UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year end October 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _____
Commission File Numbers: 1-1520 and 1-15147
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
B. Names of issuers of the securities held pursuant to the plan and the
addresses of their principal executive offices:
GenCorp Inc.
P.O. Box 537012
Sacramento, CA 95853-7012
and
OMNOVA Solutions Inc.
175 Ghent Road
Fairlawn, OH 44333-3300
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Financial Statements
As of October 31, 2001 and 2000 and for the
Year Ended October 31, 2001
CONTENTS
Report of Independent Auditors...............................................1
Financial Statements
Statements of Net Assets Available for Benefits..............................2
Statement of Changes in Net Assets Available for Benefits....................3
Notes to Financial Statements................................................4
Signature...................................................................14
Consent of Independent Auditors (Exhibit 23)................................15
Report of Independent Auditors
The Administrative Committee
GenCorp Retirement Savings Plan (formerly GenCorp/OMNOVA Solutions Joint
Retirement Savings Plan)
We have audited the accompanying statements of net assets available for benefits
of GenCorp Retirement Savings Plan (formerly GenCorp/OMNOVA Solutions Joint
Retirement Savings Plan) as of October 31, 2001 and 2000, and the related
statement of changes in net assets available for benefits for the year ended
October 31, 2001. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
October 31, 2001 and 2000, and the changes in its net assets available for
benefits for the year ended October 31, 2001, in conformity with accounting
principles generally accepted in the United States.
Ernst & Young LLP
March 22, 2002
1
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Statements of Net Assets Available for Benefits
OCTOBER 31,
2001 2000
----------------------------------------
ASSETS
Plan interest in:
GenCorp Retirement Savings Plans Master Trust $316,866,938 $ -
GenCorp Inc. Master Trust - 360,679,068
----------------------------------------
Net assets available for benefits $316,866,938 $360,679,068
========================================
See accompanying notes.
2
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Statement of Changes in Net Assets Available for Benefits
Year Ended October 31, 2001
ADDITIONS
Contributions:
Participant $ 16,738,208
Company 8,305,394
Rollover 1,105,440
---------------------
26,149,042
Transfer in from Profit Sharing Retirement and Savings Plan for Salaried Employees of GenCorp
Inc. and Certain Subsidiary Companies 24,117,140
Transfer in from Draftex Inc. Retirement Savings Plan 2,825,884
---------------------
26,943,024
Total additions 53,092,066
DEDUCTIONS
Benefits paid directly to participants 33,352,029
Transfer to Aerojet Fine Chemicals Retirement Savings Plan 7,932,708
Transfer to OMNOVA Solutions Retirement Savings Plan 42,968,208
Administrative expenses 503,516
---------------------
Total deductions 84,756,461
Investment (loss) income:
Plan's interest in GenCorp Inc. Master Trust and GenCorp Retirement Savings Plans Master
Trust investment (loss) income (12,147,735)
---------------------
Net decrease (43,812,130)
Net assets available for benefits, beginning of year 360,679,068
---------------------
Net assets available for benefits, end of year $ 316,866,938
=====================
See accompanying notes.
3
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Notes to Financial Statements
October 31, 2001
1. DESCRIPTION OF THE PLAN
The following description of the GenCorp Retirement Savings Plan, formerly
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan (the Plan), provides only
general information. Participants should refer to the Plan Document for a more
complete description of the Plan's provisions.
GENERAL
GenCorp Inc. (the Company) established the Plan effective July 1, 1989. The Plan
is a defined contribution plan covering all eligible employees of the Company
and participating subsidiaries. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). On October 1, 1999, the
Company spun off its Performance Chemicals and Decorative & Building Products
businesses into a separate, independent public company, OMNOVA Solutions Inc.
(OMNOVA). The Plan was amended to become a multiple employer plan and its name
was changed to GenCorp/OMNOVA Solutions Joint Retirement Savings Plan.
Effective December 1, 2000, the Plan was amended to be a single employer plan.
As a result of the amendment, balances totaling $42,968,208 of participants who
are current or former employees of OMNOVA were spun-off and transferred to the
OMNOVA Solutions Retirement Savings Plan on December 1, 2000.
Effective December 1, 2000, the Profit Sharing Retirement and Savings Plan for
Salaried Employees of Gen Corp Inc. and Certain Subsidiary Companies (Profit
Sharing Plan), including the account balances of all remaining participants of
the Profit Sharing Plan, was merged into the Plan. As a result of the merger,
$24,117,140 in assets were transferred into the Plan on December 1, 2000.
4
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
GENERAL (CONTINUED)
During the period commencing November 1, 2000 and ending upon the merger of the
Profit Sharing Plan into the Plan on December 1, 2000, the net assets available
for benefits in the Profit Sharing Plan changed as follows:
Net assets available for benefits, beginning period $ 46,097,585
Plan interest in Master Trust investment loss (3,266,249)
Benefits paid directly to participants (1,083,560)
Administrative expenses (2,786)
Transfer to Pension Plan for Salaried Employees of OMNOVA Solutions Inc. (510,079)
Transfer to GenCorp Consolidated Pension Plan (7,410,986)
Transfer to OMNOVA Solutions Retirement Savings Plan (9,706,785)
--------------------
Net assets available prior to merger $ 24,117,140
====================
On December 1, 2000, account balances totaling $7,932,708 of participants of the
Plan who are employees of Aerojet Fine Chemicals LLC were spun-off and
transferred to the Aerojet Fine Chemicals Retirement Savings Plan.
Effective October 1, 2001, the Draftex Inc. Retirement Savings Plan was merged
into the Plan. As a result of the merger, $2,825,884 in assets were transferred
into the Plan on October 1, 2001.
CONTRIBUTIONS
Each year, participants may elect to contribute, on a pretax or after-tax basis,
up to 16% of their eligible compensation as defined by the Plan Document.
Pre-tax contributions are subject to annual deductibility limits specified under
the Code.
5
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
CONTRIBUTIONS (CONTINUED)
The Company makes matching contributions equal to 100% of the first 3% of
participants' compensation contributed and 50% of the next 3% of compensation
contributed. Participants who are members of certain unions in states outside
California may have different levels of Company matching contributions or no
Company matching contributions. Company matching contributions are made to the
OMNOVA (prior to December 1, 2000) and GenCorp Stock Funds. Participants may
also contribute amounts representing distributions from other qualified plans. A
participant may not transfer from the GenCorp Stock Fund or OMNOVA Stock Fund
(prior to December 1, 2000) their interest in any matching contributions.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of (a) the Company's or OMNOVA's contributions and, as the case may
be, (b) Plan earnings (losses), and is charged with an allocation of certain
administrative expenses (see "Administration Expenses" below). Allocations are
based on participant earnings (losses) or account balances, as defined.
Forfeited balances of terminated participants' nonvested accounts are used to
reduce future Company contributions. The balance of forfeited nonvested accounts
was not material as of October 31, 2001 and 2000. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's account.
VESTING
A participant's interests in his or her rollover contributions, if any, and
employee contributions that a participant has made or the Company or OMNOVA has
made for a participant pursuant to a Salary Reduction Agreement are at all times
vested and not subject to forfeiture. A participant's interest in the matching
contributions made for his or her benefit is at all times vested and not subject
to forfeiture, except such forfeitures as may be required or permitted in order
to meet the non-discrimination provisions of the Internal Revenue Code (Code) or
other applicable provisions of law. A participant may not, however, elect a
voluntary in-service withdrawal of any plan shares attributable to matching
contributions until such matching contributions have remained in the Plan for at
least 24 months.
6
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum loan amount of $1,000
up to 50 percent of their account balance but not more than $50,000.
Participants may have two loans outstanding at any given time. Company and
OMNOVA matching contributions are not available for loans, but are included in
computing the maximum loan amount. Loan terms range from 1 to 5 years or up to
10 years for the purchase of a primary residence. The loans are secured by the
balance in the participants' accounts and bear interest at a rate of one percent
above the prevailing prime rate. Principal and interest is paid ratably through
payroll deductions.
PAYMENT OF BENEFITS
Distribution of the vested value of the participant's account will be made to
participants upon termination of employment, early or normal retirement,
financial hardship, or death. Participants may request to receive benefits in
the form of lump sum distributions, installment payments, or annuities in
certain cases.
ADMINISTRATIVE EXPENSES
Fees and expenses of the Plan for legal, accounting, and other administrative
services are allocated among and charged to, individual participants' accounts
but may be paid directly by the Company. For the period November 1, 2000 through
November 30, 2000, while the Plan's assets were held by Mellon Bank, N.A.,
participants were charged a proportionate share of fees and expenses of the
Trustee, investment managers, and other service providers. Expenses incurred in
connection with the purchase or sale of securities were paid from trust assets.
During the period December 1, 2000 through October 31, 2001, while the Plan's
assets were held by Fidelity Management Trust Company, participants were charged
nominal transaction processing fees; however, all other fees were paid by the
Company.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan subject to the provisions of ERISA. In the event of the
Plan's termination, participants will continue to be 100% vested in their
accounts.
7
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Notes to Financial Statements (continued)
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared on the accrual basis of
accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
Except for the synthetic guaranteed investment contracts, the Plan's interest in
the GenCorp Inc. Master Trust and, effective December 1, 2000, the GenCorp
Retirement Savings Plans Master Trust (collectively, Master Trust) is stated at
fair value. The value of the Plan's interest in the Master Trust is based on the
beginning of year value of the Plan's interest in the trust plus actual
contributions and allocated investment income less actual distributions and
allocated administrative expenses (Note 4). Except for the synthetic guaranteed
investment contracts, quoted market prices are used to value investments in the
Master Trust. Shares of registered investment companies are valued at quoted
market prices, which represent the net asset values of shares held by the Master
Trust at year end. Investments in common/collective trusts are valued based upon
the quoted redemption value of units owned by the Plans at year end. Investments
in marketable equity and debt securities are valued at quoted market price as
determined on the last business day of the Plans' fiscal years. Money market
funds are valued at cost plus accrued interest, which approximates fair value.
The Company's and OMNOVA's common stock is traded on a national securities
exchange and is valued at the last reported sales price on the last day of the
plan year. Participant notes receivable are valued at their outstanding
balances, which approximate fair value.
The GenCorp Inc. Master Trust held synthetic guaranteed investment contracts
(SGICs) at October 31, 2000. SGICs are promises by a bank or insurance company
to repay principal plus accrued income at contract maturity subject to the
credit worthiness of the issuer. The assets supporting the SGICs are owned by
the GenCorp Inc. Master Trust. The bank or insurance company issues a wrapper
contract that allows participant-directed transactions to be made at contract
value. Wrapper contracts are valued as the difference between the fair value of
the supporting assets and contract value. The assets supporting the SGICs are
comprised of government agency bonds and corporate bonds and notes with fair
values of $66,799,855 at October 31, 2000. The contract value of the SGICs at
October 31, 2000 is $66,469,247.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
8
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Notes to Financial Statements (continued)
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of these financial statements in conformity with accounting
principles generally accepted in the United States requires the Plan's
investment managers and Trustee, who are fiduciaries of the Plan, to make
estimates, assumptions and valuations that affect the amounts reported in the
financial statements and accompanying footnotes. Actual results could differ
from those estimates.
RECLASSIFICATION
Certain amounts in the October 31, 2000 financial statements have been
reclassified to conform to the 2001 presentation.
3. NONPARTICIPANT-DIRECTED INVESTMENTS
The GenCorp Inc. and OMNOVA Solutions Inc. common stock funds contain
participant account balances that are both participant-directed and
nonparticipant-directed. Because the funds contain balances that are
non-participant directed, the entire balance in the funds are considered
nonparticipant-directed for disclosure purposes.
Information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant-directed investments is as follows:
OCTOBER 31,
2001 2000
----------------------------------------
Net assets:
Interest and dividends receivable $ - $ 412,050
Common/collective trust funds - 1,997,008
Money market funds 2,262,957 -
GenCorp Inc. Common Stock 59,532,035 46,652,427
OMNOVA Solutions Inc. Common Stock 10,161,557 26,321,861
----------------------------------------
71,956,549 75,383,346
Less: payables - (129,605)
----------------------------------------
Total $ 71,956,549 $ 75,253,741
========================================
9
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Notes to Financial Statements (continued)
3. NONPARTICIPANT-DIRECTED INVESTMENTS (CONTINUED)
YEAR ENDED
OCTOBER 31, 2001
--------------------
Changes in net assets:
Plan's interest in Master Trust investment income $ 18,150,623
Company contributions 8,274,945
Participant contributions 1,284,439
Benefits paid directly to participants (7,549,355)
Transfer in from Profit Sharing Plan 1,667,561
Transfer to OMNOVA Solutions Retirement Savings Plan (14,046,454)
Transfer to Aerojet Fine Chemicals Retirement Savings Plan (1,629,364)
Net transfers to participant-directed investments (9,449,587)
--------------------
$ (3,297,192)
====================
4. INVESTMENTS IN GENCORP INC. MASTER TRUST AND GENCORP RETIREMENT SAVINGS PLANS
MASTER TRUST
The GenCorp Inc. Master Trust was established for the investment of the assets
of the following defined contribution plans sponsored by the Company and OMNOVA:
GenCorp OMNOVA Solutions Joint Retirement Savings Plan, Profit Sharing
Retirement and Savings Plan for Salaried Employees of GenCorp Inc. and Certain
Subsidiary Companies, GenCorp Bargaining Unit Employees' Savings Plan and
Defined Contribution Pension Plan For Hourly Employees of GenCorp Inc. and
Certain Subsidiary Companies. The GenCorp Inc. Master Trust's assets were held
by Mellon Bank, N.A. Effective December 1, 2000, the Company terminated the
GenCorp Inc. Master Trust and established the GenCorp Retirement Savings Plans
Master Trust with Fidelity Management Trust Company serving as trustee. The
plans covered under the new master trust agreement with Fidelity are GenCorp
Retirement Savings Plan and GenCorp Bargaining Unit Employees' Savings Plan.
At October 31, 2001 and 2000, all of the Plan's assets were in the GenCorp
Retirement Savings Plans Master Trust and the GenCorp Inc. Master Trust,
respectively (collectively, Master Trust). Each participating defined
contribution plan has an undivided interest in the Master Trust. Ownership is
represented by units of participation.
10
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Notes to Financial Statements (continued)
4. INVESTMENTS IN GENCORP INC. MASTER TRUST AND GENCORP RETIREMENT SAVINGS PLAN
MASTER TRUST (CONTINUED)
Participation by the Plan's funds in the corresponding Master Trust funds is
increased or decreased by the purchase or redemption of units of participation
at the unit value established at the end of the day on which the purchase or
redemption of units occurred. Income, administrative expenses, and gains and
losses are allocated among the Plans based on their proportionate dollar
interest in the Master Trust. At October 31, 2001 and 2000, the Plan's interest
in the net assets of the Master Trust was approximately 99.06% and 87.92%,
respectively.
Financial information for the Master Trust funds is as follows:
OCTOBER 31
2001 2000
----------------------------------------
Investments at fair value as determined by quoted market
price:
Cash, cash equivalents, money market funds and sales
pending settlement $ 10,756,131 $ 11,209,723
Common stocks 474,072 -
U.S. Government securities - 3,074,087
Corporate debt securities - 5,563,043
Common/collective trusts 86,109,016 239,098,146
Shares of registered investment companies 145,296,943 -
Accrued interest and dividends receivable 1,521 1,066,973
GenCorp Inc. Common Stock 59,532,035 49,189,391
OMNOVA Solutions Inc. Common Stock 10,161,557 28,279,845
Investments at estimated fair value:
Participant notes receivable 7,548,663 6,398,566
Investments at contract value:
Synthetic guaranteed investment contracts - 66,469,247
----------------------------------------
319,879,938 410,349,021
Less: payables - (136,413)
----------------------------------------
$ 319,879,938 $ 410,212,608
========================================
11
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Notes to Financial Statements (continued)
4. INVESTMENTS IN GENCORP MASTER TRUST AND GENCORP RETIREMENT SAVINGS PLAN
MASTER TRUST (CONTINUED)
Investment income (loss) for the Master Trust is as follows:
YEAR ENDED
OCTOBER 31, 2001
--------------------
Net appreciation (depreciation) in fair value of investments:
Common stocks $ (222,209)
U.S. Government securities 328
Corporate debt securities (7,689)
Common/collective trusts (14,867,360)
Shares of registered investment companies (27,275,071)
GenCorp Inc. Common Stock 17,408,640
OMNOVA Solutions Inc. Common Stock 580,172
--------------------
(24,383,189)
Interest 7,110,530
Dividends 2,077,631
--------------------
$ (15,195,028)
====================
5. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated May 21, 1997 stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code) and, therefore, the related trust is exempt
from taxation. Subsequent to the issuance of the determination letter, the Plan
was amended and restated. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Company believes the
Plan is being operated in compliance with the applicable requirements of the
Code and, therefore, believes that the Plan is qualified and the related trust
is tax exempt.
12
GenCorp Retirement Savings Plan
(formerly GenCorp/OMNOVA Solutions Joint Retirement Savings Plan)
Notes to Financial Statements (continued)
6. SUBSEQUENT EVENT
On October 19, 2001, the Company's wholly owned subsidiary, Aerojet-General
Corporation (Aerojet), completed the sale of its Electronic and Information
Systems business to Northrop Grumman Corporation. As a result of the sale,
balances totaling $33,592,146 of participants who are current or former
employees of Aerojet's Azusa, CA facility were transferred to the Northrop
Grumman Electronic Systems - Space Division - Consolidated Pension Plan on
February 15, 2002.
13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, GenCorp
Inc., as Plan Administrator, has duly caused this annual report to be signed on
its behalf by the undersigned thereunto duly authorized.
GENCORP RETIREMENT SAVINGS PLAN
(formerly GenCorp/OMNOVA Solutions
Joint Retirement Savings Plan)
By /s/ Yasmin R. Seyal
--------------------------------------
Yasmin R. Seyal
Senior Vice President, Finance; Acting
Chief Financial Officer
Date: April 29, 2002
14