inc., lead the field of four domestic
manufacturers serving the market for heavy-duty diesel engines in power ranges
from 5,000 to 30,000 horsepower. Fairbanks Morse competes with six domestic
manufacturers in the medium speed (1,000 to 5,000 horsepower) engine market,
dominated by General Motors Corporation ("General Motors") and Caterpillar Inc.,
and with several foreign manufacturers. Numerous domestic and foreign
manufacturers compete in the under 1,500 horsepower engine market.
In the first quarter of 1994, Fairbanks Morse acquired equipment and other
assets related to the Alco engine business from General Electric Transportation
Systems ("GE Transportation"). Fairbanks Morse manufactures and sells engines
and aftermarket parts for Alco diesel engines used in power plants and marine
markets. While GE Transportation has retained the rights to sell and market Alco
engines and aftermarket parts for its locomotive markets, Fairbanks Morse has
been issued a preferred supplier contract to manufacture these engines and parts
for General Electric's locomotive needs. In 1995, Fairbanks Morse is scheduled
to deliver the first of its Alco locomotive engines to the Pakistan Railway.
6
AUTOMOTIVE
Coltec's Automotive segment manufactures and markets a selected line of high
value-added products, including fuel injection system assemblies and components,
transmission controls, suspension controls, emission control air pumps, oil
pumps and seals for original equipment manufacturers and the replacement parts
market. The operating units, principal products and principal markets of the
Automotive segment are as follows:
OPERATING UNITS PRINCIPAL PRODUCTS PRINCIPAL MARKETS
- ----------------------------- ----------------------------- -----------------------------
Holley Automotive Engine induction system Automotive manufacturers
components, transmission
controls, electronic
actuators and suspension
controls
Coltec Automotive Air pumps and oil pumps Automotive manufacturers
Holley Performance Products New, replacement, Automotive manufacturers,
remanufactured and wholesale distributors and
performance carburetors, and retailers in replacement
electronic fuel injection markets
components
Farnam Sealing Systems Gaskets and seals Automotive industry
Stemco Truck Products Oil seals, exhaust systems Fleet truck operators, truck
and hubodometers parts distributors
Performance Friction Products Transmission synchronizers Automotive and truck
manufacturers
Coltec's principal automotive products have strong brand name recognition.
Coltec has targeted the development of highly-engineered components for fuel
injection systems, modulators and electronic solenoid actuators, transmission
controls, suspension controls and air and oil pumps. By forming close,
interactive relationships with the domestic automotive manufacturers, Coltec has
taken advantage of a shift by these manufacturers from internal sourcing to
procurement of components from outside suppliers.
AUTOMOTIVE PRODUCTS
Coltec, through its Holley Automotive Division, designs and manufactures
engine induction components and systems, electrohydraulic control devices for
transmissions, suspensions and steering systems, transmission modulators and
other automotive products used in passenger cars and trucks. Holley has been
recognized for its engineering excellence and has strategically changed its
structure and product line to accommodate the evolving automotive market. These
products are sold directly to original equipment manufacturers, Chrysler
Corporation ("Chrysler"), Ford Motor Company ("Ford") and General Motors.
Holley currently produces all of the multi-point throttle bodies used on
Chrysler-imported 3.0 liter engines and the Chrysler-manufactured 3.3 liter
engines. These six-cylinder engines propel vehicles including Chrysler Voyager
and Dodge Caravan minivans. Holley also is the sole source of the upper intake
module assembly for the Chrysler LH mid-size sedans (the Chrysler
7
Concorde, New Yorker and LHS, Dodge Intrepid and Eagle Vision) equipped with the
3.5 liter engine. Holley supplies the throttle body assemblies for the newly
introduced four-cylinder 2.4 liter and six-cylinder 2.5 liter Chrysler Stratus
and Dodge Cirrus.
In the non-fuel area, significant business has been obtained as a result of
Holley's development of modulators and electronic solenoid actuators. Holley
currently supplies high volumes of aneroid and non-aneroid modulators to the
General Motors Powertrain Division. Applications in the transmission controls
area include Saturn vehicles equipped with automatic transmission, Ford Mondeo,
Contour and Mercury Mystique and General Motors Cadillac, Aurora, light trucks
and front-wheel drive passenger cars.
In 1994 Holley provided its first suspension solenoids for Sachs Automotive
of America and Firestone Industrial Products, suppliers of an adaptive
suspension system for Ford's Lincoln Continental vehicles. Late in the 1995
model year, Holley will also be supplying a suspension solenoid to Fichtel &
Sachs in Europe. This will be Holley's first penetration of the European market
for OEM suspension solenoids.
Coltec, through its Coltec Automotive Division, produces a mechanical air
pump that supplies additional air to the exhaust system which enhances the
oxidation process and reduces pollutants emitted into the atmosphere. This pump
currently is used mainly in truck and van applications, and to a lesser extent
in passenger car lines as part of an emission control system designed to meet
federal "clean air" regulations. Applications for this product line have been
declining since the mid-1980's as automotive manufacturers have improved fuel
delivery systems to give cleaner engine burn. Coltec Automotive is the sole
independent domestic supplier of automotive mechanical air pumps. Major
customers are Ford, Chrysler and General Motors. Coltec Automotive has also
developed an advanced electric air pump designed to cope with increasingly
stringent emission standards. This pump has been designated by Ford for use with
the new 4.6 liter modular engine in the 1995 model year Lincoln Continental.
Additional applications beginning with the 1996 model include the Lincoln Town
Car, Lincoln Mark VIII, Ford Mustang, Ford Taurus and Mercury Sable.
Coltec Automotive has also developed a line of engine oil pumps for use in
many of Ford's cars and light trucks. Applications have expanded to the modular
V-8, Zetec and Duratec V-6 engines being introduced for the 1995 model year.
Coltec, through Holley Performance Products, manufactures and markets fuel
injection components and other fuel metering devices and controls such as intake
manifolds, electric fuel pumps, emission control devices, and engine and road
speed governors, new and remanufactured automotive and marine carburetors,
remanufactured automotive air conditioning units, carburetor parts and repair
kits, mechanical fuel pumps, valve covers and related engine components under
the Holley name. Holley carburetors and components are used in domestic and
foreign vehicles and marine engines and are sold directly to OEM's, principally
Chrysler, Ford, General Motors and Outboard Marine Corporation, and, through
distributors and mass merchandisers to the parts and replacement market.
In the domestic market, these Divisions compete principally with Ford,
General Motors and several independent manufacturers. To date, Coltec has not
been a significant supplier to foreign vehicle manufacturers.
8
TRUCK PRODUCTS AND SEALING SYSTEMS
Coltec, through its Stemco Inc subsidiary operating as the Stemco Truck
Products Division ("Stemco"), is one of the leading domestic manufacturers of
wheel lubrication systems for heavy-duty trucks. Stemco also produces mileage
recording devices (hubodometers) and exhaust systems for the heavy-duty truck,
medium-duty truck and school bus markets and manufactures moisture ejectors and
other related products for vehicle and stationary air systems. Approximately 80%
of Stemco revenues are derived from replacement parts. Stemco, through its
Performance Friction Products Operation, manufactures a line of fluorocarbon
friction materials, a line of carbon-based friction materials and synchronizers
and clutch plates for transmissions, transfer cases and wet brakes for use in
trucks, off highway equipment and passenger cars. Coltec, through its Farnam
Sealing Systems Division, manufactures and markets automotive and industrial
gaskets, seals and other sealing system products for engines, fuel systems and
transmissions. Stemco's truck products and Coltec's sealing systems include
highly-engineered proprietary products.
INDUSTRIAL
In the Industrial segment, Coltec, through its Garlock Inc subsidiary
("Garlock"), is a leading manufacturer of industrial seals, gaskets, packing
products and self-lubricating bearings and, through its Delavan-Delta, Inc.
subsidiary, is a producer of technologically advanced spray nozzles for
agricultural, home heating and industrial applications. Coltec also produces air
compressors for manufacturers. The operating units, principal products and
principal markets of the Industrial segment are as follows:
OPERATING UNITS PRINCIPAL PRODUCTS PRINCIPAL MARKETS
- ---------------------------------- ---------------------------------- ----------------------------------
Garlock Mechanical Packing Seals, gaskets, packings and Chemical, pulp and paper,
expansion joints utilities and industrial
manufacturers
Garlock Valves & Industrial Valves, PTFE sheet and tape Chemical and industrial
Plastics manufacturers
France Compressor Products Compressor valves and seals Compressor manufacturers and users
Garlock Bearings Self-lubricating metal-backed Industrial and automotive
bearings and materials manufacturers
Delavan Commercial Products Industrial, agricultural, and Agricultural operations, oil
heating unit spray nozzles burner manufacturers and
replacement market
Ortman Fluid Power Hydraulic and pneumatic cylinders Industrial manufacturers
Haber and Sterling Cold-forming dies and Fastener and automotive
thread-rolling dies manufacturers
FMD Electronics Electronic ignition systems and Industrial manufacturers
level control instruments
Quincy Compressor Helical screw and reciprocating Manufacturing and oil and gas
air compressors industries
9
Coltec's Industrial segment manufactures and markets a wide range of
products for use in various industries. In this segment, Coltec's strategy has
involved developing high quality products, capitalizing on brand name
recognition, targeting specific, well-defined markets and building good
distribution systems.
In January 1994, Coltec sold its Central Moloney Transformer Division.
SEALS, PACKINGS AND GASKETING MATERIAL
Coltec, through its Garlock Inc subsidiary ("Garlock"), is a leading
manufacturer of industrial seals, gasketing material and gasket assemblies and
packing products. Through its France Compressor Products Division of Garlock
("France"), Coltec manufactures and markets rod packings, piston rings, valves
and components for reciprocating gas and air compressors used primarily in the
hydrocarbon processing industry. These products withstand high temperature,
corrosive environments, prevent leakage and exclude contaminants from rotating
and reciprocating machinery and seal joints.
Manufacturing processes involve plastics, rubbers, metals, textiles,
chemicals, aramid fibers, carbon fibers, or a combination of the same. Garlock
has been a leader in using advanced technology to develop new products,
including its GYLON line of products, and in converting to asbestos-free
products. Approximately 95% of the gasketing and packing materials currently
manufactured by Garlock worldwide are asbestos-free. Because the raw materials
for Garlock's products are widely available, the seals, gasketing materials and
packings business of Garlock is not dependent on a limited number of suppliers.
Garlock's seals, gasketing material and packings are marketed through sales
personnel, sales representatives, agents and distributors to numerous industrial
customers involved principally in the petroleum, steel, chemical, food
processing, power generation and pulp and paper industries.
Most seals, gasketing material and packings wear out during the life of the
product in which they are incorporated. Accordingly, the service and replacement
market for these products is significant. In 1994, the service and replacement
market accounted for approximately 80% of Garlock's sales of seals, gasketing
material and packings.
Manufacturers in this market compete on the basis of price and aftermarket
services. Garlock's extensive distribution network, and its leadership in
product development, have contributed to the establishment of what Coltec
believes to be its leading position in the market for seals, gasketing products
and packings. France believes it is a leading supplier of premium components in
the aftermarket, where it competes primarily with C. Lee Cook and Cook Manley,
subsidiaries of Dover Corporation, and Hoerbinger Corporation of America Inc.
BEARINGS, VALVES, PLASTICS, NOZZLES, CYLINDERS,
FORMING TOOLS, IGNITION SYSTEMS AND LEVEL CONTROLS
Coltec, through its 80% owned subsidiary Garlock Bearings Inc, is a leading
manufacturer of steel-backed and fiberglass-backed self-lubricating bearings and
bearing materials primarily for the automotive, truck, agricultural and
construction markets. Garlock also manufactures polytetrafluoroethylene ("PTFE")
lined butterfly and plug valves and components and PTFE tapes.
Coltec, through its Delavan-Delta, Inc. subsidiary operating as the Delavan
Commercial Products Division, manufactures and markets spray nozzles and
accessories for the agricultural,
10
industrial and home heating markets. These products are sold to OEM's,
distributors and other end-users throughout the world. Coltec believes that
Delavan Commercial Products Division is one of the leading manufacturers of
spray nozzles for residential oil-fired burners.
Coltec, through Garlock's Ortman Fluid Power operation, manufactures
hydraulic and pneumatic cylinders in bore diameter sizes from 1 1/2 to 24
inches. Coltec, under the Sterling and Haber names, manufactures and markets a
wide variety of metal cutting and metal forming tools. Sales of these products
are primarily made directly to consumers. Competition for such products is
provided by numerous companies.
Coltec, through its FMD Electronics Operation, manufactures magnetos,
ignition systems and level control instruments. These products are sold to OEM's
and through factory and regional sales forces to various accounts for resale.
AIR COMPRESSORS
Coltec, through its Quincy Compressor Division ("Quincy"), manufactures and
markets reciprocating and helical screw air compressors and vacuum pumps.
Helical screw air compressors are manufactured and sold under a non-exclusive
license and technical assistance agreement with Svenska Rotor Maskiner
Aktiebolag, a Swedish licensor.
Reciprocating and helical screw air compressors have a wide range of
industrial applications, providing compressed air for general plant services,
pneumatic climate and instrument control, dry-type sprinkler systems, air loom
weaving, paint spray processes, diesel and gas engine starting, pressurization,
pneumatic tools and other air-actuated equipment. Engine-driven skid-mounted
models of helical screw air compressors are used in energy related services,
such as air-assisted deep-hole drilling, both on offshore drilling platforms and
in tertiary recovery schemes involving on-site combustion approaches. Quincy air
compressors are marketed through a well-developed distribution network
consisting of field sales personnel and distributors to OEM's located in major
industrial centers throughout the United States, Canada, Mexico and the Pacific
Rim.
In the domestic market for small, industrial, reciprocating air compressors,
management believes that Ingersoll-Rand is the major competitor, with Champion
Pneumatic Machinery Co., Inc. and the Campbell-Hausfeld division of Scott Fetzer
as other competitors. In the domestic market for helical screw air compressors,
management believes that Ingersoll-Rand and Sullair are the dominant
competitors, with Gardner-Denver Division of Cooper Industries, Inc. and Atlas
Copco Corporation as other competitors.
INTERNATIONAL OPERATIONS
Coltec's international operations, mainly in Canada, are conducted through
foreign-based manufacturing or sales subsidiaries, or both, and by export sales
of domestic divisions to unrelated foreign customers. Export sales of products
of the Automotive segment and diesel engines are made either directly or through
foreign representatives. Compressors are sold through foreign distributors.
Certain products of the Industrial segment are sold in foreign countries through
salesmen and sales representatives or sales agents.
Coltec's manufacturing and marketing activities in Canada are carried on
through subsidiaries. Menasco Aerospace Ltd., an indirect wholly owned
subsidiary of Coltec, manufactures landing gear systems and aircraft flight
controls and, through its Menasco Aviation Services Ltd. subsidiary, provides
overhaul service for Canadian and other customers. Walbar Canada Inc., a wholly
owned subsidiary of Walbar, manufactures jet engine compressor blades, vanes and
turbine components in Canada. Garlock of Canada Ltd., a wholly owned subsidiary
of Garlock,
11
manufactures and markets seals, gasketing material, packings and truck products.
It also markets parts for Fairbanks Morse diesel engines and accessories as well
as other products for use in Canada and for export to other countries.
Through wholly owned or majority controlled foreign subsidiaries, Coltec
operates 16 plants in Canada, Mexico, France, the United Kingdom, Australia and
Germany. In addition, Coltec occupies leased office and warehouse space in
various foreign countries.
Devaluations or fluctuations relative to the United States dollar in the
exchange rates of the currency of any country where Coltec has foreign
operations could adversely affect the profitability of such operations in the
future.
For financial information on operations by geographic segments, see Note 11
of the Notes to Financial Statements of Coltec's 1994 Annual Report to its
shareholders incorporated herein by reference.
Coltec's contracts with foreign nations for delivery of military equipment,
including components, are subject to deferral or cancellation by United States
Government regulation or orders regulating sales of military equipment abroad.
Any such action on the part of the United States Government could have an
adverse effect on Coltec.
SALES TO THE MILITARY AND BY CLASS OF PRODUCTS
Sales to the military and other branches of the United States Government,
primarily in the Aerospace/Government segment, were 11%, 14% and 15% of total
Coltec sales in 1994, 1993 and 1992, respectively. During the last three fiscal
years, landing gear systems was the only class of similar products that
accounted for at least 10% of total Coltec sales. In 1994, 1993 and 1992, sales
of landing gear systems constituted 11%, 11% and 12%, respectively, of total
Coltec sales.
BACKLOG
At December 31, 1994, Coltec's backlog of firm unfilled orders was $668.8
million compared with $669.7 million at December 31, 1993. Of the $668.8 million
backlog at December 31, 1994, approximately $250.8 million is scheduled to be
shipped after 1995.
CONTRACT RISKS
Coltec, through its various operating units, primarily Menasco, Chandler
Evans, Walbar and Delavan Gas Turbine Products, produces products for
manufacturers of commercial aircraft pursuant to contracts that generally call
for deliveries at predetermined prices over varying periods of time and that
provide for termination payments intended to compensate for certain costs
incurred in the event of cancellation. In addition, certain commercial aviation
contracts contain provisions for termination for convenience similar to those
contained in United States Government contracts described below. Longer-term
agreements normally provide for price adjustments intended to compensate for
deferral of delivery depending upon market conditions.
A significant portion of the business of Coltec's Menasco, Chandler Evans,
Walbar and Delavan Gas Turbine Products divisions has been as a subcontractor
and as a prime contractor in supplying products in connection with military
programs. Substantially all of Coltec's government contracts are firm
fixed-price contracts. Under firm fixed-price contracts, Coltec agrees to
perform certain work for a fixed price and, accordingly, realizes all the
benefit or detriment occasioned by decreased or increased costs of performing
the contracts. From time to time, Coltec accepts fixed-price contracts for
products that have not been previously developed. In such cases, Coltec is
subject to the risk of delays and cost over-runs. Under United States Government
regulations, certain costs, including certain financing costs, portions of
research and development costs, and certain marketing expenses related to the
preparation of competitive bids and
12
proposals, are not allowable. The Government also regulates the methods under
which costs are allocated to Government contracts. With respect to Government
contracts that are obtained pursuant to an open bid process and therefore result
in a firm fixed price, the Government has no right to renegotiate any profits
earned thereunder. In Government contracts where the price is negotiated at a
fixed price rather than on a cost-plus basis, as long as the financial and
pricing information supplied to the Government is current, accurate and
complete, the Government similarly has no right to renegotiate any profits
earned thereunder. If the Government later conducts an audit of the contractor
and determines that such data were inaccurate or incomplete and that the
contractor thereby made an excessive profit, the Government may take action to
recoup the amount of such excessive profit, plus treble damages, and take other
enforcement actions.
United States Government contracts are, by their terms, subject to
termination by the Government either for its convenience or for default of the
contractor. Fixed-price-type contracts provide for payment upon termination for
items delivered to and accepted by the Government, and, if the termination is
for convenience, for payment of the contractor's costs incurred plus the costs
of settling and paying claims by terminated subcontractors, other settlement
expenses, and a reasonable profit on its costs incurred. However, if a contract
termination is for default, (a) the contractor is paid such amount as may be
agreed upon for completed and partially-completed products and services accepted
by the Government, (b) the Government is not liable for the contractor's costs
with respect to unaccepted items, and is entitled for repayment of advance
payments and progress payments, if any, related to the terminated portions of
the contracts, and (c) the contractor may be liable for excess costs incurred by
the Government in procuring undelivered items from another source.
In addition to the right of the Government to terminate, Government
contracts are conditioned upon the continuing availability of Congressional
appropriations. Congress usually appropriates funds on a fiscal-year basis even
though contract performance may take many years. Consequently, at the outset of
a major program, the contract is usually partially funded, and additional monies
are normally committed to the contract by the procuring agency only as
appropriations are made by Congress for future fiscal years.
A substantial portion of Coltec's automotive products are sold pursuant to
the terms and conditions (including termination for convenience provisions) of
the major domestic automotive manufacturers' purchase orders, and deliveries are
subject to periodic authorizations which are based upon the production schedules
of such automotive manufacturers.
RESEARCH AND PATENTS
Most divisions of Coltec maintain staffs of manufacturing and product
engineers whose activities are directed at improving the products and processes
of Coltec's operations. Manufactured and development products are subject to
extensive tests at various divisional plants. Total research and development
cost, including product development, was $23.8 million for 1994, $22.1 million
for 1993 and $22.9 million for 1992. Coltec presently has approximately 370
employees engaged in research, development and engineering activities.
Coltec owns a number of United States and other patents and trademarks and
has granted licenses under some of such trademarks. Management does not consider
the business of Coltec as a whole to be materially dependent upon any patent,
patent right or trademark.
EMPLOYEE RELATIONS
As of December 31, 1994, Coltec had approximately 9,800 employees, of whom
approximately 4,000 were salaried. Approximately 40% of the hourly employees are
represented by
13
unions for collective bargaining purposes. Union agreements relate, among other
things, to wages, hours and conditions of employment, and the wages and benefits
furnished are generally comparable to industry and area practices.
Four collective bargaining agreements covering approximately 450 hourly
employees which expired in 1994 have been renegotiated. In 1995, one collective
bargaining agreement covering approximately 170 hourly employees is due to
expire. Coltec considers the labor relations of Coltec to be satisfactory,
although Coltec does experience work stoppages from time to time.
Coltec is subject to extensive Government regulations with respect to many
aspects of its employee relations, including increasingly important occupational
health and safety and equal employment opportunity matters. Failure to comply
with certain of these requirements could result in ineligibility to receive
Government contracts. These conditions are common to the various industries in
which Coltec participates and entail the risk of financial and other exposure.
For litigation relating to labor and other matters, see Item 3. "Legal
Proceedings.--Other Litigation."
14
EXECUTIVE OFFICERS OF THE REGISTRANT
Because the Proxy Statement for Coltec's Annual Meeting of Shareholders will
not contain information with respect to all executive officers of Coltec, set
forth below is the information with respect to the executive officers of Coltec
required by Item 401 of Regulation S-K. Unless otherwise indicated, each
occupation set forth opposite an individual's name refers to employment with
Coltec.
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT/MATERIAL POSITIONS HELD
NAME AND AGE DURING PAST FIVE YEARS
- ---------------------------- ------------------------------------------------------------------------------
John M. Cybulski (58) Senior Vice President, Aerospace since May 1991. Group President from prior to
1990 to May 1991. President of Menasco Aerospace Ltd. from prior to 1990 to
June 1991.
Richard L. Dashnaw (58) Senior Vice President, Group Operations and President of the Fairbanks Morse
Engine Division since January 1994. Group President and President of the
Fairbanks Morse Engine Division from February 1991 to December 1993. President
of the Fairbanks Morse Engine Division from prior to 1990 to February 1991.
Anthony J. diBuono (64) Executive Vice President, Chief Legal Officer and Secretary since January
1994. Senior Vice President, General Counsel and Secretary from prior to 1990
to January 1994.
John W. Guffey, Jr. (57) Chairman of the Board of Directors, Chief Executive Officer and President
since February 1995. President and Chief Operating Officer from May 1991 to
January 1995. President of the Mechanical Packing Division of Garlock Inc from
prior to 1990 to May 1991. Group President from prior to 1990 to May 1991.
Laurence H. Polsky (51) Executive Viec President, Administration since January 1994. Senior Vice
President, Administration from April 1992 to December 1993. Vice President,
Personnel for Cooper Industries, Inc., a diversified manufacturing company,
from prior to 1990 to April 1992.
Paul G. Schoen (50) Executive Vice President, Finance; Treasurer and Chief Financial Officer since
January 1994. Senior Vice President, Finance; Treasurer and Chief Financial
Officer from May 1991 to December 1993. Senior Vice President and Controller
from January 1991 to May 1991. Vice President, Accounting from prior to 1990
to December 1990.
Robert J. Tubbs (47) Senior Vice President and General Counsel since March 1995. General
Counsel--Operations of Olin Corporation ("Olin"), a chemical and metals
manufacturing company, from May 1993 to February 1995. Deputy General Counsel
of Olin from prior to 1990 to May 1993.
All officers serve at the pleasure of the Board. None of the executive
officers or directors of Coltec is related to any other executive officer or
director by blood, marriage or adoption.
15
ITEM 2. PROPERTIES.
Coltec operates 59 manufacturing plants in 21 states and in Canada, Mexico,
France, the United Kingdom, Australia and Germany. In addition, Coltec has other
facilities throughout the United States and in various foreign countries, which
include sales offices, repair and service shops, light manufacturing and
assembly facilities, administrative offices and warehouses.
Certain information with respect to Coltec's principal manufacturing plants
that are owned in fee, all of which (other than Palmyra, New York) are
encumbered pursuant to the 1994 Credit Agreement between Coltec and certain
banks and related security documents, is set forth below:
APPROXIMATE
NUMBER OF APPROXIMATE
SEGMENT LOCATION SQUARE FEET ACREAGE
- --------------- ----------------------------------- ------------ ---------------
Aerospace/ West Hartford, Connecticut(a) 1,200,000 111
Government Beloit, Wisconsin 856,000 73
Ft. Worth, Texas 394,000 43
Oakville, Ontario 239,000 14
Mississauga, Ontario 141,000 7
Automotive Bowling Green, Kentucky 480,000 60
Longview, Texas 265,000 52
Sallisaw, Oklahoma 220,000 53
Industrial Palmyra, New York 691,000 139
<FN>
- ---------
(a) Approximately 238,000 square feet are utilized by the Aerospace/Government
segment with the balance leased, available for lease or available for sale.
In addition to above facilities, certain manufacturing activities of some
industry segments are conducted within leased premises, the largest of which is
approximately 173,000 square feet. The Automotive segment has significant
manufacturing facilities on leased premises in Water Valley, Mississippi and
Longview, Texas. The Industrial segment has leased facilities located in Quincy,
Illinois. Some of these leases provide for options to purchase or to renew the
lease with respect to the leased premises.
Coltec's total manufacturing facilities presently being utilized aggregate
approximately 6,100,000 square feet of floor area of which approximately
5,300,000 square feet of area are owned in fee and the balance is leased.
Coltec leases approximately 39,000 square feet at 430 Park Avenue, New York,
New York, for its executive offices, and has renewal options under such lease
through 2001.
In the opinion of management, Coltec's principal properties, whether owned
or leased, are suitable and adequate for the purposes for which they are used
and are suitably maintained for such purposes. See Item 3. "Legal Proceedings --
Environmental Regulations" for a description of proceedings under applicable
environmental laws regarding certain of Coltec's properties.
ITEM 3. LEGAL PROCEEDINGS.
ASBESTOS LITIGATION
As of December 31, 1994 and 1993, two subsidiaries of Coltec were among a
number of defendants (typically 15 to 40) in approximately 76,700 and 68,500
actions, respectively, (including approximately 3,300 and 6,100 actions,
respectively, in advanced stages of processing) filed in various states by
plaintiffs alleging injury or death as a result of asbestos fibers. Through
December 31, 1994, approximately 110,200 of the approximately 186,900 total
actions brought have been settled or otherwise disposed.
16
The damages claimed for personal injury or death vary from case to case and
in many cases plaintiffs seek $1 million or more in compensatory damages and $2
million or more in punitive damages. Although the law in each state differs to
some extent, it appears, based on advice of counsel, that liability for
compensatory damages would be shared among all responsible defendants, thus
limiting the potential monetary impact of such judgments on any individual
defendant.
Following a decision of the Pennsylvania Supreme Court, in a case in which
neither Coltec nor any of its subsidiaries were parties, that held insurance
carriers are obligated to cover asbestos-related bodily injury actions if any
injury or disease process, from first exposure through manifestation, occurred
during a covered policy period (the "continuous trigger theory of coverage"),
Coltec settled litigation with its primary and most of its first-level excess
insurance carriers, substantially on the basis of the Court's ruling. Coltec is
currently negotiating with its remaining excess carriers to determine, on behalf
of its subsidiaries, how payments will be made with respect to such insurance
coverage for asbestos claims. Coltec is currently receiving payments pursuant to
an interim agreement with certain of its excess carriers. Coltec believes that a
final agreement can be achieved without litigation, and on substantially the
same basis that it has resolved the issues with its primary and first-level
carriers.
Settlements are generally made on a group basis with payments made to
individual claimants over periods of one to four years. During 1994 and 1993,
two subsidiaries of Coltec received approximately 29,800 and 27,400 new actions,
respectively, with a comparable number of actions received in 1992. Payments
were made with respect to asbestos liability and related costs aggregating $46.4
million in 1994, $38.7 million in 1993 and $39.8 million in 1992, substantially
all of which were covered by insurance. In accordance with Coltec's internal
procedures for the processing of asbestos product liability actions and due to
the proximity to trial or settlement, certain outstanding actions have
progressed to a stage where Coltec can reasonably estimate the cost to dispose
of these actions. As of December 31, 1994, Coltec estimates that the aggregate
remaining cost of the disposition of the settled actions for which payments
remain to be made and actions in advanced stages of processing, including
associated legal costs, is approximately $42.3 million and Coltec expects that
this cost will be substantially covered by insurance.
With respect to the 73,400 outstanding actions as of December 31, 1994 which
are in preliminary procedural stages, Coltec lacks sufficient information upon
which judgments can be made as to the validity or ultimate disposition of such
actions, thereby making it difficult to estimate with reasonable certainty the
potential liability or costs to Coltec. When asbestos actions are received they
are typically forwarded to local counsel to ensure that the appropriate
preliminary procedural response is taken. The complaints typically do not
contain sufficient information to permit a reasonable evaluation as to their
merits at the time of receipt, and in jurisdictions encompassing a majority of
the outstanding actions, the practice has been that little or no discovery or
other action is taken until several months prior to the date set for trial.
Accordingly, Coltec generally does not have the information necessary to analyze
the actions in sufficient detail to estimate the ultimate liability or costs to
Coltec, if any, until the actions appear on a trial calendar. A determination to
seek dismissal, to attempt to settle or to proceed to trial is typically not
made prior to the receipt of such information.
It is also difficult to predict the number of asbestos lawsuits that
Coltec's subsidiaries will receive in the future. Coltec has noted that, with
respect to recently settled actions or actions in advanced stages of processing,
the mix of the injuries alleged and the mix of the occupations of the plaintiffs
have been changing from those traditionally associated with Coltec's asbestos-
related actions. Coltec is not able to determine with reasonable certainty
whether this trend will
17
continue. Based upon the foregoing, and due to the unique factors inherent in
each of the actions, including the nature of the disease, the occupation of the
plaintiff, the presence or absence of other possible causes of a plaintiff's
illness, the availability of legal defenses, such as the statute of limitations
or state of the art, and whether the lawsuit is an individual one or part of a
group, management is unable to estimate with reasonable certainty the cost of
disposing of outstanding actions in preliminary procedural stages or of actions
that may be filed in the future. However, Coltec believes that its subsidiaries
are in a favorable position compared to many other defendants because, among
other things, the asbestos fibers in its asbestos-containing products were
encapsulated. Considering the foregoing, as well as the experience of Coltec's
subsidiaries and other defendants in asbestos litigation, the likely sharing of
judgments among multiple responsible defendants, and the significant amount of
insurance coverage that Coltec expects to be available from its solvent
carriers, Coltec believes that pending and reasonably anticipated future actions
are not likely to have a material effect on Coltec's results of operations and
financial condition.
Although the insurance coverage which Coltec has is substantial, it should
be noted that insurance coverage for asbestos claims is not available to cover
exposures initially occurring on and after July 1, 1984. Coltec's subsidiaries
continue to be named as defendants in new cases, some of which allege initial
exposure after July 1, 1984.
In addition to claims for personal injury, Coltec's subsidiaries were among
40 or more defendants in 34 cases involving property damage claims based upon
asbestos-containing materials found in schools, public facilities and private
commercial buildings. The subsidiaries have been dismissed without payment in 31
of these cases. One school case was settled for an amount that is not material
and two cases remain unresolved as against one subsidiary only. However, based
upon the proceedings to date in these cases, it appears that the subsidiary has
no liability in those two cases.
ENVIRONMENTAL REGULATIONS
Coltec and its subsidiaries are subject to numerous federal, state and local
environmental laws, many of which are becoming increasingly stringent, giving
rise to increased compliance costs. For example, the Clean Air Amendments will
regulate emissions at certain of Coltec's facilities that were previously
unregulated. Most significantly, certain existing and many newly constructed or
modified facilities will be required to obtain air emission permits that were
not previously required. Although many of the standards under the Clean Air
Amendments have not yet been promulgated, Coltec has made a preliminary
determination of their impact on its operations. Based upon this determination,
Coltec believes that it will not be at a competitive disadvantage in complying
with the Clean Air Amendments and that any costs to comply with the Clean Air
Amendments will not have a material effect on Coltec's results of operations and
financial condition.
Coltec and its subsidiaries are also subject to the federal Resource
Conservation and Recovery Act of 1976 ("RCRA"), and its analogous state
statutes. Although the costs under RCRA for the treatment, storage and disposal
of hazardous materials generated at Coltec's facilities are increasing, Coltec
does not believe that such costs will have a material effect on Coltec's results
of operations and financial condition.
Coltec has been notified that it is among the Potentially Responsible
Parties ("PRPs") under the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), or similar state
laws, for the costs of investigating and in some cases remediating contamination
by hazardous materials at several sites. CERCLA imposes joint and
18
several liability for the costs of investigating and remediating properties
contaminated by hazardous materials. Liability for these costs can be imposed on
present and former owners or operators of the properties or on parties who
generated the wastes that contributed to the contamination. The process of
investigating and remediating contaminated properties can be lengthy and
expensive. The process is also subject to the uncertainties occasioned by
changing legal requirements, developing technological applications and liability
allocations among PRPs. Among the sites where Coltec or its subsidiaries have
been designated a PRP are: Clare Municipal Well Fields, Clare, Michigan; Quincy
Municipal Landfills #2 and #3, Quincy, Illinois; Byron Barrel and Drum, Byron,
New York; Operating Industries, Inc., Monterey Park, California; San Fernando
Valley Site, Glendale, California; and Hardage Landfill, Criner, Oklahoma.
Coltec is also working with various state authorities to investigate and
remediate certain properties that are or were the site of Coltec's operations.
Among such sites are the following: Holley Automotive property, Water Valley,
Mississippi; Fairbanks Morse Engine property, Beloit, Wisconsin; Walbar Inc
property, Peabody, Massachusetts; former Precision Seals property, Gastonia,
North Carolina; and former Central Moloney properties in Arcadia, Florida, and
Pine Bluff, Arkansas. Based on the progress to date in the investigation,
cleanup and allocation of responsibility for these sites, Coltec has estimated
that its costs in connection with all except one of these sites approximates
$20.0 million at December 31, 1994, and has accrued for this amount in the
Consolidated Balance Sheet as of December 31, 1994. Although Coltec is pursuing
insurance recovery in connection with certain of these matters, Coltec has not
recorded a receivable with respect to any potential recovery of costs in
connection with any environmental matter. While progress toward the
investigation, cleanup and responsibility allocation at the Liberty Industrial
Finishing site, Farmingdale, New York has not been sufficient to allow Coltec at
this time to determine the extent of its potential financial responsibility at
this site, Coltec does not believe that its costs in connection with Liberty
Industrial Finishing will have a material effect on Coltec's results of
operations and financial condition.
OTHER LITIGATION
In September 1983, the local employees' union at Menasco Canada Ltee. (now
Menasco Aerospace Ltd.) ("Menasco Canada"), a federation of trade unions and
several member-employees filed a complaint in the Province of Quebec Superior
Court against Menasco Canada, alleging, among other things, an illegal lock-out,
failure to negotiate in good faith, interference with the affairs of the union
and various violations of local law. The plaintiffs are collectively seeking
approximately Cdn. $14.0 million in damages, and Menasco Canada has filed a
cross-claim for Cdn. $21.0 million and has closed its operations in Quebec
Province. Coltec does not believe that this action will have a material effect
on Coltec's results of operations and financial condition.
On September 24, 1986, approximately 150 former salaried employees of
Crucible Inc (a former subsidiary of Coltec) commenced an action claiming
benefits under a plant shutdown plan that had been created in 1969 (George
Henglein v. Colt Industries Operating Corporation Informal Plan for Plant
Shutdown Benefits for Salaried Employees, U.S. District Court for the Western
District of Pennsylvania, 86-cv-02021). Future eligibility of any employee for
such Plan was eliminated by Crucible Inc in November 1972. Plaintiffs claim that
they did not receive notice of such termination and therefore were entitled to
benefits in 1982 when the Midland steel-making facility closed. Following a
non-jury trial in the U.S. District Court for the Western District of
Pennsylvania, defendant's motion to dismiss was granted and the plaintiffs
appealed. The Court of Appeals for the Third Circuit remanded the case to the
District Court directing it to make specific findings of fact and conclusions of
law and also found for the defendant on the jurisdiction of the District Court.
The defendants' motion to dismiss was granted by the District Court, appealed to
the Third Circuit Court of Appeals and remanded to the District Court for
19
additional findings of fact. On February 10, 1994, the District Court dismissed
the plaintiffs' complaint and the plaintiffs appealed to the Third Circuit Court
of Appeals. On September 26, 1994, the Third Circuit Court of Appeals remanded
the case to the District Court and on November 4, 1994 denied the defendant's
request for a rehearing. Coltec has petitioned to the U.S. Supreme Court for a
writ of certiorari. Coltec does not believe that this action will have a
material effect on Coltec's results of operations and financial condition.
In an alleged class action filed in June 1984, a group of former salaried
employees whose employment had been terminated due to the closing of the Midland
steelmaking facility have asserted claims for damages in amounts equal to the
present value of the collective bargaining unit's pension plan, insurance and
unemployment benefits (Donald A. Nobers v. Crucible Inc, Court of Common Pleas
of Beaver County, Pennsylvania, Civil Action No. 843-1984). The case was
dismissed by the Common Pleas Court due to the preemptive provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The
Pennsylvania Superior Court reversed the lower court and held that the
plaintiffs' claim was based upon an alleged contract. The Pennsylvania Supreme
Court refused to hear the appeal and reinstated the case in the Court of Common
Pleas. On February 16, 1993, the Court of Common Pleas granted defendants'
motion for summary judgment concluding that it lacked jurisdiction of the
subject matter, which decision was affirmed by the Superior Court of
Pennsylvania. The plaintiffs' appeal to the Supreme Court of Pennsylvania was
denied on June 7, 1994. Plaintiffs' petition to the U.S. Supreme Court for a
writ of certiorari is being held in that court pending compliance with rules of
the U.S. Supreme Court. Coltec does not believe that this action will have a
material effect on Coltec's results of operations and financial condition.
In addition to the litigation described above, there are various pending
legal proceedings involving Coltec which are routine in nature and incidental to
the business of Coltec. Coltec does not believe that these proceedings will have
a material effect on Coltec's results of operations and financial condition.
The United States Government conducts investigations into procurement of
defense contracts as a part of a continuing process. Under current federal law,
if such investigations establish such improper activities, among other matters,
debarment or suspension of a company from participating in the procurement of
defense contracts could result. These conditions are common to the aerospace and
government industries in which Coltec participates and entail the risk of
financial and other exposure. Coltec is not aware of any such investigation, nor
is Coltec aware of any facts which, if known to investigators, might prompt any
investigation.
PRODUCT LIABILITY INSURANCE
Coltec has product liability insurance coverage for liabilities arising from
aircraft products which Coltec believes to be in adequate amounts. In addition,
with respect to other products, (exclusive of liability for exposure to asbestos
products) Coltec has product liability insurance in amounts exceeding $2.5
million per occurrence, which Coltec believes to be adequate.
Coltec has been self-insured with respect to liability for exposure to
asbestos products since third party insurance became unavailable in July 1984.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
20
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Coltec's Common Stock (symbol COT) is listed on the New York and Pacific
Stock Exchanges. The high and low prices of the stock for each quarter during
1994 and 1993, based on the Composite Tape, were as follows:
1994 1993
----------------- -----------------
HIGH LOW HIGH LOW
------- ------- ------- -------
First quarter........................... 21 7/8 18 3/4 19 1/4 16 1/4
Second quarter.......................... 20 1/2 18 1/4 17 1/2 14 7/8
Third quarter........................... 19 7/8 18 1/8 18 15 1/4
Fourth quarter.......................... 19 16 19 3/8 16
At December 31, 1994, there were 523 shareholders of record. No dividends
were paid in 1994 and 1993, and no dividends are expected to be paid in 1995.
ITEM 6. SELECTED FINANCIAL DATA.
The five year tabular presentation under the caption "Selected Financial
Data" of Coltec's 1994 Annual Report to its shareholders is incorporated herein
by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
The information under the caption "Financial Review" of Coltec's 1994 Annual
Report to its shareholders is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The "Quarterly Sales and Earnings" information in Note 14 of the Notes to
Financial Statements of Coltec's 1994 Annual Report to its shareholders and the
Consolidated Balance Sheet, the Consolidated Statement of Earnings, the
Consolidated Statement of Cash Flows, the Consolidated Statement of
Shareholders' Equity, the Notes to Financial Statements, Report of Management
and the Report of Independent Public Accountants of Coltec's 1994 Annual Report
to its shareholders are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
21
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information under the caption "Election of Directors" in Coltec's Proxy
Statement for its 1995 Annual Meeting of Shareholders is herein incorporated by
reference. In respect of information as to Coltec's executive officers, see the
information under the caption "Executive Officers of the Registrant" under Item
1 of Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION.
The text and tabular information under the caption "Executive Compensation
and Other Information" in Coltec's Proxy Statement for its 1995 Annual Meeting
of Shareholders is herein incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information under the captions "Security Ownership of Certain Beneficial
Owners" and "Security Ownership of Management" in Coltec's Proxy Statement for
its 1995 Annual Meeting of Shareholders is herein incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information under the caption "Compensation Committee Interlocks and
Insider Participation" in Coltec's Proxy Statement for its 1995 Annual Meeting
of Shareholders is herein incorporated by reference.
22
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this report:
(1) Financial Statements (incorporated by reference from the 1994 Annual Report to
Shareholders):
Consolidated Balance Sheet at December 31, 1994 and 1993
Consolidated Statement of Earnings for the Three Years ended December 31, 1994
Consolidated Statement of Cash Flows for the Three Years ended December 31,
1994
Consolidated Statement of Shareholders' Equity for the Three Years Ended
December 31, 1994
Notes to Financial Statements
Report of Management
Report of Independent Public Accountants
(2) Financial Statement Schedules listed in the Index to Financial Statement
Schedules on page S-1 hereof.
(3) The exhibits required by Item 601 of Regulation S-K as listed in the
accompanying exhibit index commencing on page I-1 hereof.
(b) No reports on Form 8-K were filed by Coltec during the last quarter of
the period ending December 31, 1994.
(c) Exhibits 3.2, 4.15, 10.9, 12.1, 13.1, 21.1, 23.1 and 27.1 are filed
herewith.
23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Coltec Industries Inc
(Registrant)
Date: March 15, 1995 By: ________/s/_PAUL G. SCHOEN_______
Paul G. Schoen
Executive Vice President Finance
and Treasurer
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 in the capacities noted on March , 1995.
NAME AND TITLE NAME AND TITLE
- ---------------------------------------------------- ----------------------------------------------------
/s/ JOSEPH R. COPPOLA /s/ JOEL MOSES
----------------------------------------- -----------------------------------------
Joseph R. Coppola Joel Moses
Director Director
/s/ JOHN W. GUFFEY, JR. /s/ PAUL G. SCHOEN
----------------------------------------- -----------------------------------------
John W. Guffey, Jr. Paul G. Schoen
Director, Chairman of the Board, Director, Executive Vice
Chief Executive Officer Finance and Treasurer
and President (Principal Financial and Accounting Officer)
/s/ DAVID I. MARGOLIS /s/ RICHARD A. STUCKEY
----------------------------------------- -----------------------------------------
David I. Margolis Richard A. Stuckey
Director Director
/s/ J. BRADFORD MOONEY, JR.
-----------------------------------------
J. Bradford Mooney, Jr.
Director
INDEX TO FINANCIAL STATEMENT SCHEDULES
PAGE
FINANCIAL STATEMENT SCHEDULES NUMBER
- ----------------------------------------------------- -----
II -- Valuation and Qualifying Accounts for the
three years ended December 31, 1994...... S-2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF COLTEC INDUSTRIES INC:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in Coltec Industries Inc and
subsidiaries' annual report to shareholders incorporated by reference in this
Form 10-K, and have issued our report thereon dated January 23, 1995. Our audits
were made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedule listed in the index to financial
statement schedules is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
New York, N.Y.
January 23, 1995
S-1
SCHEDULE II
1994, 1993 AND 1992
COLTEC INDUSTRIES INC AND SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 31, 1994
(IN THOUSANDS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
ADDITIONS
--------------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS(1) OF PERIOD
- ----------------------------------------------------------------------------------------------------------------
1994
Valuation accounts deducted from assets--
Allowance for doubtful accounts...... $ 4,170 $ 229 $ -- $ 275 $ 4,124
-------------------------------------------------------------------
-------------------------------------------------------------------
Reserve for potential losses from
excess and slow-moving
inventories........................ $ 18,086 $ 4,595 $ -- $ 7,105 $ 15,576
-------------------------------------------------------------------
-------------------------------------------------------------------
1993
Valuation accounts deducted from assets--
Allowance for doubtful accounts...... $ 4,614 $ 335 $ -- $ 779 $ 4,170
-------------------------------------------------------------------
-------------------------------------------------------------------
Reserve for potential losses from
excess and slow-moving
inventories........................ $ 16,789 $ 6,379 $ -- $ 5,082 $ 18,086
-------------------------------------------------------------------
-------------------------------------------------------------------
1992
Valuation accounts deducted from assets--
Allowance for doubtful accounts...... $ 4,624 $ 206 $ -- $ 216 $ 4,614
-------------------------------------------------------------------
-------------------------------------------------------------------
Reserve for potential losses from
excess and slow-moving
inventories........................ $ 16,569 $ 5,252 $ -- $ 5,032 $ 16,789
-------------------------------------------------------------------
-------------------------------------------------------------------
<FN>
- ---------
Notes:
(1) Deductions are for the purposes for which the valuation accounts were
created.
S-2
INDEX TO EXHIBITS
3.1 -- Amended and Restated Articles of Incorporation of Coltec, filed as Exhibit
3.1 to Coltec's Registration Statement on Form S-2 (No. 33-44846) (the "Form
S-2 Registration Statement") and incorporated herein by reference.
3.2 -- By-laws of Coltec.
4.1 -- Form of Senior Securities Indenture, dated as of December 1, 1985, between
Coltec and Mellon Bank, N.A., as Trustee, filed as Exhibit 4.1 to Coltec's
Registration Statement on Form S-3 (No. 33-1811) and incorporated herein by
reference.
4.2 -- Agreement of Resignation, Appointment and Acceptance, dated as of May 10,
1991, by and among Coltec, Mellon Bank, N.A. and The Bank of New York, filed
as Exhibit 4.3 to the Form S-2 Registration Statement and incorporated herein
by reference.
4.3 -- Specmien certificate for 11 1/4% Debentures Due December 1, 2015, filed as
Exhibit 4.14 to Coltec's Registration Statement on Form S-2 and S-3 (Nos.
33-8585 and 33-1811) the ("Form S-2/S-3 Registration Statement") and
incorporated herein by reference.
4.4 -- Supplemental Indenture, dated as of April 1, 1992, between Coltec and The
Bank of New York, as Trustee, relating to the Senior Securities Indenture,
dated as of December 1, 1985, between Coltec and Mellon Bank, N.A., as the
original Trustee, filed as Exhibit 6 to Coltec's Current Report on Form 8-K
dated April 1, 1992 (the "Form 8-K") and incorporated herein by reference.
4.5 -- Credit Agreement, dated as of March 24, 1992 (the "Credit Agreement") among
Coltec and the financial institutions party thereto, Bankers Trust Company,
Manufacturers Hanover Trust Company, Barclays Bank PLC, New York Branch and
Credit Lyonnais New York Branch, as Agents, and Bankers Trust Company, as
Administrative Agent, filed as Exhibit 4.13 to Coltec Holdings Inc.'s Annual
Report on Form 10-K for the fiscal year ended December 31, 1991 and
incorporated herein by reference.
4.6 -- First Amendment, dated as of April 1, 1992, to the Credit Agreement, dated as
of March 24, 1992, filed as Exhibit 3 to the Form 8-K and incorporated herein
by reference.
4.7 -- Second Amendment, dated as of April 8, 1992, to the Credit Agreement, filed
as Exhibit 4.7 to Coltec's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.
4.8 -- Third Amendment and Waiver, dated as of September 3, 1992, to the Credit
Agreement, filed as Exhibit 4.8 to Coltec's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 and incorporated herein by reference.
4.9 -- Fourth Amendment and Consent, dated as of September 25, 1992, to the Credit
Agreement, filed as Exhibit 4.9 to Coltec's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 and incorporated herein by reference.
4.10 -- Fifth Amendment, dated as of May 26, 1993, to the Credit Agreement, filed as
Exhibit 4.10 to Coltec's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.
I-1
4.11 -- Sixth Waiver, dated as of August 3, 1993, to the Credit Agreement, filed as
Exhibit 4.11 to Coltec's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.
4.12 -- Seventh Consent, dated as of October 27, 1993, to the Credit Agreement, filed
as Exhibit 4.12 to Coltec's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.
4.13 -- Eighth Waiver, dated as of December 23, 1993, to the Credit Agreement, filed
as Exhibit 4.13 to Coltec's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.
4.14 -- Credit Agreement among Coltec, Various Banks, The Co- Agents and Bankers
Trust Company, as Administrative Agent dated as of March 24, 1992 and Amended
and Restated as of January 11, 1994 (the "Amended Credit Agreement"), filed
as Exhibit 4.14 to Coltec's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.
4.15 -- First Waiver dated as of December 15, 1994 to the Amended Credit Agreement.
4.16 -- Form of Indenture, dated as of October 26, 1992, between Coltec and United
States Trust Company of New York, as Trustee, relating to Coltec's 9 3/4%
Senior Notes Due 1999 (including the form of 9 3/4% Senior Note Due 1999),
filed as Exhibit 4.1 to Coltec's Registration Statement on Form S-3 (No.
33-52414) and incorporated herein by reference.
4.17 -- Indenture, dated as of April 1, 1992, between Coltec and United States Trust
Company of New York, as Trustee, relating to Coltec's 9 3/4% Senior Notes Due
2000 (including the form of 9 3/4% Senior Note Due 2000), filed as Exhibit 4
to the Form 8-K and incorporated herein by reference.
4.18 -- Indenture, dated as of April 1, 1992, between Coltec and Norwest Bank
Minnesota, National Association, as Trustee, relating to Coltec's 10 1/4%
Senior Subordinated Notes Due 2002 (including the form of 10 1/4% Senior
Subordinated Note Due 2002), filed as Exhibit 5 to the Form 8-K and
incorporated herein by reference.
Pursuant to paragraph (4)(iii) of Item 601(b) of Regulation S-K, there are
omitted certain agreements, which the registrant hereby agrees to furnish to
the Commission upon request.
10.1* -- Form of Family Protection Agreement used in connection with Coltec's Family
Protection Program, filed as Exhibit 3.5.1 to Coltec's Registration Statement
on Form 8-B, filed with the Securities and Exchange Commission on June 25,
1976 and incorporated herein by reference.
10.2* -- Benefits Equalization Plan of Coltec, filed as Exhibit 10.2 to Coltec's
Annual Report on Form 10-K for the fiscal year ended December 31, 1988 and
incorporated herein by reference.
10.3* -- Amendment No. 1 to the Benefits Equalization Plan, filed as Exhibit 10.3 to
Coltec's Annual Report on Form 10-K for the fiscal year ended December 31,
1993 and incorporated herein by reference.
10.4* -- Supplemental Retirement Savings Plan of Coltec, filed as Exhibit 10.3 to
Coltec's Annual Report on Form 10-K for the fiscal year ended December 31,
1988 and incorporated herein by reference.
I-2
10.5* -- Coltec's 1977 Long-Term Performance Plan, filed as Exhibit 10.5 to the Form
S-2/S-3 Registration Statement and incorporated herein by reference.
10.6* -- Amendment to Coltec's 1977 Long-Term Performance Plan described in Proposal 2
of Coltec's Proxy Statement for its 1981 Annual Meeting of Shareholders,
filed as Exhibit 10.6 to the Form S-2/S-3 Registration Statement and
incorporated herein by reference.
10.7* -- Amendment No. 2 to Coltec's 1977 Long-Term Performance Plan, filed as Exhibit
10.7 to the Form S-2/S-3 Registration Statement and incorporated herein by
reference.
10.8* -- Form of Employment Agreements between Coltec and John W. Guffey, Jr., Paul G.
Schoen and Anthony J. diBuono, filed as Exhibit 10.13 to the Form S-2
Registration Statement and incorporated herein by reference.
10.9* -- Employment Agreement dated as of April 13, 1992 between Coltec and Laurence
H. Polsky.
10.10* -- Employment Letter Agreement, dated August 1, 1990, between Coltec and John M.
Cybulski, filed as Exhibit 10.14 to the Form S-2 Registration Statement and
incorporated herein by reference.
10.11* -- Resolutions adopted by the Board of Directors of Coltec on July 14, 1982
establishing a pension program for directors who are not otherwise entitled
to a pension from Coltec, filed as Exhibit 10.16 to the Form S-2/S-3
Registration Statement and incorporated herein by reference.
10.12* -- The Incentive Plan for Certain Employees of Coltec and Subsidiaries (the
"Incentive Plan"), filed as Exhibit 10.22 to the Form S-2 Registration
Statement and incorporated herein by reference.
10.13* -- Amendments to the Incentive Plan, filed as Exhibit 10.13 to Coltec's Annual
Report on Form 10-K for the fiscal year ended December 31, 1993 and
incorporated herein by reference.
10.14* -- Coltec's 1992 Stock Option and Incentive Plan, filed as Exhibit 10.24 to
Coltec's Annual Report on Form 10-K for the fiscal year ended December 31,
1991 and incorporated herein by reference.
10.15* -- Amendment No. 1 to the Coltec 1992 Stock Option and Incentive Plan, filed as
Exhibit 10.15 to Coltec's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.
10.16* -- 1994 Long-Term Incentive Plan of Coltec, filed as Exhibit 10.16 to Coltec's
Annual Report on Form 10-K for the fiscal year ended December 31, 1993 and
incorporated herein by reference.
10.17* -- Annual Incentive Plan For Certain Employees of Coltec Industries Inc and Its
Subsidiaries, filed as Exhibit 10.17 to Coltec's Annual Report on Form 10-K
for the fiscal year ended December 31, 1993 and incorporated herein by
reference.
10.18 -- 1994 Stock Option Plan for Outside Directors, filed as Exhibit 10.18 to
Coltec's Annual Report on Form 10-K for the fiscal year ended December 31,
1993 and incorporated herein by reference.
I-3
12.1 -- Computation of Ratio of Earnings to Fixed Charges.
13.1 -- Portions of Coltec's 1994 Annual Report to Shareholders.
21.1 -- List of Subsidiaries of Coltec.
23.1 -- Consent of Arthur Andersen LLP.
27.1 -- Financial Data Schedule.
<FN>
- ---------
* These exhibits are management contracts or compensatory plans or arrangements
required to be filed as an exhibit to this Form 10-K pursuant to item 14(c) of
Form 10-K.
I-4