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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, 1995
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
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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, 1996, there were outstanding 70,168,963 shares of the
registrant's Common Stock, par value $.01 per share. On March 1, 1996, the
aggregate market value of the registrant's voting stock (based on a closing
price of $13.50 per share held by non-affiliates was $942,077,750. 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 1995 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 1995 Annual Report to its
shareholders and the information in Note 10 of the Notes to Financial Statements
of Coltec's 1995 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 and Aircraft manufacturers, domestic and
components, flight control actuation foreign airlines
systems, other aircraft components
and repair and overhaul
Chandler Evans Control Systems Fuel pumps and control systems for Aircraft engine manufacturers
aircraft engines
Walbar Blades, vanes and discs for jet and Aircraft engine and stationary gas
other gas turbine engines; protec- turbine manufacturers
tive coatings for gas turbine en-
gines
Delavan Gas Turbine Products Fuel injectors, spraybars and other Aircraft engine manufacturers
components for gas turbine engines
Lewis Engineering Cockpit instrumentation and sensors Commercial and military aircraft and
engine manufacturers
Fairbanks Morse Engine Large engines powered by diesel fuel U.S. Navy, electric utilities
or natural gas
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 and flight control
actuation systems for various Boeing, McDonnell Douglas, Lockheed Martin,
Fokker, Bombardier, and other aircraft, Coltec has been awarded contracts to
supply a completely integrated landing gear system for the Boeing 737-700
aircraft and derivatives and the Bombardier Dash 8-400 commuter aircraft. 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,
1
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 AND FLIGHT CONTROL SYSTEMS
Coltec, through its Menasco Aerosystems Division and its Menasco Aerospace
Division of its Canadian subsidiary, Coltec Aerospace Canada Ltd. (together
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 84% of
Menasco's sales and 11% of Coltec's sales during 1995. For the years 1995, 1994
and 1993, commercial sales accounted for 77%, 64% and 62%, 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 during 1995, 20 shipsets were delivered to The
Boeing Company ("Boeing"). Delivery of landing gear for the Boeing 777 aircraft
commenced in 1993. Boeing has announced that 230 firm orders and options for an
additional 140 of its 777 aircraft have been placed as of December 31, 1995.
Menasco has been selected by Bombardier as the supplier of the complete landing
gear system for the Dash 8-400 commuter aircraft. 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 737-600/700/800 aircraft,
the nose landing gear for the Boeing 767 aircraft, the main landing gear for the
McDonnell Douglas MD-80/90 aircraft and Fokker 70/100 aircraft, and nose landing
gear components for the Airbus Industrie 330/340 aircraft. Menasco supplies
flight controls for the Canadair RJ-601 aircraft and Fokker 70/100 aircraft.
Menasco's military products include the main and nose landing gear for the
Taiwanese Indigenous Defense Fighter being built for the Taiwanese government
and it 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 include the main and tail landing gear for the McDonnell Douglas
AH-64 Apache helicopter, the F-15 aircraft and the new F/A-18E/F Navy fighter
aircraft currently under development for the U.S. Navy. The latter two programs
were part of the 1995 acquisition of the AlliedSignal landing gear business.
Other programs include the flight controls for the McDonnell Douglas C-17
military transport and the main and nose landing gear for the F-16 and C-130
aircraft produced by Lockheed Martin Corp.
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 a landing
gear system 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.
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 competitor is Cleveland Pneumatic Division of The
2
B.F. Goodrich Company and 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 1995, 1994 and 1993,
commercial sales accounted for 80%, 74% and 67%, respectively, of Chandler
Evans' total sales.
For 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 has
developed a FADEC for the Allison 250 engine and deliveries began in mid-1995.
Also, Chandler Evans has developed a 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 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 and the main fuel pump for the General Electric
F-414 engine. 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 1995, 43% 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 Inc. ("AlliedSignal") and the Hamilton Standard Division of
United Technologies Corporation in fuel controls.
AIRCRAFT ENGINE COMPONENTS
Coltec, through its Walbar Inc subsidiary and Walbar Canada Division of
Coltec Aerospace Canada Ltd. (together referred to as "Walbar"), manufactures
turbine components and turbine and compressor rotating parts primarily for
aircraft gas turbine engines and for land-based, marine and industrial gas
turbine applications, and performs services including repairs and protective
coatings for these products. 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 various commercial engines used on
commercial and military aircraft manufactured by Boeing, Airbus Industrie,
McDonnell Douglas, Bombardier, Cessna, Beech, Lear Jet and others. 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 turbine blades for most of the Pratt & Whitney Canada,
AlliedSignal and General Electric
3
Company ("General Electric") engine families. 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. For the years 1995, 1994 and 1993, commercial
sales accounted for approximately 84%, 78% and 85%, respectively, of Walbar's
total sales.
Following the reduction in military aircraft engine funding, Walbar has
focused on non-aerospace applications and has significant market share in the
locomotive turbo charger and gas turbine power generation markets.
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. In the
aftermarket, Walbar is providing repair and overhaul services of various gas
turbine components to the airlines. Walbar's proprietary protective coating
technology are used by most gas turbine manufacturers.
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.
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 General Electric, AlliedSignal
Engine, Pratt & Whitney Canada and Rolls Royce's Allison Engine Division.
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. Another 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. For the years 1995, 1994 and 1993, commercial
sales accounted for 75%, 78% and 69%, 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, business jet and regional airline engine fuel injection market
segment.
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. 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. 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 1995, 59% of Fairbanks Morse's sales were for replacement
parts and service for Fairbanks Morse engines.
4
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.
Under the U.S. Navy Sealift program, Fairbanks Morse has received orders
valued at approximately $80 million to produce sixteen PC4.2 engines and related
equipment that will propel four ships with options to produce engines for two to
four additional ships. Two of these engines were shipped in 1995 and the
remaining engines are scheduled to be delivered through 1998.
In 1994, Fairbanks Morse acquired the Alco engine business from General
Electric Transportation Systems to provide parts and service for approximately
8,000 existing engines worldwide and obtained a preferred supplier agreement to
manufacture these engines and parts for General Electric's locomotive needs. In
1995, 22 Alco locomotive engines built by Fairbanks Morse were delivered to the
Pakistan Railway.
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.
AUTOMOTIVE
Coltec's Automotive segment manufactures and markets fuel injection
assemblies and components, transmission controls, engine induction systems and
components, steering 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 components, Automotive manufacturers
transmission controls, electronic
actuators, suspension controls,
steering controls and air and oil
pumps
Holley Performance Products New, replacement, remanufactured and Automotive manufacturers, wholesale
performance carburetors, and distributors and retailers in
electronic fuel injection components replacement markets
Farnam Sealing Systems Gaskets and seals Automotive industry
Stemco Truck Products Oil seals, exhaust systems and Fleet truck operators, truck parts
hubodometers distributors
Performance Friction Products Transmission synchronizers Automotive and truck manufacturers
5
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 Inc and Coltec Automotive Inc
subsidiaries operating as the Holley Automotive Division ("Holley"), designs and
manufactures engine induction components and systems, electrohydraulic control
devices for transmissions, suspensions and steering systems, transmission
modulators, air and oil pumps and other automotive products used on passenger
cars and trucks. 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's 2.4L, 3.0L and 3.3L engines. These six-cylinder engines propel
vehicles including Plymouth Voyager, Chrysler Town and Country 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 Concorde and LHS, Dodge Intrepid
and Eagle Vision) equipped with the 3.5L engine. Holley supplies the throttle
body assemblies for the four-cylinder 2.4L and six-cylinder 2.5L Chrysler
Stratus and Dodge Cirrus.
Holley is the sole supplier of two-bore throttle body assemblies for
Chrysler's Dodge Ram pick-up truck and large vans for the 3.9L, 5.2L, 5.9L and
8.0L engines. Holley also manufactures the 5.2L throttle body assembly for the
Jeep Grand Cherokee.
In the non-fuel area, Holley currently supplies 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.
Holley produces mechanical and electric air pumps that supply additional air
to the exhaust system which enhances the oxidation process and reduces
pollutants emitted into the atmosphere designed to meet federal clean air
regulations. The mechanical air pump is presently used in full size truck and
van applications. The electric air pump is presently used on the Ford Taurus,
Mercury Sable, Ford Mustang, Lincoln Continental and Mark VIII.
Holley is a supplier of oil pumps to Ford. Current sourcing includes modular
V-8 pumps used on vans and medium and light trucks. Car applications include all
large Ford and Mercury/Lincoln vehicles as well as the Lincoln Continental and
Mark VIII. Holley oil pumps are also used on the Contour/Mystique, Taurus/Sable
and Escort. In addition, Holley provides the oil pump that is used on the Zetec
engine in Mexico, Germany and the United Kingdom.
Coltec, through its Holley Performance Products Inc subsidiary operating as
the Holley Performance Products Division, 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.
6
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 Inc subsidiary operating as the 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 Farnam's sealing systems include highly-engineered
proprietary products.
INDUSTRIAL
In the Industrial segment, Coltec, through its Garlock Inc, Coltec
Industrial Products Inc and Garlock Bearings Inc subsidiaries, is a leading
manufacturer of industrial seals, gaskets, packing products and self-lubricating
bearings and, through its Delavan Inc and Delavan-Delta, Inc. subsidiaries, 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 ex- Chemical, pulp and paper, utilities
pansion joints and industrial manufacturers
Garlock Valves & Industrial Valves, PTFE sheet and tape Chemical, pulp and paper, utilities
Plastics and industrial manufacturers
France Compressor Products Compressor valves and seals Compressor manufacturers and users and
energy and refining industries
Garlock Bearings Self-lubricating metal backed bearings Industrial and automotive manu-
and materials factures
Delavan Commercial Products Industrial, agricultural, and heating Industrial and agricultural opera-
unit spray nozzles tions, oil burner manufacuters and
replacement market
Ortman Fluid Power Hydraulic and pneumatic cylinders Industrial manufacturers and users
Haber and Sterling Cold-forming dies and thread-rolling Fastener and automotive manufacturers
dies
FMD Electronics Electronic ignition systems and level Industrial manufacturers
control instruments
Quincy Compressor Helical screw and reciprocating air Manufacturing and oil and gas
compressors industries
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.
7
SEALS, PACKINGS AND GASKETING MATERIAL
Garlock Inc operating as the Garlock Mechanical Packing Division ("Garlock")
is a leading manufacturer of industrial seals, gasketing material and gasket
assemblies and packing products.
Manufacturing processes involve 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 1995, 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.
BEARINGS, VALVES, COMPRESSOR PRODUCTS, 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. Coltec, through its Coltec Industrial Products Inc
subsidiary operating as the Garlock Valves & Industrial Plastics Division,
manufactures polytetrafluoroethylene ("PTFE") lined butterfly and plug valves
and components and PTFE tapes.
Coltec, through its Coltec Industrial Products Inc subsidiary operating as
the France Compressor Products Division ("France"), manufactures and markets rod
packings, piston rings, valves and components for reciprocating gas and air
compressors used primarily in the hydrocarbon and petrochemical processing
industries. These products withstand high temperature, corrosive environments,
prevent leakage, limit fugitive emissions and exclude contaminants from rotating
and reciprocating machinery and seal joints. 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.
Coltec, through its Delavan Inc and Delavan-Delta, Inc. subsidiaries
operating as the Delavan Commercial Products Division, manufactures and markets
spray nozzles and accessories for the agricultural, industrial and home heating
markets. These products are sold to OEM's, distributors and other end-users.
Coltec believes that Delavan Commercial Products Division is one of the leading
manufacturers of spray nozzles for residential oil-fired burners.
Coltec, through its Coltec Industrial Products Inc subsidiary operating as
the 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 thread rolling dies and
metal forming tools. Sales of these products are primarily made directly to
consumers. Competition for such products is provided by numerous companies.
8
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,
competitors include the Gardner-Denver Division of Cooper Industries, Inc.,
Sullair Corp., Ingersoll-Rand Company, Atlas Copco Compressor Inc, Le Roi
Industries Inc. and Campbell-Hausfeld Division of The Scott Fetzer Co.
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. Coltec Aerospace Canada Ltd., an indirect wholly owned
subsidiary of Coltec, manufactures landing gear systems and aircraft flight
controls, provides overhaul service for these systems and controls for Canadian
and other customers and manufactures turbine components and turbine and
compressor rotating parts primarily for aircraft gas turbine engines. Garlock of
Canada Ltd., a wholly owned subsidiary of Garlock Inc, 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 10
of the Notes to Financial Statements of Coltec's 1995 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.
9
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 10%, 11% and 14% of total
Coltec sales in 1995, 1994 and 1993, 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 each of 1995, 1994 and
1993, sales of landing gear systems constituted 11% of total Coltec sales.
BACKLOG
At December 31, 1995, Coltec's backlog of firm unfilled orders was $727.7
million compared with $668.8 million at December 31, 1994. Of the $727.7 million
backlog at December 31, 1995, approximately $268.3 million is scheduled to be
shipped after 1996.
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 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.
10
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 $25.6 million for 1995, $23.8 million
for 1994 and $22.1 million for 1993. Coltec presently has approximately 410
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, 1995, Coltec had approximately 9,600 employees, of whom
approximately 4,000 were salaried. Approximately 40% of the hourly employees are
represented by 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.
Two collective bargaining agreements covering approximately 365 hourly
employees were renegotiated in 1995. In 1996, one collective bargaining
agreement covering approximately 510 hourly employees has been renegotiated and
seven collective bargaining agreements covering approximately 1,090 hourly
employees are 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."
11
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
NAME AND AGE POSITIONS HELD DURING PAST FIVE YEARS
- ------------------------- ------------------------------------------------------------
John M. Cybulski (59) Senior Vice President, Aerospace since May 1991. Group
President from prior to 1991 to May 1991. President of
Menasco Aerospace Ltd., a subsidiary of Coltec, from prior
to 1990 to June 1991.
Richard L. Dashnaw (59) 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 1991 to
February 1991.
John W. Guffey, Jr. (58) 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 1991 to May 1991. Group President from prior to
1991 to May 1991.
Laurence H. Polsky (52) Executive Vice 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 1991 to April 1992.
Paul G. Schoen (51) 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.
Robert J. Tubbs (48) Senior Vice President, General Counsel and Secretary since
November 1995. 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 1991 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.
ITEM 2. PROPERTIES.
Coltec operates 62 manufacturing plants in 22 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.
12
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/Government...... Beloit, Wisconsin 856,000 73
West Hartford, Connecticut (a) 492,000 79
Ft. Worth, Texas 394,000 43
Oakville, Ontario 238,000 14
Mississauga, Ontario 141,000 7
Automotive................ Bowling Green, Kentucky 480,000 60
Longview, Texas 265,000 52
Water Valley, Mississippi 221,000 59
Sallisaw, Oklahoma 220,000 53
Industrial................ Palmyra, New York 691,000 139
- ------------------------
(a) Approximately 238,000 square feet are utilized by the Aerospace/Government
segment with the balance leased.
In addition to above facilities, certain manufacturing activities of some
industry segments are conducted within leased premises, the largest of which is
in the Industrial segment, located in Quincy, Illinois, and covers approximately
173,000 square feet. 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 6,200,000 square feet of floor area of which approximately
5,400,000 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, 1995 and 1994, two subsidiaries of Coltec were among a
number of defendants (typically 15 to 40) in approximately 105,300 and 76,700
actions, respectively, (including approximately 4,900 and 3,300 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, 1995, approximately 131,200 of the approximately 236,500 total
actions brought have been settled or otherwise disposed.
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
13
litigation with its primary and most of its first-level excess insurance
carriers, substantially on the basis of the Court's ruling. Coltec has
negotiated a final agreement with most of its excess carriers that are in the
layers of coverage immediately above its first layer. Coltec is currently
receiving payments pursuant to this agreement. Coltec believes that, with
respect to the remaining carriers, a final agreement can be achieved without
litigation, and on substantially the same basis that it has resolved the issues
with its other carriers.
Settlements are generally made on a group basis with payments made to
individual claimants over periods of one to four years. During 1995, 1994 and
1993, two subsidiaries of Coltec received approximately 44,000, 29,800 and
27,400 new actions, respectively. Payments were made with respect to asbestos
liability and related costs aggregating $56,739,000 in 1995, $46,374,000 in
1994, and $38,677,000 in 1993, 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,
1995, 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
$59,241,000 and Coltec expects that this cost will be substantially covered by
insurance.
With respect to the 100,400 outstanding actions as of December 31, 1995
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 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.
14
In addition to claims for personal injury, Coltec's subsidiaries have been
involved in an insignificant number of property damage claims based upon
asbestos-containing materials found in schools, public facilities and private
commercial buildings. Based upon the proceedings to date, the overwhelming
majority of these claims have been resolved without a material adverse impact on
Coltec, Likewise, the insignificant number of claims remaining to be resolved
are not expected to have a material effect on Coltec's results of operations and
financial condition.
ENVIRONMENTAL REGULATIONS
Coltec and its subsidiaries are subject to numerous federal, state and local
environmental laws. For example, the Clean Air Act Amendments regulate emissions
at certain of Coltec's facilities. In connection with the Clean Air Act
Amendments, Coltec will be required to make capital expenditures for equipment
to control emissions of hazardous air pollutants. In addition, certain of
Coltec's facilities will be required to obtain air emission control permits.
Coltec has made a determination of the impact on its operations of the Clean Air
Act Amendments. Based upon this determination, Coltec believes that it will not
be at a competitive disadvantage in complying with the Clean Air Act Amendments
and that any costs to comply with the Clean Air Act Amendments will not have a
material effect on Coltec's results of operations and financial condition.
Coltec and its subsidiaries also incur costs on a recurring basis for the
treatment, storage and disposal of hazardous materials generated at Coltec's
facilities in order to comply with the federal Resource Conservation and
Recovery Act of 1976, and its analogous state statutes. Coltec does not believe
that such costs have, nor will they 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 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; Lake of Isles, Connecticut 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: Liberty Industrial Finishing Site, Farmingdale, New York;
Holley Automotive properties in Water Valley, Mississippi and Paris, Tennessee;
Fairbanks Morse Engine property, Beloit, Wisconsin; Walbar Inc, Arizona Tempe
Facility in Chandler, Arizona; former Pratt & Whitney Cutting Tool property,
Hinsdale, New Hampshire; 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 these sites approximates $20.0 million at December 31,
1995, and has accrued for this amount in the Consolidated Balance Sheet as of
December 31, 1995. 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.
OTHER LITIGATION
In September 1983, the local employees' union at Menasco Canada Ltee. (now
Coltec Aerospace Canada Ltd.) ("Menasco Canada"), a federation of trade unions
and several member-employees filed a
15
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
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. Defendant's petition to the U.S. Supreme Court for a
writ of certiorari and its motion to dismiss were denied in 1995. The District
Court has ordered a new trial to commence in May 1996 or, alternatively, in July
1996. 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.
16
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
1995 and 1994 were as follows:
1995 1994
---------------- ----------------
HIGH LOW HIGH LOW
------- ------- ------- -------
First quarter........................... 17 3/8 15 3/8 21 7/8 18 3/4
Second quarter.......................... 18 3/4 16 3/4 20 1/2 18 1/4
Third quarter........................... 18 1/8 11 1/8 19 7/8 18 1/8
Fourth quarter.......................... 12 1/4 10 1/8 19 16
At December 31, 1995, there were 493 shareholders of record. No dividends
were paid in 1995 and 1994, and no dividends are expected to be paid in 1996.
ITEM 6. SELECTED FINANCIAL DATA.
The five year tabular presentation under the caption "Selected Financial
Data" of Coltec's 1995 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 1995 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 12 of the Notes to
Financial Statements of Coltec's 1995 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 1995 Annual Report
to its shareholders are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
17
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 1996 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 1996 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 1996 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 1996 Annual Meeting
of Shareholders is herein incorporated by reference.
18
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 1995 Annual
Report to Shareholders): Consolidated Balance Sheet at December 31, 1995 and
1994; Consolidated Statement of Earnings for the Three Years ended December
31, 1995; Consolidated Statement of Cash Flows for the Three Years ended
December 31, 1995; Consolidated Statement of Shareholders' Equity for the
Three Years Ended December 31, 1995; Notes to Financial Statements; Report
of Management; and 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, 1995.
(c) Exhibits 4.16, 4.17, 10.8, 10.9, 10.10, 10.17, 10.20, 10.21, 12.1, 13.1,
21.1, 23.1 and 27.1 are filed herewith.
19
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 14, 1996 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 14, 1996.
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 PRESIDENT
CHIEF EXECUTIVE OFFICER AND FINANCE AND TREASURER (PRINCIPAL
PRESIDENT 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
20
INDEX TO FINANCIAL STATEMENT SCHEDULES
PAGE
FINANCIAL STATEMENT SCHEDULES NUMBER
- ------------------------------------------------------------------ ------
II Valuation and Qualifying Accounts for the three years ended
- -- December 31, 1995.......................................... S-3
S-1
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 22, 1996. 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 22, 1996
S-2
SCHEDULE II
1995, 1994 AND
1993
COLTEC INDUSTRIES INC AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 31, 1995
(IN THOUSANDS)
COLUMN C
-----------------------
COLUMN B ADDITIONS COLUMN E
---------- ----------------------- ----------
COLUMN A BALANCE AT CHARGED TO CHARGED TO COLUMN D BALANCE AT
- -------------------------------------------------- BEGINNING COSTS AND OTHER ------------- END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS (1) PERIOD
- -------------------------------------------------- ---------- ---------- ---------- ------------- ----------
1995
Valuation accounts deducted from assets --
Allowance for doubtful accounts............... $ 4,124 $ 327 $ -- $ 277 $ 4,174
---------- ---------- --- ------------- ----------
---------- ---------- --- ------------- ----------
Reserve for potential losses from excess and
slow-moving inventories...................... $ 15,576 $ 7,794 $ -- $ 6,833 $ 16,537
---------- ---------- --- ------------- ----------
---------- ---------- --- ------------- ----------
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
---------- ---------- --- ------------- ----------
---------- ---------- --- ------------- ----------
- ------------------------
Note:
(1) Deductions are for the purposes for which the valuation accounts were
created.
S-3
INDEX TO EXHIBITS
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 filed as Exhibit 3.2 to Coltec's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994 and
incorporated herein by reference.
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 Specimen 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.
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.
I-1
EXHIBITS
- -------
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 filed as Exhibit 4.15 to Coltec's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and incorporated
herein by reference.
4.16 Second Waiver dated as of June 5, 1995 to the Amended Credit
Agreement.
4.17 Second Amendment dated as of November 17, 1995 to the Amended
Credit Agreement.
4.18 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
Regis-tration Statement on Form S-3 (No. 33-52414) and
incorporated herein by reference.
4.19 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.
4.20 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
EXHIBITS
- -------
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* Employment Agreement between Coltec and John W. Guffey, Jr. dated
June 1, 1995.
10.9* Form of Employment Agreement between Coltec and Paul G. Schoen and
Laurence H. Polsky dated June 1, 1995.
10.10* Form of Employment Agreement between Coltec and John M. Cybulski,
Richard L. Dashnaw and Robert J. Tubbs dated June 1, 1995.
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 incor-
porated 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* Resolutions of the Board of Directors of Coltec on July 13, 1995
amending Section 6(a) of the 1994 Long-Term Incentive Plan.
10.18* 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.
10.19 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.
10.20 Deferred Compensation Plan For Non-Employee Directors.
10.21 Resolution of the Board of Directors of Coltec on May 30, 1995
establishing a Change In Control arrangement for non-employee
directors.
12.1 Computation of Ratio of Earnings to Fixed Charges.
13.1 Portions of Coltec's 1995 Annual Report to Shareholders.
I-3
EXHIBITS
- -------
21.1 List of Subsidiaries of Coltec.
23.1 Consent of Arthur Andersen LLP.
27.1 Financial Data Schedule.
- ------------------------
*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