1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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, 1996.
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 1-892
THE B.F.GOODRICH COMPANY
(Exact name of registrant as specified in its charter)
New York 34-0252680
(State of incorporation) (I.R.S. Employer Identification No.)
4020 Kinross Lakes Parkway
Richfield, Ohio 44286-9368
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 659-7600
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of Each Exchange on
Title of Each Class Which Registered
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Common Stock, $5 par value New York Stock Exchange
9 5/8% Notes, maturing in 2001
8.30% Cumulative Quarterly Income Preferred
Securities, Series A* New York Stock Exchange
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* Issued by BFGoodrich Capital and the payments of trust distributions and
payments on liquidation or redemption are guaranteed under certain circumstances
by The B.F.Goodrich Company. The B.F.Goodrich Company is the owner of 100% of
the common securities issued by BFGoodrich Capital, a Delaware statutory
business trust.
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days Yes X No
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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 reference in Part III of this Form 10-K. [ ]
The aggregate market value of the voting stock, consisting solely of common
stock, held by nonaffiliates of the registrant as of February 5, 1997 was
$2,239.1 million ($41.625 per share). On such date, 53,792,458 of such shares
were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1996 Annual Report to Shareholders are incorporated by reference
into Parts I, II and IV.
Portions of the proxy statement dated March 7, 1997 are incorporated by
reference into Part III.
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PART I
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ITEM 1. BUSINESS
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GENERAL DEVELOPMENT OF BUSINESS
The B.F.Goodrich Company ("BFGoodrich" or the "Company") manufactures and
supplies a wide variety of systems and component parts for the aerospace
industry and provides maintenance, repair and overhaul services on commercial,
regional, business and general aviation aircraft. The Company also manufactures
specialty plastics and specialty additives products for a variety of end-user
applications. In addition, the Company produces chlor-alkali and olefins
products.
On October 21, 1996, the Company entered into a definitive agreement to sell
Tremco Incorporated ("Tremco"), its wholly owned subsidiary, to RPM, Inc. The
transaction was completed on February 3, 1997, for approximately $230 million
resulting in an estimated pretax gain of approximately $85 million, subject to
post-closing adjustments. Also during 1996, the Company disposed of Tremco
Autobody Technologies, Inc. and an adhesives business. The operations of Tremco,
Tremco Autobody Technologies, Inc. and the adhesives business represented the
Sealants, Coatings and Adhesives ("SC&A") Group of the Company. The disposition
of the SC&A Group represents the disposal of a segment of a business under APB
Opinion No. 30. Accordingly, the Consolidated Statement of Income has been
restated to reflect the SC&A Group as a discontinued operation.
A further description of the Company's business is provided below.
BFGoodrich, with 1996 sales of $2.2 billion, is organized into two principal
business segments: BFGoodrich Aerospace ("Aerospace") and BFGoodrich Specialty
Chemicals ("Specialty Chemicals"). The chlor-alkali and olefins operation,
principally a commodities business, is reported as "Other Operations." The
Company maintains patent and technical assistance agreements, licenses and
trademarks on its products, process technologies and expertise in most of the
countries in which it operates. The Company conducts its business through
numerous business groups of BFGoodrich and over 66 wholly and majority-owned
subsidiaries worldwide.
The principal executive offices of BFGoodrich are located in Richfield, Summit
County, Ohio with a mailing address at 4020 Kinross Lakes Parkway, Richfield,
Ohio 44286-9368 (telephone (216) 659-7600).
The Company was incorporated under the laws of the State of New York on May 2,
1912 as the successor to a business founded in 1870.
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During 1996, the Company's Specialty Chemicals segment acquired five businesses
for cash consideration of approximately $108 million. The aggregate purchase
price includes approximately $80 million of goodwill. The purchase price
allocations have been based on preliminary estimates, which may be revised at a
later date. Operations of these businesses are included in the Company's results
from the dates of acquisition.
Four of the acquisitions are part of the Specialty Additives Group. One of the
businesses acquired is a European-based supplier of emulsions and polymers for
use in paint and coatings for textiles, paper, graphic arts and industrial
applications. Two of the acquisitions represent product lines consisting of
water-borne acrylic resins and coatings and additives used in the graphic arts
industry. The fourth acquisition consists of water-based textile coatings
product lines. The Specialty Plastics Group made the remaining acquisition, a
small supplier of anti-static compounds.
During 1995, the Company acquired four small aerospace businesses and two small
specialty chemical businesses for an aggregate price of $15.4 million.
Operations of these businesses are included in the Company's results from the
dates of acquisition.
In 1995, the Company sold Arrowhead Industrial Water, Inc., for an adjusted
selling price of $84.3 million, which resulted in a pretax gain of $3.6 million.
During 1994, the Company acquired two small specialty chemical businesses which
manufacture coatings and products for the textile industry. Operations of these
businesses are included in the Specialty Chemicals business segment since the
dates of acquisition.
In 1993, the Company acquired certain assets and assumed certain liabilities of
eight businesses and acquired the minority interest in a previously
majority-owned subsidiary, for approximately $528.5 million. Acquisitions of
Aerospace businesses amounted to approximately $504.8 million. These
acquisitions included the Cleveland Pneumatic Company Division and Cleveland
Pneumatic Product Service Division (collectively referred to as "Cleveland
Pneumatic") for approximately $193.4 million from Pneumo Abex Corporation, a
wholly owned subsidiary of Abex Inc., and the aerospace business ("Rosemount
Aerospace") of Rosemount Inc., a wholly owned subsidiary of Emerson Electric
Company, for approximately $301.1 million. Operations of these businesses are
included in the Company's results from the dates of acquisition.
Cleveland Pneumatic designs, develops and manufactures landing gear for
commercial and military aircraft and also provides overhaul service for
commercial aircraft landing gear. Principal manufacturing facilities are located
in Cleveland, Ohio and Tullahoma, Tennessee. The service facilities are located
in Miami, Florida.
Rosemount Aerospace designs and manufactures aerospace sensors and related
equipment in facilities located in Burnsville and Eagan, Minnesota.
The other Aerospace acquisitions, which were, in the aggregate, not significant,
include a specialty heating and avionics power business and a manufacturer of
automated test equipment for aircraft.
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The three Specialty Chemicals businesses acquired in 1993 included a water
management business (which was subsequently included in and sold along with
Arrowhead Industrial Water, Inc.), a manufacturer of urethane polymer resins and
a small reaction-injection-molding business. These acquisitions in the aggregate
were not significant.
In December 1993, the Company disposed of its remaining investment in The Geon
Company. The Geon Company ("Geon") was formed in early 1993 from the business
(other than the chloralkali, ethylene and utilities operations primarily
located at Calvert City, Kentucky) that was previously included in the former
Geon Vinyl Division of BFGoodrich. The disposition of Geon through public
offerings of stock generated net cash proceeds of $470.4 million and a financial
gain of $110.9 million after tax. Prior to the sale of Geon, the Company
received a special distribution of $160.0 million from Geon. Net assets of Geon,
including equity in earnings of the business to the dates of disposition, were
approximately $247.0 million.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
In 1996, 1995 and 1994 sales to U.S. government departments and agencies,
principally in the Aerospace business segment, totaled approximately 10 percent,
10 percent and 11 percent, respectively, of consolidated sales.
For financial information concerning the Company's sales, operating income,
identifiable assets, property additions, depreciation and amortization and
geographic information, see Note I of the Notes to Consolidated Financial
Statements appearing beginning on page 36 of the Company's 1996 Annual Report to
Shareholders, which is incorporated herein by reference.
NARRATIVE DESCRIPTION OF BUSINESS
Aerospace
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The Company's Aerospace business is conducted through three major business
groups.
Landing Systems Group manufactures aircraft landing gear; aircraft wheels and
brakes; high-temperature composites and manufactures aircraft evacuation slides
and rafts for commercial, military, regional and business aviation customers,
and space programs.
Sensors and Integrated Systems Group manufactures sensors and sensor-based
systems; fuel measurement and management systems; engine electrical and ignition
system components; electromechanical actuators; aircraft windshield wiper
systems; health and usage management systems, electronic test equipment; ice
protection systems; specialty heated products; collision warning systems;
weather detection systems; standby attitude indicators; aircraft lighting
components; and polymer and composite products for commercial, military,
regional, business and general aviation customers, and for aircraft engine and
space programs.
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Maintenance, Repair and Overhaul Group ("MRO") provides maintenance, repair and
overhaul of commercial airframes, components, wheels and brakes, landing gear,
instruments and avionics for commercial, regional, business and general aviation
customers.
The Company is among the largest suppliers of aircraft systems and components
and aircraft maintenance repair and overhaul service businesses in the world. It
competes with other aerospace industry manufacturers to supply parts and provide
service on specific fleets of aircraft, frequently on a program-by-program bid
basis. Competition is primarily based on product performance, service capability
and price. Contracts to supply systems and components and provide service are
generally with aircraft manufacturers, airlines and airfreight businesses
worldwide. The Company also competes on U.S. government contracts, generally as
a subcontractor. Competition is principally based on product performance and
price.
Specialty Chemicals
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The Company's Specialty Chemicals business is conducted through two major
business groups.
Specialty Plastics Group manufactures thermoplastic polyurethane and alloys;
high-heat-resistant and low-combustibility plastics; static-dissipating
polymers; and reaction-injection molding resins. Products are marketed and sold
to manufacturers for film and sheet applications; wire and cable jacketing; and
magnetic media. Specialty plastics are also used in the manufacture of
automotive products; recreational vehicles and products; agricultural equipment;
industrial equipment; plumbing and industrial pipe; fire sprinkler systems and
building material components.
Specialty Additives Group manufactures synthetic thickeners and emulsifiers;
controlled release and suspension agents; polymer emulsions; rubber and
lubricant additives and plastic and adhesive modifiers. These products are used
by manufacturers of personal-care products; pharmaceuticals; liquid soaps and
detergents; water treatment products; electronics; tires and petroleum products
and molded plastics. Specialty additives are also used in textile printing
manufacturing; non-woven manufacturing; paper coating and saturation; graphic
arts; and paints and industrial coatings.
The Company competes with other major chemical manufacturers. Products are sold
primarily based on product performance. Frequently, products are manufactured or
formulated to order for specific customer applications and often involve
considerable technical assistance from the Company.
Other Operations
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Other Operations represent the chlor-alkali and olefins operations located at
Calvert City, Kentucky. The chlor-alkali and olefins business participates in a
highly cyclical chlorine, caustic soda, ethylene and olefin co-product commodity
market. Sales and operating results are largely dependent on industry supply and
demand. The Company believes it does not have a significant
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market share and, as a result, products produced by this business are sold at
established market prices.
BACKLOGS
At December 31, 1996, the Company had a backlog of approximately $1.1 billion,
principally related to the Aerospace business segment, of which approximately 60
percent is expected to be filled during 1997. The amount of backlog at December
31, 1995 was approximately $1.0 billion. Backlogs in the Aerospace business are
subject to delivery delays or program cancellations, which are beyond the
Company's control.
RAW MATERIALS
Raw materials used in the manufacture of Aerospace products, including steel and
carbon, are available from a number of manufacturers and are generally in
adequate supply.
Availability of all major monomers and chemicals used in the Specialty Chemicals
business is anticipated to be adequate for 1997. While chemical feedstocks are
currently in adequate supply, in past years, from time-to-time for limited
periods, various chemical feedstocks were in short supply. However, the effect
of any future shortages on the Company's operations will depend upon the
duration of any such shortages and possibly on future U.S. government policy,
which cannot be determined at this time.
ENVIRONMENTAL
Federal, state and local statutes and regulations relating to the protection of
the environment and the health and safety of employees and other individuals
have resulted in higher operating costs and capital investments by the
industries in which the Company operates. Because of a focus toward greater
environmental awareness and increasingly stringent environmental regulations,
the Company believes that expenditures for compliance with environmental, health
and safety regulations will continue to have a significant impact on the conduct
of its business. Although it cannot predict accurately how these developments
will affect future operations and earnings, the Company does not believe these
costs will vary significantly from those of its competitors.
For additional information concerning environmental matters, see Note Q of the
Notes to Consolidated Financial Statements appearing on page 43 of the Company's
1996 Annual Report to Shareholders, which is incorporated herein by reference.
RESEARCH AND DEVELOPMENT
The Company conducts research and development under Company-funded programs for
commercial products and under contracts with others. Research and development
expense amounted to $124.1 million in 1996, which includes amounts funded by
customers. For additional information concerning research and development
expense, see Note J of the Notes to
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Consolidated Financial Statements appearing on page 38 of the Company's 1996
Annual Report to Shareholders, which is incorporated herein by reference.
PATENTS AND LICENSES
The Company has many patents of its own and has acquired licenses under patents
of others. While such patents in the aggregate are important to the Company,
neither the primary business of the Company nor any of its industry segments is
dependent on any single patent or group of related patents. The Company uses a
number of trademarks important either to its business as a whole or to its
industry segments considered separately. The Company believes that these
trademarks are adequately protected.
HUMAN RESOURCES
As of December 31, 1996, the Company had 13,143 employees in the United States
and Canada, which includes 1,506 employees of the now divested Sealants,
Coatings and Adhesives Group. An additional 1,017 people were employed overseas.
Approximately 6,200 employees were hourly paid. The Company believes it has good
relationships with its employees.
The hourly employees who are unionized are covered by collective bargaining
agreements with a number of labor unions and with varying contract termination
dates ranging from May 1997 to September 1999. There were no material work
stoppages during 1996.
FOREIGN OPERATIONS
The Company is engaged in business in foreign markets. Manufacturing and service
facilities for Aerospace and Specialty Chemicals are located in Belgium, Canada,
England, France, Hong Kong, The Netherlands, Singapore and Spain. A plant in
Korea manufactures specialty chemicals for BFGoodrich. The Company also markets
its products and services through sales subsidiaries and distributors in a
number of foreign countries. The Company also has technical fee and patent
royalty agreements with various foreign companies.
Outside North America, no single foreign geographic area is currently
significant, although the Company is expanding its business in Europe. Currency
fluctuations, tariffs and similar import limitations, price controls and labor
regulations can affect the Company's foreign operations, including foreign
affiliates. Other potential limitations on the Company's foreign operations
include expropriation, nationalization, restrictions on foreign investments or
their transfers, and additional political and economic risks. In addition, the
transfer of funds from foreign operations could be impaired by the
unavailability of dollar exchange or other restrictive regulations that foreign
governments could enact. The Company does not believe that such restrictions or
regulations have a materially adverse effect on its business, in the aggregate.
For additional financial information about foreign and domestic operations and
export sales, see Note I of the Notes to Consolidated Financial Statements
appearing beginning on page 36 of the Company's 1996 Annual Report to
Shareholders, which is incorporated herein by reference.
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ITEM 2. PROPERTIES
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The manufacturing and service operations of the Company are carried on at
facilities, all of which are owned, unless otherwise indicated, at the following
locations:
Aerospace Specialty Chemicals
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Amelot, France* Akron, Ohio
Austin, Texas* Antwerp, Belgium
Basingstoke, England* Apeldoorn, The Netherlands***
Bedford, Massachusetts Ashland, Ohio***
Burnsville, Minnesota Avon Lake, Ohio
Cedar Knolls, New Jersey Barbourville, Kentucky***
Cleveland, Ohio** Barcelona, Spain
Columbus, Ohio Calvert City, Kentucky
Dallas, Texas* Chagrin Falls, Ohio
East Brunswick, New Jersey* Cleveland, Ohio***
Eagan, Minnesota Dijon, France
Everett, Washington** Elyria, Ohio
Fort Lauderdale, Florida Gastonia, North Carolina
Grand Rapids, Michigan Gothenburg, Sweden***
Green, Ohio** Greenville, South Carolina
Harrow, England* Henry, Illinois
Jacksonville, Florida Hindley, England***
Louisville, Kentucky* Lawrence, Massachusetts
Lynnwood, Washington* Leominster, Massachusetts
Marlboro, Massachusetts* Louisville, Kentucky
Memphis, Tennessee Oevel, Belgium
Miami, Florida* Pedricktown, New Jersey
Middletown, Connecticut* Somersby, Australia***
New Century, Kansas** Toronto, Ontario, Canada***
Norwich, New York Twinsburg, Ohio
Oldsmar, Florida Vernon, California***
Ontario, California*
Paris, France Other Operations
Phoenix, Arizona ----------------
Pueblo, Colorado Calvert City, Kentucky
Santa Fe Springs, California**
Singapore* Research Facilities and
Spencer, West Virginia Administrative Offices Other Than
Taipo, Hong Kong* Manufacturing Facility Offices
Tempe, Arizona* ------------------------------
Troy, Ohio Avon Lake, Ohio*
Tullahoma, Tennessee Beachwood, Ohio***
Union, West Virginia Brecksville, Ohio
Vergennes, Vermont Brussels, Belgium*
Wilmington, North Carolina Cleveland, Ohio*
Wokingham, England Hong Kong*
Zevenaar, The Netherlands London, England*
Montrose, Ohio
North Canton, Ohio*
Paris, France
* Leased Richfield, Ohio
** Leased in part Uniontown, Ohio*
*** This site was operated by Tremco Washington, D.C.*
Incorporated which was divested Waterloo, Ontario, Canada*
in 1997
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The Company considers that its properties are well maintained and in good
operating condition.
The Company and its subsidiaries are lessees under a number of cancelable and
non-cancelable leases for certain real properties, used primarily for
administrative, retail, maintenance, repair and overhaul of aircraft, aircraft
wheels and brakes and evacuation systems and warehouse operations, and for
certain equipment.
ITEM 3. LEGAL PROCEEDINGS
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There are pending or threatened against BFGoodrich or its subsidiaries various
claims, lawsuits and administrative proceedings, all arising from the ordinary
course of business with respect to commercial, product liability and
environmental matters, which seek remedies or damages. BFGoodrich believes that
any liability that may finally be determined with respect to commercial and
product liability claims, should not have a material effect on the Company's
consolidated financial position or results of operations.
The Company has been named a potentially responsible party by the U.S.
Environmental Protection Agency in connection with 32 sites most of which relate
to businesses that the Company has previously discontinued. The Company believes
it may have continuing liability with respect to not more than 15 sites, most of
which relate to previously discontinued businesses. Sites for which successor
companies have assumed liability are not included. Based on information
currently available, the Company believes it has adequately accrued for future
environmental expenditures. However, management believes that it is reasonably
possible that additional environmental costs may be incurred beyond the amounts
accrued as a result of new information. The amounts, if any, however, cannot be
estimated and management believes that they would not be material to the
Company's financial condition, but could be material to the Company's results of
operations in a given period.
One of the sites at which the Company has been designated as a potentially
responsible party is at the Industrial Excess Landfill in Uniontown, Ohio. The
Company, with certain other parties, has formed a coalition and has contributed
towards the cost of a community water system. The coalition offered to perform
certain additional remediation efforts at the site, but this offer was rejected
and the EPA has commenced litigation in the Federal District Court for the
Northern District of Ohio seeking past and future clean-up and oversight costs.
The defendants have joined approximately 68 third party defendants from which
they are seeking cost recovery and contribution. In December 1991, the State of
Ohio filed a suit in the U.S. District Court for the Northern District of Ohio
seeking to recover oversight costs as well as seeking civil penalties for
contamination of waters of the state (groundwater) without a permit since 1971.
The Company believes the action for penalties is without merit. The Company
believes it has adequately accrued for liabilities arising from this matter.
Another site, Beacon Heights landfill in Beacon Falls, Connecticut, has been the
subject of a suit and consent decree in the Federal District Court for the
District of Connecticut. Under the consent decree the Company and a coalition of
others have substantially performed the EPA
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selected remedy. However, construction was not completed before winter weather
set in in 1993 and the deadline for completion of construction was not met.
Subsequently, the work has been substantially completed. The Government asserted
stipulated penalties for failing to complete the remediation project on time,
which penalties the generators disputed. An agreement has been reached to settle
the stipulated penalties issue for $600,000. The Company's share of this
liability is approximately 41%. The Company believes it has adequately accrued
for liabilities arising from this matter.
The Company, among others, has been sued by the State of Oklahoma Department of
Environmental Quality in State District Court in Ottawa County, Oklahoma,
concerning environmental conditions at the Company's former tire plant site in
Miami, Oklahoma. Liability relating to further investigation of potential soil
and groundwater contamination at the site have been assumed by The Uniroyal
Goodrich Tire Company. Since the Company transferred title to the facility in
1993, demolition without complete abatement of asbestos has occurred at the site
due to actions of the past owner or its demolition contractor. The Company does
not believe it will have any material liability at this site although the suit
does seek penalties for alleged violations of environmental laws which could
exceed $100,000 if upheld by the court.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
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STOCKHOLDER MATTERS
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Common stock prices and dividends are on page 45 of the Company's 1996 Annual
Report to Shareholders. The number of common shareholders at December 31, 1996,
is included in "Other Data: Common shareholders of record at end of year" on
page 46 of the Company's 1996 Annual Report to Shareholders. The discussions of
the limitations and restrictions on the payment of dividends on common stock are
included in Note D on pages 32 and 33, and Note O on page 41 of the Company's
1996 Annual Report to Shareholders. All of these sections are incorporated
herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
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Sales from continuing operations, income from continuing operations before
cumulative effect of change in method of accounting, total assets, non-current
long-term debt and capital lease obligations, mandatorily redeemable preferred
securities of Trust, redeemable preferred stock, income from continuing
operations per share of common stock, and dividends per share of common stock as
of and for each of the years in the five-year period ended December 31, 1996, on
page 46 of the Company's 1996 Annual Report to Shareholders, are incorporated
herein by reference.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
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CONDITION AND RESULTS OF OPERATIONS
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Management's Discussion and Analysis on pages 18-24 of the Company's 1996 Annual
Report to Shareholders, is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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The consolidated financial statements and the related notes thereto, together
with the report thereon of Ernst & Young LLP dated February 4, 1997, and
supplementary data, appearing on pages 25-46 of the Company's 1996 Annual Report
to Shareholders, are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
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ACCOUNTING AND FINANCIAL DISCLOSURE
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None.
PART III
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
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Biographical information concerning the Company's Directors appearing under the
caption "Election of Directors" in the Company's proxy statement dated March 7,
1997 is incorporated herein by reference. Biographical information concerning
the Company's Executive Officers is as follows:
John D. Ong, Age 63, Chairman
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Mr. Ong joined the Company in 1961 as Assistant Counsel. Mr. Ong progressed
through a number of business positions. He was elected Group Vice President of
the Company in 1972, Executive Vice President and a Director in June 1973, Vice
Chairman of the Board in April 1974, President in April 1975, President and
Chief Operating Officer in 1977, Chairman and Chief Executive Officer in July
1979. He relinquished the title of Chief Executive Officer in December 1996. Mr.
Ong has a B.A. and M.A. in history from Ohio State University and an LL.B. from
Harvard Law School. Mr. Ong has announced his intention to retire July 1, 1997.
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David L. Burner, Age 57, Chief Executive Officer and President
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Mr. Burner joined the Company in 1983 as Vice President, Finance, for the
Company's Engineered Products Group. He served in several other management
positions before being named Executive Vice President of BFGoodrich Aerospace in
1985. He was appointed President of BFGoodrich Aerospace in 1987. Mr. Burner was
elected a Senior Vice President in 1990, an Executive Vice President in 1993,
President in December 1995, and, additionally, Chief Executive Officer in
December 1996. Before joining BFGoodrich he was Executive Vice President and
Chief Financial Officer of ABS Industries in Willoughby, Ohio. Mr. Burner
received a B.S.C. degree in accounting from Ohio University.
Jon V. Heider, Age 62, Executive Vice President and General Counsel
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Mr. Heider joined the Company in June 1984 as Vice President and General
Counsel. He was elected Senior Vice President in 1988 and Executive Vice
President in 1994. Prior to coming with the Company, Mr. Heider was employed by
Air Products and Chemicals Inc., Allentown, Pa., where he held several posts
including that of General Counsel. His last assignment there was as Vice
President of Corporate Development. His association with Air Products and
Chemicals spanned 18 years. Mr. Heider has a B.A. from the University of
Wisconsin and a J.D. from Harvard Law School.
Marshall O. Larsen, Age 48, Executive Vice President and President and Chief
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Operating Officer, BFGoodrich Aerospace
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Mr. Larsen joined the Company in 1977 as an Operations Analyst. He served in
various management positions until 1986 when he became Assistant to the
President of the Company. He later served as General Manager of several
divisions of BFGoodrich Aerospace. In 1994, Mr. Larsen was elected a Vice
President of the Company and named Group Vice President, Safety Systems,
BFGoodrich Aerospace. In December 1995 he was elected Executive Vice President
of the Company and named President and Chief Operating Officer of BFGoodrich
Aerospace. Mr. Larsen has a B.S. in engineering from the U.S. Military Academy
and an M.S. in industrial administration from the Krannert Graduate School of
Management at Purdue University.
D. Lee Tobler, Age 63, Executive Vice President and Chief Financial Officer
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Mr. Tobler joined the Company in January 1985 as Executive Vice President and
Chief Financial Officer and was elected a Director in April 1988. Prior to
coming with the Company, Mr. Tobler had been Group Vice President and Chief
Administrative and Financial Officer of Zapata Corporation from 1981 to 1984.
Mr. Tobler has a B.A. from Brigham Young University and an M.B.A. from
Northwestern University.
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Nicholas J. Calise, Age 55, Vice President, Associate General Counsel and
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Secretary
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Mr. Calise joined the Company in October 1984 as Secretary and was also
appointed Staff Vice President and Assistant General Counsel. In January 1989 he
was elected Vice President and Associate General Counsel. Prior to joining
BFGoodrich, he was with the Richardson-Vicks Inc. Home Care Products Division,
Memphis, Tennessee, where he was Division Counsel, Director - Planning and
Business Development and Marketing Director. Mr. Calise has an A.B. from
Middlebury College and an M.B.A. and LL.B. from Columbia University.
Robert A. McMillan, Age 54, Vice President and Treasurer
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Mr. McMillan joined the Company in July 1974 as an Economist. He progressed
through a number of positions and was elected Vice President and Treasurer in
August 1986 and served in this capacity until January 1997. Mr. McMillan has a
B.A. from the University of California at Santa Barbara and a Ph.D. in economics
from the University of California at Berkeley and was an Economist at the
Federal Reserve Bank of Cleveland and the Bank of America before joining
BFGoodrich.
Steven G. Rolls, Age 42, Vice President and Controller
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Mr. Rolls joined the Company in September 1981 as a Financial Analyst. He
subsequently served in various capacities in the Treasury department, becoming
an Assistant Treasurer in 1985. In 1987 he joined BFGoodrich Canada as Vice
President, Finance and Treasurer. In 1989 he was appointed Vice President -
Finance for the Aerospace business. Mr. Rolls was elected Vice President and
Controller in 1993. He has a B.S. in business administration from Miami
University and an M.B.A. from Ohio State University.
George K. Sherwood, Age 58, Vice President - Tax Administration
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Mr. Sherwood joined the Company in July 1985 as Staff Vice President - Taxes and
was elected Vice President - Tax Administration in April 1986. Prior to joining
BFGoodrich, Mr. Sherwood was Vice President - Tax Administration for Zapata
Corporation. Mr. Sherwood has a B.S. in business administration from Kansas
State College and an M.B.A. in management from The University of Tulsa.
Les C. Vinney, Age 48, Vice President and Treasurer
- ---------------------------------------------------
Mr. Vinney joined the Company in 1991 as Vice President of Finance and Chief
Financial Officer, Specialty Polymers and Chemicals Division. In 1993, he was
named Senior Vice President, Finance and Administration, BFGoodrich Specialty
Chemicals. In 1994, he was named Group Vice President, Sealants, Coatings and
Adhesives Group, and President, Tremco Incorporated, and elected a Vice
President of the Company. In January 1997, Mr. Vinney was elected Vice President
and Treasurer of the Company. Prior to joining the Company, he was with
Engelhard Corporation in a number of senior operating and financial management
positions, including Group Vice President of the Engineered Materials Division.
He also held various management positions with Exxon Corporation. Mr. Vinney has
a B.A. in economics and political science and an M.B.A. from Cornell University.
- 13 -
14
ITEM 11. EXECUTIVE COMPENSATION
- -------- ----------------------
Information concerning executive compensation appearing under the captions
"Compensation Committee Report" and "Compensation of Directors" in the Company's
proxy statement dated March 7, 1997, is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
- -------- ---------------------------------------------------
MANAGEMENT
- ----------
Security ownership data appearing under the captions "Holdings of Company Equity
Securities by Directors and Executive Officers" and "Beneficial Ownership of
Securities" in the Company's proxy statement dated March 7, 1997, is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
None.
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
- -------- ------------------------------------------------------
FORM 8-K
- --------
(a) (1) and (2) - The response to this portion of Item 14 is
submitted as a separate section of this Form 10-K on
page F-1.
(3) - Listing of Exhibits:
A listing of exhibits is on pages II-1 to II-3 of
this Form 10-K.
(b) Reports on Form 8-K filed in the fourth quarter of 1996.
None.
- 14 -
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on February 17, 1997.
The BFGoodrich Company
(Registrant)
By /s/DAVID L. BURNER
---------------------------------
(David L. Burner, Chief Executive
Officer and President)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below on February 17, 1997 by the following persons (including a
majority of the Board of Directors) on behalf of the registrant and in the
capacities indicated.
/s/ DAVID L. BURNER
- ---------------------------------- ----------------------------------
(David L. Burner) (Thomas H. O'Leary)
Chief Executive Officer, President Director
and Director
(Principal Executive Officer)
/s/ DOUGLAS E. OLESEN
----------------------------------
/s/ JOHN D. ONG (Douglas E. Olesen)
- ---------------------------------- Director
(John D. Ong)
Chairman and Director
/s/ RICHARD DE J. OSBORNE
----------------------------------
/s/ D. LEE TOBLER (Richard de J. Osborne)
- ---------------------------------- Director
(D. Lee Tobler)
Executive Vice President and
Chief Financial Officer and Director /s/ JOSEPH A. PICHLER
(Principal Financial Officer) ----------------------------------
(Joseph A. Pichler)
Director
/s/ STEVEN G. ROLLS
- ----------------------------------
(Steven G. Rolls) /s/ ALFRED M. RANKIN, JR.
Vice President and Controller ----------------------------------
(Principal Accounting Officer) (Alfred M. Rankin, Jr.)
Director
/s/ JEANETTE GRASSELLI BROWN
- ---------------------------------- /s/ IAN M. ROSS
(Jeanette Grasselli Brown) ----------------------------------
Director (Ian M. Ross)
Director
/s/ GEORGE A. DAVIDSON, JR.
- ---------------------------------- /s/ WILLIAM L. WALLACE
(George A. Davidson, Jr.) ----------------------------------
Director (William L. Wallace)
Director
/s/ RICHARD K. DAVIDSON
- ---------------------------------- /s/ A. THOMAS YOUNG
(Richard K. Davidson) ----------------------------------
Director (A. Thomas Young)
Director
/s/ JAMES J. GLASSER
- ----------------------------------
(James J. Glasser)
Director
- 15 -
16
THE B.F.GOODRICH COMPANY
INDEX TO FINANCIAL INFORMATION
Item 14(a)(1)-(2)
Reference
---------
1996
Annual
Report to
shareholders
(page)
---------
Data incorporated by reference from the 1996
Annual Report to Shareholders of The BFGoodrich Company:
Report of Independent Auditors 25
Consolidated Statement of Income for the years
ended December 31, 1996, 1995 and 1994 26
Consolidated Balance Sheet at December 31,
1996 and 1995 27
Consolidated Statement of Cash Flows for the
years ended December 31, 1996, 1995 and 1994 28
Consolidated Statement of Shareholders' Equity
for the years ended December 31, 1996, 1995
and 1994 29
Notes to Consolidated Financial Statements 30 - 44
Quarterly Financial Data (Unaudited) 45
Schedules have been omitted since the required information is not present, or
not present in amounts sufficient to require submission of the schedule, or
because the information is included in the above listed financial statements or
notes thereto.
F-1
17
Item 14 (a)(3) Index to Exhibits
Table II
Exhibit No.
- -----------
3(A) The Company's Restated Certificate of Incorporation, as amended
through August 5, 1988. This exhibit was filed with the same
designation as an exhibit to the Company's Form 10-Q for the
quarter ended September 30, 1988, and is incorporated herein by
reference.
(B) The Company's By-Laws, as amended, through February 18, 1991.
This exhibit was filed with the same designation as an exhibit to
the Company's Form 10-K Annual Report for the year ended December
31, 1990, and is incorporated herein by reference.
4 Information relating to the Company's long-term debt is set forth
in Note D - "Financing Arrangements" on pages 32 and 33 of the
Company's 1996 Annual Report to Shareholders, and is incorporated
herein by reference. Instruments defining the rights of holders
of such long-term debt are not filed herewith since no single
debt item exceeds 10% of consolidated assets. Copies of such
instruments will be furnished to the Commission upon request.
10(A) Stock Option Plan.
10(B)(4) Form of Disability Income Agreement. This exhibit was filed with
the same designation as an exhibit to the Company's Form 10-K
Annual Report for the year ended December 31, 1988, and is
incorporated herein by reference.
10(B)(5) Form of Supplemental Executive Retirement Plan Agreement. This
exhibit was filed with the same designation as an exhibit to the
Company's Form 10-K Annual Report for the year ended December 31,
1989 and is incorporated herein by reference.
10(C) Performance Share Plan. This exhibit was filed with the same
designation as an exhibit to the Company's Form 10-K Annual
Report for the year ended December 31, 1991, and is incorporated
herein by reference.
10(E) Management Incentive Program. This exhibit was filed with the
same designation as an exhibit to the Company's Form 10-Q for the
quarter ended September 30, 1989, and is incorporated herein by
reference.
II-1
18
Item 14 (a)(3) Index to Exhibits
Table II
Exhibit No.
- -----------
10(F) Form of Management Continuity Agreement entered into by The
B.F.Goodrich Company and certain of its employees. This exhibit
was filed with the same designation as an exhibit to the
Company's Form 10-K Annual Report for the year ended December 31,
1992, and is incorporated herein by reference.
10(G) Senior Executive Management Incentive Plan. This exhibit was
filed as Appendix B to the Company's 1995 Proxy Statement dated
March 2, 1995 and is incorporated herein by reference.
10(H) Rights Agreement between The B.F.Goodrich Company and Morgan
Shareholder Services Trust Company, as Rights Agent, dated as of
July 20, 1987, and amended and restated as of December 7, 1987
which includes: as Exhibit A thereto, the form of Designation,
Preferences and Rights of Cumulative Participating Preferred
Stock, Series E; as Exhibit B thereto, the Form of Rights
Certificate; as Exhibit C thereto, the Summary of Rights to
Purchase Preferred Stock; and the Supplement to the Summary of
Rights to Purchase Preferred Stock. This exhibit was filed with
the same designation as an exhibit to the Company's Form 10-K
Annual Report for the year ended December 31, 1987, and is
incorporated herein by reference. Agreement dated as of August 1,
1989, substituting The Bank of New York as Rights Agent and
Agreement dated as of August 1, 1989 with The Bank of New York
amending the Rights Agreement. This exhibit was filed with the
same designation as an exhibit to the Company's Form 10-K Annual
Report for the year ended December 31, 1989 and is incorporated
herein by reference.
10(I) Employee Protection Plan. This exhibit was filed with the same
designation as an exhibit to the Company's Form 10-Q for the
quarter ended September 30, 1989, and is incorporated herein by
reference.
10(J)(1) Benefit Restoration Plan. This exhibit was filed as Exhibit 10(J)
to the Company's Form 10-K Annual Report for the year ended
December 31, 1992, and is incorporated herein by reference.
10(J)(2) The B.F.Goodrich Company Savings Benefit Restoration Plan was
filed as Exhibit 4(b) to the Company's Registration Statement No.
333-19697 on Form S-8 and is incorporated herein by reference.
10(K) Long-Term Incentive Plan and form of award. This exhibit was
filed as Exhibit 10(K) to the Company's Form 10-K Annual Report
for the year ended December 31, 1995, and is incorporated herein
by reference.
10(L) Amended and Restated Separation Agreement between the Company and
The Geon Company, which was filed as exhibit 10.1 to Registration
Statement No. 33-70998 on Form S-1 of The Geon Company, is
incorporated herein by reference.
II-2
19
Item 14 (a)(3) Index to Exhibits
Table II
Exhibit No.
- -----------
10(M) Amended and Restated General Assignment and Bill of Sale between
the Company and The Geon Company, which was filed as exhibit 10.2
to Registration Statement No. 33-70998 on Form S-1 of The Geon
Company, is incorporated herein by reference.
10(N) Amended and Restated Assumption of Liabilities and
Indemnification Agreement between the Company and The Geon
Company, which was filed as exhibit 10.3 to Registration
Statement No. 33-70998 on Form S-1 of The Geon Company, is
incorporated herein by reference.
10(O) Outside Directors' Phantom Share Plan. This exhibit was filed as
Exhibit 10(O) to the Company's Form 10-K Annual Report for the
year ended December 31, 1995, and is incorporated herein by
reference.
11 Statement re Computation of per share earnings
13 Annual Report to Shareholders. The Company's 1996 Annual Report
to Shareholders (only those portions incorporated by reference in
the Form 10-K).
21 Subsidiaries
23 Consent of Independent Auditors
27 Financial Data Schedule
The Company will supply copies of the foregoing exhibits to any shareholder upon
receipt of a written request addressed to the Secretary of The B.F.Goodrich
Company, 4020 Kinross Lakes Parkway, Richfield, Ohio 44286-9368, and the payment
of $.50 per page (except for the Annual Report to Shareholders which is
complimentary) to help defray the costs of handling, copying and postage.
II-3