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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
Commission file number 1-5263
THE LUBRIZOL CORPORATION
29400 Lakeland Boulevard
Wickliffe, Ohio 44092-2298
(Name of registrant and address of principal executive offices)
OHIO 34-0367600
(State of incorporation) (I.R.S. Employer Identification No.)
Registrant's telephone number, including area code: (216) 943-4200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- ------------------------------- -----------------------
Common Shares without par value New York Stock Exchange
Common Share purchase rights New York Stock Exchange
Preferred Share purchase rights New York Stock Exchange
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. [X]
Aggregate market value (on basis of closing sale price) of voting
stock held by non-affiliates as of March 4, 1994: $2,433,762,869
Number of the registrant's Common Shares, without par value,
outstanding as of March 4, 1994: 66,554,659
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's 1993 Annual Report to its shareholders
(Incorporated into Part I and II of this Form 10-K)
Portions of the registrant's Proxy Statement dated March 16, 1994
(Incorporated into Part III of this Form 10-K)
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PART I
ITEM 1. BUSINESS
Lubrizol was organized under the laws of Ohio in 1928. The
company began business as a compounder of special-purpose lubricants, and in
the early 1930's was among the first to commence research in the field of
lubricant additives. Today, the company is a full service supplier of
performance chemicals to diverse markets worldwide. These specialty chemical
products are created through the application of advanced chemical, mechanical
and biological technologies to enhance the performance and quality of the
customer products in which they are used. The company develops, produces and
sells chemical additives for transportation and industrial lubricants and
functional fluids, fuel additives and diversified specialty chemical products.
Prior to December 1, 1992, the company also had a separately
reportable Agribusiness segment. That segment included traditional operations
which develop, produce and market planting seeds and specialty vegetable oils,
and also included strategic biotechnology research and development. As
described in Note 16 to the Financial Statements (included in the company's
1993 Annual Report to its shareholders and incorporated herein by reference) on
December 1, 1992, the company transferred substantially all of its Agribusiness
segment, other than the specialty vegetable oil operations, to Mycogen
Corporation and a joint venture partnership formed with Mycogen. The
transferred assets were related to the seed business activities of the
company's former Agrigenetics Division. The Agribusiness assets and operations
retained by the company are not reportable as a separate industry segment after
1992.
Financial information for the industry segments, prior to
December 1, 1992, is contained in Note 14 to the Financial Statements and in
the table of Operating Results by Business Segment contained in Management's
Discussion and Analysis on page 29 of the 1993 Annual Report to shareholders
which are incorporated herein by reference.
Specialty Chemicals
PRINCIPAL PRODUCTS. The company's principal products are
additive systems for gasoline and diesel engine oils, automatic transmission
fluids, gear oils, industrial fluids, metalworking compounds and fuels. The
company also offers other specialty chemical products. Additives for engine
oils accounted for 50% of consolidated revenues in 1993, 48% in 1992, and 45%
in 1991. Additives for driveline oils accounted for 19%, 18% and 19% of
consolidated revenues for these respective periods.
Additives improve the lubricants and fuels used in cars, trucks,
buses, off-highway equipment, marine engines and industrial applications. In
lubricants, additives enable oil to withstand a broader range of temperatures,
limit the buildup of sludge and varnish deposits, reduce wear, inhibit the
formation of foam, rust and corrosion, and retard oxidation. In fuels,
additives help maintain efficient operation of the fuel delivery system, help
control deposits and corrosion, improve combustion and assist in preventing
decomposition during storage.
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Due to the variety in the properties and applications of oils, a
number of different chemicals are used to formulate Lubrizol's products. Each
additive combination is designed to fit the characteristics of the customer's
base oil and the level of performance specified. Engine oils for passenger
cars contain a combination of chemical additives which usually includes one or
more detergents, dispersants, oxidation inhibitors and wear inhibitors, pour
point depressants and viscosity improvers. Other chemical combinations are
used in heavy duty engine oils for trucks and off-highway equipment and in
formulations for gear oils, automatic transmission fluids, industrial oils,
metalworking fluids, and gasoline, diesel and residual fuels.
COMPETITION. The chemical additive field is highly competitive
in terms of price, product performance and customer service. The company's
principal competitors, both in the United States and overseas, are four major
petroleum companies and one chemical company. The petroleum companies produce
lubricant and fuel additives for their own use, and also sell additives to
others. These competing companies are also customers of Lubrizol. Excluding
viscosity improvers, management believes, based on volume sold, that it is the
largest supplier to the petroleum industry of performance chemicals for
lubricants.
CUSTOMERS. In the United States, Lubrizol markets its additive
products through its own sales organization. The company's additive customers
consist primarily of oil refiners and independent oil blenders and are located
in more than 100 countries. Approximately 60% of the company's sales are made
to customers outside of North America. The company's ten largest customers,
most of which are international oil companies and a number of which are groups
of affiliated entities, accounted for approximately 44% of consolidated sales
in 1993. Although the loss of any one of these customers could have a material
adverse effect on the company's business, each is made up of a number of
separate business units that the company believes make independent purchasing
decisions with respect to chemical additives. Sales to Royal Dutch Petroleum
Company (Shell) and its affiliates accounted for 9% of consolidated sales in
1993.
RAW MATERIALS. Lubrizol utilizes a broad variety of chemical raw
materials in the manufacture of its additives and uses oil in processing and
blending additives. These materials are obtainable from several sources, and
for the most part are derived from petroleum. Historically, the unstable
conditions in the Middle East have caused the cost of raw materials to
fluctuate significantly; however, it has not significantly affected the
availability of raw materials to the company. The company expects raw
materials to be available in adequate amounts in 1994.
RESEARCH, TESTING AND DEVELOPMENT. Lubrizol has historically
emphasized research and has developed a large percentage of the additives it
manufactures and sells. Technological developments in the design of engines
and other automotive equipment, combined with rising demands for environmental
protection and fuel economy, require increasingly sophisticated chemical
additives.
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Research and development expenditures were $88.5 million in 1993,
$76.2 million for 1992 and $63.7 million for 1991. These amounts were
equivalent to 5.8%, 5.3% and 4.7% of the respective revenues for such years.
These amounts include expenditures for the performance evaluation of additive
developments in engines and other types of mechanical equipment as well as
expenditures for the development of specialty chemicals for industrial
applications. In addition, $83.0 million, $63.6 million and $64.0 million was
spent in 1993, 1992 and 1991, respectively, for technical service activities,
principally for evaluation in mechanical equipment of specific lubricant
formulations designed for the needs of petroleum industry customers throughout
the world.
The company has two research facilities at Wickliffe, Ohio, one
of which is principally for lubricant additive research and the other for
research in the field of other specialty chemicals. The company also maintains
a mechanical testing laboratory at Wickliffe, equipped with a variety of
gasoline and diesel engines and other mechanical equipment to evaluate the
performance of additives for lubricants and fuels. Lubrizol has similar
mechanical testing laboratories in England and Japan and, in addition, makes
extensive use of independent contract research firms. Extensive field testing
is also conducted through various arrangements with fleet operators and others.
Liaison offices in Detroit, Michigan; Hazelwood, England;
Hamburg, Germany; Tokyo, Japan; and Paris, France maintain close contact with
the principal automotive and equipment manufacturers of the world and keep the
company abreast of the performance requirements for Lubrizol products in the
face of changing technologies. These liaison activities also serve as contacts
for cooperative development and evaluation of products for future applications.
Contacts with the automotive and equipment industry are important so the
company may have the necessary direction and lead time to develop products for
use in engines, transmissions, gear sets, and other areas of equipment that
require lubricants of advanced design.
PATENTS. Lubrizol owns certain United States patents relating to
lubricant and fuel additives, lubricants, chemical compositions and processes,
and protective coating materials and processes. It also owns similar patents
in foreign countries. While such domestic and foreign patents expire from time
to time, Lubrizol continues to apply for and obtain patent protection on an
ongoing basis. Although the company believes that, in the aggregate, its
patents constitute an important asset, it does not regard its business as being
materially dependent upon any single patent or any group of related patents.
The company has filed claims against Exxon Corporation and its
affiliates ("Exxon") alleging infringements by Exxon of certain of the
company's patents. These suits are pending in the United States and in Canada,
France and the United Kingdom, and are at various stages. The international
suits allege infringement of patents that correspond to a United States patent
admitted as valid by Exxon in a settlement in 1988. In the suit in Canada, a
determination of liability has been made by the courts against Exxon and in
favor of the company, and the case has been returned to the trial court for an
assessment of damages. In another patent infringement suit, instituted by
Exxon in the United States, liability and
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damages determinations have been made (which are subject to appeal) against the
company and in favor of Exxon. For further information regarding these cases,
refer to Note 18 to the Financial Statements included in the company's 1993
Annual Report to its shareholders.
ENVIRONMENTAL MATTERS. The company is subject to federal, state
and local laws and regulations designed to protect the environment and limit
manufacturing wastes and emissions. The company believes that as a general
matter its policies, practices and procedures are properly designed to prevent
unreasonable risk of environmental damage and the consequent financial
liability to the company. Compliance with the environmental laws and
regulations requires continuing management effort and expenditures by the
company. Capital expenditures for environmental projects are anticipated to be
$20 million in 1994, which is approximately the same as 1993. Management
believes that the cost of complying with environmental laws and regulations
will not have a material affect on the earnings, liquidity or competitive
position of the company.
The company is engaged in the handling, manufacture, use,
transportation and disposal of substances that are classified as hazardous or
toxic by one or more regulatory agencies. The company believes that its
handling, manufacture, use, transportation and disposal of such substances
generally have been in accord with environmental laws and regulations.
Among other environmental laws, the company is subject to the
federal "Superfund" law, under which the company has been designated as a
"potentially responsible party" that may be liable for cleanup costs associated
with various waste sites, some of which are on the U.S. Environmental
Protection Agency Superfund priority list. The company's experience,
consistent with what it believes to be the experience of others in similar
cases, is that Superfund site liability tends to be apportioned among parties
based upon contribution of materials to the Superfund site. Accordingly, the
company measures its liability and carries out its financial reporting
responsibilities with respect to Superfund sites based upon this standard, even
though Superfund site liability is technically joint and several in nature.
The company views the expense of remedial clean-up as a part of its product
cost, and accrues for estimated environmental liabilities with regular charges
to cost of sales. Management considers its environmental accrual to be
adequate to provide for its portion of costs for all known environmental
matters, including Superfund sites. Based upon consideration of currently
available information, management does not believe liabilities for
environmental matters will have a material adverse effect on the company's
financial position, operating results or liquidity.
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EXHIBIT 12
THE LUBRIZOL CORPORATION AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
(all amounts except ratios are shown in thousands)
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
Pretax income $119,651 $177,144 $178,140 $271,212 $137,746
Deduct earnings of less
than 50% owned affiliates
(net of distributed
earnings) included in
pretax income (2,355) 9 (3,796) (3,401) (43)
Add losses of less than 50%
owned affiliates included
in pretax income 21,063 2,769 53 -0- 972
Add fixed charges net of
capitalized interest 4,154 3,615 7,738 6,049 5,438
Add previously capitalized
interest amortized during
period 272 162 96 6
------- ------- ------- ------- -------
"Earnings" $142,785 $183,699 $182,231 $273,866 $144,113
======= ======= ======= ======= =======
Gross interest expense
including capitalized
interest ("Fixed Charges") $ 6,292 $ 4,981 $ 9,049 $ 7,070 $ 5,438
Ratio of earnings to
fixed charges 22.7 36.9 20.1 38.7 26.5
Special adjustments:
- -------------------
"Earnings" $142,785 $273,866
Plus special charges 86,303
Less Genentech gain (42,443) (101,921)
Plus Agribusiness write-off 9,734
------- -------
Adjusted "Earnings" $186,645 $181,679
======= =======
Ratio of adjusted earnings
to fixed charges 29.7 25.7
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AGRIBUSINESS
As discussed in Note 16 to the Financial Statements, on December
1, 1992, the company transferred substantially all of the Agribusiness segment,
other than the specialty vegetable oil operations, to Mycogen Corporation and a
joint venture partnership (Agrigenetics, L.P.) formed with Mycogen. The
company's 1993 consolidated revenues, costs and expenses include specialty
vegetable oil operations, but do not include amounts related to the transferred
assets. As also discussed in Note 16 to the Financial Statements, on December
31, 1993, the company exchanged another portion of its investment in the
partnership for additional Mycogen common stock and cash. The company's
investment in Mycogen, which includes Agrigenetics, Inc. (formerly
Agrigenetics, L.P.), is accounted for by the equity method, under which the
company recognizes its share of the earnings or losses of such entities.
The specialty vegetable oil operation retained by the company
sells specialty vegetable oils and operates an oilseed crushing and refining
facility. Specialty vegetable oil sales consist primarily of high oleic
sunflower oil in either crude or refined forms and safflower oil. Pursuant to
contractual arrangements, the company has agreed to purchase planting seed for
specialty vegetable oils from Agrigenetics, Inc., which in turn is to supervise
production of oilseed for crushing. The company's ability to acquire high
oleic oil seed is subject to governmental, agricultural and export policies as
well as the weather. The discussion below is presented only for historical
purposes except for any references to specialty vegetable oils.
The transferred portion of the Agribusiness operations produced
and marketed planting seeds for agricultural crops. The principal seed
products were hybrid seed corn, hybrid sorghum, soybeans, hybrid sunflowers,
alfalfa, and cotton. Revenues from planting seeds contributed approximately
75% of the Agribusiness sales in 1992 and 68% in 1991.
Substantially all of the company's planting seed, and oilseed for
crushing, was produced by an established network of growers under specified
planting conditions on a short-term contract basis. The company furnished
parental seed to its growers, primarily from stock developed, multiplied and
maintained by the company. Company personnel supervised planting, growing and
harvesting.
The seed products were marketed through three regional groups
representing eight Agrigenetics seed brands and through an international
marketing group and three overseas subsidiaries, all of which sold planting
seeds. The products were marketed primarily to dealers and distributors, most
of whom were farmers with long-term relationships with the company. The
company sold its seeds primarily in the major farm production areas in the
United States. The company markets specialty vegetable oil through its own
sales organization and commissioned agents. Sales to date have been
principally to food processors.
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The United States seed industry is highly competitive and
fragmented. Based on revenue figures from industry sources, management
believes the transferred Agribusiness operations were the sixth largest seed
company in the United States. The market for vegetable oils is very large and
very competitive. The company's TRISUN(R) sunflower oil sells for a premium
over regular sunflower oil. TRISUN(R) oil is very high in monounsaturates, and
therefore more stable and resistant to oxidation than other vegetable oils.
Agribusiness revenues from the sale of planting seeds were earned
principally during the first half of the calendar year, and losses from these
operations were incurred in the last half as a result of continuing operating
expenses with low sales. Working capital needs were also seasonal.
Expenditures for inventories were made during the last half of the year, while
substantial collections on sales were not received until the second and third
quarters of the following year.
Strategic Agribusiness activities consisted principally of
internal biotechnology research and development directed toward developing new
products for the agriculture, food and chemical industries. Agribusiness'
research and development consisted of traditional plant breeding and strategic
research in advanced plant science. Plant breeding attempts to create
desirable plants by crossing selected parent plants. The genetic combinations
of the crosses are then tested under field conditions to determine if desired
characteristics appear. Traditional research expense of the Agribusiness
segment was $7.2 million in 1992 and $7.8 million in 1991.
A major portion of Agribusiness' strategic research and
development was conducted at the research laboratory in Madison, Wisconsin.
Strategic research was focused on specialty chemicals and food products derived
from oil seed crops and on genetic improvement of specific attributes of hybrid
plant varieties. Total Agribusiness strategic research expense was $7.7
million in 1992 and $8.6 million in 1991.
The company has United States utility patents covering its high
oleic sunflower oil and seeds. The high oleic patents are being re-examined by
the U.S. Patent and Trademark Office, and such re-examination has not been
resolved. If the re-examination results in the cancellation of the patents,
management believes that its business will not be materially affected.
GENERAL
EMPLOYEES. At December 31, 1993, the company and its
wholly-owned subsidiaries had 4,613 employees of which approximately 60% were
in the U.S.
INTERNATIONAL OPERATIONS. Financial information with respect to
domestic and foreign operations is contained in Note 12 to the Financial
Statements that is included in the company's 1993 Annual Report to its
shareholders and is incorporated herein by reference.
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The company supplies its additive customers abroad from overseas
manufacturing plants and through export from the United States. Sales and
technical service offices are maintained in more than 30 countries outside the
United States. As a result, the company is subject to business risks inherent
in non-U.S. activities, including political uncertainty, import and export
limitations, exchange controls and currency fluctuations. The company believes
risks related to its foreign operations are mitigated due to the political and
economic stability of the countries in which its largest foreign operations are
located.
While changes in the dollar value of foreign currencies will
affect earnings from time to time, the longer term economic effect of these
changes should not be significant given the company's net asset exposure,
currency mix and pricing flexibility. Generally, the income statement effect
of changes in the dollar value of foreign currencies is partially or wholly
offset by the company's ability to make corresponding price changes in local
currency. The company's consolidated net income will generally benefit
(decline) as foreign currencies increase (decrease) in value compared to the
U.S. dollar. In 1993, European currencies weakened and the Japanese yen
strengthened resulting in insignificant net earnings effect.
ITEM 2. PROPERTIES
The general offices of the company are located in Wickliffe,
Ohio. The company has various leases for general office space primarily
located in Eastlake, Ohio; Houston, Texas; and London, England. The company
owns three additive manufacturing plants in the United States; one located in
the Cleveland, Ohio area, at Painesville, and two near Houston, Texas, at Deer
Park and Bayport. Outside the United States, the company owns additive
manufacturing plants in Australia, Brazil, Canada, England, France (three
locations), Japan, South Africa and Singapore. All of these plants, other than
Singapore, are owned in fee. In Singapore, Lubrizol owns the plant but leases
the land on which the plant is located. The company owns in fee mechanical
testing facilities in Wickliffe, Ohio; Hazelwood, England; and Atsugi, Japan.
The company also owns an oilseed crushing and refining plant located in
Culbertson, Montana. Finally, the company owns in fee a manufacturing plant in
Germany that manufactures performance chemical additives for the coatings
industry.
Additive manufacturing plants in India, Mexico, Saudi Arabia and
Venezuela are owned and operated by joint venture companies licensed by
Lubrizol. Lubrizol's ownership of each of these companies ranges from 40% to
49%.
Lubrizol has entered into long-term contracts for its exclusive
use of major marine terminal facilities at the Port of Houston, Texas. In
addition, Lubrizol has leases for storage facilities in Australia, Chile,
Ecuador, Finland, France, Holland, Singapore, Spain, South Africa, Sweden, and
Turkey; East Liverpool, Ohio; Los Angeles, California; St. Paul, Minnesota;
Bayonne, New Jersey; and Tacoma, Washington. In some cases, the ownership or
leasing of such facilities is through certain of its subsidiaries or
affiliates.
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The company initiated a manufacturing rationalization plan during
the third quarter of 1993. The plan will be implemented over the next several
years and, through consolidation, is expected to result in a one-third
reduction in the number of units used to produce intermediate products. See
Note 17 to the Financial Statements included in the company's Annual Report to
its shareholders.
Although the company continues to maintain a capital expenditure
program to support its operations, management of the company believes that its
facilities are adequate for its present operations and for the foreseeable
future.
ITEM 3. LEGAL PROCEEDINGS
The company is a party in a case brought by Exxon Corporation and
its affiliates, Exxon Chemical Patents, Inc. and Exxon Research & Engineering
Company, in the Southern District of Texas, Houston Division on September 19,
1989. In December 1992, the trial jury rendered a verdict that the company
willfully infringed an Exxon patent pertaining to an oil soluble copper
additive component. In early 1993, the court prohibited the company from
making or selling any additive packages in the United States that contained
this component and awarded Exxon $18.1 million for attorneys' fees. On
November 18, 1993, another jury in the same case awarded Exxon $48 million in
damages. The findings of infringement and validity of the Exxon patent as well
as the $18.1 million attorneys' fee award are on appeal to the United States
Court of Appeals for the Federal Circuit in Washington, D.C., which has
jurisdiction over all patent cases. Oral argument in this appeal was heard on
December 6, 1993, and a decision may be forthcoming in 1994. On February 18,
1994, acting on a request from Exxon that the damages amount be tripled, the
trial court judge doubled the damages amount and awarded prejudgment interest,
court costs and additional attorneys' fees to Exxon. The total amount of the
judgment, including the previously awarded attorneys' fees, is $129 million.
The company has the right to appeal the February 1994 damages award to the same
court in Washington, D.C., as is considering the appeal of the original
verdict.
The company's management continues to believe that it has not
infringed the Exxon patent and that the patent is invalid. Based on the advice
of legal counsel, management believes that the December 1992 trial court
judgment will not be upheld on appeal.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the vote of the security holders
during the three months ended December 31, 1993.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The following sets forth the name, age, recent business experience and
certain other information relative to each person who is an executive officer
of Lubrizol as of March 1, 1994.
Name Business Experience
---- -------------------
L. E. Coleman Dr. Coleman, age 63, has been Chairman of the Board since 1982. He has been Chief
Executive Officer since 1978.
W. G. Bares Mr. Bares, age 52, was elected President in 1982 and Chief Operating Officer in 1987.
J. R. Ahern Mr. Ahern, age 47, became Controller in June 1990. From August 1987 to June 1990, he
served as Vice President of Finance for Agrigenetics Company.
R. A. Andreas Mr. Andreas, age 49, has been Vice President and Chief Financial Officer since June
1990. From 1983 to 1990 he was Corporate Controller.
J. W. Bauer Mr. Bauer, age 40, became Vice President and General Counsel in April 1992, after
serving as General Counsel from August 1991. From 1989 to 1991, he was Corporate
Counsel - Litigation.
J. G. Bulger Mr. Bulger, age 58, holds the position of Vice President - Sales and was named Vice
President in September 1993. From 1989 to 1993, he was Senior Vice President - Sales
for Lubrizol Petroleum Chemicals Company.
S. A. Di Biase Dr. Di Biase, age 41, is Vice President - Research and Development and has been Vice
President since September 1993. From 1990 to September 1993, he was Director of
Strategic Research. During 1989 through 1990, he was Manager of Industrial Technology.
G. R. Hill Dr. Hill, age 52, became Senior Vice President - Business Development in October 1993
and was named Senior Vice President in 1988.
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Name Business Experience
---- -------------------
J. E. Hodge Mr. Hodge, age 51, is Vice President - Operations and was named Vice President in
September 1993. During 1989 through 1993, he was General Manager - Deer Park/Bayport
Plants.
K. H. Hopping Mr. Hopping, age 47, became Vice President and Secretary of the Corporation in April
1991 after serving as Senior Vice President - Marketing and Product Development for
Lubrizol Petroleum Chemicals Company from 1988 to 1991.
R. Y. K. Hsu Dr. Hsu, age 66, was named Counselor to the Chairman in 1992, upon reaching the
mandatory retirement age for elected officers. From 1982 to 1992, he was Senior Vice
President.
W. R. Jones Mr. Jones, age 51, has been Treasurer since 1980.
S. F. Kirk Mr. Kirk, age 44, holds the position of Vice President - Segment Management and was
named Vice President in September 1993. From January 1991 to 1993, he was Senior Vice
President - Marketing and Technology for Lubrizol Petroleum Chemicals Company. During
1989 through January 1991, Mr. Kirk was General Manager - North American Sales for
Lubrizol Petroleum Chemicals Company.
Y. Le Couedic Mr. Le Couedic, age 46, is Vice President - Management Information Systems and became
Vice President in September 1993. From 1991 to 1993, he was Division Head - Corporate
R&D - Administrative Services. From September 1989 to August 1991 he was Administrative
Manager for the Hazelwood, U.K. Laboratory.
W. D. Manning Mr. Manning, age 59, was named Assistant to the President in August 1993 and has been
Senior Vice President since 1987. From 1987 to 1993, he was President of Lubrizol
Petroleum Chemicals Company.
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Name Business Experience
---- -------------------
M. W. Meister Mr. Meister, age 39, is Vice President - Human Resources and was named Vice President in
April 1993. From November 1992 to April 1993, he was General Manager - Human Resources.
During 1989 to 1992, he was Director - Human Resources for Agrigenetics Company.
D. A. Muskat Mr. Muskat, age 54, was named Operations Manager in August 1993. From September 1989 to
August 1993 he was Vice President - Operations for Lubrizol Petroleum Chemicals Company.
From 1987 to 1989, he was Division Head - USA Operations.
R. J. Senz Mr. Senz, age 52, was named Senior Vice President - Corporate Planning and Development
in August 1993 and has been Senior Vice President since 1992. From 1989 to 1992, he
served as Vice President. He was President of Lubrizol Performance Products Company
from 1985 to 1993. Mr. Senz is the brother-in-law of Mr. Bares.
All executive officers serve at the pleasure of the Board.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The Common Shares of The Lubrizol Corporation are listed on the
New York Stock Exchange under the symbol LZ. The number of shareholders of
record of Common Shares was 6,576 as of February 10, 1994.
Information relating to the recent price and dividend history
of the company's Common Shares follows:
Common Share Price History
------------------------------------------- Dividends
1993 1992 Per Common Share
---------------------------------------------------------------------
High Low High Low 1993 1992
---------------------------------------------------------------------
1st quarter $31 1/4 $26 5/8 $34 $27 7/8 $ .21 $ .20
2nd quarter 34 1/2 28 7/8 34 7/8 31 .21 .20
3rd quarter 36 29 34 7/8 27 3/8 .21 .20
4th quarter 36 3/8 30 3/4 28 3/4 24 5/8 .22 .21
-------------------
$ .85 $ .81
===================
All share and per share data have been restated to reflect the
2-for-1 stock split effected on August 31, 1992.
ITEM 6. SELECTED FINANCIAL DATA.
The summary of selected financial data for each of the last five
years included in the Historical Summary contained on pages 44 and 45 of
Lubrizol's 1993 Annual Report to its shareholders is incorporated herein by
reference. Other income for 1993 includes $42.4 million for the gain on sale
of Genentech (see Note 7) and a special charge of $86.3 million (see Note 17).
Included in other income for 1990 is $101.9 million for the gain on sale of
Genentech.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The Management's Discussion and Analysis of Financial Condition
and Results of Operations contained on pages 25 through 29, inclusive, of
Lubrizol's 1993 Annual Report to its shareholders is incorporated herein by
reference.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of Lubrizol and its
subsidiaries, together with the independent auditors' report relating thereto,
contained on pages 30 through 42, inclusive, of Lubrizol's 1993 Annual Report
to its shareholders, and the Quarterly Financial Data (Unaudited) contained on
page 43 of such 1993 Annual Report are incorporated herein by reference.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information relating to directors of Lubrizol contained under
the heading "Election of Directors" on pages 1 to 5, inclusive, of Lubrizol's
Proxy Statement dated March 16, 1994, is incorporated herein by reference.
Information relative to executive officers of Lubrizol is contained under Part
I of this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
The information relating to executive compensation contained under
the headings "Committees and Compensation of the Board of Directors" on page 6,
"Executive Compensation" on pages 8 through 11, inclusive, and under "Employee
and Executive Officer Benefit Plans - Pension Plans" and "- Executive
Agreements" on pages 15, 16, and 17 of Lubrizol's Proxy Statement dated March
16, 1994, is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information relating to security ownership set forth under the
heading "Security Ownership of Directors and Management" on page 7 of
Lubrizol's Proxy Statement dated March 16, 1994, is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not applicable.
-13-
16
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) Documents filed as part of this Annual Report:
1. The following consolidated financial statements of The
Lubrizol Corporation and its subsidiaries, together
with the independent auditors' report relating thereto,
contained on pages 30 through 43, inclusive, of
Lubrizol's 1993 Annual Report to its shareholders and
incorporated herein by reference:
Consolidated Statements of Income for the years ended
December 31, 1993, 1992 and 1991
Consolidated Balance Sheets at December 31, 1993 and
1992
Consolidated Statements of Cash Flows for the years
ended December 31, 1993, 1992 and 1991
Consolidated Statements of Shareholders' Equity for the
years ended December 31, 1993, 1992 and 1991
Notes to Financial Statements
Independent Auditors' Report
Quarterly Financial Data (Unaudited)
2. Schedules
I Other Investments
V Property, Plant and Equipment
VI Accumulated Depreciation of Property, Plant
and Equipment
IX Short-Term Borrowings
X Supplementary Income Statement Information
Schedules other than those listed above are omitted
because of the absence of conditions under which they
are required or because the required information is
included in the financial statements and notes thereto.
3. Exhibits
(3)(a) Amended Articles of Incorporation of The Lubrizol
Corporation, as adopted September 23, 1991.
-14-
17
(3)(b) Regulations of The Lubrizol Corporation, as
amended effective April 27, 1992.
(4)(a) Article Fourth of Amended Articles of
Incorporation.
(4)(b) The company agrees, upon request, to furnish to
the Securities and Exchange Commission copies of
financial documents evidencing long-term debt,
which debt does not exceed 10% of the total
assets of the company and its subsidiaries on a
consolidated basis.
(4)(c) Rights Agreement between The Lubrizol Corporation
and National City Bank dated October 6, 1987.
(4)(d) Amendment to Rights Agreement dated October 6,
1987, between The Lubrizol Corporation and
National City Bank, effective October 24, 1988.
(4)(e) Special Rights Agreement between The Lubrizol
Corporation and National City Bank dated October
31, 1988.
(4)(f) Amendment No. 2 to Rights Agreement dated October
6, 1987, as amended, between The Lubrizol
Corporation and National City Bank, effective
October 28, 1991.
(4)(g) Amendment No. 1 to Special Rights Agreement dated
October 31, 1988, between The Lubrizol Corporation
and National City Bank, effective October 28,
1991.
(10)(a)* The Lubrizol Corporation 1975 Employee Stock
Option Plan, as amended.
(10)(b)* The Lubrizol Corporation 1985 Employee Stock
Option Plan, as amended.
(10)(c)* The Lubrizol Corporation 1981 Key Employee
Incentive Stock Option Plan.
(10)(d)* The Lubrizol Corporation Deferred Compensation
Plan for Directors.
(10)(e)* Form of Employment Agreement between The Lubrizol
Corporation and certain of its senior executive
officers.
-15-
18
(10)(f)* The Lubrizol Corporation Excess Defined Benefit
Plan, as amended.
(10)(g)* The Lubrizol Corporation Excess Defined
Contribution Plan, as amended.
(10)(h)* The Lubrizol Corporation Variable Award Plan.
(10)(i)* The Lubrizol Corporation Executive Death Benefit
Plan, as amended.
(10)(j)* Amendment No. 1 to the Amended and Restated
Severance Agreement between The Lubrizol
Corporation and Dr. R.Y.K. Hsu. (Reference is
made to Exhibit (10)(k) to The Lubrizol
Corporation's Annual Report on Form 10-K for the
year ended December 31, 1990, which Exhibit is
incorporated herein by reference.)
(10)(k)* Employment and Consulting Agreement dated
February 23, 1987, between The Lubrizol
Corporation and Dr. R.Y.K. Hsu with Amendment
dated December 28, 1989. (Reference is made to
Exhibit (10)(l) to The Lubrizol Corporation's
Annual Report on Form 10-K for the year ended
December 31, 1990, which Exhibit is incorporated
herein by reference.)
(10)(l)* The Lubrizol Corporation 1991 Stock Incentive
Plan, as amended.
(10)(m)* The Lubrizol Corporation Deferred Stock
Compensation Plan for Outside Directors.
(10)(n)* Amendment to Employment and Consulting Agreement
dated October 1, 1992, between The Lubrizol
Corporation and Dr. R.Y.K. Hsu. (Reference is
made to Exhibit (10)(q) to The Lubrizol
Corporation's Annual Report on Form 10-K for the
year ended December 31, 1992, which Exhibit is
incorporated herein by reference.)
(10)(o)* Early Retirement and General Release Agreement
dated April 14, 1993, between The Lubrizol
Corporation and William D. Manning.
(10)(p)* The Lubrizol Corporation Officers' Supplemental
Retirement Plan
(11) Statement setting forth computation of per share
earnings.
-16-
19
(12) Computation of Ratio of Earnings to Fixed Charges.
(13) The following portions of The Lubrizol
Corporation 1993 Annual Report to its
shareholders:
Pages 25-29 Management's Discussion and Analysis
of Financial Condition and Results
of Operations
Page 30 Consolidated Statements of Income
for the years ended December 31,
1993, 1992 and 1991
Page 31 Consolidated Balance Sheets at
December 31, 1993 and 1992
Page 32 Consolidated Statements of Cash
Flows for the years ended December
31, 1993, 1992 and 1991
Page 33 Consolidated Statements of
Shareholders' Equity for the years
ended December 31, 1993, 1992 and
1991
Pages 34-41 Notes to Financial Statements
Page 42 Independent Auditors' Report
Page 43 Quarterly Financial Data
(Unaudited)
Pages 44-45 Historical Summary
(21) List of Subsidiaries of The Lubrizol Corporation.
(23) Consent of Independent Auditors.
*Indicates management contract or compensatory plan or arrangement.
(b) The Lubrizol Corporation filed a Current Report on Form 8-K,
reporting under "Item 5 - Other Events," a damage award
granted to Exxon Corporation on November 18, 1993, against
the company.
-17-
20
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on March 28, 1994, on its behalf by the undersigned, thereunto duly authorized.
THE LUBRIZOL CORPORATION
BY /s/L. E. Coleman
---------------------------------
L. E. Coleman, Chairman of the
Board and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below on March 28, 1994, by the following
persons on behalf of the Registrant and in the capacities indicated.
/s/L. E. Coleman Chairman of the Board and Chief
- ------------------------------- Executive Officer and Director
L. E. Coleman (Principal Executive Officer)
/s/R. A. Andreas Vice President and Chief Financial
- ------------------------------- Officer (Principal Financial Officer)
R. A. Andreas
/s/G. P. Lieb Controller, Accounting and Financial
- ------------------------------- Reporting (Principal Accounting
G. P. Lieb Officer)
/s/W. G. Bares President, Chief Operating Officer
- ------------------------------- and Director
W. G. Bares
/s/Edward F. Bell Director
- -------------------------------
Edward F. Bell
/s/Peggy G. Elliott Director
- -------------------------------
Peggy G. Elliott
/s/David H. Hoag Director
- ------------------------------
David H. Hoag
/s/Thomas C. MacAvoy Director
- -------------------------------
Thomas C. MacAvoy
/s/William P. Madar Director
- -------------------------------
William P. Madar
/s/Richard A. Miller Director
- -------------------------------
Richard A. Miller
/s/Ronald A. Mitsch Director
- -------------------------------
Ronald A. Mitsch
/s/Renold D. Thompson Director
- -------------------------------
Renold D. Thompson
/s/Karl E. Ware Director
- -------------------------------
Karl E. Ware
21
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of
The Lubrizol Corporation:
We have audited the consolidated financial statements of The
Lubrizol Corporation as of December 31, 1993 and 1992 and for each of the three
years in the period ended December 31, 1993, and have issued our report thereon
dated February 18, 1994; such consolidated financial statements and report are
included in your 1993 Annual Report to shareholders and are incorporated herein
by reference. Our audits also included the financial statement schedules of
The Lubrizol Corporation, listed in Item 14. These financial statement
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
/s/Deloitte & Touche
- ----------------------------
DELOITTE & TOUCHE
Cleveland, Ohio
February 18, 1994
S-1
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SCHEDULE I
THE LUBRIZOL CORPORATION AND SUBSIDIARIES
OTHER INVESTMENTS
December 31, 1993
(In Thousands)
Balance at
Number of Market End of
Company Shares(A) Cost(A) Value(A) Period
- ------------------------------ --------- ------- -------- ----------
Investments at Equity:
Mycogen Corporation
(common stock) 6,134 $32,241 $ 62,874 $32,241
Lubrizol India, Ltd. 9,874
Agrigenetics, Inc. 9,092
Other 8,702
-------
Total $59,909
=======
Investments at Cost:
Mycogen Corporation
(preferred stock) $28,540
Catalytica, Inc. 2,341 $8,979 $ 18,144 8,979
Genentech, Inc.
(common stock) 2,000 $4,094 $101,000 4,094
Other 1,724
-------
Total $43,337
=======
NOTE: (A) Where number of shares, cost and market value are not shown,
companies (or in the case of Mycogen Corporation, shares of its
preferred stock) were not publicly traded.
S-2
23
SCHEDULE V
THE LUBRIZOL CORPORATION AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
(In Thousands of Dollars)
Balance at Balance at
Beginning Additions Retire- Other End of
of Period at Cost ments Changes Period
---------- --------- ------- ------- ---------
Year Ended December 31, 1993
Land & improvements $ 75,997 $ 5,772 $ 176 $ (924) $ 80,669
Buildings & improvements 153,232 18,860 1,071 10,597 181,618
Machinery & equipment 659,574 73,250 12,011 6,596 727,409
Construction in progress 69,889 29,973 (452) 99,410
-------- -------- ------- -------- ----------
Total $958,692 $127,855 $13,258 $ 15,817(A) $1,089,106
======== ======== ======= ======== ==========
Year Ended December 31, 1992
Land & improvements $ 75,348 $ 5,102 $ 22 $ (4,431) $ 75,997
Buildings & improvements 168,186 14,908 734 (29,128) 153,232
Machinery & equipment 658,966 63,337 10,216 (52,513) 659,574
Construction in progress 59,761 12,467 303 (2,036) 69,889
-------- -------- ------- -------- ----------
Total $962,261 $ 95,814 $11,275 $(88,108)(B) $ 958,692
======== ======== ======= ======== ==========
Year Ended December 31, 1991
Land & improvements $ 70,799 $ 4,628 $ 671 $ 592 $ 75,348
Buildings & improvements 158,451 8,680 835 1,890 168,186
Machinery & equipment 604,929 61,443 8,322 916 658,966
Construction in progress 52,817 7,647 (703) 59,761
-------- -------- ------- -------- ----------
Total $886,996 $ 82,398 $ 9,828 $ 2,695(B) $ 962,261
======== ======== ======= ======== ==========
NOTE: (A) Translation adjustment; $1.0 million land and improvements,
$9.7 buildings and improvements, and $12.9 machinery and equipment
from purchase of Langer & Company G.m.b.H.; $(1.4) land and
improvements as a result of the special charge (see Note 17 to the
Financial Statements).
(B) Translation adjustment and in 1992, $(3.1) million land and
improvements, $(25.5) buildings and improvements, $(34.5)
machinery and equipment and $(1.0) construction in progress from
transfer of certain Agribusiness assets.
S-3
24
SCHEDULE VI
THE LUBRIZOL CORPORATION AND SUBSIDIARIES
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT (Note A)
(In Thousands of Dollars)
Additions
Balance at Charged to Balance at
Beginning Cost and Retire- Other End of
of Period Expenses ments Changes Period
--------- ---------- ------- ------- ----------
Year Ended December 31, 1993
Land & improvements $ 35,508 $ 2,768 $ 92 $ (244) $ 37,940
Buildings & improvements 70,889 6,635 955 773 77,342
Machinery & equipment 476,708 50,192 11,796 21,085 536,189
-------- ------- ------- ------- --------
Total $583,105 $59,595 $12,843 $21,614 (B) $651,471
======== ======= ======= ======= ========
Year Ended December 31, 1992
Land & improvements $ 33,804 $ 2,484 $ 5 $ (775) $ 35,508
Buildings & improvements 77,143 6,686 533 (12,407) 70,889
Machinery & equipment 471,284 49,265 9,288 (34,553) 476,708
-------- ------- ------- -------- --------
Total $582,231 $58,435 $ 9,826 $(47,735)(C) $583,105
======== ======= ======= ======== ========
Year Ended December 31, 1991
Land & improvements $ 31,695 $ 2,327 $ 149 $ (69) $ 33,804
Buildings & improvements 70,278 6,457 779 1,187 77,143
Machinery & equipment 431,472 45,830 7,689 1,671 471,284
-------- ------- ------- -------- --------
Total $533,445 $54,614 $ 8,617 $ 2,789(C) $582,231
======== ======= ======= ======== ========
NOTES: (A) Depreciation is computed using the straight-line, sum-of-the-years
digits, and declining balance methods, at rates based on the
estimated useful lives of the assets. A general range of the
estimated useful lives follows:
Land improvements. . . . . . . . . . 8 to 25 years
Buildings and improvements . . . . . 5 to 65 years
Machinery and equipment. . . . . . . 3 to 20 years
(B) Translation adjustment and $25.3 million machinery and equipment
as a result of the special charge (see Note 17 to the Financial
Statements).
(C) Translation adjustment and in 1992, $(0.3) million land and
improvements, $(11.2) buildings and improvements and $(24.1)
machinery and equipment from transfer of certain Agribusiness
assets.
S-4
25
SCHEDULE IX
THE LUBRIZOL CORPORATION AND SUBSIDIARIES
SHORT-TERM BORROWINGS
Years Ended December 31, 1993, 1992 and 1991
(In Thousands of Dollars)
Weighted Maximum Weighted
Category of Average Amount Average
Aggregate Interest Outstanding Average Interest
Short-Term Balance at Rate at at Any Daily Rate for
Borrowings End of Year End of Year Month-End Balance the Year (A)
- ---------------- ----------- ----------- ----------- ------- ------------
1993
Commercial Paper $ 4,400 3.3% $28,500 $15,277 3.2%
Bank Borrowings 10,190 6.1% $32,300 $16,862 5.4%
-------
$14,590
=======
1992
Bank Borrowings $25,140 6.9% $27,071 $11,465 8.1%
-------
$25,140
=======
1991
Bank Borrowings $32,801 8.7% $54,298 $30,310 8.6%
-------
$32,801
=======
NOTE: (A) The weighted average interest rates were computed by relating
interest expense for the year to average daily balances.
S-5
26
SCHEDULE X
THE LUBRIZOL CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
(In Thousands of Dollars)
Charged to Cost
Item(A) and Expenses
- ----------------------------- ---------------------------------------------
For the Year Ended December 31
---------------------------------------------
1993 1992 1991
------- ------ ------
Maintenance and repairs $57,170 $54,712 $51,969
======= ======= =======
Depreciation and amortization
of intangible assets $61,674 $62,013 $59,473
======= ======= =======
Taxes, other than payroll and
income taxes $19,281 $18,352 $16,186
======= ======= =======
NOTE: (A) Amounts for royalties and advertising costs are not presented as
such amounts are less than 1% of revenues.
S-6
27
EXHIBIT INDEX
(3)(a) Amended Articles of Incorporation of The Lubrizol
Corporation, as adopted September 23, 1991.
(3)(b) Regulations of The Lubrizol Corporation, as amended
effective April 27, 1992.
(4)(a) Article Fourth of Amended Articles of Incorporation.
(4)(b) The company agrees, upon request, to furnish to the
Securities and Exchange Commission copies of financial
documents evidencing long-term debt, which debt does not
exceed 10% of the total assets of the company and its
subsidiaries on a consolidated basis.
(4)(c) Rights Agreement between The Lubrizol Corporation and
National City Bank dated October 6, 1987.
(4)(d) Amendment to Rights Agreement dated October 6, 1987,
between The Lubrizol Corporation and National City Bank,
effective October 24, 1988.
(4)(e) Special Rights Agreement between The Lubrizol Corporation
and National City Bank dated October 31, 1988.
(4)(f) Amendment No. 2 to Rights Agreement dated October 6, 1987,
as amended, between The Lubrizol Corporation and National
City Bank, effective October 28, 1991.
(4)(g) Amendment No. 1 to Special Rights Agreement dated October
31, 1988, between The Lubrizol Corporation and National
City Bank, effective October 28, 1991.
(10)(a) The Lubrizol Corporation 1975 Employee Stock Option Plan,
as amended.
(10)(b) The Lubrizol Corporation 1985 Employee Stock Option Plan,
as amended.
(10)(c) The Lubrizol Corporation 1981 Key Employee Incentive Stock
Option Plan.
(10)(d) The Lubrizol Corporation Deferred Compensation Plan for
Directors.
(10)(e) Form of Employment Agreement between The Lubrizol
Corporation and certain of its senior executive officers.
(10)(f) The Lubrizol Corporation Excess Defined Benefit Plan, as
amended.
(10)(g) The Lubrizol Corporation Excess Defined Contribution Plan,
as amended.
(10)(h) The Lubrizol Corporation Variable Award Plan.
(10)(i) The Lubrizol Corporation Executive Death Benefit Plan, as
amended.
(10)(j) Amendment No. 1 to the Amended and Restated Severance
Agreement between The Lubrizol Corporation and Dr. R.Y.K.
Hsu. (Reference is made to Exhibit (10)(k) to The
Lubrizol Corporation's Annual Report on Form 10-K for the
year ended December 31, 1990, which Exhibit is
incorporated herein by reference.)
28
(10)(k) Employment and Consulting Agreement dated February 23,
1987, between The Lubrizol Corporation and Dr. R.Y.K. Hsu
with Amendment dated December 28, 1989. (Reference is
made to Exhibit (10)(l) to The Lubrizol Corporation's
Annual Report on Form 10-K for the year ended December 31,
1990, which Exhibit is incorporated herein by reference.)
(10)(l) The Lubrizol Corporation 1991 Stock Incentive Plan, as
amended.
(10)(m) The Lubrizol Corporation Deferred Stock Compensation Plan
for Outside Directors.
(10)(n) Amendment to Employment and Consulting Agreement dated
October 1, 1992, between The Lubrizol Corporation and Dr.
R.Y.K. Hsu. (Reference is made to Exhibit (10)(q) to The
Lubrizol Corporation's Annual Report on Form 10-K for the
year ended December 31, 1992, which Exhibit is
incorporated herein by reference.)
(10)(o) Early Retirement and General Release Agreement dated April
14, 1993, between The Lubrizol Corporation and William D.
Manning.
(10)(p) The Lubrizol Corporation Officers' Supplemental Retirement
Plan.
(11) Statement setting forth computation of per share earnings.
(12) Computation of Ratio of Earnings to Fixed Charges.
(13) The following portions of The Lubrizol Corporation 1993
Annual Report to its shareholders:
Pages 25-29 Management's Discussion and Analysis of
Financial Condition and Results of Operations
Page 30 Consolidated Statements of Income for the
years ended December 31, 1993, 1992 and 1991
Page 31 Consolidated Balance Sheets at December 31,
1993 and 1992
Page 32 Consolidated Statements of Cash Flows for the
years ended December 31, 1993, 1992 and 1991
Page 33 Consolidated Statements of Shareholders'
Equity for the years ended December 31, 1993,
1992 and 1991
Pages 34-41 Notes to Financial Statements
Page 42 Independent Auditors' Report
Page 43 Quarterly Financial Data (Unaudited)
Pages 44-45 Historical Summary
(21) List of Subsidiaries of The Lubrizol Corporation.
(23) Consent of Independent Auditors.