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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994. Commission file number 1-892
THE B.F.GOODRICH COMPANY
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(Exact name of registrant as specified in its charter)
New York 34-0252680
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3925 Embassy Parkway
Akron, Ohio 44333-1799
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 374-3985
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
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Convertible Preferred Stock, Series D,
$1 par value New York Stock Exchange
Common Stock, $5 par value New York Stock Exchange
9 5/8% Notes, maturing in 2001
7% Subordinated Debentures,
maturing to 1997 New York Stock Exchange
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/
The aggregate market value of the voting stock, consisting solely of
common stock, held by non-affiliates of the registrant based upon the New York
Stock Exchange - Composite Transaction Listing as of February 14, 1995 was
$1,144.7 million ($44.375 per share). On such date, 25,795,706 of such shares
were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1994 Annual Report to Shareholders are incorporated by
reference into Parts I, II and IV.
Portions of the proxy statement dated March 2, 1995 are incorporated by
reference into Part III.
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PART I
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ITEM 1. BUSINESS
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GENERAL DEVELOPMENT OF BUSINESS
The B.F.Goodrich Company ("BFGoodrich" or the "Company") manufactures and
supplies a wide variety of supplies and component parts for the aerospace
industry and provides maintenance, repair and overhaul services on commercial,
regional and general aviation aircraft. The Company also manufactures
specialty plastics, specialty additives, sealants, coatings and adhesives
products for a variety of end user applications and designs, builds and
services water purification systems for large applications in industries such
as mining, refinery and power generation. In addition the Company produces
chlor-alkali and olefins. A further description of the Company's business is
provided below.
BFGoodrich, with 1994 sales of $2.2 billion, is organized into two principal
business segments: BFGoodrich Aerospace ("Aerospace") and BFGoodrich Specialty
Chemicals ("Specialty Chemicals"). The chlor-alkali and olefins operation,
principally a commodities business, is reported as "Other Operations." The
Company maintains patent and technical assistance agreements, licenses and
trademarks on its products, process technologies and expertise in most of the
countries in which it operates. The Company conducts its business through
numerous business groups of BFGoodrich and over 66 wholly- and majority-owned
subsidiaries worldwide.
The principal executive offices of BFGoodrich are located in Bath Township,
Summit County, Ohio with a mailing address at 3925 Embassy Parkway, Akron, Ohio
44333-1799 (telephone (216) 374-3985).
The Company was incorporated under the laws of the State of New York on May 2,
1912 as the successor to a business founded in 1870.
During 1994, the Company acquired two small specialty chemical businesses which
manufacture coatings and products for the textile industry. Operations of
these businesses are included in the Specialty Chemicals business segment since
the dates of acquisition.
In 1993, the Company acquired certain assets and assumed certain liabilities of
eight businesses and acquired the minority interest in a previously
majority-owned subsidiary, for approximately $528.5 million. Acquisitions of
Aerospace businesses amounted to approximately $504.8 million. These
acquisitions included the Cleveland Pneumatic Company Division and Cleveland
Pneumatic Product Service Division (collectively referred to as "Cleveland
Pneumatic") for approximately $193.4 million from Pneumo Abex Corporation, a
wholly-owned subsidiary
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of Abex Inc. and the aerospace business ("Rosemount Aerospace") of Rosemount
Inc., a wholly-owned subsidiary of Emerson Electric Company for approximately
$301.1 million.
Cleveland Pneumatic designs, develops and manufactures landing gear for
commercial and military aircraft and also provides overhaul service for
commercial aircraft landing gear. Principal manufacturing facilities are
located in Cleveland, Ohio and Tullahoma, Tenn.
Rosemount Aerospace designs and manufactures aerospace sensors and related
equipment in facilities located in Burnsville and Eagan, Minn. and Bognor
Regis, England.
The other Aerospace acquisitions, which were, in the aggregate, not
significant, include a specialty heating and avionics power business and a
manufacturer of automated test equipment for aircraft.
The three Specialty Chemicals businesses acquired in 1993 included a water
management business, a manufacturer of urethane polymer resins and a small
reaction injection molding business. These acquisitions in the aggregate were
not significant.
In December 1993, the Company disposed of its remaining investment in The Geon
Company. The Geon Company ("Geon") was formed in early 1993 from the business
(other than the chlor-alkali, ethylene and utilities operations primarily
located at Calvert City, Ky.) that was previously included in the former Geon
Vinyl Division of BFGoodrich. The disposition of Geon through public offerings
of stock generated net cash proceeds of $470.4 million and a financial gain of
$110.9 million after tax. Prior to the sale of Geon, the Company received a
special distribution of $160.0 million from Geon. Net assets of Geon,
including equity in earnings of the business to the dates of disposition, were
approximately $247.0 million.
In 1992, the Company's Aerospace business acquired ATIS Cabine S.A., France, an
overhaul service center for aircraft emergency evacuation systems. In the same
year the Company also formed a joint venture for an aircraft wheel and brake
repair and overhaul center which refurbishes carbon brakes in Hong Kong. Also
in 1992, an adhesives company was acquired and a concrete additives company was
sold. In 1991, the Company acquired the Stormscope(R) weather mapping systems
product line from 3M. Also in 1991, the Company acquired Godfrey Engineering,
Inc., a manufacturer of electro-optical systems, used primarily in airport and
aircraft lighting.
At the end of 1990, the Company acquired various business units of the Hercules
Aircraft and Electronics Group. These businesses supply aircraft
fuel-measurement and management systems; speed and torque-sensing devices; jet
engine electrical and ignition
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systems; electromechanical actuators; and aircraft engine sensors. Also in
1990, the Company acquired Safeway Products Inc., a privately-held manufacturer
of electrothermal products.
In 1992, the Company sold the BFGoodrich Aerospace Display Systems and Rivnut
Engineered Fasteners business units.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
In 1994, 1993 and 1992 sales to U.S. government departments and agencies,
principally in the Aerospace business segment, totalled approximately 10
percent, 10 percent and 12 percent, respectively, of consolidated sales.
As a result of declines in defense spending and sales increases in commercial
businesses, the Company believes that U.S. Government sales, as a percent of
total consolidated sales will continue to decline in the foreseeable future.
For financial information concerning the Company's sales, operating income,
identifiable assets, property additions, depreciation and amortization of
property and geographic information, see Note H of the Notes to Consolidated
Financial Statements appearing beginning on page 35 of the Company's 1994
Annual Report to Shareholders, which is incorporated herein by reference.
NARRATIVE DESCRIPTION OF BUSINESS
Aerospace
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The Company's Aerospace business is conducted through four major business
groups.
Landing Systems Group manufactures landing gear and aircraft wheels and brakes
for commercial, military, regional and business aviation customers.
Sensors and Integrated Systems Group manufactures sensors and related
equipment; fuel and integrated utility measurement and management systems;
engine ignition system components; electromechanical actuators; and aircraft
windshield wiper systems for commercial, military, regional and business
aviation customers.
Safety Systems Group manufactures aircraft evacuation slides and rafts;
aircraft and helicopter de-icing systems; navigation, traffic alert and
collision avoidance systems; weather detection systems; and airport and
aircraft lighting components.
Maintenance, Repair and Overhaul Group ("MRO") provides maintenance, repair and
overhaul of commercial airframes and components including wheels and brakes,
and instruments and avionics for commercial, regional and general aviation
customers.
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The Company is among the largest suppliers of aircraft components and parts and
aircraft maintenance repair and overhaul service businesses in the world. It
competes with other aerospace manufacturers to supply parts and provides
service on specific fleets of aircraft, frequently on a program-by-program bid
basis. Competition is primarily based on product performance, service
capability and price. Contracts to supply components and parts and provide
service are generally with aircraft manufacturers, airlines and airfreight
businesses worldwide. The Company also competes on U.S. government contracts,
generally as a subcontractor. Competition is principally based on product
performance and price.
Specialty Chemicals
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The Company's Specialty Chemicals business is conducted through four major
business groups.
Specialty Plastics Group manufactures thermoplastic polyurethane; high-heat,
corrosion-resistant and low-combustibility plastics; and thermoset resins for
reaction liquid polymer molded parts. Products are marketed and sold to
manufacturers for film and sheet applications; fabric coatings; wire and cable
coating and magnetic media. Specialty plastics are also used in the
manufacture of automotive products; recreational vehicles and products; lawn
and garden equipment; plumbing and industrial pipe; fire sprinkler systems and
building material components.
Specialty Additives Group manufactures synthetic thickeners and emulsifiers;
controlled release and suspension agents; polymer emulsions; dissolvable films;
rubber and lubricant additives and plastic and adhesive modifiers. These
products are used by manufacturers of personal care products; pharmaceuticals;
liquid soaps and detergents; water treatment products; electronics; tires and
petroleum products and molded plastics. Specialty additives are also used in
textile printing manufacturing; non-woven manufacturing; paper coating and
saturation; graphic arts; and paints and industrial coatings.
Sealants, Coatings and Adhesives Group manufactures insulating glass sealants;
construction sealants and water proofing coatings; commercial glazing products
and roofing products. This Group also manufactures automotive sealants;
adhesives and paint products; structural adhesives; laminating adhesives and
rust paints and primers. Products are sold to manufacturers of windows; the
construction and building maintenance industry and automotive and aircraft
assembly industries. Other products are sold in the automotive repair and
residential maintenance markets.
Water Systems and Services Group designs and builds permanent,
owned-and-operated water purification systems and rapid-response mobile water
purification systems. This Group also provides operating services for these
systems under longer-term service
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contracts. Principal users of these systems include customers in the
semiconductor, mining, refinery and power generation industries.
The Company competes with other major chemical manufacturers. Products are
sold primarily based on product performance. Frequently, products are
manufactured or formulated to order for specific customer applications and
often involve considerable technical assistance from the Company.
Other Operations
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Other operations consist of the chlor-alkali and ethylene operations located at
Calvert City, Ky. The chlor-alkali and olefins business participates in a
highly cyclical chlorine, caustic soda, ethylene and olefin co-product
commodity market. Sales and operating results are largely dependent on
industry supply and demand. The Company believes it does not have a
significant market share and, as a result, products produced by this business
are sold at established market prices.
BACKLOGS
At December 31, 1994, the Company had a backlog of approximately $850 million,
principally related to the Aerospace business segment, of which approximately
64 percent is expected to be filled during 1995. The amount of backlog at
December 31, 1993 was approximately $884 million. Backlogs in the Aerospace
business are subject to delivery delays or program cancellations, which are
beyond the Company's control.
RAW MATERIALS
Raw materials used in the manufacture of Aerospace products including steel and
carbon are available from a number of manufacturers and are generally in
adequate supply.
Availability of all major monomers and chemicals used in the Specialty
Chemicals business is anticipated to be adequate for 1995. While chemical
feedstocks are currently in adequate supply, in past years, from time-to-time
for limited periods, various chemical feedstocks were in short supply.
However, the effect of any future shortages on the Company's operations will
depend upon the duration of any such shortages and possibly on future U.S.
government policy, which cannot be determined at this time.
ENVIRONMENTAL
Federal, state and local statutes and regulations relating to the protection of
the environment and the health and safety of employees and other individuals
have resulted in higher operating costs and capital investments by the
industries in which the Company operates. Because of the continuing trend
toward greater environmental awareness and increasingly stringent environmental
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regulations, the Company believes that expenditures for compliance with
environmental, health and safety regulations will continue to have a
significant impact on the conduct of its business. Although it cannot predict
accurately how these developments will affect future operations and earnings,
the Company does not believe these costs will vary significantly from those of
its competitors.
For additional information concerning environmental matters, see Note O of the
Notes to Consolidated Financial Statements appearing on page 41 of the
Company's 1994 Annual Report to Shareholders, which is incorporated herein by
reference.
RESEARCH AND DEVELOPMENT
The Company conducts research and development programs which are directed
toward the development of new products and processes and improvement in
existing products and manufacturing technology. Research and development
expense amounted to $75.5 million, $67.9 million and $67.9 million for the
years ended December 31, 1994, 1993 and 1992, respectively.
PATENTS AND LICENSES
The Company has many patents of its own and has acquired licenses under patents
of others. While such patents in the aggregate are important to the Company,
neither the primary business of the Company nor any of its industry segments is
dependent on any single patent or group of related patents. The Company uses a
number of trademarks important either to its business as a whole or to its
industry segments considered separately. The Company believes that these
trademarks are adequately protected.
HUMAN RESOURCES
As of December 31, 1994, the Company had 12,456 employees in the United States
and Canada. An additional 936 people were employed overseas. Approximately
6,900 employees were hourly paid. The Company believes it has good
relationships with its employees.
The hourly employees who are unionized are covered by collective bargaining
agreements with a number of labor unions and with varying contract termination
dates ranging from March, 1995 to September, 1999. There were no material work
stoppages during 1994.
FOREIGN OPERATIONS
The Company is engaged in business in foreign markets. Manufacturing and
service facilities for Aerospace and Specialty Chemicals are located in
Australia, Belgium, Canada, England, France, Germany, Hong Kong, The
Netherlands, Singapore and Sweden. A plant in Korea manufactures specialty
chemicals for BFGoodrich. The Company also markets its products and services
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through sales subsidiaries and distributors in a number of foreign countries.
The Company also has technical fee and patent royalty agreements with various
foreign companies.
Outside North America, no single foreign geographic area is currently
significant. Currency fluctuations, tariffs and similar import limitations,
price controls and labor regulations can affect the Company's foreign
operations, including foreign affiliates. Other potential limitations on the
Company's foreign operations include expropriation, nationalization,
restrictions on foreign investments or their transfers, and additional
political and economic risks. In addition, the transfer of funds from foreign
operations could be impaired by the unavailability of dollar exchange or other
restrictive regulations that foreign governments could enact. The Company does
not believe that these restrictions or regulations have a materially adverse
effect on its business, in the aggregate.
For additional financial information about foreign and domestic operations and
export sales, see Note H of the Notes to Consolidated Financial Statements
appearing beginning on page 35 of the Company's 1994 Annual Report to
Shareholders, which is incorporated herein by reference.
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ITEM 2. PROPERTIES
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The manufacturing and service operations of the Company are carried on at
facilities, all of which are owned, unless otherwise indicated, at the
following locations:
Aerospace Specialty Chemicals
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Amelot, France* Akron, Ohio
Austin, Texas* Apeldoorn, The Netherlands
Basingstoke, England* Ashland, Ohio
Bognor Regis, England** Avon Lake, Ohio
Burnsville, Minnesota Barbourville, Kentucky
Cedar Knolls, New Jersey Baton Rouge, Louisiana*
Chester, New Jersey* Brighton, Michigan
Cleveland, Ohio Calvert City, Kentucky
Columbus, Ohio Cleveland, Ohio
Dallas, Texas* Columbus, Ohio*
East Brunswick, New Jersey* Conroe, Texas
Eagan, Minnesota Dijon, France
Everett, Washington** El Cajon, California*
Fort Lauderdale, Florida Elk Grove, Illinois*
Grand Rapids, Michigan Fallsington, Pennsylvania*
Grantsville, West Virginia* Gastonia, North Carolina
Greensburg, Ohio** Gothenburg, Sweden
Harrow, England* Greenville, South Carolina
Industrial Airport, Kansas** Henry, Illinois
Jacksonville, Florida Hindley, England
Louisville, Kentucky* Leominster, Massachusetts
Lynnwood, Washington* London, England*
Marlboro, Massachusetts* Los Angeles, California
Melbourne, Florida Louisville, Kentucky
Miami, Florida* Milpitas, California
Middletown, Connecticut* Montreal, Quebec, Canada
Mississauga, Ontario, Canada* Oevel, Belgium
Norwich, New York Pedricktown, New Jersey
Oldsmar, Florida Sydney, Australia*
Ontario, California* Toronto, Ontario, Canada
Ottawa, Canada* Vernon, California
Paris, France*
Phoenix, Arizona Other Operations
Pueblo, Colorado ----------------
Santa Fe Springs, California Calvert City, Kentucky
Santa Fe Springs, California*
Singapore* Research Facilities and
Spencer, West Virginia Administrative Office Other Than
Taipo, Hong Kong* Manufacturing Facility Offices
Tempe, Arizona* --------------------------------
Toulouse, France* Avon Lake, Ohio*
Troy, Ohio Bath, Ohio*
Tullahoma, Tennessee Beachwood, Ohio
Union, West Virginia Brecksville, Ohio
Vergennes, Vermont Brussels, Belgium*
Wessling, Germany* Cleveland, Ohio*
Wilmington, North Carolina Houston, Texas*
Wokingham, England Lincolnshire, Illinois*
Zevenaar, The Netherlands Milan, Italy
Montrose, Ohio
New York, New York*
Paris, France
Uniontown, Ohio*
Washington, D.C.*
Waterloo, Ontario, Canada
* Leased
** Leased in part
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The Company considers that its properties are well maintained and in good
operating condition.
The Company and its subsidiaries are lessees under a number of cancelable and
non-cancelable leases for certain real properties, used primarily for
administrative, retail, maintenance, repair and overhaul of aircraft, aircraft
wheels and brakes and evacuation systems and warehouse operations, and for
certain equipment.
ITEM 3. LEGAL PROCEEDINGS
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There are pending or threatened against BFGoodrich or its subsidiaries various
claims, lawsuits and administrative proceedings, all arising from the ordinary
course of business with respect to commercial, product liability and
environmental matters, which seek remedies or damages. BFGoodrich believes
that any liability that may finally be determined should not have a material
effect on the Company's consolidated financial position.
The Company has been named a potentially responsible party by the U.S.
Environmental Protection Agency in connection with approximately 39 locations
most of which relate to businesses that the Company has previously divested.
The Company believes it may have continuing liability with respect to not more
than 22 sites. Sites for which successor companies have assumed liability are
not included. The Company does not believe that any of the matters either
individually or in the aggregate will have a material adverse financial effect
on the Company.
One of the sites at which the Company has been designated as a potentially
responsible party is at the Industrial Excess Landfill in Uniontown, Ohio. The
Company, with certain other parties, has formed a coalition and has contributed
towards the cost of a community water system. The coalition offered to perform
certain additional remediation efforts at the site, but this offer was rejected
and the EPA has commenced litigation seeking past and future clean-up and
oversight costs. The defendants have joined approximately 68 third party
defendants from which they are seeking cost recovery and contribution. In
December 1991 the State of Ohio filed a suit in the U.S. District Court for the
Northern District of Ohio seeking to recover oversight costs as well as seeking
civil penalties for contamination of waters of the state (groundwater) without
a permit since 1971. The Company believes the action for penalties is without
merit. The Company believes it has adequately accrued for liabilities arising
from this matter.
Another site, Beacon Heights landfill in Beacon Falls, CT, has been the subject
of a suit and consent decree. Under the consent decree the Company and a
coalition of others have substantially performed the EPA selected remedy.
However, construction was not completed before winter weather set in in 1993
and the deadline for completion of construction was not met. Subsequently the
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work has been substantially completed. As a result, stipulated penalties have
been accruing under the terms of the decree. A settlement of the penalties may
be as much as $1 million. If settlement does not occur, a force majeure claim
has been made. It is anticipated that these penalties may be settled for a
reduced amount. The Company's share of this liability is approximately 41%.
The Company believes it has adequately accrued for liabilities arising from
this matter.
In 1991 the Company agreed to participate in the U.S. Environmental Protection
Agency Compliance Audit Program ("CAP") under Section 8(e) of the Toxic
Substances Control Act. That section requires reporting of information
indicating a substantial risk of injury to health or the environment from a
chemical substance or mixture. Under the CAP, the Company agreed to conduct an
audit of its files and report any information that should have been reported
previously. The total potential maximum liability of the Company and its
subsidiaries under the CAP is $1 million. The first part of the CAP required
reporting of substantial risk information concerning health effects. This part
of the audit was completed and the Company anticipates it may be subject to
civil penalties of approximately $175,000 that will be payable at the
conclusion of the second phase. The remaining part of the CAP involves
substantial risk information concerning the environment. The Company will
perform its obligations under this portion of the CAP after the U.S.
Environmental Protection Agency issues guidance concerning the kinds of
environmental information that it believes are reportable. The Company
believes that any civil penalties arising from this portion would not be
substantially different than those incurred under the first portion of the CAP.
The Company believes it has adequately accrued for liabilities arising from
this matter.
On March 10, 1993, Westlake Monomers Corporation ("Westlake") brought an action
in the District Court of Harris County, Texas, alleging that pursuant to a
Right of First Refusal Agreement, it has a right to compel an appraisal and a
right then to elect to purchase all of the common stock of The Geon Company
which was the subject of an initial public offering. Westlake sought to enjoin
the proposed offering and asked for specific performance of the Right of First
Refusal Agreement, attorneys' fees and damages.
The court denied Westlake's application for temporary injunction to enjoin the
sale of the Geon common stock and enjoined BFGoodrich and Geon from encumbering
or transferring the facilities subject to the Right of First Refusal (the
"Facilities") to third parties and ordered BFGoodrich and Geon to maintain and
operate the Facilities in accordance with industry standards until a final
disposition of the lawsuit has been reached. BFGoodrich has not transferred
the Facilities to Geon and continues to operate the Facilities itself.
BFGoodrich has agreed to indemnify and hold Geon harmless from and against any
liabilities and expenses arising directly from the lawsuit. The
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lawsuit has been stayed pending arbitration pursuant to the Master Conveyance
Agreement by which the Company transferred the vinyl chloride monomer
facilities at Calvert City to Westlake in 1990. Westlake also sought to
arbitrate a claim that the aforesaid Amended and Restated Assumption of
Liabilities and Indemnification Agreement relating to certain liabilities at
Calvert City is violative of the assignment clause of the Master Conveyance
Agreement, but has abandoned that claim.
On October 31, 1994, the arbitrator ruled that the Right of First Refusal was
triggered, but the decision did not identify whether the trigger applied to
assets or shares, and did not specify a remedy. Further proceedings with
respect to the scope of the remedy are underway.
The Company has filed a counterclaim against Westlake for tortious interference
with business relations, business disparagement and business defamation. The
counterclaim is not likely to be heard until after the conclusion of the
arbitration proceeding.
In 1991 the Company instituted suit in the United States District Court for the
District of Delaware against Allied-Signal Incorporated and Aircraft Braking
Systems Corporation, alleging infringement of two Company patents relating to
extended disk life brakes and their application in carbon aircraft brakes. The
defendants deny infringement and allege the patents are invalid. The Company
is seeking substantial damages. The trial court issued a decision in November
1994 that Allied-Signal did infringe the patents, but held the patents were
invalid on two separate grounds. The court also determined that Aircraft
Braking Systems did not infringe the patents. The court denied defendant's
request for attorney fees. All parties have appealed the decision.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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Not applicable.
PART II
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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
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Common Stock Prices and Dividends are on page 42 of the Company's 1994 Annual
Report to Shareholders. The number of common shareholders at December 31,
1994, is included in "Other Data: Number of common shareholders at end of
year" on page 44 of the Company's 1994 Annual Report to Shareholders and is
based on the number of shareholders of record at that date. The discussions of
the limitations and restrictions on the payment of dividends on Common Stock
are included in Note C on pages 31 and 32, and Note L on pages 38 and 39 of the
Company's 1994 Annual Report to Shareholders. All of these sections are
incorporated herein by reference.
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ITEM 6. SELECTED FINANCIAL DATA
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Sales from continuing operations, income from continuing operations before
cumulative effect of change in method of accounting, total assets, non-current
long-term debt and capital lease obligations, redeemable preferred stock,
income from continuing operations per share of common stock, and dividends per
share of common stock as of and for each of the years in the five year period
ended December 31, 1994, on page 44 of the Company's 1994 Annual Report to
Shareholders, are incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
- ----------------------
Management's Discussion and Analysis on pages 16-21, 23, 25 and 27 of the
Company's 1994 Annual Report to Shareholders, is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ------- -------------------------------------------
An index to the consolidated financial statements and supplementary data
contained in the Company's 1994 Annual Report to Shareholders, which is
incorporated herein by reference is contained on page F-1 of this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------- ---------------------------------------------------------------
FINANCIAL DISCLOSURE
- ---------------------
None.
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PART III
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------- --------------------------------------------------
Biographical information concerning the Company's Directors appearing under the
caption "Election of Directors" in the Company's proxy statement dated March 2,
1995 is incorporated herein by reference. Biographical information concerning
the Company's Executive Officers is as follows:
John D. Ong, Age 61, Chairman, President and Chief Executive Officer
- --------------------------------------------------------------------
Mr. Ong joined the Company in 1961 as Assistant Counsel. Mr. Ong progressed
through a number of business positions. He was elected Group Vice President of
the Company in 1972, Executive Vice President and a Director in June 1973, Vice
Chairman of the Board in April 1974, President in April 1975, President and
Chief Operating Officer in 1977, and Chairman, and Chief Executive Officer in
July 1979. Mr. Ong has a B.A. and M.A. in history from Ohio State University
and an LL.B. from Harvard Law School.
David L. Burner, Age 55, Executive Vice President and President and Chief
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Operating Officer, BFGoodrich Aerospace
- ---------------------------------------
Mr. Burner joined the Company in 1983 as Vice President, Finance, for the
Company's Engineered Products Group. He served in several other management
positions before being named Executive Vice President of BFGoodrich Aerospace
in 1985. He was appointed President of BFGoodrich Aerospace in 1987. Mr.
Burner was elected a Senior Vice President in 1990 and an Executive Vice
President in 1993. Before joining BFGoodrich he was Executive Vice President
and Chief Financial Officer of ABS Industries in Willoughby, Ohio. Mr. Burner
received a B.S.C. degree in accounting from Ohio University.
Wayne O. Smith, Age 51, Executive Vice President and President and Chief
- ------------------------------------------------------------------------
Operating Officer, BFGoodrich Specialty Chemicals
- -------------------------------------------------
Mr. Smith joined the Company in April 1994 as Executive Vice President and
President, BFGoodrich Specialty Chemicals. Prior to joining the Company, Mr.
Smith was employed as Group Vice President-Gasses Americas, The BOC Group, Ltd.
from 1990 to 1993 and earlier in 1990, as President and Chief Operating
Officer, Chemical Lime, Inc. Between 1974 and 1990 he held various assignments
at Air Products and Chemicals, his last as General Manager of their Specialty
Chemicals Division. He was formerly a Captain and fighter pilot serving eight
years in the Air Force. Mr. Smith has a B.S. in Engineering Sciences from the
United States Air Force Academy.
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D. Lee Tobler, Age 61, Executive Vice President and Chief Financial Officer
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Mr. Tobler joined the Company in January 1985 as Executive Vice President and
Chief Financial Officer and was elected a Director in April 1988. Prior to
coming with the Company, Mr. Tobler had been Group Vice President and Chief
Administrative and Financial Officer of Zapata Corporation from 1981 to 1984.
Mr. Tobler has a B.A. from Brigham Young University and an M.B.A. from
Northwestern University.
Jon V. Heider, Age 60, Executive Vice President and General Counsel
- -------------------------------------------------------------------
Mr. Heider joined the Company in June 1984 as Vice President and General
Counsel. He was elected Senior Vice President in 1988 and Executive Vice
President in 1994. Prior to coming with the Company, Mr. Heider was employed
by Air Products and Chemicals Inc., Allentown, Pa., where he held several posts
including that of General Counsel. His last assignment there was as Vice
President of Corporate Development. His association with Air Products and
Chemicals spanned 18 years. Mr. Heider has a B.A. from the University of
Wisconsin and a J.D. from Harvard Law School.
Nicholas J. Calise, Age 53, Vice President, Associate General Counsel and
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Secretary
- ---------
Mr. Calise joined the Company in October 1984 as Secretary and was also
appointed Staff Vice President and Assistant General Counsel. In January 1989
he was elected Vice President and Associate General Counsel. Prior to joining
BFGoodrich, he was with the Richardson-Vicks Inc. Home Care Products Division,
Memphis, Tennessee, where he was Division Counsel, Director - Planning and
Business Development and Marketing Director. Mr. Calise has an A.B. from
Middlebury College and an M.B.A. and LL.B. from Columbia University.
Robert A. McMillan, Age 52, Vice President and Treasurer
- --------------------------------------------------------
Mr. McMillan joined the Company in July 1974 as an Economist. He progressed
through a number of positions and was elected Vice President and Treasurer
effective August 1, 1986. Mr. McMillan has a B.A. from the University of
California at Santa Barbara and a Ph.D. in economics from the University of
California at Berkeley and was an Economist at the Federal Reserve Bank of
Cleveland and the Bank of America before joining BFGoodrich.
- 14 -
16
Steven G. Rolls, Age 40, Vice President and Controller
- ------------------------------------------------------
Mr. Rolls joined the Company in September 1981 as a Financial Analyst. He
subsequently served in various capacities in the Treasury department, becoming
an Assistant Treasurer in 1985. In 1987 he joined BFGoodrich Canada as Vice
President, Finance and Treasurer. In 1989 he was appointed Vice President -
Finance for the Aerospace business. Mr. Rolls was elected Vice President and
Controller in 1993. He has a B.S. in business administration from Miami
University and an M.B.A. from Ohio State University.
George K. Sherwood, Age 56, Vice President - Tax Administration
- ---------------------------------------------------------------
Mr. Sherwood joined the Company in July 1985 as Staff Vice President - Taxes
and was elected Vice President - Tax Administration in April 1986. Prior to
joining BFGoodrich, Mr. Sherwood was Vice President - Tax Administration for
Zapata Corporation. Mr. Sherwood has a B.S. in business administration from
Kansas State College and an M.B.A. in management from The University of Tulsa.
ITEM 11. EXECUTIVE COMPENSATION
- -------- ----------------------
Information concerning executive compensation appearing under the captions
"Compensation Committee Report" and "Compensation of Directors" in the
Company's proxy statement dated March 2, 1995, is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -------- --------------------------------------------------------------
Security ownership data appearing under the captions "Holdings of Company
Equity Securities by Directors and Executive Officers" and "Beneficial
Ownership of Securities" in the Company's proxy statement dated March 2,
1995, is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
Information appearing under the caption "Transactions With Directors" in the
Company's proxy statement dated March 2, 1995, is incorporated herein by
reference.
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
- -------- ------------------------------------------------------
FORM 8-K
- ---------
(a) (1) and (2) - The response to this portion of Item 14 is
submitted as a separate section of this Form 10-K on page F-1.
(3) - Listing of Exhibits:
A listing of exhibits is on pages II-1 to II-3 of this
Form 10-K.
- 15 -
17
(b) Reports on Form 8-K filed in the fourth quarter of 1994.
None.
- 16 -
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on February 20, 1995.
The BFGoodrich Company
(Registrant)
By /S/JOHN D. ONG
-------------------------------------
(John D. Ong, Chairman, President and
and Chief Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on February 20, 1995 by the following persons
(including a majority of the Board of Directors) on behalf of the registrant
and in the capacities indicated.
/S/STEVEN G. ROLLS /S/JOSEPH A. PICHLER
- ------------------------------------ ------------------------------
(Steven G. Rolls) (Joseph A. Pichler)
Vice President and Controller Director
(Principal Accounting Officer)
/S/ALFRED M. RANKIN, JR.
-----------------------------
(Alfred M. Rankin, Jr.)
/S/JEANETTE GRASSELLI BROWN Director
- ------------------------------------
(Jeanette Grasselli Brown)
Director
/S/IAN M. ROSS
-----------------------------
(Ian M. Ross)
Director
/S/GEORGE A. DAVIDSON, JR.
- ------------------------------------
(George A. Davidson, Jr.)
Director /S/D. LEE TOBLER
-----------------------------
(D. Lee Tobler)
Executive Vice President and
/S/JAMES J. GLASSER Chief Financial Officer and
- ------------------------------------ (Principal Financial Officer)
(James J. Glasser)
Director
/S/WILLIAM L. WALLACE
-----------------------------
/S/THOMAS H. O'LEARY (William L. Wallace)
- ------------------------------------ Director
(Thomas H. O'Leary)
Director
/S/JOHN L. WEINBERG
-----------------------------
/S/JOHN D. ONG (John L. Weinberg)
- ------------------------------------ Director
(John D. Ong)
Chairman, President
Chief Executive Office and Director
(Principal Executive Officer)
- 17 -
19
APPENDIX
PART II, ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following information appears in graphic form on pages 17 and 19 of the
Company's 1994 Annual Report to Shareholders:
1994 Aerospace Sales by Group:
Landing Systems 29%
Sensors and Integrated Systems 28%
Safety Systems 18%
Maintenance, Repair and Overhaul 25%
1994 Specialty Chemicals Sales by Group:
Specialty Plastics 23%
Specialty Additives 37%
Sealants, Coatings and Adhesives 35%
Water Systems and Services 5%
20
THE B.F.GOODRICH COMPANY
INDEX TO FINANCIAL INFORMATION
Item 14(a)(1)-(2)
Reference
------------
1994
Annual
Report to
Shareholders
(page)
------------
Data incorporated by reference from the 1994
Annual Report to Shareholders of The BFGoodrich
Company:
Consolidated Statement of Income for the years
ended December 31, 1994, 1993 and 1992 22
Consolidated Balance Sheet at December 31,
1994 and 1993 24
Consolidated Statement of Cash Flows for the
years ended December 31, 1994, 1993 and 1992 26
Consolidated Statement of Shareholders' Equity
for the years ended December 31, 1994, 1993
and 1992 28
Notes to Consolidated Financial Statements 29 - 41
Quarterly Financial Data (Unaudited) 42
Report of Independent Auditors 43
Schedules have been omitted since the required information is not present, or
not present in amounts sufficient to require submission of the schedule, or
because the information required is included in the above listed financial
statements or notes thereto.
F-1
21
Item 14 (a)(3) Index to Exhibits
Table II
Exhibit No.
- -----------
3(A) The Company's Restated Certificate of Incorporation, as
amended through August 5, 1988. This exhibit was filed
with the same designation as an exhibit to the Company's
Form 10-Q for the quarter ended September 30, 1988, and is
incorporated herein by reference.
(B) The Company's By-Laws, as amended, through February 18,
1991. This exhibit was filed with the same designation as
an exhibit to the Company's Form 10-K Annual Report for the
year ended December 31, 1990, and is incorporated herein by
reference.
4 Information relating to the Company's long-term debt is set
forth in Note C - "Financing Arrangements" on pages 31 and
32 of the Company's 1994 Annual Report to Shareholders, and
is incorporated herein by reference. Instruments defining
the rights of holders of such long-term debt are not filed
herewith since no single debt item exceeds 10% of
consolidated assets. Copies of such instruments will be
furnished to the Commission upon request.
10(A) Key Employees' Stock Option Plan. This exhibit was filed
with the same designation as an exhibit to the Company's
Form 10-K Annual Report for the year ended December 31,
1991, and is incorporated herein by reference.
10(B)(4) Form of Disability Income Agreement. This exhibit was
filed with the same designation as an exhibit to the
Company's Form 10-K Annual Report for the year ended
December 31, 1988, and is incorporated herein by reference.
10(B)(5) Form of Supplemental Executive Retirement Plan Agreement.
This exhibit was filed with the same designation as an
exhibit to the Company's Form 10-K Annual Report for the
year ended December 31, 1989 and is incorporated herein by
reference.
10(C) Performance Share Plan. This exhibit was filed with the
same designation as an exhibit to the Company's Form 10-K
Annual Report for the year ended December 31, 1991, and is
incorporated herein by reference.
10(E) Management Incentive Program. This exhibit was filed with
the same designation as an exhibit to the Company's Form
10-Q for the quarter ended September 30, 1989, and is
incorporated herein by reference.
II-1
22
Item 14 (a)(3) Index to Exhibits
Table II
Exhibit No.
- -----------
10(F) Form of Management Continuity Agreement entered into by The
B.F.Goodrich Company and certain of its employees. This
exhibit was filed with the same designation as an exhibit
to the Company's Form 10-K Annual Report for the year ended
December 31, 1992, and is incorporated herein by reference.
10(G) Performance Unit Plan of The B.F.Goodrich Company. This
exhibit was filed with the same designation as an exhibit
to the Company's Form 10-Q for the quarter ended September
30, 1989, and is incorporated herein by reference.
10(H) Rights Agreement between The B.F.Goodrich Company and
Morgan Shareholder Services Trust Company, as Rights Agent,
dated as of July 20, 1987, and amended and restated as of
December 7, 1987 which includes: as Exhibit A thereto, the
form of Designation, Preferences and Rights of Cumulative
Participating Preferred Stock, Series E; as Exhibit B
thereto, the Form of Rights Certificate; as Exhibit C
thereto, the Summary of Rights to Purchase Preferred Stock;
and the Supplement to the Summary of Rights to Purchase
Preferred Stock. This exhibit was filed with the same
designation as an exhibit to the Company's Form 10-K Annual
Report for the year ended December 31, 1987, and is
incorporated herein by reference. Agreement dated as of
August 1, 1989, substituting The Bank of New York as Rights
Agent and Agreement dated as of August 1, 1989 with The
Bank of New York amending the Rights Agreement. This
exhibit was filed with the same designation as an exhibit
to the Company's Form 10-K Annual Report for the year ended
December 31, 1989 and is incorporated herein by reference.
10(I) Employee Protection Plan. This exhibit was filed with the
same designation as an exhibit to the Company's Form 10-Q
for the quarter ended September 30, 1989, and is
incorporated herein by reference.
10(J) Benefit Restoration Plan. This exhibit was filed with the
same designation as an exhibit to the Company's Form 10-K
Annual Report for the year ended December 31, 1992, and is
incorporated herein by reference.
10(K) Long-Term Incentive Plan. This exhibit was filed with the
same designation as an exhibit to the Company's Form 10-K
Annual Report for the year ended December 31, 1992, and is
incorporated herein by reference.
10(L) Amended and Restated Separation Agreement between the
Company and The Geon Company, which was filed as exhibit
10.1 to Registration Statement No. 33-70998 on Form S-1 of
The Geon Company, is incorporated herein by reference.
II-2
23
Item 14 (a)(3) Index to Exhibits
Table II
Exhibit No.
- -----------
10(M) Amended and Restated General Assignment and Bill of Sale
between the Company and The Geon Company, which was filed
as exhibit 10.2 to Registration Statement No. 33-70998 on
Form S-1 of The Geon Company, is incorporated herein by
reference.
10(N) Amended and Restated Assumption of Liabilities and
Indemnification Agreement between the Company and The Geon
Company, which was filed as exhibit 10.3 to Registration
Statement No. 33-70998 on Form S-1 of The Geon Company, is
incorporated herein by reference.
11 Statement re Computation of per share earnings
13 Annual Report to Shareholders. The Company's 1994 Annual
Report to Shareholders (only those portions incorporated by
reference in the Form 10-K).
21 Subsidiaries
23 Consent of Independent Auditors
27 Financial Data Schedule
The Company will supply copies of the foregoing exhibits to any shareholder
upon receipt of a written request addressed to the Secretary of The
B.F.Goodrich Company, 3925 Embassy Parkway, Akron, Ohio 44333-1799, and the
payment of $.50 per page to help defray the costs of handling, copying and
postage.
II-3