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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, 1993
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 1-5112
ETHYL CORPORATION
(Exact name of registrant as specified in its charter)
VIRGINIA 54-0118820
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
330 SOUTH FOURTH STREET
P. O. Box 2189
RICHMOND, VIRGINIA 23217
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: 804-788-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
COMMON STOCK, $1 Par NEW YORK STOCK EXCHANGE
PACIFIC STOCK EXCHANGE
PREFERRED SHARE PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
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.
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 at least the past 90 days.
Yes X No
(i)
Aggregate market value of voting stock held by non-affiliates of the
registrant as of January 31, 1994: $1,787,879,360.*
Number of shares of Common Stock outstanding as of January 31, 1994:
118,406,665.
*In determining this figure, an aggregate of 21,107,108 shares of Common
Stock reported in the registrant's Proxy Statement for the 1994 Annual
Meeting of Shareholders as beneficially owned by Floyd D. Gottwald, Jr.,
Bruce C. Gottwald, and the members of their immediate families have been
excluded because the shares are held by affiliates. See Item 12 herein.
The aggregate market value has been computed on the basis of the closing
price in the New York Stock Exchange Composite Transactions on January 31,
1994, as reported by The Wall Street Journal.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of Ethyl Corporation's Annual Report to Shareholders for
the year ended December 31, 1993 (the "Annual Report"), are
incorporated by reference into Parts I, II and IV of this Form
10-K.
2. Portions of Ethyl Corporation's definitive Proxy Statement for its
1994 Annual Meeting of Shareholders to be filed with the Securities
and Exchange Commission pursuant to Regulation 14A under the
Securities Exchange Act of 1934 (the "Proxy Statement") are
incorporated by reference into Part III of this Form 10-K.
(ii)
PART I
Recent Developments
At the close of business on February 28, 1994, Ethyl Corporation
("Ethyl" or "the Company") distributed to its common stock shareholders all
of the outstanding shares of its wholly-owned subsidiary, Albemarle
Corporation ("Albemarle"), a Virginia Corporation. Albemarle owns,
directly or indirectly, the Chemicals Businesses, which include the Olefins
and Derivatives, the Bromine Chemicals and the Specialty Chemicals
divisions, all of which were formerly owned directly or indirectly by the
Company.
The U.S. Internal Revenue Service ("IRS") issued a favorable tax
ruling that the spin-off was tax-free to Ethyl and its shareholders. One
share of Albemarle common stock was distributed to Ethyl's common
shareholders for every two shares of Ethyl's common stock held.
The impact of the spin-off has not been reflected in this report,
or in Ethyl's 1993 Annual Report. Pro forma financial information, which
is important for the reader to obtain a meaningful understanding of Ethyl's
financial position and results of operations after the spin-off, is shown
in the footnotes to the annual report, and is incorporated by reference.
The pro forma financial statements are for information purposes only and
illustrate the estimated effects of the spin-off of Albemarle Corporation.
The pro forma condensed balance sheet of Ethyl as of December 31, 1993,
presents the financial position of Ethyl assuming that the Distribution, the
split of the Ethyl credit facility and the reduction of Ethyl's shareholders'
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equity as a result of such transfer had occurred as of that date. The pro
forma condensed statements of income for 1993 and 1992 present the results of
operations of Ethyl assuming that the Distribution had occurred as of January
1, 1992. The pro forma information may not necessarily reflect the future
results of operations or financial position of Ethyl or what the results of
operations or financial position of Ethyl would have been if Ethyl had operated
without Albemarle.
Continuity of management is viewed as particularly important in the
period immediately following the spin-off of Albemarle's shares due to the
interrelationship of the operations of the Ethyl Businesses and the
Albemarle Businesses. Because Ethyl and Albemarle desire to maintain
continuity of the management philosophy of both companies, a very limited
number of executive officers will have positions in both companies. The
executive officers and directors listed in this report are the executive
officers and directors of the Company on an ongoing basis as of March 25,
1994.
Information on the ongoing Ethyl Businesses was provided in a
report on Form 8-K, included as an Exhibit to this Form 10-K.
Information on the operation of the Albemarle Businesses was
provided in an Information Statement which was included as an Exhibit to
the Form 8-K.
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Item 1. BUSINESS
DESCRIPTION OF BUSINESS
Ethyl Corporation (the "Company") is a major producer of per-
formance chemicals including fuel and lubricant additives, brominated flame
retardants, polymer intermediates and catalysts, detergent intermediates,
agricultural chemical intermediates, pharmaceutical intermediates,
electronic materials, and bromine chemicals. The Company also owns Whitby,
Inc. ("Whitby"), which in turn owns Whitby Pharmaceuticals, Inc. ("Whitby
Pharmaceuticals"), which markets pharmaceutical products that are contract
manufactured for it.
Incorporated in Virginia in 1887, the Company employs approximately
5,500 people.
The following discussion of the Company's businesses as of December
31, 1993, should be read in conjunction with the information contained in
the "1993 Financial Review" section of Ethyl's Annual Report as of December
31, 1993, referred to in Item 7 below.
Chemicals
The Company conducts its worldwide chemicals operations through the
Petroleum Additives Division, which includes fuel additives and lubricant
additives, and the Chemicals Businesses, which consist of three divisions
- -- Olefins and Derivatives, Bromine Chemicals and Specialty Chemicals,
which includes Electronic Materials.
The Chemicals Businesses manufacture a broad range of chemicals,
most of which are additives to or intermediates for detergents, plastics
and elastomers, agricultural pesticides and herbicides, pharmaceuticals and
electronic semiconductors. Most sales of the Chemicals Businesses products
are made directly to manufacturers of such products, including chemical and
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polymer companies, pharmaceutical companies, and detergent manufacturers in
the United States and throughout the world.
The Petroleum Additives Division manufactures a broad range of
additives for motor fuels and lubricating oils. Most sales of fuel
additives for gasoline, diesel fuels and heating oils are sold directly to
petroleum refiners and marketers, terminals and blenders, while lubricant
additive packages are sold directly to companies producing finished oils
and fluids in the United States and throughout the world.
The Company produces a majority of its products in the United
States and also has major production facilities in Belgium, Canada and
France. The processes and technology for most of these products were
developed in the Company's research and development laboratories.
The Company's divisions operate in a highly competitive
environment. Some market areas involve a significant number of
competitors, while others involve only a few. The competitors are both
larger and smaller than the Company in terms of resources and market
shares. Competition in connection with all of the Company's products
requires continuing investments in research and development of new products
or leading technologies, in continuing product and process improvements and
in providing specialized customer services.
Principal Olefins and Derivatives products include linear alpha
olefins and synthetic primary alcohols used as intermediates in the
manufacture of detergents, plasticizers, polymers, synthetic
lubricants and lubricant additives; poly alpha olefins used in the
formulation of synthetic lubricants and personal-care products; and zeolite
A, which is used as a builder in detergent formulations. Also produced are
tertiary amines for disinfectants and sanitizers and alkenyl succinic
anhydride for paper sizing.
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Bromine Chemicals products include brominated flame retardants for
use in polymers, clear brine fluids for use in oil and gas well drilling
and completion, and bromine-containing chemicals used in water
purification, in soil fumigation and as chemical intermediates; and organic
and inorganic brominated compounds used as pharmaceutical, photographic and
agrichemical intermediates; and also high-purity caustic potash and
potassium carbonate used in the glass, chemical and food industries.
Specialty Chemicals include the active ingredient in ibuprofen pain
relievers; aluminum alkyl polymerization co-catalysts,
high-molecular-weight phenolic antioxidants for polymers, ortho-alkylated
phenols, diamines and anilines used as polymer additive intermediates;
polymer modifiers; herbicide intermediates; organophosphorus intermediates
used in insecticides; and Electronic Materials. Electronic materials
primarily include polycrystalline silicon, which is produced in the
Company's polysilicon production facility by a unique process developed by
the Company. The same polysilicon plant also produces silane gas. These
products are used in the semiconductor industry.
Products of the Petroleum Additives Division include additives for
gasoline and diesel fuels, additives for passenger-car and diesel crankcase
lubricants, gear lubricants, transmission fluids and hydraulic fluids, as
well as railroad-engine oil additives.
Gasoline fuel additive products include lead and manganese
antiknock compounds to increase octane and prevent power loss due to early
or late combustion (engine knock); hindered phenolic antioxidants to
prevent thermal degradation during storage and transport; corrosion
inhibitors to prevent fuel storage and pumping system failures; detergent
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packages to keep carbon deposits from forming on fuel injectors,
intake valves or carburetors and in combustion chambers; and dyes to
provide color differentiation.
Lead antiknock compounds, which are sold worldwide by the Petroleum
Additives Division to petroleum refiners, remain one of the Company's
largest product lines. The Company estimates that it accounts for
approximately one-third of the total worldwide sales of lead antiknock
compounds.
For a number of years, lead antiknock compounds have been subject
to regulations restricting the amount of the product that can be used in
gasoline in the United States. Similar restrictions have been in effect in
Canada since 1990. The North American market for these products in motor
vehicles has effectively been eliminated, but the market for their use in
piston aircraft and certain other applications has remained at about the
same level for years and is expected to remain stable. As the Company has
forecasted and planned, the market for these products in other major
markets, particularly Western Europe, continues to decline as the use of
unleaded gasoline grows.
The contribution of lead antiknock compounds to the Company's net
sales has declined to about 13% in 1993 from about 16% in 1992 and about
19% in 1991. The lead antiknock profit contribution to the Company's
operating profit, excluding allocation of corporate expenses, is
estimated to have been 49% in 1993, 50% in 1992 and 44% in 1991. Excluding
the costs related to the planned cessation of lead antiknock compound
production at the Company's Canadian plant, the 1993 lead antiknock profit
contribution would have been about 52%. In recent years, the Company has
been able to offset a continuing decline in shipments of lead antiknock
compounds with higher margins due primarily to significant increases in selling
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prices. Any further decline in the use of lead antiknocks would adversely
affect such sales and profit contributions unless the Company can offset such
declines with increased market share and/or higher selling prices.
The Company currently produces some of its lead antiknock compounds
in its subsidiary's Canadian plant and obtains additional quantities under
a supply agreement with E.I. DuPont de Nemours & Company. On January 11,
1994, the Company announced an agreement with The Associated Octel Company
Limited ("Octel") of London under which Octel has agreed to allocate a
portion of its production capacity of lead antiknock compounds to the
Company for sale and distribution through the Company's worldwide network.
Ethyl also announced that its Canadian subsidiary would cease production of
lead antiknock compounds by March 31, 1994. The agreement continues so
long as the Company determines that a market continues to exist for lead
antiknock compounds. Under the agreement with Octel, the Company has the
right to purchase from Octel antiknock compounds which the Company
estimates will be sufficient to cover its needs in any contract year.
Purchases are at a fixed initial price per pound with periodic escalations
and adjustments.
In addition to the supply agreement, Octel and the Company have
agreed that the Company will assume the distribution for Octel of any of
its lead antiknock compounds that are shipped in bulk.
The Company believes the agreements with Octel will assure it of an
ongoing efficient source of supply for lead antiknock compounds as the
worldwide demand for these products continues to decline. It does not
anticipate that the cessation of its Canadian antiknock operations and the
entry into the Octel supply agreement will adversely affect its relations
with its customers, nor will these changes have a material effect on its future
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results of operations. The Company and Octel will continue to compete
vigorously in sales and marketing of lead antiknock compounds.
The Company also sells manganese-based antiknock compounds, HiTEC(R)
3000 (MMT), which are used in unleaded gasoline in Canada. The Company
conducted extensive testing of this product prior to filing a request in
1990 for a fuel-additive waiver from the United States Environmental
Protection Agency (the "EPA") required to begin marketing the additive for
use in unleaded gasoline in the United States. The Company voluntarily
withdrew its waiver application in November 1990 after public hearings and
detailed exchanges of information with the EPA, when the EPA raised several
health and environmental questions near the end of the 180-day statutory
review period. The Company continued testing and filed a new waiver
request in July 1991, followed by additional public hearings and detailed
exchanges of information with the EPA.
In January 1992, the EPA denied the Company's application for a
waiver. An appeal was filed with the United States Court of Appeals for
the District of Columbia Circuit contesting the EPA's denial of the
application for a waiver for the use of the additive in unleaded gasoline.
In April 1993, the Court remanded the case to the EPA for reconsideration
within 180 days of its denial of the Company's waiver application,
directing the EPA to consider new evidence and make a new decision.
On November 30, 1993, the EPA determined that emissions data
contained in the Company's application satisfy all Clean Air Act standards,
but reported that it was not able to complete its assessment of the overall
public health implications of manganese. The Company and the EPA mutually
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agreed to an 180-day extension, until May 29, 1994, to resolve this last
remaining issue.
The Petroleum Additives Division also produces diesel fuel additive
products, including cetane improvers for consistent combustion and power
delivery; amine stabilizers and hindered phenolic antioxidants to prevent
degradation during storage and transport; cold flow improvers to enhance
fuel pumping under cold-weather conditions; detergent packages to keep
carbon deposits from forming on fuel injectors and in combustion chambers;
dyes for fuel identification and leak detection; lubricity agents; and a
conductivity modifier to neutralize static charge build-up in fuel and
products for home heating oils.
The division's lubricant additive products include (i) engine oil
additive packages for passenger car motor oils for gasoline engines, heavy-
duty diesel oils for diesel powered vehicles, diesel oils for locomotive,
marine and stationary power engines and oils for two-cycle engines, (ii)
specialty additive packages for automatic transmission fluids, automotive
and industrial gear oils, hydraulic fluids and industrial oils, and (iii)
components for engine oil and specialty additive packages such as
antioxidants to resist high-temperature degradation, antiwear agents to
protect metal surfaces from abrasion, detergents to prevent carbon and
varnish deposits from forming on engine parts, dispersants to keep engine
parts clean by suspending insoluble products of fuel combustion and oil
oxidation, friction reducers to facilitate movement, pour point depressants
to enable oils to flow at cold temperatures, corrosion inhibitors to
protect metal parts, and viscosity-index improvers to control oils' rate of
flow at low and high temperatures.
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Major raw materials used by the Company's operating chemical divisions include
ethylene, polybutene, process oil, aluminum and sodium and lead metals, 2-ethyl-
1-hexanol, isobutylene, and phenol and bisphenol-A, as well as electricity and
natural gas as fuels, which are purchased or provided under contracts at prices
the Company believes are competitive. The Company also produces bromine from
extensive brine reserves in Arkansas.
With separate, sharpened focus on two distinctly different
businesses the Chemicals Businesses and Petroleum Additives--Ethyl took
steps in 1993 to reorganize the Baton Rouge-based Chemicals Businesses
while continuing to consolidate the Petroleum Additives Division's
administrative, sales and research activities in Richmond, Virginia.
The February 8, 1993, acquisition of Potasse et Produits Chimiques
added organic and inorganic brominated compounds and high-purity caustic
potash and potassium carbonate product lines to the Company's existing
businesses.
Recent developments include economic recovery for Ethyl's poly
alpha olefins businesses which began in late 1993, supported by the recent
introduction by several major U.S. oil companies of full or partially
synthetic passenger car motor oils requiring the use of poly alpha olefins.
In 1993, new zeolite A capacity was added at the Houston Plant to support
the product's continued market penetration as an environmentally accepted
replacement for phosphate builders in laundry detergents. A line of
polydecene emollients developed for nonoily personal-care end uses was
commercialized and R&D developed new applications in detergents,
stabilizers and cleansers for Ethyl's patented ADMOX(R) brand of low-water
amine oxide.
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Commercialization of SAYTEX(R) 8010 flame retardant was accomplished in early
1993 followed by the successful start-up later in the year of a new production
facility in Magnolia, Arkansas. The first commercial plant for SAYTEX(R) BT-93W
flame retardant is scheduled for start-up in early 1994 in Magnolia. Also, in
response to worldwide market demand for SAYTEX RB-100(R) flame retardant, used
primarily in printed circuit boards, a multimillion-dollar investment program to
increase capacity and improve quality has been completed at Magnolia.
The Company is actively targeting the development of S(+)-ibuprofen
(an enhanced version of ibuprofen). Construction of a new facility was
completed in the fourth quarter of 1993 and is in the start-up phase. A
plant expansion to increase production capability of ibuprofen also is in
progress. All of these facilities are located at the Orangeburg, South
Carolina plant.
The late December 1992 acquisition of the marketing and sales
activities of a lubricant additives business in Japan following the June
1992 acquisition of the petroleum additives products and technologies of
Amoco Petroleum Additives Company and their subsequent integration into the
Company's product lines also were part of a major ongoing effort to expand
and improve the product lines and geographic coverage of the Petroleum
Additives Division.
As part of the consolidation of the Petroleum Additives Division,
construction continues on a major Petroleum Additives research complex in
Richmond, scheduled for completion in mid-1994. The market for lubricant
additives has been experiencing significant changes as a result of market
and regulatory demands. The demands for better fuel economy, reduced
emissions and cleaner oils have led to new equipment design and more
stringent performance requirements. Such requirements mean reformulation of
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many products, new product development and more product qualification tests.
To maintain and enhance a responsive worldwide product supply
network for its petroleum additives, Ethyl is partially replacing the
manufacturing capacity of products produced under contract for Ethyl by
Amoco Petroleum Additives Company through June of 1995, and expanding
capacity for other products. Ethyl has had a supply arrangement with Amoco
since mid-1992, when it acquired Amoco's petroleum additives business. The
new, more efficient facilities are scheduled for start-up, primarily in
1995, at Houston, Texas; Sauget, Illinois; Feluy, Belgium; and Natchez,
Mississippi.
Pharmaceuticals
Whitby offers a complete line of hydrocodone-based analgesic
products, including LORTAB(R) products; VICON(R) products, which include
prescription and over-the-counter vitamin and mineral products; and THEO-
24(R) products, which consist of a series of varying dosage
bronchodilators. Other products include WINSOR(R) brand prescription
dosage ibuprofen and over-the-counter products.
Third-party manufacturers inspected by the United States Food and
Drug Administration formulate and produce Whitby's products according to
Whitby's specifications.
Whitby sells its products to wholesalers, large pharmacy chains and
institutional purchasers such as hospital chains and health maintenance
organizations.
In 1993, Whitby launched three new products: Duratuss(TM)
prescription tablets for coughs and colds, Duratuss HD Elixir(TM) for the
same indications, and a 400 mg product extension to its Theo-24 series of
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respiratory products. In December 1993, Ethyl decided to discontinue
pharmaceutical research projects previously conducted by Whitby Research,
Inc., a subsidiary of Whitby. This will allow Whitby to focus on the
acquisition of new products through purchase, license or strategic
alliance. Whitby will also conduct, through a network of outside contract
organizations, drug-development work on projects driven by the marketing
group.
Research and Patents
The Company spent approximately $76 million, $74 million and $69
million in 1993, 1992 and 1991, respectively, on research and development,
which amounts qualified under the technical accounting definition of
research and development. Total R&D and technical services support
spending for 1993 was some $126 million, including $50 million related to
technical services support to customers, testing of existing products, cost
reduction, quality improvement and environmental studies. Substantially
all of such activities were sponsored by the Company. Most research and
development was related to the Company's chemical operations, but a portion
was related to design and development of new drug molecules by Whitby
Research prior to the decision to discontinue pharmaceutical research in
December 1993.
The Company owns more than 2200 active United States and foreign
patents, including 113 U.S. patents and 178 foreign patents issued in 1993.
Some of these patents are licensed to others. In addition, rights under
the patents and inventions of others have been acquired by the Company
through licenses. The Company's patent position is actively being managed
and is deemed by it to be adequate for the conduct of its business.
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Environmental Requirements
The Company is subject to Federal, state and local requirements
regulating the handling, manufacture or use of materials (some of which are
classified as hazardous or toxic by one or more regulatory agencies), the
discharge of materials into the environment and the protection of the
environment. It is the Company's policy to comply with these requirements
and to provide workplaces for employees that are safe, healthy and
environmentally sound and that will not adversely affect the safety, health
or environment of communities in which the Company does business. The
Company believes that as a general matter its policies, practices and
procedures are properly designed to prevent any unreasonable risk of
environmental damage, and of resulting financial liability, in connection
with its business.
The Clean Air Act Amendments of 1990 ("the Amendments") became
Federal law on November 15, 1990. Because the EPA and the states are still
in the process of completing and implementing definitive regulations,
interpreting the Amendments and establishing detailed requirements, the
Company is unable at this time to make any detailed assessment of the
effect of the Amendments on its earnings or operations.
Among other environmental requirements, the Company is subject to
the Federal Comprehensive Environmental Response, Compensation and
Liability Act ("Superfund"), and similar state laws, under which the
Company has been designated as a potentially responsible party ("PRP")
which may be liable for a share of the costs associated with cleaning up
various hazardous waste sites, some of which are on the EPA's Superfund
national priority list. Although, under some court interpretations of
these laws, a PRP might have to bear more than its proportional share of the
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cleanup costs if appropriate contributions from other PRPs are not able
to be obtained, the Company has been able to demonstrate it is only a de
minimis participant at all but a few of the sites. Also, the Company has
settled or resolved actions related to certain sites and generally has not
had to bear significantly more than its proportional share in multiparty
situations. Further, almost all of the sites represent environmental
issues that are quite mature and that have been investigated, studied and
in many cases settled. In de minimis PRP matters, the Company's policy
generally is to negotiate a consent decree and to pay any apportioned
settlement, enabling the Company to be effectively relieved of any further
liability as a PRP, except for remote contingencies. In other than de
minimis PRP matters, the Company's records indicate that unresolved
exposures are expected to be immaterial. Because the Company's management
has been actively involved in evaluating environmental matters, the Company
is able to conclude that the outstanding environmental liabilities for
unresolved PRP sites for which the Company would not be a de minimis
participant should not be material.
Compliance with government pollution-abatement and safety
regulations usually increases operating costs and requires remediation
costs and investment of capital that in some cases produces no monetary
return. Operating and remediation costs charged to expense were $61
million in 1993 versus $51 million in 1992 and $38 million in 1991
(excluding depreciation of previous capital expenditures) and are expected
to be somewhat higher in the next few years than in the past. Capital
expenditures for pollution-abatement and safety projects, including such
costs that are included in other projects, were about $30 million, $29
million and $25 million in 1993, 1992 and 1991, respectively. For each of
the next few years, capital expenditures for these types of projects are likely
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to increase somewhat from current levels. Management's estimates of the effects
of compliance with governmental pollution-abatement and safety regulations are
subject to (i) the possibility of changes in the applicable statutes and
regulations or in judicial or administrative construction of such statutes and
regulations, and (ii) uncertainty as to whether anticipated solutions to
pollution problems will be successful, or whether additional expenditures may
prove necessary.
FINANCIAL INFORMATION AS TO INDUSTRY SEGMENTS AND GEOGRAPHIC AREAS
The Company's remaining operations are substantially all in the
Chemicals Industry. Geographic area information for the Company's
operations for the three years ended December 31, 1993, is presented in the
Annual Report on pages 26 and 27 (and the related notes on page 28) and is
incorporated herein by reference.
FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT
SALES
Financial information about the Company's foreign and domestic
operations and export sales for the three years ended December 31, 1993, is
set forth in the Annual Report on pages 26 and 27 and in Notes 1, 3, 12, 14
and 15 of the Notes to the Financial Statements on pages 35, 36, 38, 39,
40, 41 and 42 and is incorporated herein by reference. See also
information as to the Company's foreign lead antiknock compounds business
under "DESCRIPTION OF BUSINESS - Chemicals" above.
Domestic export sales to non-affiliates may be made worldwide but
are made primarily in the Far East, Latin America and Europe. Foreign
unaffiliated sales are made primarily in Europe, Canada, the Far East and
the Middle East.
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Item 2. PROPERTIES
The following is a brief description of the principal plants and
related facilities of the Company, all of which are owned except as stated
below.
LOCATION PRINCIPAL OPERATIONS
Baton Rouge, Louisiana Research and product-development
(2 facilities) activities
Bracknell, Berkshire, Research and testing activities
England
Deer Park, Texas (leased land) Production of poly alpha olefins
Elk Grove Village, Illinois Research and product-development
(leased) activities
Feluy, Belgium Production of aluminum alkyls,
orthoalkylated anilines and phenols,
lubricant additives, poly alpha olefins
and linear alpha olefins
Houston, Texas Production of aluminum alkyls, synthetic
primary alcohols, linear alpha olefins,
lubricant additive dispersants and
blends, alkenyl succinic anhydride,
orthoalkylated anilines and phenols,
polycrystalline silicon, high-purity
silane, zeolite A and other chemicals;
research activities
Louvain-la-Neuve, Belgium Research and customer technical service
activities
Magnolia, Arkansas Production of flame retardants, bromine,
(2 facilities) ethylene dibromide, vinyl bromide,
several inorganic bromides, agricultural
chemical intermediates, tertiary amines,
and polyimide foam; research activities
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Natchez, Mississippi Production of lubricant additives
including mainly detergents
Orangeburg, South Carolina Production of specialty chemicals,
including pharmaceutical intermediates;
and fuel additives, including
antioxidants, diesel fuel cetane
improver and manganese antiknocks; and
orthoalkylated phenols, polymer
modifiers and performance polymers;
research activities
St. Louis, Missouri Research and product-development
activities
Sarnia, Ontario, Canada Production of lead antiknock compounds1,
lubricant additives, cold flow improvers
and diesel fuel cetane improver
Sauget, Illinois Production of lubricant additives,
including detergents, dispersants,
antioxidants, antiwear agents, crankcase
packages, transmission and gear packages
and friction reducers
Thann, France Production of organic and inorganic
brominated pharmaceutical, photographic
and agrochemical intermediates, high-
purity caustic potash and potassium
carbonate; product development
activities
1 The Company will cease production of lead antiknock compounds by March 31,
1994.
The Company believes that its plants, including approved expansions,
are more than adequate at projected sales levels. The Company currently
has excess capacity in linear and poly alpha olefins and polysilicon.
Operating rates of certain other plants vary with product mix and normal
seasonal sales swings. The Company believes that its plants generally are
well maintained and in good operating condition.
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The Company owns its corporate headquarters offices in Richmond, Virginia, and
its regional offices in Bracknell, Berkshire, England. The Company leases its
executive offices in New York, New York, and Baton Rouge, Louisiana, and its
regional offices in Brussels, Belgium; Mississauga, Ontario, Canada; Singapore;
and Tokyo, Japan, as well as various sales and other offices. Whitby leases
office space in Richmond, Virginia.
The Company's research laboratory at Louvain-la-Neuve, Belgium, was
completed in mid-1993.
The Company also began construction in late 1992 of a $70-million
lubricant and fuel additives research and product-development facility in
Richmond, Virginia, scheduled for start-up in the summer of 1994. At that
time, research and product-development activities at St. Louis, Missouri,
will be phased out. All expenses in connection with the discontinuance of
the St. Louis operations have been fully provided for.
The Company is partially replacing the manufacturing capacity of
Amoco's Wood River, Illinois, lubricant and fuel additives plant from which
the Company currently is receiving product under a supply agreement. The
new, more efficient facilities are scheduled for start-up in 1995 at
Houston, Texas; Sauget, Illinois; Feluy, Belgium; and Natchez, Mississippi.
The Company is obtaining lubricant additives, including crankcase
packages and certain components, under a long-term supply agreement with a
subsidiary of Mitsubishi Kasei Corporation from its petroleum additives
plant in Yokkaichi, Japan. The Company also has a long-term services
agreement for research and product development and customer technical
services activities at the research facility associated with the petroleum
additives plant in Yokkaichi, Japan.
-19-
Item 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are involved from time to time in
legal proceedings of types regarded as common in the Company's businesses,
particularly administrative or judicial proceedings seeking remediation
under environmental laws, such as Superfund, and products liability
litigation.
A 1992 products liability suit is pending in a Minnesota state court
against the Company, another chemical company, and the owner and leasing
agent of a residence in Minneapolis at which two children are claimed to
have been injured by ingesting soil and dust containing lead from peeling
paint and automotive emissions. In recent years, many suits have been
brought against paint manufacturers and landlords alleging personal injury
caused by ingesting lead from paint found in paint chips, dirt and dust.
Like these suits, the Minnesota suit just mentioned involves alleged injury
from paint lead in chips, dirt and dust, but also involves alleged injury
from gasoline lead in dirt and dust, as well. The Company believes the
Minnesota suit is without merit with respect to the Company, but since the
suit partially rests on a theory of harm to children from eating dirt
containing automotive lead emissions, the Company is vigorously defending
it.
While it is not possible to predict or determine the outcome of the
proceedings presently pending, in the Company's opinion they will not
ultimately result in any liability that would have a material adverse
effect upon the results of operations or financial condition of the Company
and its subsidiaries on a consolidated basis.
-20-
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company will be requesting that shareholders approve increasing the
number of shares issuable pursuant to the stock option plan by 5.9 million
shares.
-21-
ADDITIONAL INFORMATION - EXECUTIVE OFFICERS OF THE COMPANY
The names and ages of all executive officers of the Company, as of
March 25, 1994, are set forth on the following pages. The term of office
of each such officer is until the meeting of the Board of Directors
following the next annual shareholders meeting (April 28, 1994). All of
such officers have been employed by the Company for at least the last five
years, with the exception of Thomas E. Gottwald, who rejoined the Company
August 1, 1991, following two years as General Manager of Tredegar Film
Products, a division of Tredegar Industries, Inc., which was spun off to
Ethyl shareholders in mid-1989, following assignments with Ethyl in
Corporate Business Development and Strategic Planning.
-22-
Name Age Office
*Bruce C. Gottwald 60 Chairman of the Board and of the
Executive Committee, Chief
Executive Officer, Director
*Floyd D. Gottwald, Jr. 71 Vice Chairman of the Board,
Director
*Charles B. Walker 55 Vice Chairman of the Board,
Chief Financial Officer and
Treasurer, Director
*Thomas E. Gottwald 33 President and Chief Operating
Officer, Director
*William M. Gottwald, MD 46 Senior Vice President and
President of Whitby, Director
E. Whitehead Elmore 55 Special Counsel to the Company's
Executive Committee and
Corporate Secretary
Sampson H. Bass, Jr. 64 Vice President - Secretary to
the Executive Committee
David A. Fiorenza 44 Vice President - Finance and
Controller
C. S. Warren Huang 44 Vice President - Research and
Development
Donald R. Lynam 55 Vice President - Air
Conservation
Steven M. Mayer 51 Vice President and General
Counsel
Ian A. Nimmo 52 Vice President - Lubricant
Additives
Henry C. Page, Jr. 55 Vice President - Human Resources
Newton A. Perry 51 Vice President - Fuel Additives
A. Prescott Rowe 56 Vice President - External
Affairs
*Member of the Executive
Committee
Floyd D. Gottwald, Jr., and Bruce C. Gottwald are brothers. William M.
Gottwald, MD, is a son of Floyd D. Gottwald, Jr. Thomas E. Gottwald is a
son of Bruce C. Gottwald.
-23-
Certain Agreements Between Albemarle and Ethyl
The Chemicals Businesses have in the past engaged in numerous
transactions with the Ethyl Businesses. Such transactions have included,
among other things, the provision of various types of financial support by
the Company. Although the Company will continue to provide certain support
services to Albemarle and Albemarle will provide certain support services
to the Company for a limited period of time, most of such services are
expected ultimately to be discontinued. In addition to these services, for
a more extended period of time, Albemarle will provide services to the
Company at Orangeburg, South Carolina, and Feluy, Belgium, and Albemarle
and the Company will exchange services at Houston, Texas.
Orangeburg, South Carolina Agreements
The Orangeburg, South Carolina plant consists of facilities for the
production of petroleum additives and specialty chemicals. After the
Distribution, Albemarle will operate for the Company the facilities that
produce petroleum additives (the "Orangeburg Additives Facility") for a
period of ten years, with an option by the Company to extend for an
additional ten years. The operating agreement relating to the Orangeburg
Additives Facility (the "Orangeburg Operating Agreement") provides that
Albemarle will produce certain petroleum additive products meeting the
Company's specifications and provide certain services and utilities
customarily used by or reasonably necessary to maintain the Orangeburg
Additives Facility in accordance with design capacity. At its option and
upon 180 days' notice, the Company may assume responsibility for the
operation of the Orangeburg Additives Facility, in which event Albemarle
would continue to provide certain services and utilities for that facility.
-24-
The Company will reimburse Albemarle for certain costs specified in the
Orangeburg Operating Agreement and will pay to Albemarle a monthly operating
fee based on a percentage of such reimbursable costs. Albemarle will produce
under a supply contract MMT for the Company in facilities owned by Albemarle.
Albemarle also will be licensed by the Company, subject to certain restrictions,
to produce and sell MMT for its own account to the extent of any excess not set
aside for the Company under the supply contract.
Albemarle will own the land on which the Orangeburg Additives Facility
is located. In conjunction with Albemarle's operation of the Orangeburg
Additives Facility for the Company, Albemarle will lease the land to the
Company for a period of ten years, with an option by the Company to extend
for an additional ten years. Albemarle and the Company will have a
separate blending services agreement (the "Orangeburg Blending Agreement"),
pursuant to which Albemarle will provide storage, blending and packaging
services to the Company in connection with the operation of the Orangeburg
Additives Facility. The term of the Orangeburg Blending Agreement will be
for ten years, and the Company will have the option to extend for an
additional ten years. Pursuant to the Orangeburg Blending Agreement, the
Company will reimburse Albemarle for specified costs associated with the
blending operations and will pay to Albemarle a monthly operating fee based
on a percentage of such reimbursable costs. Pursuant to an antioxidant
supply agreement, Albemarle will produce antioxidants for the Company at
the Orangeburg plant. The Company will reimburse Albemarle for specified
production costs and pay a monthly fee. The antioxidant supply agreement
will be for ten years, and the Company will have the option to extend for
an additional ten years.
-25-
Houston, Texas Agreement
The Houston, Texas plant consists of facilities for the production of
petroleum additives, olefins and derivatives and specialty chemicals.
After the Distribution, the Company will own the petroleum additives
facility at the Houston plant (the "Houston Additives Facilities"), and
Albemarle will own the facilities that produce olefins and derivatives and
specialty chemicals.
Albemarle and the Company will have a reciprocal agreement (the
"Houston Services Agreement"), with respect to the operation of the
Company's Houston Additives Facilities and Albemarle's chemical operations
adjoining the Houston Additives Facilities. Pursuant to the Houston
Services Agreement, the Company will provide to Albemarle certain services
and utilities related to Albemarle's chemicals operations in Houston, while
Albemarle will provide to the Company certain services and utilities
related to the Company's petroleum additives operations in Houston. The
term of the Houston Services Agreement is ten years, but any party
receiving services and utilities may terminate one or more of such services
or utilities upon giving 60 days' notice to the other party or may
terminate all of such services and utilities upon giving 180 days' notice
to the other party. Each party also has the right to extend for an
additional ten years the Houston Services Agreement with respect to the
services and utilities that it is receiving. Each party providing services
will receive from the other party reimbursement of specified costs and a
monthly service fee based on a percentage of such reimbursable costs.
Feluy, Belgium Agreement
The Feluy, Belgium plant consists of facilities for the production of
petroleum additives, olefins and derivatives and specialty chemicals.
After the Distribution, the Company will own and operate the petroleum
additives facility at the Feluy, Belgium plant (the "Feluy Additives
Facility"), and Albemarle will own the facilities that produce olefins and
derivatives and specialty chemicals at the Feluy plant.
Albemarle and the Company will have an agreement (the "Feluy Services
Agreement"), with respect to the operation of the Company's Feluy Additives
Facility. Pursuant to the Feluy Services Agreement, Albemarle will provide
to the Company certain services and utilities related to the Company's
petroleum additives operation in Feluy. The term of the Feluy Services
Agreement is ten years, but the Company may terminate one or more of such
services or utilities upon giving 60 days' notice to Albemarle or may
terminate all of such services and utilities upon giving 180 days' notice
to Albemarle. The Company also has the right to extend the Feluy Services
Agreement for an additional ten years. Albemarle will receive from the
Company reimbursement of specified costs and a monthly service fee based on
a percentage of such reimbursable costs.
-26-
Indemnification and Tax-Sharing Agreements
Pursuant to an indemnification agreement between the Company and
Albemarle, the Company will indemnify Albemarle for losses to Albemarle
after the Distribution Date resulting from the conduct of the Ethyl
Businesses, including environmental liabilities, before and after the
Distribution Date, and Albemarle will indemnify the Company for losses to
the Company after the Distribution Date resulting from the conduct of the
-27-
Chemicals Businesses, including environmental liabilities, before and
after the Distribution Date. Tax liabilities, and related indemnification,
are covered under a tax sharing agreement. Under that agreement the
Company will be responsible for the taxes of the Ethyl Businesses and the
Chemicals Businesses for periods prior to the Distribution, except with
respect to taxes attributable to subsidiaries of the Company that will
become subsidiaries of Albemarle in connection with the Distribution.
Albemarle will be responsible for the taxes of the Chemicals Businesses for
post-Distribution periods.
-28-
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The information contained on page 29 of the Annual Report under the
captions "Dividend Information & Equity Per Common Share" and "Market
Prices of Common Stock & Shareholder Data" and on pages 36 to 38 of the
Annual Report in Notes 1, 10 and 11 of the Notes to Financial Statements is
incorporated herein by reference.
Item 6. SELECTED FINANCIAL DATA
The information for the five years ended December 31, 1993, contained
in the Five-Year Summary on pages 14 and 15 of the Annual Report is
incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The textual and tabular information concerning the years 1993, 1992 and
1991 contained in the "1993 Financial Review" section on pages 16 through
27 of the Annual Report (and the related notes on page 28) are incorporated
herein by reference.
Additional information on restructuring costs from that included in the
Annual Report is as follows:
The major components of the $36.1 million in special charges in 1993 ($22.4
million after income taxes) included $14.2 million related to ceasing production
at the Canadian lead antiknock facility of which $11.4 million was a noncash
write-down of the remaining book value of the assets (which will reduce annual
depreciation and amortization by about $1.5 million per year), $8.3 million for
relocation of employees and other restructuring costs, $6.0 million covering
manpower reductions of 55 employees and other costs in connection with
discontinuing pharmaceutical research projects at Whitby Research, Inc., as well
as $7.6 million for work force reductions of about 165 chemicals and corporate
employees in the U.S. and Europe.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements contained on pages 30 through
34, the Notes to Financial Statements contained on pages 35 through 45, the
Report of Independent Accountants on page 46 and the information under the
caption "Selected Quarterly Financial Data (Unaudited)" on page 28 of the Annual
Report are incorporated herein by reference.
-29-
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Inapplicable.
-30-
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information contained in the Proxy Statement under the caption
"Election of Directors" concerning directors and persons nominated to
become directors of the Company is incorporated herein by reference. See
"Additional Information -- Executive Officers of the Company" at the end of
Part I above for information about the executive officers of the Company.
Item 11. EXECUTIVE COMPENSATION
The information contained in the Proxy Statement under the caption
"Compensation of Executive Officers and Directors" concerning executive
compensation is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information contained in the Proxy Statement under the caption
"Stock Ownership" is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information contained in the Proxy Statement under the caption
"Election of Directors," specifically in the last several paragraphs of
such section, is incorporated herein by reference.
-31-
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) The following consolidated financial statements of the
registrant included on pages 30 to 46 in the Annual Report are incorporated
herein by reference in Item 8:
Consolidated balance sheets as of December 31, 1993 and December 31,
1992
Consolidated statements of income, shareholders' equity and cash flows
for the years ended December 31, 1993, 1992, and 1991
Notes to financial statements
Report of Independent Accountants
(a) (2) See Index to Financial Statement Schedules of
registrant and its consolidated subsidiaries at F-1.
(a) (3) Exhibits
The following documents are filed as exhibits to this Form
10-K pursuant to Item 601 of Regulation S-K:
3.1 Restated Articles of Incorporation of the registrant (filed
as Exhibit 3.1 to the registrant's Report on Form 10-K for
the year ended December 31, 1992, and incorporated herein by
reference thereto).
3.2 By-laws of the registrant.
4.1 $500 million Credit Agreement, dated as of February 16,
1994.
4.2 Indenture, dated as of June 15, 1985 (filed as Exhibit 4 to
the registrant's Registration Statement on Form S-3 filed on
June 27, 1985, and incorporated herein by reference
thereto), as supplemented by the First Supplemental
Indenture dated as of June 15, 1986 (filed as Exhibit 4.2 to
the registrant's Registration Statement on Form S-3 filed on
June 12, 1986, and incorporated herein by reference
-32-
thereto), and the Prospectus Supplement, dated as of
September 16, 1988, setting the terms for the public sale of
$200,000,000 aggregate principal amount of its 9.8% Notes
due September 15, 1998 (filed on September 16, 1988, and
incorporated herein by reference thereto).
10.1 Bonus Plan of the registrant (filed as Exhibit 10.1 to the
registrant's Report on Form 10-K for the year ended December
31, 1992, and incorporated herein by reference thereto).
10.2 Incentive Stock Option Plan of the registrant (filed as
Exhibit 10.2 to the registrant's Report on Form 10-K for the
year ended December 31, 1992, and incorporated herein by
reference thereto).
10.3 Non-Employee Directors' Stock Acquisition Plan (filed as Exhibit
A to the registrant's Proxy Statement for Annual Meeting of
Shareholders filed on March 17, 1993, and incorporated herein by
reference thereto).
10.4 Excess Benefit Plan of the registrant (filed as Exhibit 10.4 to
the registrant's Report on Form 10-K for the year ended December
31, 1992, and incorporated herein by reference thereto).
10.5 Supply Agreement, dated as of December 22, 1993, between Ethyl
Corporation and the Associated Octel Company Limited (filed as
Exhibit 99 on the Registrant's Report on Form 8-K filed on
February 17, 1994, and incorporated herein by reference thereto).
11 Computation of Earnings Per Share.
13 The registrant's Annual Report to Shareholders for the year
ended December 31, 1993 (note 1).
22 List of subsidiaries of the registrant.
23 Consent of Independent Certified Public Accountants.
__________________________
Note 1. With the exception of the information incorporated
in this Form 10-K by reference thereto, the Annual Report
shall not be deemed "filed" as part of this Form 10-K.
-33-
28 Trust Agreement Between Ethyl Corporation and NationsBank of
Virginia, N.A. (filed as Exhibit 28 to the registrant's
Report on Form 10-K for the year ended December 31, 1992,
and incorporated herein by reference thereto).
99 Form 8-K filed on February 25, 1994.
(b) Form 8-K as filed with the Commission on February 25, 1994.
(c) Exhibits - The response to this portion of Item 14 is
submitted as a separate section of this report.
(d) Financial Statement Schedules - The response to this
portion of Item 14 is submitted as a separate section of this
report.
-34-
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.
ETHYL CORPORATION
(Registrant)
By: /s/ Bruce C Gottwald
Bruce C. Gottwald, Chairman
of the Board
Dated: March 25, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated as of March 25, 1994.
Signature Title
/s/ Bruce C Gottwald Chairman of the Board,
(Bruce C. Gottwald) Chairman of the Executive
Committee, Chief Executive
Officer and Director
(Principal Executive Officer)
/s/ Charles B Walker Vice Chairman of the Board,
(Charles B. Walker) Treasurer, Chief Financial
Officer and Director
(Principal Financial Officer)
-35-
Signature Title
/s/ David A. Fiorenza Vice President - Finance and
(David A. Fiorenza) Controller (Principal
Accounting Officer)
/s/ L B Andrew Director
(Lloyd B. Andrew)
/s/ Joseph C. Carter Jr Director
(Joseph C. Carter, Jr.)
/s/ Ronald V. Dolan Director
(Ronald V. Dolan)
/s/ Floyd D Gottwald Jr Vice Chairman of the Board
(Floyd D. Gottwald, Jr.) and Director
/s/ Bruce C. Gottwald Jr. Director
(Bruce C. Gottwald, Jr.)
/s/ Thomas E Gottwald President and Director
(Thomas E. Gottwald)
/s/ William M Gottwald Senior Vice President
(William M. Gottwald) and Director
-36-
Signature Title
/s/ Gilbert M Grosvenor Director
(Gilbert M. Grosvenor)
/s/ Andre B. Lacy Director
(Andre B. Lacy)
/s/ Emmett J. Rice Director
(Emmett J. Rice)
-37-
INDEX TO FINANCIAL STATEMENT SCHEDULES OF REGISTRANT
AND SUBSIDIARIES
Pages
Report of Independent Accountants on Financial
Statement Schedules F-2
ETHYL CORPORATION AND SUBSIDIARIES
Schedules:
V - Property, Plant and Equipment for the years
ended December 31, 1993, 1992 and 1991 F-3
VI - Accumulated Depreciation, Depletion and
Amortization of Property, Plant & Equipment
for the years ended December 31, 1993, 1992
and 1991 F-4
X - Supplementary income statement information
for the years ended December 31, 1993, 1992
and 1991 F-5
Schedules other than those listed above are omitted as the information is
either not applicable, not required or has been furnished in the financial
statements or notes thereto.
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and
Shareholders of Ethyl Corporation
Our report on the consolidated financial statements of Ethyl Corporation and
Subsidiaries has been incorporated by reference in this Form 10-k from page 46
46 of the 1993 Annual Report to Shareholders of Ethyl Corporation. In
connection with our audits of such financial statements, we have also audited
the related financial statement schedules listed in the index on page F-1 of
this Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
/s/ Coopers & Lybrand
COOPERS & LYBRAND
Richmond, Virginia
January 31, 1994
F-2
ETHYL CORPORATION AND SUBSIDIARIES
SCHEDULE V - PROPERTY,PLANT AND EQUIPMENT
for the years ended December 31, 1993, 1992, and 1991
( In Thousands )
Beginning Other Changes Ending
Balance Additions (1) Retirements Add (Deduct) Balance
--------- -------------- ----------- ------------- -------
December 31, 1993
Land $54,131 $5,020 $15 $1,459 (2) $60,227
(368) (3)
Land Improvements 57,313 1,769 1,050 (2) 59,637
(1,137) (3)
642 (4)
Brinefields 17,184 2 727 (86) (4) 16,373
Buildings 114,995 5,034 188 18,905 (2) 137,980
(1,330) (3)
564 (4)
Machinery & 1,313,232 101,742 11,975 80,349 (2) 1,462,172
Equipment (20,381) (3)
(795) (4)
CWIP 82,361 91,462 15 797 (2) 172,241
(2,039) (3)
(325) (4)
---------- -------- ------- ------- ----------
Total $1,639,216 $205,029 $12,920 $77,305 $1,908,630
========== ======== ======= ======= ==========
December 31, 1992
Land $50,407 $4,121 $0 $623 (2) $54,131
(1,020) (3)
Land Improvements 44,589 11,987 40 1,345 (2) 57,313
(568) (3)
Brinefields 16,187 1,124 127 17,184
Buildings 107,384 8,725 217 1,338 (2) 114,995
(2,235) (3)
Machinery & 1,130,948 192,554 16,130 15,924 (2) 1,313,232
Equipment (10,064) (3)
CWIP 148,600 (61,099) 3 (5,137) (3) 82,361
---------- -------- ------- ------- ----------
Total $1,498,115 $157,412 $16,517 $206 $1,639,216
========== ======== ======= ======= ==========
December 31, 1991
Land $45,131 $750 $0 $26 (3) $50,407
4,500 (5)
Land Improvements 42,393 2,107 2 91 (3) 44,589
Brinefields 16,203 18 34 16,187
Buildings 96,476 11,359 427 (24) (3) 107,384
Machinery & 1,031,465 111,471 14,579 2,331 (3) 1,130,948
Equipment 260 (5)
CWIP 102,164 40,443 5,720 (3) 148,600
273 (5)
---------- -------- ------- ------- ----------
Total $1,333,832 $166,148 $15,042 $13,177 $1,498,115
========== ======== ======= ======= ==========
1) Consists of normal additions for cash
2) Purchase price allocation of businesses acquired
3) Foreign currency translation adjustment in accordance with FASB No.52
4) Reclass to Other Fixed Asset Category
5) Reclassified from Other Balance Sheet Accounts
Depreciation is computed over the estimated useful lives of the related assets
resulting in annual depreciation rates of:
Land Improvements.....Straight line - 3.3% to 20%
Machinery & equipment.....Straight line - 4% to 33.3%
Brinefields.....Straight line - 10% which will approximate unit of production
Buildings.....Straight line - 2.2% to 10%
F-3
ETHYL CORPORATION AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
for the years ended December 31, 1993, 1992, and 1991
( In Thousands )
Beginning Other Changes Ending
Balance Additions Retirements Add (Deduct) Balance
--------- --------- ----------- ------------- -------
December 31, 1993
Land Improvements $26,864 $3,114 $0 $115 (1) $29,767
(393) (2)
67 (3)
Brinefields 12,575 645 688 12,532
Buildings 43,785 5,551 147 239 (1) 48,741
(681) (2)
(6) (3)
Machinery & 726,218 103,682 10,876 7,308 (1) 819,320
Equipment (6,701) (2)
(61) (3)
(250) (4)
-------- -------- ------- ------ --------
Total $809,442 $112,992 $11,711 ($363) $910,360
======== ======== ======= ====== ========
December 31, 1992
Land Improvements $24,594 $2,574 $12 ($292) (2) $26,864
Brinefields 12,024 664 113 12,575
Buildings 40,269 4,331 116 (699) (2) 43,785
Machinery & 654,561 88,688 11,471 (5,429) (2) 726,218
Equipment (131) (4)
-------- -------- ------- ------ --------
Total $731,448 $96,257 $11,712 ($6,551) $809,442
======== ======== ======= ====== ========
December 31, 1991
Land Improvements $22,394 $2,136 $1 $65 (2) $24,594
Brinefields 11,420 609 5 12,024
Buildings 36,798 3,602 227 96 (2) 40,269
Machinery & 586,192 77,934 11,019 1,238 (2) 654,561
Equipment 216 (5)
-------- -------- ------- ------ --------
Total $656,804 $84,281 $11,252 $1,615 $731,448
======== ======== ======= ====== ========
1) Reserve for writedowns and disposals
2) Foreign currency translation adjustment in accordance with FASB No.52
3) Reclass to Other Fixed Asset Category
4) Reverse excess reserve for product discontinuance
5) Reclassified from Other Balance Sheet Accounts
F-4
ETHYL CORPORATION AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
for the years ended December 31, 1993, 1992, and 1991
( In Thousands )
Col. A Col. B
Item Charged to Costs and Expenses
1993 1992 1991
---- ---- ----
Maintenance and repairs: $96,851 $83,463 $80,991
======= ======= =======
Amortization of intangible assets, taxes, other than payroll and income taxes,
royalties and advertising costs are less than one percent of revenue as reported
in the related income statements for 1993, 1992 and 1991.
F-5
EXHIBIT INDEX
Number and Name of Exhibit Page Number
3.1 Restated Articles of Incorporated by reference -
Incorporation see Page 34
3.2 By-laws Pages 46 through 75
4.1 $500 million Credit Agreement, Pages 76 through 185
dated as of February 16, 1994
4.2 1988 $200,000,000 Debt Incorporated by reference -
Offering see Page 35
10.1 Bonus Plan Incorporated by reference -
see Page 35
10.2 Incentive Stock Option Incorporated by reference -
Plan see Page 35
10.3 Non-Employee Directors' Stock Incorporated by reference -
Acquisition Plan see Page 35
10.4 Excess Benefit Plan Incorporated by reference
see Page 35
10.5 Supply Agreement between Ethyl Incorporated by reference
Corporation and Associated see Page 35
Octel Company
11 Computation of Earnings Page 186
Per Share
13 Annual Report Pages 187 through 238
22 List of Subsidiaries Pages 239
23 Consent of Independent Page 240
Certified Public Accountants
28 Trust Agreement Incorporated by reference -
see Page 36
99 Form 8K filed on February 25, 1994 Pages 241 through 261