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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
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8974
ALLIEDSIGNAL INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-2640650
- ---------------------------------------- ---------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Columbia Road
P.O. Box 4000
Morristown, New Jersey 07962-2497
- ---------------------------------------- ---------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201)455-2000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
- ---------------------------------------- ---------------------------------------------
Common Stock, par value $1 per share* New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Money Multiplier Notes due 1996-2000 New York Stock Exchange
9 7/8% Debentures due June 1, 2002 New York Stock Exchange
9.20% Debentures due February 15, 2003 New York Stock Exchange
Zero Coupon Serial Bonds due 1995-2009 New York Stock Exchange
9 1/2% Debentures due June 1, 2016 New York Stock Exchange
- ------------
* The common stock is also listed for trading on the Amsterdam, Basle,
Frankfurt, Geneva, London, Paris, Tokyo and Zurich stock exchanges.
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was approximately $9.6 billion at December 31, 1994.
There were 283,131,846 shares of Common Stock outstanding at December 31, 1994.
Documents Incorporated by Reference
Part I and II: Annual Report to Shareowners for the Year Ended December
31, 1994.
Part III: Proxy Statement for Annual Meeting of Shareowners to be held
April 24, 1995.
________________________________________________________________________________
________________________________________________________________________________
ALLIEDSIGNAL INC.
CROSS REFERENCE SHEET
Page(s) in
Form 10-K Heading(s) in Annual Report to Shareowners for Annual
Item No. Year Ended December 31, 1994 Report
- ---------------------------------- ------------------------------------------------------------ ------------
1. Business Note 26. Segment Financial Data ............................ 37
Note 25. Geographic Areas -- Financial Data ................ 37
Management's Discussion and Analysis ....................... 21
3. Legal Proceedings Note 20. Commitments and Contingencies ..................... 34
5. Market for the Regis- Note 27. Unaudited Quarterly Financial
trant's Common Equity Information ................................................ 38
and Related Stock- Selected Financial Data .................................... 39
holder Matters
6. Selected Financial Data Selected Financial Data .................................... 39
7. Management's Discussion and Management's Discussion and Analysis ....................... 19
Analysis of Financial
Condition and Results of
Operations
8. Financial Statements and Report of Independent Accountants .......................... 38
Supplementary Data Consolidated Statement of Income ........................... 26
Consolidated Statement of Retained Earnings ................ 26
Consolidated Balance Sheet ................................. 27
Consolidated Statement of Cash Flows ....................... 28
Notes to Financial Statements .............................. 29
Heading(s) in Proxy Statement for Page(s) in
Annual Meeting of Shareowners Proxy
to be held April 24, 1995 Statement
------------------------------------------------------------ ------------
10. Directors and Executive Election of Directors; Voting Securities ................... *
Officers of the Registrant
11. Executive Compensation Election of Directors -- Compensation of Directors;
Executive Compensation ..................................... *
12. Security Ownership of Certain Voting Securities .......................................... *
Beneficial Owners and
Management
- ------------
* To be included in a definitive Proxy Statement to be filed with the
Securities and Exchange Commission not later than 120 days after December 31,
1994.
2
NOTE: AlliedSignal Inc. is sometimes referred to in this Report as the
Registrant and as the Company, and AlliedSignal Inc. and its consolidated
subsidiaries are sometimes referred to as the Company as the context may so
require.
TABLE OF CONTENTS
ITEM PAGE
---- ----
Part I. 1 Business........................................................................................ 4
2 Properties...................................................................................... 14
3 Legal Proceedings............................................................................... 15
4 Submission of Matters to a Vote of Security Holders............................................. 15
Executive Officers of the Registrant............................................................... 15
Part II. 5 Market for the Registrant's Common Equity and Related Stockholder Matters....................... 17
6 Selected Financial Data......................................................................... 17
7 Management's Discussion and Analysis of Financial Condition and Results of Operations........... 17
8 Financial Statements and Supplementary Data..................................................... 17
9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure............ 17
Part III. 10 Directors and Executive Officers of the Registrant............................................. 17(a)
11 Executive Compensation......................................................................... 17(a)
12 Security Ownership of Certain Beneficial Owners and Management................................. 18(a)
13 Certain Relationships and Related Transactions................................................. 18
Part IV. 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K................................ 18
Signatures.................................................................................................... 19
- ------------
(a) These items are omitted since the Registrant will file with the Securities
and Exchange Commission a definitive Proxy Statement pursuant to Regulation
14A involving the election of directors not later than 120 days after
December 31, 1994. Certain other information relating to the Executive
Officers of the Registrant appears at pages 15 and 16 of this Report.
3
PART I.
ITEM 1. BUSINESS
AlliedSignal Inc. with its consolidated subsidiaries (sometimes referred to
in this Report as the Company) was organized in the State of Delaware in 1985.
The Company is the successor to Allied Corporation, which was organized in the
State of New York in 1920.
The Company's operations are conducted under three business segments:
aerospace, automotive and engineered materials.
The Company's products are used by many major industries, including
textiles, construction, plastics, electronics, motor vehicles, chemicals,
housing, telecommunications, utilities, packaging, military and commercial
aviation and aerospace, and in the space program, and agriculture. The following
is a description of the Company's three business segments and their principal
products and activities.
AEROSPACE
The Aerospace segment is among the world's largest manufacturers and
suppliers of advanced technology products and services for the military,
commercial and general aviation, and space markets.
In 1994 the Company substantially completed a restructuring and
consolidation of Aerospace's 12 principal product lines into four strategic
business units: Aerospace Equipment Systems (Equipment Systems), Commercial
Avionics Systems (Avionics Systems), AlliedSignal Engines (Engines) and
Government Electronic Systems (Electronic Systems).
The Company serves key military and commercial segments of the aviation,
defense and space markets with a broad array of systems, subsystems, components
and services. It designs, develops, manufactures, markets and services hundreds
of products found on all types of aircraft, from single-engine executive
aircraft and wide-bodied 'jumbos' flown by the world's commercial carriers, to
trainers, transports, bombers, fighters and helicopters used by the U.S. and
other countries for national defense. The Company's global business consists
primarily of original-equipment sales and an extensive aftermarket business,
including spare parts, maintenance and repair, and retrofitting. Worldwide
customers include all of the major airframe and engine manufacturers, including
Boeing, McDonnell Douglas, Lockheed, Airbus Industrie (Airbus), British
Aerospace, Fokker, Cessna, Fairchild, Dassault, Rockwell International, Pratt &
Whitney, General Electric (GE) and Rolls Royce, as well as the world's leading
airlines.
Principal products, manufactured for military aircraft, civil air transport
and general aviation markets, include primary propulsion, consisting of
turboprop, turbofan, turbojet and turboshaft engines, and auxiliary power gas
turbine engines; environmental control systems, consisting of air conditioning,
cabin pressure and temperature controls; airborne weather avoidance and
collision avoidance radar systems; forward-looking wind shear detection systems
and wing ice detection systems; aircraft communications -- both voice and data;
microwave landing systems; automatic flight control systems; pneumatic control
systems; engine and flight instruments; motion sensing and air data systems;
navigation and identification equipment, including identification of
friend-or-foe systems; cockpit data recorders; ground proximity warning
equipment; electric power generating systems; fuel control systems; aircraft
wheels and brakes; test systems; electromechanical and hydraulic systems and
components; heat transfer equipment and engine oil cooling systems. Other
products include electronic cooling systems and infrared radiation suppressors.
The Company also manufactures products for missiles, spacecraft defense
command, control communication and intelligence programs and oceanic
applications, primarily for defense markets. Products include cryptographic
equipment, radar proximity fuzes, space-pointing devices for deep space probes
and control systems for spacecraft, gyroscopes for tactical missiles and
military aircraft, antisubmarine warfare systems as well as field engineering
management and technical support services to the National Aeronautics and Space
Administration (NASA) and the U.S. Department of Energy (DOE).
4
In June 1994 the Company sold a portion of its small aerospace actuation
business and all of its general aviation repair and overhaul hangar business,
consisting of five airport-based hangar facilities.
In October 1994 the Company completed the purchase of the Lycoming Turbine
Engine Division of Textron Inc. for $375 million and the assumption of certain
liabilities. The acquisition extended the Company's turbine engine product
offerings into the 50- to 115-seat regional aircraft market and in helicopters
and other commercial and military applications.
The Company entered into a number of alliances and joint ventures during
the year, of which the following were among the most significant. The Company,
to be more responsive to its Japanese customers, formed a strategic alliance
with Shimadzu Corporation, Kyoto, Japan covering aerospace equipment and
controls products in Japan under which the Company designated Shimadzu as its
first-preference company for all future manufacturing and business development
in Japan. The agreement covers environmental control systems, engine controls
and accessories and actuation products. Engines selected Kawasaki Heavy
Industries of Kobe, Japan as its partner to manufacture the Company's 131-series
auxiliary power units (APU) for the new McDonnell Douglas MD-90 and Boeing 737
aircraft programs. Kawasaki is also developing and building the accessory
gearbox for Engines' new RE220 APU. The Company has signed a memorandum of
agreement to form a joint venture with TAECO, a Hong Kong-based aerospace
company, to start an aircraft maintenance center at TAECO's facility in Xiamen,
China. The joint venture will provide repair and overhaul services on all the
Company's products used by airline operators in China and the rest of Asia. The
Company also signed a letter of intent with China Eastern Airlines to establish
a joint venture to provide aircraft wheel and brake repair and overhaul services
in Shanghai, China.
The Company is affected by the level of expenditures for defense and space
programs and the level of production of commercial and general aviation
aircraft. The Company's aerospace products are sold directly to the U.S.
government, aircraft manufacturers and commercial airlines, and to dealers and
distributors of general aviation products.
Moderate growth in the Company's commercial business for aerospace products
is expected, over the long term, to mitigate a reduction in U.S. defense
spending. Moreover, aerospace sales are not dependent on any one key defense
program or commercial customer. However, contract awards by aircraft
manufacturers, some of which are discussed below, can be cancelled or reduced if
aircraft orders are cut back. The products and services are sold in competition
with those of a large number of other companies, some of which have substantial
financial resources and significant technological capabilities. Among those
companies that compete with several of the segment's product areas are GE,
Honeywell, Rockwell International, Sundstrand and United Technologies.
Sales to the U.S. government, acting through its various departments and
agencies and through prime contractors, amounted to $1,886 million for 1994 and
$1,911 million for 1993, which amounts include sales to the Department of
Defense of $1,300 million in 1994 and $1,391 million in 1993. Approximately 59%
and 61% of sales to the U.S. government in 1994 and 1993, respectively, were
made under fixed-price contracts in which the Company agrees to perform the
contract for a fixed price and retains for itself any benefits of cost savings
or must bear the burden of cost overruns.
Government contracts are generally terminable by the government at will.
Upon termination, the contractor is normally entitled to reimbursement for
allowable costs and to an allowance for profit. However, if the contract is
terminated because of the contractor's default, the contractor may not recover
all of its costs and may be liable for any excess costs incurred by the
government in procuring undelivered items from another source.
The Company, as are other government contractors, is subject to government
investigations of business practices and compliance with government procurement
regulations. Although such regulations provide that a contractor may be
suspended or debarred from government contracts under certain circumstances, and
the outcome of pending government investigations cannot be predicted with
certainty, management is not presently aware of any such investigation which it
expects will have a material adverse effect on the Company.
Orders for certain products sold to general and commercial aviation
customers mainly consist of relatively short-term and frequently renewed
commitments. Government procurement agencies
5
generally issue contracts covering relatively long periods of time. Total
backlog for products and services for both government and commercial contracts
was $4,730 million at December 31, 1994 and $4,773 million at December 31, 1993
of which U.S. and foreign government orders were $1,803 million and $1,861
million for the respective years. The Company anticipates that approximately
$2,681 million of the total 1994 backlog will be filled during 1995.
The Aerospace segment's international operations consist primarily of
exporting U.S. manufactured products, performance of services, operating
aircraft repair and overhaul facilities and licensing activities. The principal
manufacturing facility outside of the U.S. is in Canada.
In 1994, as in the prior year, world defense spending continued to decline.
Furthermore, most major U.S. and international airlines operated in a difficult
economic environment, with the modest turnarounds that began in the second half
of 1993 continuing in 1994. While the regional airlines showed some financial
strength, growth in the high end corporate aviation market remained slow.
Aerospace was awarded a number of significant contracts in 1994 and had
strong success in booking new programs, being awarded approximately 64% of the
programs bid.
Aerospace was awarded several significant contracts related to Boeing's new
737-700 program totaling about $3 billion in potential sales over the life of
the program. The most significant of these awards included the Company's
designation as the sole supplier of APUs for this new family of aircraft; the
contract has a sales potential of $2 billion. Equipment Systems won contracts
for the environmental control and bleed air systems with a sales potential of
$370 million. GE's Aircraft Engines unit awarded contracts to Equipment Systems
for the main fuel control and the air turbine start system for its CFM56-7
engine on the new 737 program with a combined sales potential of $260 million.
Southwest Airlines awarded a contract with a sales potential of $225 million to
Equipment Systems for wheels and brakes on its new Boeing 737-700 fleet.
Equipment Systems was also awarded a contract for the engine nose cowl anti-ice
valve with a sales potential of $22 million.
The Company has received contracts for the proposed MD-95, McDonnell
Douglas' newest twin-engine aircraft for the 100-passenger market. Equipment
Systems will supply the environmental control systems and Avionics Systems will
provide the communications and navigational systems on a
Supplier-Furnished-Equipment basis. The combined sales potential of the two
contracts is more than $500 million.
Aero Vodochody of Czechoslovakia selected International Turbine Engines
Corp., a joint venture between Engines and the Aero Industry Development Center
of the Republic of China (Taiwan), to supply F124-GA-100 engines for its L-159
light attack/advanced trainer aircraft. The sales potential of the contract is
$290 million. Aero Vodochody also chose a Rockwell-AlliedSignal team to supply
the avionics suite for its L-159 program; Electronic Systems is responsible for
supplying and integrating selected avionics subsystems. Lockheed Aircraft
Services awarded a contract to Electronic Systems to upgrade the integrated
cockpits displays and mission avionics in A-4M SkyHawk tactical fighters sold by
the U.S. government to the Republic of Argentina's Air Force.
Engines received an order to supply the Garrett Turbine Compressor Power
180C engine for up to 750 ground carts for the U.S. Air Force (USAF) for the San
Antonio Air Logistics Center's Large Aircraft Start System. The contract has a
sales potential of $75 million.
Electronic Systems received a contract with a sales potential of $200
million to produce an inertial measurement unit for Northrop's Brilliant
Anti-Tank Weapon.
The USAF's Philips Laboratory awarded Equipment Systems a contract to
develop a turbopump. This contract has sales potential of about $5 million and
is considered strategically significant because it positions Equipment Systems
for entry into the turbopump market.
Two important APU maintenance service agreements (MSA) were awarded during
the year. Southwest Airlines, for its fleet of 737 aircraft, awarded a contract
with a sales potential of $100 million to the Company and Alaska Airlines
selected the Company to service its APUs with a sales potential of $7.6 million.
6
The Australian Civil Aviation Authority awarded a contract for $9 million
to Electronic Systems to provide a parallel approach radar monitor (PARM) for
Sydney's airport; it will be the third airport in the world and the first
outside the U.S. with a PARM.
The Company was also awarded new contracts in general aviation in 1994.
Avionics Systems successfully penetrated the safety avionics market by winning a
contract from Gulfstream to provide a safety avionics suite for the Gulfstream
GV aircraft. The award included a traffic alert and collision avoidance system
(TCAS II), ground proximity warning systems and maintenance data acquisition
units. Israeli Aircraft Industries selected the Company for three contracts with
a combined sales potential exceeding $30 million. The TFE731-40 engine, a
turbofan from the Company's new generation of TFE731 engines, was selected as
the propulsion system for the Astra SPX aircraft and the Company's APUs and
environmental control systems were selected for the Galaxy business jet.
Dassault Aviation selected Engines to supply the most powerful of its new family
of turbofan engines, the TFE731-60, for Dassault's new Falcon 900EX. Engines
received a contract for 69 TPE 331-13 turboprop engines from Jetstream with a
sales potential of $220 million. Canadair selected Engines to supply APUs and
air turbine start systems for its fleet of Global Express aircraft with a
combined sales potential of $50 million.
NASA awarded AlliedSignal Technical Services Corporation (ATSC) the test,
evaluation and maintenance contract for its White Sands Test Facility in New
Mexico. The initial three-year contract, plus a two-year option, will have a
sales potential of $163 million. In an award that secured a strong position for
future potential space station work, Equipment Systems received a contract from
NASA's Lewis Research Center to develop the first space flight demonstration of
a solar dynamic electric power generation system with a sales potential of $15
million. Aerospace was part of four industry teams that will share in $98
million in technology reinvestment project grants from the U.S. government's
Advanced Research Projects Agency. Among the projects will be a $42 million
award for the development of a radar system to be used in an Autonomous Landing
Guidance System and a $43 million award to develop Fly-by-Light Advanced Systems
Hardware. ATSC will develop and install the ground system for Taiwan's new
satellite program under a contract with a sales potential, including options, of
$32 million.
The Company was also awarded a number of significant contracts in 1993.
Chalk Airlines purchased Engine's TPE331-14 turboprop to re-engine its
fleet of Albatross amphibian aircraft with a sales potential of $24 million. The
U.S. Army funded a $73 million contract add-on under which LHTEC, a joint
venture with Allison Engines, will continue development of a growth version of
its T-800 turboshaft engine which has been selected for use on the RAH-66
Comanche helicopter.
The Company received new military avionics contracts in 1993. Electronic
Systems, teamed with Chrysler Technology, was awarded a major contract from the
USAF for the update of autopilots and displays for the C-130 and C-141 aircraft.
The program has a sales potential to the Company of $500 million. Avionics
Systems was awarded a $15 million contract from Lockheed to supply TCAS II for
C-130 aircraft. Electronic Systems received an order from McDonnell Douglas
Helicopter Company to update the display processor for the AH-64 Longbow Apache
helicopter, a program with a sales potential of over $300 million. Electronic
Systems received a significant contract from the USAF Special Operations Command
for the Multi-mission Advanced Tactical Terminal, a program with a sales
potential of $170 million. Electronic Systems led one of four winning teams for
the Advanced Research Projects Agency's Small Low-cost Interceptor Device (SLID)
program which is expected to develop military land vehicle protection through
the use of smart small projectiles. SLID has a sales potential of $110 million.
Electronic Systems was also awarded several contracts for its APX-100
Identification Friend-or-Foe transponder from the U.S. Navy, Air National Guard,
U.K. Ministry of Defence and Teledyne Ryan with a combined sales potential of
over $150 million.
Other key military aircraft equipment awards included wheels and brakes for
the F-18E/F (the Navy's first-line fighter) and the integrated environmental
control system for the F-22, by Equipment Systems, together with more than $340
million in sales potential. The latter was particularly notable because it began
as a procurement for a single component of the environmental control systems,
but
7
Equipment System's strong focus on systems integration turned it into a contract
for the complete system.
ATSC was successful in booking several technical services programs. These
programs included the NASA White Sands program, with $225 million in sales, the
U.S. Marine Corps' Maritime Prepositioning Ship program, with $125 million in
sales, and a number of smaller NASA programs with over $130 million in sales
potential.
In the commercial and general aviation aircraft market, in addition to the
1994 awards previously mentioned, Equipment Systems was designated as one of two
wheel and brake suppliers for Boeing on its new 737-700 transport, a program
with $1.3 billion in sales potential. On the new Gulfstream GV aircraft, Engines
was awarded a contract to supply the APUs and Equipment Systems received a
contract for the environmental control and cabin pressure control systems.
Together, the awards have a sales potential of $130 million. Equipment Systems
received the engine starting system contract for the BMW/Rolls Royce BR-710
engine, the selected engine for both the Gulfstream GV and the Canadair Global
Express aircraft. Furthermore, Equipment Systems received the environmental
control system contract for the new Learjet Model 45 general aviation aircraft.
Equipment Systems was awarded contracts for aircraft wheels and brakes from
Continental Airlines with a sales potential of $170 million and from JAL, Air
France and Egyptair with a combined sales potential of $140 million. Engines was
awarded an APU long-term maintenance service agreement from a major airline with
a sales potential of $135 million.
In the spacecraft market, Lockheed Missile & Space Company awarded
Electronic Systems the ring laser gyro and momentum wheel contracts for its
IRIDIUM program and a ring laser gyro contract for its Frugal Satellite program.
The combined potential sales of these programs is $50 million.
The Company expects that these programs will require only minimal fixed
capital spending.
AUTOMOTIVE
The Automotive segment designs, engineers and manufactures systems and
components for worldwide vehicle manufacturers and aftermarket customers. The
segment's principal business areas are braking systems, engine components,
safety restraint systems and the aftermarket. Within each area, the segment
offers a wide range of products for passenger cars and light, medium and heavy
trucks.
For manufacturers of passenger cars and light trucks, the Company provides
disc and drum brakes, power brake boosters and master cylinders, anti-lock
braking systems (ABS), friction materials, spark plugs, turbochargers and
occupant protection systems (seat belts, air bags and related components).
The Company's primary product offerings for the manufacturers of medium and
heavy trucks and off-road vehicles primarily include air and hydraulic brake
actuation components, air and hydraulic drum and disc brakes, ABS, compressors,
air dryers, friction materials, turbochargers and charge-air intercoolers.
The aftermarket business includes replacement parts for most of the above
items as well as air, oil and fuel filters, wire and cable products, and brake
sealants and fluids.
Automotive operations are located in the U.S., Australia, Brazil, Canada,
China, France, Germany, India, Ireland, Italy, Japan, Malaysia, Mexico,
Portugal, South Korea, Spain and the U.K. Distribution and marketing are
conducted in these and numerous other countries as well. Internationally,
products are marketed under the Bendix, Fram, Autolite, Garrett and Jurid
trademarks.
Worldwide passenger car and truck original-equipment sales accounted for
approximately 74% in 1994 and 70% in 1993 of the net sales of the Automotive
segment with aftermarket sales accounting for the balance. In 1994 and 1993
Automotive operations outside the U.S. accounted for $2,217 and $2,002 million,
or 45% and 44%, respectively, of worldwide sales.
In 1994 and 1993 sales of automotive original-equipment systems and
components were made to approximately 30 customers of which the Company's five
largest automotive manufacturing customers accounted for approximately 62% and
60%, respectively, of such sales. Total worldwide sales (for
8
original-equipment and aftermarket use) for 1994 and 1993 to the five automotive
manufacturers amounted to $2,063 and $1,886 million, including sales to Ford
Motor Company (Ford), the segment's largest customer, of $782 and $715 million
for the respective years.
In 1994 the Company established two joint ventures in Europe, one with
Sogefi S.p.A. and the other with Gilardini, a subsidiary of Fiat, and Sequa. The
joint venture with Sogefi S.p.A., a European manufacturer and distributor of
automotive filters and other automotive products, is expected to enable both
partners to penetrate new markets through a joint distribution network and to
reduce costs through consolidation of both warehouses and distribution centers.
The joint venture with Gilardini and Sequa -- BAG, S.p.A. -- will manufacture
and supply hybrid inflators for driver and passenger-side air bags to be
assembled by a Company plant in Italy. These operations will provide the Company
with an entry into the European air bag market. In January 1995 the Company and
Jidosha Kiki Co. of Japan formed a joint venture to supply brake boosters for
vehicles built in Europe by Japanese manufacturers. The venture will be based in
Pamplona, Spain.
The Company acquired substantially all of the seat belt business of General
Safety, a North American designer and manufacturer of safety restraint systems,
in 1994. The acquisition is expected to bolster growth potential for the Company
as a leading supplier of vehicle safety restraint systems in North America.
In late December 1994 the Company acquired Ford's spark plug manufacturing
plant in Treforest, South Wales. The acquisition enhanced the Company's
relationship with Ford as its sole supplier of spark plugs in both North America
and Europe and is expected to provide a manufacturing base in Europe for growth
in the aftermarket spark plug business.
In February 1995 the Company reached an agreement to acquire the Budd
Company's Wheel and Brake Division, whose products include: rotors, hubs, drums
and related assemblies for passenger cars and light trucks; steel disk wheels
for heavy trucks; and demountable rims and hub and drum assemblies for medium-
and heavy-duty trucks. The Wheel and Brake Division had sales of about $250
million in the fiscal year ended September 30, 1994. The Company signed a letter
of intent to acquire Fiat Auto Poland S.A.'s braking business, whose products
include disc and drum brakes, master cylinders and brake boosters. The
manufacturing facility of the business is located in Twargodora, Poland. Sales
of about $30 million are expected in 1995.
Construction of a new turbocharger plant in Shanghai, China began in 1994.
This facility is expected to enable the Company to serve the rapidly growing
diesel engine market in China and provide turbochargers to international markets
as opportunities develop. In December 1994, as a temporary measure, the Company
began producing turbochargers in a leased facility in China.
The Company continues to invest in the ABS and air bag segments of the
automotive industry. New ABS product introductions and major awards on a number
of car models continue to provide the Company with the synergies necessary to be
a worldwide brake system supplier. The Company's global air bag position is
expected to continue to strengthen with the formation in 1994 of the BAG, S.p.A.
inflator joint venture and with the establishment of an air bag module assembly
operation in Italy. The new air bag assembly operation has received sales awards
from European manufacturers.
The Company initiated facilities rationalization plans in 1991 and 1992
which will significantly reduce the number of worldwide automotive locations
through 1995. By the end of 1994, 23 operating plants had been closed.
Rationalization and consolidations of sales offices, distribution centers, and
research and development facilities will continue throughout 1995.
The segment's operations outside the U.S. are conducted through various
foreign companies in which it has interests ranging from minor to complete
control. International operations also include the exporting of U.S.
manufactured products and licensing activities.
The Automotive segment's products are sold in highly competitive markets to
customers who demand performance, quality and competitive prices. Virtually all
automotive components are sold in competition with other independent suppliers
or with the captive component divisions of the vehicle manufacturers. While the
Company's competitive position varies among its products, the Company believes
it is a significant factor in each of its major product markets. The major
independent competitors in one or more major business areas include: ITT Teves,
Lucas Girling, Rockwell-WABCO,
9
Dana, Autoliv, Cooper Industries, Schwitzer, Midland, Bosch, Kelsey Hayes, KKK,
TRW, Purolator, Delco, AM Brake, Raybestos, Takata and Morton.
ENGINEERED MATERIALS
The Engineered Materials segment is composed of five major divisions:
Fibers, Fluorine Products, Performance Materials, Plastics and Laminate Systems.
Other businesses not included in these divisions are the Paxon joint venture,
the Environmental Catalysts joint venture and Carbon Materials.
Fibers. The Company is a leading producer of type 6 nylon and the third
largest producer of nylon in the U.S. The Company is also the largest domestic
producer of caprolactam, the primary intermediate for type 6 nylon, from which
it produces fine and heavy denier nylon yarns and molding compounds and film.
These yarns are sold under the trademarks Anso'r', Anso X'r', Anso IV'r', Anso
V'r', Worry-Free'r', CrushResister'tm' and Caprolan'r'. In addition, the Company
produces heavy denier polyester yarns. The Company primarily sells yarns to the
carpet, textile, motor vehicle and industrial markets.
In the carpet yarn markets, both continuous filament and staple nylon yarns
are sold to yarn processors and mills for the manufacture of carpeting. Nylon
filament and staple are the dominant fiber yarns used in carpet production. The
four largest producers, including the Company, have over 90% of domestic
capacity. The Company has achieved recognition as a leader in product
development and has developed a strong customer base. Brand identity, service to
customers and quality are important competitive factors in the market and there
is considerable price competition. The Company strengthened its position in
Europe through the acquisition of carpet yarn facilities from Akzo NV in the
third quarter of 1993.
In the motor vehicle and industrial markets, the Company's primary products
are nylon and polyester yarns for use in tire cord, seat belts, hoses,
tarpaulins and outdoor furniture. In Europe the Company produces industrial
polyester yarn in a $200 million facility in Longlaville, France, which began
operations in the fourth quarter of 1993. The Company believes that polyester
yarn will become the primary reinforcement for passenger car radial tires in the
world in the late 1990s and is exploring development opportunities in the Far
East.
The textile fibers markets, where the Company sells Caprolan'r' nylon flat
yarns for warp knit and weaving applications, include intimate apparel, sports
outerwear, jackets and such recreational products as sleeping bags, back packs
and luggage. The industry is highly price competitive.
Fluorine Products. The major fluorine products are hydrofluoric acid (HF),
fluorocarbons, sulfur hexafluoride (SF6) and sterilant gases.
The Company is the world's largest producer of HF and an industry leader in
the production and sale of products derived from HF, including fluorocarbons,
SF6 and uranium hexafluoride (UF6).
Genetron'r' fluorocarbons are sold mainly as refrigerants to
original-equipment and replacement manufacturers of air conditioning and
refrigeration equipment and as foam blowing agents to rigid foam producers.
Genesolv'r' fluorocarbons are sold as solvents in precision cleaning
applications such as electronics, optics and aerospace applications.
Approximately one-third of the Company's Genetron'r' and Genesolv'r' products
are chlorofluorocarbons (CFCs). The Montreal Protocol (Protocol), which is
supported by 87 countries, regulates worldwide CFC production and consumption.
With few exceptions, the Protocol requires 100% elimination of fully halogenated
CFC production by industrialized countries by December 31, 1995. The amended
U.S. Clean Air Act also regulates CFCs and similarly requires that most U.S.
production of CFCs be phased out by the end of 1995. CFCs produced in the U.S.
are also subject to the Ozone Depleting Chemical Tax of the Revenue
Reconciliation Act of 1989.
The Company is continuing its efforts to develop environmentally-safer
fluorocarbon products as it replaces the current CFC product line. An existing
commercial plant in El Segundo, CA was converted in 1991 to manufacture
hydrochlorofluorocarbon (HCFC)-141b, a key substitute for CFC-11, a blowing
agent in urethane foams, and as a replacement for CFC-113 in critical solvent
applications. By 1994 the Company more than tripled the plant's capacity to 60
million pounds per year. The Company has
10
commercialized key CFC substitute products in various applications, including
automotive air conditioning and residential, commercial and industrial
refrigeration. In this connection, the Company began manufacturing
environmentally-safer alternatives to CFCs at a new $70 million multi-product
commercial facility in Geismar, LA targeted primarily at the substitute products
HCFC-123, HCFC-124, hydrofluorocarbon (HFC)-125 and HFC-134a. The Company is
continuing its research and development efforts in view of the changing
regulatory environment in which it operates. The Company does not currently
expect that the Protocol or the U.S. Clean Air Act will have a material adverse
effect on the Company. However, the Company cannot predict the impact of
possible future regulatory issues.
The Company acquired the CFC business of Akzo NV, with facilities in the
Netherlands, in April 1994. This acquisition has provided the Company with
access to new markets for its fluorocarbon products.
The Company is one of two domestic producers of SF6, a gas primarily used
by utilities because of its electrical insulatory properties in circuit
breakers, switches, transmission lines and electronic minisubstations.
The Company also produces sterilant gases which primarily consist of blends
of ethylene oxide and fluorocarbons that are sold to hospitals, medical device
manufacturers and contract sterilizers. The Company holds the patents for
selected sterilant gas blends using environmentally-safer fluorocarbons.
Performance Materials. Businesses included are A-C'r' performance
additives, performance chemicals, advanced microelectronics materials, amorphous
metals, specialty films, nuclear services and the UOP joint venture.
A-C'r' performance additives are low-molecular weight polyethylene polymer
additives which primarily serve the textiles, plastics, adhesives and polishes
specialty markets worldwide.
The performance chemicals business is the leading supplier of specialty
oxime chemicals for use in the agricultural, coatings, photographic,
pharmaceutical, adhesives and sealants, and mining industries. The Company has
some cost benefits from its captive source of hydroxylamine sulfate.
The advanced microelectronics materials business designs, develops and
manufactures materials for semiconductor companies worldwide. The Company is a
leader in technology that smoothes integrated circuits under the trademark
ACCUGLASS'r'.
The Company manufactures amorphous metals (METGLAS'r' Alloys) that offer
significant efficiency gains in electrical distribution transformers over
conventional electrical steel which is currently used. Amorphous metals are also
a key component in theft deterrent systems used by retail companies.
Major products in the specialty films business include cast nylon
(Capran'r'), biaxially oriented nylon film (Biax'r') and fluoropolymer film
(Aclar'r'). Specialty film markets include food, pharmaceutical, and other
packaging and industrial applications.
The Company's nuclear services business processes uranium ore concentrates
into UF6 which is an essential intermediate in the production of fuel elements
for nuclear power reactors for domestic and foreign customers. In November 1992
a Company subsidiary entered into a partnership with a General Atomics'
affiliate to market UF6 conversion services supplied by the Company's
Metropolis, Illinois manufacturing facility. The partnership, ConverDyn,
competes for the open world market with four foreign processors that are either
government owned or controlled.
UOP is an equally owned joint venture with Union Carbide Corporation which
designs and licenses processes, and produces and markets catalysts for the
petroleum refining, gas processing, petrochemical and food industries.
Plastics. The Plastics business manufactures and markets engineering
resins. The Company is a leading producer of nylon 6 engineering resins
(Capron'r') for the automotive, electrical and electronic component, food
packaging, lawn care and power tool markets. The Company completed an expansion
of the color compounding facility at Sparta, TN.
Laminate Systems. This business unit manufactures circuit board laminates
for the electronic and electrical industries. The Company's product line
includes copper clad and unclad laminates used in
11
computer, telecommunication, instrumentation and military applications.
Approximately 50% of sales are to the international market, primarily in
southeast Asia and throughout Europe. The industry is highly price competitive.
The Company, in partnership with Mitsui Mining and Smelting Company, is backward
integrated in electro deposited copper foil. The Company completed construction
of a new laminates plant in Thailand in the first quarter of 1994 and commercial
production commenced in the second quarter.
Other Businesses. Businesses not included in the five major divisions of
the Engineered Materials Segment are the Paxon joint venture, Environmental
Catalysts joint venture and Carbon Materials.
The Paxon joint venture is equally owned with Exxon Corporation. The joint
venture manufactures high-density polyethylene resins used in the production of
plastics for household and industrial products.
The Environmental Catalysts business is a major worldwide supplier of
catalysts used in catalytic converters for automobiles. In November 1994 the
Company and General Motors Corporation (GM) formed a joint venture to produce
coated automotive catalytic converter substrates. The Company contributed its
environmental catalysts business and GM contributed coating-related technology
and a long-term supply contract to the joint venture.
The Carbon Materials business produces binder pitch for electrodes for the
aluminum and carbon industries, creosote oils as preservatives for the wood
products and carbon black markets, refined naphthalene as a chemical
intermediate, and driveway sealer tar and roofing pitch for the construction
industry. All of the tar products are distilled from coal tar, a by-product of
the steel industry's coking operations.
The principal raw materials used in the Engineered Materials segment are
generally readily available and include cumene, natural gas, sulfur,
terephthalic acid, ethylene and ethylene glycol, fluorspar, HF, carbon
tetrachloride, chloroform, nylon resins, fiberglass, copper foil, platinum,
rhodium and coal tar pitch. The Company is producing virtually all of its HF and
nylon resin requirements. Important competitors are: Du Pont, GE, Monsanto,
Hoechst/Celanese, BASF Fibers, Koppers, U.S.I., Phillips, Soltex, Atochem and
Nan Ya.
SEGMENT FINANCIAL DATA
Note 26 (Segment Financial Data) of Notes to Financial Statements in the
Company's 1994 Annual Report to shareowners is incorporated herein by reference.
DOMESTIC AND FOREIGN FINANCIAL DATA
Note 25 (Geographic Areas -- Financial Data) of Notes to Financial
Statements in the Company's 1994 Annual Report to shareowners is incorporated
herein by reference.
FOREIGN ACTIVITIES
The Company's foreign businesses are subject to the usual risks attendant
upon investments in foreign countries, including nationalization, expropriation,
limitations on repatriation of funds, restrictive action by local governments
and changes in foreign currency exchange rates.
The Company's principal foreign manufacturing operations are in Australia,
Brazil, Canada, France, Germany, Ireland, Italy, Japan, Mexico, Portugal, South
Korea, Spain, Singapore, Taiwan, the Netherlands and the U.K. The Company
maintains sales and business offices in these and various other countries,
including Austria, Belgium, China, Denmark, Finland, Hong Kong, India, New
Zealand, Norway, Sweden and Turkey as well as warehousing, distribution and
aircraft repair and overhaul facilities to support foreign operations and export
sales. Further information about foreign activities is discussed in the segment
narratives.
12
RAW MATERIALS
Among the principal raw materials used by the Company, in addition to those
previously discussed for the Engineered Materials segment, are electronic,
optical and mechanical component parts and assemblies, electronic and
electromechanical devices, metallic products, magnetic and induction devices,
castings, forgings, steel and bar stock, copper, aluminum, platinum and
titanium. The Company believes that sources of supply for raw materials and
components are generally adequate.
PATENTS AND TRADEMARKS
The Company owns approximately 15,000 patents or pending patent
applications and is licensed under other patents covering certain of its
products and processes. It believes that, in the aggregate, the rights under
such patents and licenses are generally important to its operations, but does
not consider that any patent or license or group of them related to a specific
process or product is of material importance in relation to the Company's total
business.
The Company also has registered trademarks for a number of its products.
Some of the more significant trademarks include: AiResearch, Anso, Autolite,
Bendix, Bendix/King, Capron, Fram, Garrett, Genetron, Jurid, King and Norplex
Oak.
RESEARCH AND DEVELOPMENT
The Company's research activities are directed toward the discovery and
development of new products and processes, improvements in existing products and
processes, and the development of new uses of existing products.
Research and development expense totaled $318 million in 1994, $313 million
in 1993 and $320 million in 1992. Customer-sponsored (principally the U.S.
government) research and development activities amounted to an additional $486,
$514 and $501 million in 1994, 1993 and 1992.
The Company's Research and Technology organization has research facilities
at Morris Township, New Jersey and Des Plaines, Illinois consisting of research
and development laboratories where special emphasis is placed upon applied
research and upon development of new products and processes. In addition, there
are approximately 48 other research laboratories and facilities which provide
direct support to the operating segments.
ENVIRONMENT
The Company is subject to various federal, state and local requirements
regulating the discharge of materials into the environment or otherwise relating
to the protection of the environment. It is the Company's policy to comply with
these requirements and the Company believes that, as a general matter, its
policies, practices and procedures are properly designed to prevent unreasonable
risk of environmental damage, and of resulting financial liability, in
connection with its business. Some risk of environmental damage is, however,
inherent in particular operations and products of the Company, as it is with
other companies engaged in similar businesses. (See the description of the
Engineered Materials segment, above, for information regarding regulation of
CFCs.)
The Company is and has been engaged in the handling, manufacture, use or
disposal of many substances which are classified as hazardous or toxic by one or
more regulatory agencies. The Company believes that, as a general matter, its
handling, manufacture, use and disposal of such substances are in accord with
environmental laws and regulations. It is possible, however, that future
knowledge or other developments, such as improved capability to detect
substances in the environment, increasingly strict environmental laws and
standards and enforcement policies thereunder, could bring into question the
Company's handling, manufacture, use or disposal of such substances.
Among other environmental requirements, the Company is subject to the
federal Superfund law, and similar state laws, under which the Company has been
designated as a potentially responsible party which may be liable for cleanup
costs associated with various hazardous waste sites, some of which are on the
U.S. Environmental Protection Agency's Superfund priority list. Although, under
some
13
court interpretations of these laws, there is a possibility that a responsible
party might have to bear more than its proportional share of the cleanup costs
if it is unable to obtain appropriate contribution from other responsible
parties, the Company has not had to bear significantly more than its
proportional share in multi-party situations taken as a whole.
Capital expenditures for environmental control facilities at existing
operations were $43 million in 1994. The Company estimates that during each of
the years 1995 and 1996 such capital expenditures will be in the $65 to $70
million range. In addition to capital expenditures, the Company has incurred and
will continue to incur operating costs in connection with such facilities.
Reference is made to Management's Discussion and Analysis at page 21 of the
Company's 1994 Annual Report to shareowners, incorporated herein by reference,
for further information regarding environmental matters.
EMPLOYEES
The Company had an aggregate of 87,500 salaried and hourly employees at
December 31, 1994. Of the approximately 30,000 unionized employees, 16,300 are
employed in the Company's U.S. and Canadian plants and other facilities.
Unionized employees are represented by local unions that are either independent
or affiliated with the United Auto Workers, the International Association of
Machinists, the United Steel Workers of America, the Oil, Chemical and Atomic
Workers International Union, the International Brotherhood of Teamsters and many
other international unions. Relations between the Company and its employees and
their various representatives have been generally satisfactory, although the
Company has experienced work stoppages from time to time. Approximately 21% of
the Company's U.S. and Canadian unionized employees are covered by labor
contracts scheduled to expire in 1995. Major labor negotiations will include
locations in all of the segments.
ITEM 2. PROPERTIES
The Company has 383 locations consisting of plants, research laboratories,
sales offices and other facilities. The plants are generally located to serve
large marketing areas and to provide accessibility to raw materials and labor
pools. The properties are generally maintained in good operating condition.
Utilization of these plants may vary with government spending and other business
conditions; however, no major operating facility is significantly idle. The
facilities, together with planned expansions, are expected to meet the Company's
needs for the foreseeable future. The Company owns or leases warehouses,
railroad cars, barges, automobiles, trucks, airplanes and materials handling and
data processing equipment. It also leases space for administrative and sales
staffs. The Company's headquarters and administrative complex are located at
Morris Township, New Jersey.
The principal plants, which are owned in fee unless otherwise indicated,
are as follows:
AEROSPACE
Phoenix, AZ (4 plants, 3 fully leased, 1 partially leased)
Prescott, AZ
Tempe, AZ
Tucson, AZ (partially leased)
Sylmar, CA
Torrance, CA (partially leased)
Stratford, CT (owned by the U.S. Government and managed by the Company)
Fort Lauderdale, FL
South Bend, IN
Olathe, KS
Columbia, MD
Towson, MD
Kansas City, MO (owned by the U.S. Government and managed by the Company)
Eatontown, NJ
Teterboro, NJ
Rocky Mount, NC
South Montrose, PA
Redmond, WA (partially leased)
Rexdale, Ont., Canada (partially leased)
Montreal, Que., Canada
Raunheim, Germany
AUTOMOTIVE
Greenville, AL
Torrance, CA
St. Joseph, MI
Fostoria, OH
Greenville, OH
Sumter, SC
Jackson, TN
Maryville, TN
Campinas, Brazil
Angers, France
Beauvais, France
Conde, France
Moulins, France
Thaon-Les-Vosges, France
Crema, Italy
Glinde, Germany
Carlisle, United Kingdom
Skelmersdale, United Kingdom
14
ENGINEERED MATERIALS
Metropolis, IL
Baton Rouge, LA
Geismar, LA
Moncure, NC
Philadelphia, PA
Pottsville, PA
Columbia, SC
Chesterfield, VA
Hopewell, VA
Longlaville, France
ITEM 3. LEGAL PROCEEDINGS
The first and second paragraphs of Note 20 (Commitments and Contingencies)
of Notes to Financial Statements at pages 34 and 35 of the Company's 1994 Annual
Report to shareowners are incorporated herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Registrant, listed as follows, are elected
annually in April. There are no family relationships among them.
NAME, AGE,
DATE FIRST
ELECTED AN OFFICER BUSINESS EXPERIENCE
- ------------------------------- ----------------------------------------------------------------------------
Lawrence A. Bossidy (a), 59 Chairman of the Board since January 1992. Chief Executive Officer of the
Company since July 1991. Vice Chairman and Executive Officer of the
1991 General Electric Company (diversified industrial corporation) from 1984 to
June 1991.
John W. Barter, 48 Executive Vice President and President, AlliedSignal Automotive since
October 1994. Senior Vice President and Chief Financial Officer from July
1985 1988 to September 1994.
Daniel P. Burnham, 48 Executive Vice President and President, AlliedSignal Aerospace since January
1992. Executive Vice President and President-Elect, AlliedSignal Aerospace
1991 Company from July 1991 to December 1991. President, AiResearch Group from
March 1990 to June 1991.
Frederic M. Poses, 52 Executive Vice President and President, AlliedSignal Engineered Materials
since April 1988.
1988
Isaac R. Barpal, 55 Senior Vice President and Chief Technology Officer since August 1993. Vice
President -- Science & Technology of Westinghouse Electric Corporation
1993 (electric equipment manufacturer) from June 1987 to July 1993.
Peter M. Kreindler, 49 Senior Vice President, General Counsel and Secretary since December 1994.
Senior Vice President and General Counsel from March 1992 to November
1992 1994. Senior Vice President and General Counsel-Elect from January 1992 to
February 1992. Partner, Arnold & Porter (law firm) from January 1990 to
December 1991.
David G. Powell (b), 61 Senior Vice President -- Public Affairs since September 1985.
1985
- ------------
(a) Also a director.
(b) Mr. Powell intends to retire on March 31, 1995.
(table continued on next page)
15
(table continued from previous page)
NAME, AGE,
DATE FIRST
ELECTED AN OFFICER BUSINESS EXPERIENCE
- ------------------------------- ----------------------------------------------------------------------------
Donald J. Redlinger, 50 Senior Vice President -- Human Resources and Communications since February
1995. Senior Vice President -- Human Resources from January 1991 to
1991 January 1995. Staff Vice President -- Human Resources from March 1990 to
December 1990.
Paul R. Schindler, 53 Senior Vice President -- International since August 1993. Chairman of
Imperial Chemical Industries Asia/Pacific (chemical manufacturer) from
1993 April 1991 to July 1993. Chairman of Imperial Chemical Industries China
from July 1989 to March 1991.
James E. Sierk, 56 Senior Vice President -- Quality and Productivity since January 1991. Vice
President -- Quality Office, Development and Manufacturing of Xerox
1991 Corporation (business products and systems and financial services) from
February 1990 to December 1990.
Hans B. Amell, 43 Vice President -- Marketing since August 1993. Vice President --
International Strategy of The Dun & Bradstreet Corporation (business
1993 information, publishing, marketing and television) from April 1991 to July
1993. Vice President -- Corporate Marketing Programs of Unisys Corporation
(business information systems, data processing and aerospace products
manufacturer) from September 1987 to March 1991.
Edward W. Callahan, 64 Vice President -- Health, Safety and Environmental Sciences since September
1985.
1985
Kenneth W. Cole, 47 Vice President -- Government Relations since January 1989.
1989
G. Peter D'Aloia, 50 Vice President and Controller since February 1994. Vice President and
Treasurer from August 1988 to January 1994.
1985
Nancy A. Garvey, 45 Vice President and Treasurer since February 1994. Staff Vice
President -- Investor Relations from November 1989 to January 1994.
1994
Richard P. Schroeder, 43 Vice President -- Manufacturing since June 1994. Vice President of Quality,
Operations and Supply Management at Asea Brown Boveri Inc. (international
1994 electrical engineering company) -- Industrial Group and North American
operations from August 1991 to May 1994. Vice President and General
Manager Customer Service, Corporate Quality, and Government Compliance of
Codex (communications for both voice and data communications systems) a
unit of Motorola, Inc. from November 1986 to July 1991.
Raymond C. Stark, 52 Vice President -- Materials Management since June 1994. Staff Vice
President -- Materials Management from May 1992 to May 1994. Vice
1994 President -- Materials Management of Xerox Corporation from January 1990
to April 1992.
16
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Market and dividend information for the Registrant's common stock is
contained in Note 27 (Unaudited Quarterly Financial Information) of Notes to
Financial Statements at page 38 of the Company's 1994 Annual Report to
shareowners, and such information is incorporated herein by reference.
The number of record holders of the Registrant's common stock is contained
in the statement 'Selected Financial Data' at page 39 of the Company's 1994
Annual Report to shareowners, and such information is incorporated herein by
reference.
ITEM 6. SELECTED FINANCIAL DATA
The information included under the captions 'For the Year' and 'At
Year-End' in the statement 'Selected Financial Data' at page 39 of the Company's
1994 Annual Report to shareowners is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
'Management's Discussion and Analysis' on pages 19 through 25 of the
Company's 1994 Annual Report to shareowners is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's consolidated financial statements, together with the report
thereon of Price Waterhouse LLP dated February 1, 1995 appearing on pages 26
through 38 of the Company's 1994 Annual Report to shareowners, are incorporated
herein by reference. With the exception of the aforementioned information and
the information incorporated by reference in Items 1, 3, 5, 6 and 7, the 1994
Annual Report to shareowners is not to be deemed filed as part of this Form 10-K
Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to directors of the Registrant, as well as information
relating to compliance with Section 16(a) of the Securities Exchange Act of
1934, will be contained in a definitive Proxy Statement involving the election
of directors which the Registrant will file with the Securities and Exchange
Commission pursuant to Regulation 14A not later than 120 days after December 31,
1994, and such information is incorporated herein by reference. Certain other
information relating to Executive Officers of the Registrant appears at pages 15
and 16 of this Form 10-K Annual Report.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation is contained in the Proxy
Statement referred to above in 'Item 10. Directors and Executive Officers of the
Registrant,' and such information is incorporated herein by reference.
17
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information relating to security ownership of certain beneficial owners and
management is contained in the Proxy Statement referred to above in 'Item 10.
Directors and Executive Officers of the Registrant,' and such information is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not Applicable
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
PAGE IN
ANNUAL REPORT TO
SHAREOWNERS
----------------
(a)(1.) Index to Consolidated Financial Statements:
Incorporated by reference to the 1994 Annual Report to shareowners:
Report of Independent Accountants.................................................... 38
Consolidated Statement of Income for the years ended December 31, 1994, 1993 and
1992................................................................................ 26
Consolidated Statement of Retained Earnings for the years ended December 31, 1994,
1993 and 1992....................................................................... 26
Consolidated Balance Sheet at December 31, 1994 and 1993............................. 27
Consolidated Statement of Cash Flows for the years ended December 31, 1994, 1993 and
1992................................................................................ 28
Notes to Financial Statements........................................................ 29
(a)(2.) Consolidated Financial Statement Schedules
The two financial statement schedules applicable to the Company have been
omitted because of the absence of the conditions under which they are required.
(a)(3.) Exhibits
See the Exhibit Index to this Form 10-K Annual Report. The following
exhibits listed on the Exhibit Index are filed with this Form 10-K Annual
Report:
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------
13 Pages 19 through 39 (except for the data included under the captions 'Financial
Statistics' on page 39) of the Company's 1994 Annual Report to shareowners
21 Subsidiaries of the Registrant
23 Consent of Independent Accountants
24 Powers of Attorney
27 Financial Data Schedule
The exhibits identified in the Exhibit Index with an asterisk(*) are
management contracts or compensatory plans or arrangements.
(b) Reports on Form 8-K
No reports on Form 8-K were filed for the three months ended December 31,
1994.
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this annual report to be
signed on its behalf by the undersigned, thereunto duly authorized.
AlliedSignal Inc.
March 2, 1995 By: G. PETER D'ALOIA
-------------------------------
G. Peter D'Aloia
Vice President and Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this
annual report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated:
NAME NAME
---- ----
* *
- ------------------------------------------------------ ------------------------------------------------------
Lawrence A. Bossidy Russell E. Palmer
Chairman of the Board and Chief Executive Director
Officer and Director
* *
- ------------------------------------------------------ ------------------------------------------------------
Hans W. Becherer Ivan G. Seidenberg
Director Director
* *
- ------------------------------------------------------ ------------------------------------------------------
Eugene E. Covert Andrew C. Sigler
Director Director
* *
- ------------------------------------------------------ ------------------------------------------------------
Ann M. Fudge John R. Stafford
Director Director
* *
- ------------------------------------------------------ ------------------------------------------------------
William R. Haselton Thomas P. Stafford
Director Director
* *
- ------------------------------------------------------ ------------------------------------------------------
Paul X. Kelley Delbert C. Staley
Director Director
* *
- ------------------------------------------------------ ------------------------------------------------------
Robert P. Luciano Robert C. Winters
Director Director
G. PETER D'ALOIA NANCY A. GARVEY
- ------------------------------------------------------ ------------------------------------------------------
G. Peter D'Aloia** Nancy A. Garvey**
Vice President and Controller Vice President and Treasurer
*By: NANCY A. GARVEY
--------------------------------------------------
(Nancy A. Garvey,
Attorney-in-fact)
** These individuals together perform the functions of principal financial
officer.
March 2, 1995
19
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------------
3(i) Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit
99.1 to the Company's Form 10-Q for the quarter ended March 31, 1993)
3(ii) By-laws of the Company, as amended (incorporated by reference to Exhibit 99.2 to the
Company's Form 10-Q for the quarter ended March 31, 1993)
4 The Company is a party to several long-term debt instruments under which, in each case, the
total amount of securities authorized does not exceed 10% of the total assets of the
Company and its subsidiaries on a consolidated basis. Pursuant to paragraph 4(iii)(A) of
Item 601(b) of Regulation S-K, the Company agrees to furnish a copy of such instruments to
the Securities and Exchange Commission upon request.
9 Omitted (Inapplicable)
10.1 Master Support Agreement, dated as of February 26, 1986 as amended and restated as of January
27, 1987, as further amended as of July 1, 1987 and as again amended and restated as of
December 7, 1988, by and among the Company, Wheelabrator Technologies Inc., certain
subsidiaries of Wheelabrator Technologies Inc., The Henley Group, Inc. and Henley Newco
Inc. (incorporated by reference to Exhibit 10.1 to the Company's Form 10-K for the year
ended December 31, 1988)
10.2* Deferred Compensation Plan for Non-Employee Directors of AlliedSignal Inc., as amended
(incorporated by reference to Exhibit 10.2 to the Company's Form 10-K for the year ended
December 31, 1993)
10.3* Retirement Plan for Non-Employee Directors of AlliedSignal Inc., as amended (incorporated by
reference to Exhibit 19.2 to the Company's Form 10-Q for the quarter ended June 30, 1990)
10.4* Stock Plan for Non-Employee Directors of AlliedSignal Inc., as amended (incorporated by
reference to Exhibit C to the Company's Proxy Statement, dated March 10, 1994, filed
pursuant to Rule 14a-6 of the Securities Exchange Act of 1934)
10.5* 1985 Stock Plan for Employees of Allied-Signal Inc. and its Subsidiaries, as amended
(incorporated by reference to Exhibit 19.3 to the Company's Form 10-Q for the quarter ended
September 30, 1991)
10.6* AlliedSignal Inc. Incentive Compensation Plan for Executive Employees, as amended
(incorporated by reference to Exhibit B to the Company's Proxy Statement, dated March 10,
1994, filed pursuant to Rule 14a-6 of the Securities Exchange Act of 1934)
10.7* Supplemental Non-Qualified Savings Plan for Highly Compensated Employees of AlliedSignal Inc.
and its Subsidiaries, as amended (incorporated by reference to Exhibit 10.1 to the
Company's Form 10-Q for the quarter ended June 30, 1993)
10.8* 1982 Stock Option Plan for Executive Employees of Allied Corporation and its Subsidiaries, as
amended (incorporated by reference to Exhibit 19.4 to the Company's Form 10-Q for the
quarter ended September 30, 1991)
10.9* AlliedSignal Inc. Severance Plan for Senior Executives, as amended (incorporated by reference
to Exhibit 10.1 to the Company's Form 10-Q for the quarter ended March 31, 1994)
10.10* Salary Deferral Plan for Selected Employees of AlliedSignal Inc. and its Affiliates
(incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q for the quarter ended
March 31, 1994)
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------------
10.11* 1993 Stock Plan for Employees of AlliedSignal Inc. and its Affiliates (incorporated by
reference to Exhibit A to the Company's Proxy Statement, dated March 10, 1994, filed
pursuant to Rule 14a-6 of the Securities Exchange Act of 1934)
10.12* Amended and restated Agreement dated May 6, 1994 between the Company and Lawrence A. Bossidy
(incorporated by reference to Exhibit 10.3 to the Company's Form 10-Q for the quarter ended
June 30, 1994)
10.13 Revolving Credit Agreement, dated as of July 7, 1993, among the Company, certain banks,
Citibank, N.A., as Administrative Agent for the banks, and ABN AMRO Bank N.V. and Morgan
Guaranty Trust Company of New York, as Co-Agents (incorporated by reference to Exhibit 10.2
to the Company's Form 10-Q for the quarter ended June 30, 1993)
10.14 Letter Amendment, dated as of July 5, 1994, to the Revolving Credit Agreement, dated as of
July 7, 1993, among the Company, certain banks, Citibank, N.A., as Administrative Agent for
the banks, and ABN AMRO Bank N.V. and Morgan Guaranty Trust Company of New York, as
Co-Agents (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q for the
quarter ended June 30, 1994)
10.15 364-Day Credit Agreement, dated as of July 7, 1993, among the Company, certain banks,
Citibank, N.A., as Administrative Agent for the banks, and ABN AMRO Bank N.V. and Morgan
Guaranty Trust Company of New York, as Co-Agents (incorporated by reference to Exhibit 10.3
to the Company's Form 10-Q for the quarter ended June 30, 1993)
10.16 Letter Amendment, dated as of July 5, 1994, to the 364-Day Credit Agreement, dated as of July
7, 1993, among the Company, certain banks, Citibank, N.A., as Administrative Agent for the
banks, and ABN AMRO Bank N.V. and Morgan Guaranty Trust Company of New York, as Co-Agents
(incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q for the quarter ended
June 30, 1994)
11 Omitted (Inapplicable)
12 Omitted (Inapplicable)
13 Pages 19 through 39 (except for the data included under the captions 'Financial Statistics'
on page 39) of the Company's 1994 Annual Report to shareowners (filed herewith)
16 Omitted (Inapplicable)
18 Omitted (Inapplicable)
21 Subsidiaries of the Registrant (filed herewith)
22 Omitted (Inapplicable)
23 Consent of Independent Accountants (filed herewith)
24 Powers of Attorney (filed herewith)
27 Financial Data Schedule (filed herewith)
28 Omitted (Inapplicable)
99 Omitted (Inapplicable)
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The Exhibits identified above with an asterisk(*) are management contracts
or compensatory plans or arrangements.
STATEMENT OF DIFFERENCES
The registered trademark symbol shall be expressed as 'r'
The trademark symbol shall be expressed as 'tm'
Subscript numerics in chemistry notation shall be expressed
as baseline numerics, e.g., sulfur hexafluoride would be expressed as SF6.