Item 1. Business
SEGMENTS OF BUSINESS
Harnischfeger Industries, Inc. ("Harnischfeger Industries" or the "Company") is a holding company for subsidiaries involved in the worldwide manufacture and distribution of: papermaking machinery (Beloit Corporation); surface mining equipment (P&H(R) Mining Equipment); material handling equipment (P&H Material Handling); and underground mining equipment (Joy Mining Machinery). In early fiscal 1996, the Company completed the acquisition of Dobson Park Industries plc ("Dobson"), an industrial engineering group with interests in underground mining equipment, industrial electronic control systems, toys and plastics. Dobson's principal subsidiary, Longwall International, is engaged in the manufacture, sale and service of mining equipment for the international underground coal mining industry and has been added to the Company's Mining Equipment Segment.
Harnischfeger Industries is the direct successor to a business begun over 100 years ago which, at October 31, 1995, through its subsidiaries, manufactures and markets products classified into three industry segments: Papermaking Machinery and Systems, Mining Equipment, and Material Handling.
PAPERMAKING MACHINERY AND SYSTEMS
The Papermaking Machinery and Systems Group is comprised of the Company's 80% interest in Beloit Corporation ("Beloit"). Mitsubishi Heavy Industries, Ltd. ("Mitsubishi") is the owner of the other 20% interest in Beloit. The Company and Mitsubishi have entered into certain agreements that provide Mitsubishi with the right to designate one of Beloit's five directors. These agreements also place certain restrictions on the transfer of Beloit stock. In the event of a change in control of the Company, Mitsubishi has the right to sell its 20% interest back to the Company for the greater of $60 million or the book value of its equity interest.
Beloit is a leader in the design and manufacture of papermaking machinery and related products used in the pulp and paper industries. Beloit operates on a global basis with major manufacturing facilities in seven countries and sales and service offices located throughout the world. In addition, licensing arrangements exist with several major foreign companies.
Beloit's activities are divided into the following categories: complete installations involving the design, manufacture and installation of integrated papermaking equipment and systems; major rebuilds and servicing of existing systems; and the sale of ancillary equipment and replacement parts. This machinery is custom designed to meet the specific needs of each customer. In 1995, Beloit expanded its service business through the acquisition of the roll-covering business of Rollin, S.A., a roll service and repair company located in France.
Beloit is known for the quality and dependability of its products and is a leader in product innovation and development. Beloit has made a continuous commitment to research and development activities, and has been granted numerous patents on its designs. Beloit systems and equipment are used by a substantial number of paper producers, both domestic and foreign, and Beloit's installed base of equipment exceeds that of any of its competitors.
A major factor in Beloit's success in the paper machinery industry has been its international manufacturing operations. Beloit's overseas facilities have been used to support both domestic and foreign sales and have provided Beloit with the flexibility to shift its manufacturing to more favorable locations as appropriate. In addition, Beloit has been able to take advantage of favorable export financing provided by certain foreign governments. Beloit's manufacturing facilities are supported by a domestic and international marketing network staffed by experienced sales engineers.
Formerly, the Papermaking and Systems Group also included the Company's 20% interest in Measurex Corporation ("Measurex"). On December 29, 1994, Measurex repurchased 2,026,900 shares of its stock which had been held by the Company. On June 23, 1995, Measurex Corporation repurchased the remaining 1,613,100 shares of its stock. These transactions resulted in a gain of $29.7 million. Measurex continues to have cooperative agreements with Beloit.
MINING EQUIPMENT
P&H Mining Equipment is the world's largest producer of electric mining shovels and is a significant producer of electric and diesel-electric crawler and walking draglines, hydraulic mining excavators, blasthole drills, and electric shovel, dredge and dragline bucket products. Electric mining shovels range in capacity from 18 to 80 cubic yards, crawler draglines from 10 to 20 cubic yards, and hydraulic mining excavators from 12 to 27 cubic yards. Capacities for the walking draglines range from 20 to 150 cubic yards.
In 1991, P&H Mining Equipment expanded its product lines by acquiring the large rotary blasthole drill product line from the Gardner-Denver Mining and Construction Division of Cooper Industries, Inc. There are three drill models currently in the active product line, with drilling diameters ranging from 9 to 22 inches and bit load capacities from 70,000 to 150,000 pounds.
The products of P&H Mining Equipment are used in mines, quarries and earth-moving operations in the digging and loading of such minerals and other ores as coal, copper, gold, iron ore, lead, zinc, bauxite, uranium, phosphate, stone and clay.
P&H Mining Equipment has a relationship in the mining shovel business with Kobe Steel, Ltd. ("Kobe") pursuant to which P&H Mining Equipment licenses Kobe to manufacture certain electric mining shovels and related replacement parts in Japan. Harnischfeger Corporation has the exclusive right to market Kobe-manufactured mining shovels and parts outside Japan (except in the case of certain government sales). In addition, Harnischfeger Corporation is party to an agreement, through 1996, with a corporate unit of the People's Republic of China, licensing the manufacture and sale of two models of electric mining shovels and related components. This relationship provides P&H Mining Equipment with an opportunity to sell component parts for shovels built in China.
On November 29, 1994, pursuant to an exchange of common stock, the Company completed its acquisition of Joy Technologies Inc. ("JOY" or "Joy Mining Machinery"), a world leader in underground mining equipment. JOY manufactures and services mining equipment for the underground extraction of coal and other bedded deposits and has facilities in Australia, South Africa, the United Kingdom and the United States, as well as sales offices in Poland and the People's Republic of China. Joy Mining Machinery designs, manufactures and distributes continuous miners, entry drivers and sump shearers; long-wall shearers; shuttle cars; and continuous haulage systems for use in underground mining. JOY products are not sold into the general construction industry, and demand for them is not tied to cycles in that industry. JOY also maintains an extensive network of service and spare parts distribution centers to rebuild and service equipment and sell spare parts in support of its installed base. This network includes six service centers in the United States and four outside of the United States, all of which are strategically located in major underground mining regions. The financial position and results of operations of Harnischfeger Industries and JOY were combined retroactively in fiscal 1995.
In early fiscal 1996, the Company completed the acquisition of Dobson Park Industries plc for a purchase price of approximately $330 million including acquisition costs.
Dobson, headquartered in the United Kingdom, is an industrial engineering group with interests in underground mining equipment, industrial electronic control systems, toys and plastics. Longwall International ("Longwall"), one of the main subsidiaries of Dobson, is engaged in the manufacture, sale and service of underground mining equipment for the international coal mining industry. Its products include electronically controlled roof support systems, armored face conveyors, pumps and belt conveyor components and systems. Longwall will be fully integrated into Joy Mining Machinery and will enable JOY to offer integrated underground longwall mining systems to the worldwide mining industry. The industrial electronic and toys/plastics businesses are being evaluated in the context of the five characteristics required for consideration as a core business of this Company. As a result of this evaluation, it is likely that these businesses will be sold.
Financial information with respect to the acquisition of Dobson is presented in Note 17 to the Financial Statements of the 1995 Annual Report to Shareholders incorporated by reference from the Company's Current Report on Form 8-K dated December 8, 1995.
P&H MATERIAL HANDLING
P&H Material Handling produces lines of through-the-air material handling equipment designed for a variety of users as well as container handling cranes for use in ports. The Division is comprised of five business groups: P&H Equipment, P&H Aftermarket, P&H Distribution and Service, Morris - Engineered Products Division and Morris - Standard Products Division.
P&H Equipment
The P&H Equipment group is comprised of the overhead crane and hoist product lines in the United States. It was formed from the core of what made up the Material Handling Equipment Division in prior years.
The new crane portion of the group is comprised of several product lines: engineered cranes, standard cranes, portal cranes and crane components. Cranes are designed for installation in a wide range of industrial settings. Each crane is engineered to the customer's specifications, using standard components wherever possible. Engineered cranes are marketed for moderate to severe duty cycle applications in capacities from 3 to 800 tons.
Standard overhead cranes are available in capacities from 5 to 100 tons. Stacker cranes, ranging in capacities from 2 to 50 tons, are particularly suitable for factory automation projects. Portal cranes range in lifting capacities from 5 to 100 tons and are used outdoors for woodyard, scrap, and container handling.
The large installed base of cranes and increasing sensitivity of customers to opportunities for improved manufacturing efficiency from upgrading their material handling equipment provides this product line an opportunity for growth.
The component products portion of this group consists of electric wire rope and chain hoists, manual chain hoists, ratchet lever hoists, and electrical products. Hoists range in capacities from 1/8 ton to 60 tons. These hoists use state-of-the-art materials and manufacturing techniques and feature a wide variety of controls.
P&H Aftermarket
The P&H Aftermarket Group consists of: Product Support, which markets repair parts, and PHoenix(TM) which handles pre-owned and remanufactured cranes and parts.
The Product Support portion of the aftermarket group markets replacement products and parts through Material Handling Centers, both independent and company owned, in domestic markets and through licensees or agents in international markets. This group differentiates itself from the competition through reliable and responsive delivery performance.
The PHoenix portion of the aftermarket group markets pre-owned cranes under the PHoenix trademark which have been remanufactured and modernized to meet customer requirements. It also markets pre-owned parts to its customers. The PHoenix group also provides engineering services for the revitalization of crane and runway systems. The group's products are marketed direct and through both independent and company owned Material Handling Centers.
P&H Distribution and Service
This group provides installation, erection and repair and maintenance services under the ProCare(R) trademark through the growing network of company owned Material Handling Centers. The group responds to customers' increased desire to outsource the repair and maintenance of overhead cranes and hoists.
Morris - Engineered Products Division
The Morris - Engineered Products Division is the larger portion of the Morris Mechanical Handling business based in the United Kingdom. It manufactures high integrity special purpose heavy lifting equipment, principally container handling cranes. In addition, its operations in South Africa are involved in the manufacture and service of cranes and other lifting equipment. It also has a United Kingdom Crane Service Division that distributes and services overhead lifting equipment throughout the United Kingdom.
Morris - Standard Products Division
The Morris - Standard Products Division manufactures hoists, cranes, linear motors, and controls. The hoist division manufactures a range of electric wire rope hoists and both electric and hand chain hoists. The industrial cranes division manufactures electric overhead cranes all to standardized designs. Linear Motors manufactures crane and general industrial controls and linear motors for special and general application. A recently acquired operation in Singapore will provide a base for distribution of standard products in that region.
DISCONTINUED SEGMENTS
Environmental
The Company completed the sale of Joy Environmental Technologies ("JET") in the first quarter of 1996. JET has been presented as a discontinued operation in the Company's Consolidated Financial Statements.
JET supplies flue gas desulfurization systems for reducing levels of sulfur dioxide in smokestack emissions which otherwise might react with other chemicals in the atmosphere to form acid rain. JET also designs, fabricates, and installs systems for the collection and removal of ash accumulated at the bottom of coalburning boilers and ash carried up the exhaust flues of these boilers. These products and services are used worldwide by various electric utilities and industrial companies.
Systems
Syscon Corporation ("Syscon"), the remaining unit in the Company's Systems Group, was sold in February, 1995 to Logicon, Inc. Syscon is engaged principally in providing systems development, systems integration and systems services to the United States Government, government agencies and commercial enterprises.
INTERNATIONAL OPERATIONS
In 1995, 1994 and 1993, Beloit's foreign sales (principally the United Kingdom, Italy, Canada, Brazil and Poland) amounted to 41%, 30% and 28%, respectively, of Beloit's consolidated net sales.
Foreign sales of the Mining Equipment segment (principally in Australia, South Africa, Brazil, Canada, United Kingdom and Germany) generated approximately 44% of the segment's consolidated net sales in 1995, 48% in 1994 and 49% in 1993.
More than 60% of Longwall's net sales in 1995 were derived from markets outside the United States (principally the United Kingdom, Continental Europe, Asia, Australia, South Africa and Canada).
P&H Material Handling has been actively increasing its global operations and now has operations in the United Kingdom, South Africa, Canada, Mexico, and Singapore which offer a combination of manufacturing, distribution and service facilities. In addition, agents and distributors represent their products in other parts of the world. Foreign sales in 1995 amounted to 48% of the segment's consolidated net sales.
Beloit has granted licensing agreements to serve certain foreign markets to companies located in Australia, Japan and Spain. The licensing agreement with Mitsubishi in Japan represents the majority of Beloit's license income. Beloit maintains sales and service offices throughout the world to remain competitive in foreign markets.
In general, sales of licensed mining products are managed within the country of manufacture by the foreign licensee. Licensee exports, together with exports from the United States, are sold through P&H Mining Equipment's and P&H Material Handling's subsidiaries, which directly or through subsidiaries or affiliates maintain regional sales offices in: Brisbane, Melbourne, Singleton, Mackay and Perth, Australia; North York and Vancouver, Canada; Hermosillo, Mexico; Belo Horizonte and Sao Paulo, Brazil; Santiago, Chile; Lima, Peru; Weiterstadt, Germany; Aylesbury, United Kingdom; Johannesburg, South Africa; and Puerto Ordaz, Venezuela.
Harnischfeger Industries' international operations are subject to certain risks not generally applicable to its domestic businesses, including currency fluctuations, changes in tariff restrictions, restrictive regulations of foreign governments (including price and exchange controls), and other governmental actions. Harnischfeger Industries has entered into various foreign currency exchange contracts with major international financial institutions designed to minimize its exposure to exchange rate fluctuations on foreign currency transactions.
GENERAL
Seasonality
No significant portion of Harnischfeger Industries' business is subject to or influenced by seasonal factors; however, Harnischfeger Industries' business is influenced by the cyclical nature of the paper machinery, mining, and capital goods industries.
Distribution
Sales of Beloit products are principally made directly to the end user. On a worldwide basis, each manufacturing facility is responsible for a designated market area. Beloit also maintains a worldwide marketing group to coordinate and support worldwide facilities in marketing strategies, technical sales support and participation in major projects including interface with engineering firms and financial institutions. Beloit offers systems and turnkey alternatives to assist in related business development throughout the world. Agents are used in certain foreign countries to augment Beloit's sales force stationed in the segment's manufacturing facilities and in sales offices worldwide.
In the United States, surface mining equipment, overhead cranes and certain electrical products are marketed principally directly from the segments' headquarters and regional sales offices. Electric wire rope and chain hoists and crane modernizations are sold through dealers and distributors, assisted and coordinated by corporate and regional office personnel. P&H Material Handling has a dealer network of regional distributorships (referred to as Material Handling Centers).
Joy Mining Machinery and Longwall sales are made mostly through sales offices located in major coal-producing areas. JOY's and Longwall's worldwide sales forces have marketing responsibility for new machine sales, as well as for parts, components and rebuild services provided to customers. A segment of the sales forces in the United States is dedicated to manning a truck fleet which visits customer sites on a regular basis in order to deliver components and parts.
The manufacture and sale of repair and replacement parts and the servicing of equipment are important aspects of P&H Mining Equipment operations. P&H Mining Equipment maintains mining parts warehouses in Arizona, Minnesota, Nevada, Wisconsin, West Virginia and Wyoming and in Australia, Brazil, Canada, Chile, Germany, South Africa and Venezuela. These warehouses facilitate shipment of customers' orders for parts, and some also function as regional service centers.
Competition
Harnischfeger Industries conducts its domestic and foreign operations under highly competitive market conditions, requiring that its products and services be competitive in price, quality, service and delivery.
The pulp and paper capital machinery market is globally competitive; Beloit's two major competitors are foreign-owned companies. The principal competitors are Valmet Paper Machinery, Inc., with controlling interest held by Valmet Corporation, Finland, and Voith Sulzer Papertech, with headquarters in Germany.
P&H Mining Equipment's principal competitors in electric mining shovels are Bucyrus Erie Company and Marion, a division of Global Industrial Technologies. Harnischfeger Industries believes P&H Mining Equipment is the leading participant in this market. Its principal competitors in the hydraulic mining excavator market are Demag, Hitachi, Caterpillar and Orenstein & Koppel. In draglines, the main competitors are Bucyrus Erie Company and Marion. The Division's main competitors in drills are Ingersoll-Rand, Driltech and Bucyrus Erie Company.
In the underground coal mining industry, JOY competes primarily on the basis of the quality and reliability of its products and its ability to provide rapid, extensive and cost-effective repair and rebuild services and delivery of spare parts. JOY's primary competitors in the continuous mining machinery industry are EIMCO(a Tampella Tamrock Company), the Jeffrey division of Indresco Inc., Simmons- Rand Company(a subsidiary of Long Airdox Company), and Voest Alpine. In the longwall shearer new equipment market, JOY competes primarily with Anderson Longwall PLC, Eickhoff Corporation, and Mitsui Miike Machinery Company, Ltd. In the continuous haulage market, JOY competes with Long Airdox, Fairchild International, and Jeffrey. In the sale of spare parts for JOY's equipment, JOY competes with EIMCO and various small suppliers.
Longwall competes globally. The primary competitors of Longwall are DBT and the Marmon Group.
The principal worldwide competitors for the P&H Material Handling Division are Demag and Konecranes International KCI. Harnischfeger Industries believes that P&H Material Handling is one of the largest worldwide participants in this market. When considering any specific geographic market, the competitors would normally be split into overhead cranes, dockside cranes, hoists, and service. There are significant numbers of competitors in each of the geographic markets and segments of those markets.
Customers
During 1995, there were no sales or services made to an individual customer amounting to 10% or more of consolidated sales.
Backlog
Backlog by business segment for the Company's continuing operations (in thousands of dollars) as of the end of fiscal years 1995 and 1994 was as follows:
Supply of Materials and Purchased Components
The Papermaking Machinery and Systems Group purchases raw materials used in its products which include: plates, sheets, shapes, carbon and alloy steel, stainless steel, brass and bronze, nickel alloy, and aluminum. Purchases of semi-processed and component parts include: castings, valves, filters, pumps, dryers, electrical equipment, and various vacuum, drying, hydraulic, combustion, material-handling and temperature control systems. Beloit has approximately 4,700 suppliers of which approximately 1,000 are most commonly used. No single source is dominant.
P&H Mining Equipment Division and P&H Material Handling manufacture machines and heat-treated gears, pinions, shafts, structural fabrications, electrical motors, generators, and other electrical parts. They purchase raw and semi-processed steel, castings, forgings, copper and other materials for these parts and components from approximately 400 suppliers. In addition, component parts, such as engines, bearings, controls, hydraulic components, and a wide variety of mechanical and electrical items are purchased from approximately 1,500 suppliers. Purchases of materials and components are made on a competitive basis with no single source being dominant.
JOY purchases electric motors, gears, hydraulic parts, electronic components, forgings, steel, clutches and other components and raw materials from outside suppliers. Although JOY purchases certain components and raw materials from a single supplier, alternative sources of supply are available for all such quantities. JOY believes that it has adequate sources of supplies of component parts and raw materials for its manufacturing requirements.
Longwall purchases electric motors, gears, hydraulic parts, electronic components, steel and other components and raw materials from outside suppliers. Certain components and raw materials are purchased from a single supplier; however, alternative sources of supply are available for all such quantities. Longwall believes that it has adequate sources of supplies of component parts and raw materials for all its manufacturing requirements.
Patents and Licenses
Patents are quite important in the papermaking industry. All major machinery manufacturers use patents extensively to protect the technology base that results from research and development. Beloit has been granted numerous patents on its designs and more are pending. Most are registered in all of the major countries into which Beloit and its licensees sell.
In May, 1993, a Federal court jury in Madison, Wisconsin returned a verdict finding that J.M. Voith GmbH of Germany and its subsidiary, Voith, Inc. of Appleton, Wisconsin infringed upon Beloit's patent on its Bel- Champ(R) technology for the drying technology of large paper manufacturing machines. The verdict was appealed by Voith. In September, 1995, J.M. Voith GmbH, Voith, Inc., and Beloit reached an understanding concerning settlement of their outstanding patent litigation.
In addition, on November 23, 1994, a Federal court jury, in Madison, Wisconsin, returned a verdict finding Valmet Corporation of Finland guilty of infringing a key patent held by Beloit Corporation on the Bel-Champ paper machine drying technology. In connection with this suit, the jury awarded Beloit $7.9 million in damages. The verdict in this case has been appealed by Valmet and the award has not been recorded in the Company's financial statements.
P&H Mining Equipment and P&H Material Handling have numerous domestic and foreign patents, patent applications and patent licensing agreements. Harnischfeger Corporation does not consider these businesses materially dependent upon any patent or patent license agreement.
JOY, Longwall and their respective subsidiaries own numerous patents and trademarks and have patent licenses from others relating to their respective products and manufacturing methods. Also, patent and trademark licenses are granted to others throughout the world and royalties are received under most of these licenses. While JOY and Longwall do not consider any particular patent or license or group of patents or licenses to be essential to their respective business as a whole, both JOY and Longwall consider its patents and licenses significant to the conduct of its business in certain product areas.
Research and Development
Harnischfeger Industries maintains a strong commitment to research and development with engineering staffs that are engaged in full-time research and development of new, and improvement of existing, products. Beloit maintains research and development facilities in Rockton, Illinois, Pittsfield, Massachusetts, Bolton, United Kingdom, Clarks Summit, Pennsylvania, Portland, Oregon and Waukesha, Wisconsin. Harnischfeger Corporation maintains research and development facilities in Milwaukee, Wisconsin. JOY and Longwall pursue technological development through the engineering of new products, systems and applications; the improvement and enhancement of licensed technology; and synergistic acquisitions of technology. Research and development expenses were $30.3 million in 1995, $28.9 million in 1994, and $26.7 million in 1993.
Environmental and Health and Safety Matters
The activities of the Company are regulated by federal, state and local statutes, regulations and ordinances relating to both environmental protection and worker health and safety. These laws govern current operations, require remediation of environmental impacts associated with past or current operations, and under certain circumstances provide for civil and criminal penalties and fines, as well as injunctive and remedial relief. The Company's foreign operations are subject to similar requirements as established by their respective countries.
The Company has expended substantial managerial and financial resources in developing and implementing actions for continued compliance with these requirements. The Company believes that it has substantially satisfied these diverse requirements. However, because these requirements are complex and, in many areas, rapidly evolving, there can be no guarantee against the possibility of sizeable additional costs for compliance in the future. These same requirements must also be met by the Company's competitors and, therefore, the costs for present and future compliance with these laws should not create a competitive disadvantage. Further, these laws have not had, and are not presently expected to have, a material adverse effect on the Company.
The Company's operations or facilities have been and may become the subject of formal or informal enforcement actions or proceedings for alleged noncompliance with either environmental or worker health and safety laws or regulations. Such matters have typically been resolved through direct negotiations with the regulatory agency and have typically resulted in corrective actions or abatement programs. However, in some cases, fines or other penalties have been paid. Historically, neither such commitments nor such penalties have been material.
Employees
As of October 31, 1995, Harnischfeger Industries employed approximately 14,000 persons, of which approximately 8,800 were employed in the United States. Approximately 6,950 of the United States employees are represented by local unions under collective bargaining agreements with expiration dates from December 31, 1995 to August 4, 2000. Harnischfeger Industries believes that it maintains generally good relationships with its employees.
Financial Information about Industry Segments
The financial information on industry segments is presented in Note 15 to the Financial Statements incorporated by reference from the Company's Current Report on Form 8-K dated December 8, 1995.
Item 2.
Item 2. Properties
As of October 31, 1995, the following principal properties were owned, except as indicated. All of these plants are generally suitable for operations.
Harnischfeger Industries owns a 120,000 square foot office building in Brookfield, Wisconsin, which is used as its worldwide corporate headquarters and is currently constructing a new corporate headquarters in St. Francis, Wisconsin.
MINING EQUIPMENT LOCATIONS
This segment operates warehouses in Casper and Green River, Wyoming; Hibbing, Minnesota; Charleston and Pineville, West Virginia; Milwaukee, Wisconsin; Phoenix, Arizona; Elco, Nevada; Birmingham, Alabama; Carlsbad, New Mexico; Norton, Virginia; Lovely and Henderson, Kentucky; Hinton, Sparwood, Cornwall and Vancouver, Canada; Bayswater, Mt. Thorley, Gracemere and Mackay, Australia; Belo Horizonte, Brazil; Weiterstadt, Germany; Johannesburg, Wadeville and Hendrina, South Africa; Stobswood, United Kingdom and Puerto Ordaz, Venezuela. The warehouses in Casper, Hibbing, Milwaukee, Mt. Thorley, Belo Horizonte and Johannesburg are owned; the others are leased. In addition, the segment leases sales offices throughout the United States and in principal locations in foreign countries.
P&H MATERIAL HANDLING LOCATIONS
This division has leased facilities for its company owned Material Handling Centers in San Leandro, California; Pittsburg, California; Portland, Oregon; Reno, Nevada; Dallas, Texas; Houston, Texas; New Orleans, Louisiana; Chicago, Illinois; Detroit, Michigan; Pittsburgh, Pennsylvania; and Cleveland, Ohio. In addition, the division leases sales offices throughout the United States and in principal locations in foreign countries. It also has approximately 18 leased locations for service operations in the United Kingdom, Mexico and South Africa.
PAPERMAKING MACHINERY AND SYSTEMS LOCATIONS
- ------------------------- (1) Under a lease expiring in 2007. (2) Under a lease expiring in 2019.
The Papermaking Machinery and Systems business has warehouse space at the above facilities and in addition maintains leased facilities in Memphis, Tennessee; Swiecie, Poland; and Montreal, Canada. Sales offices are also maintained at various locations throughout the world.
Information relating to lease commitments is presented in Note 11 to the Financial Statements incorporated by reference from the Company's Current Report on Form 8-K dated December 8, 1995.
Item 3.
Item 3. Legal Proceedings
The Company is party to litigation matters and claims which are normal in the course of its operations and, while the results of litigation and claims cannot be predicted with certainty, management believes that the final outcome of such matters will not have a materially adverse effect on the Company's consolidated financial position or results of operations.
The Company is also involved in a number of proceedings and potential proceedings relating to environmental matters. Although it is difficult to estimate the potential exposure to the Company related to these environmental matters, the Company believes that these matters will not have a materially adverse effect on its consolidated financial position or results of operations.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth quarter of fiscal 1995.
Executive Officers of the Registrant
The following table sets forth, through the date of filing this 10-K report, the executive officers of Harnischfeger Industries and its major subsidiaries, their ages, their offices with Harnischfeger Industries and the period during which they have held such offices.
Mr. Lundgren joined the Company in September, 1991. Prior to joining the Company, Mr. Lundgren was a partner with the law firm of Michael, Best & Friedrich.
Mr. Podawiltz joined the Company in February, 1995. Prior to joining the Company, Mr. Podawiltz was Vice President of Human Resources with the A.O. Smith Automotive Products Company.
The business address of each such person is 13400 Bishops Lane, Brookfield, Wisconsin 53005. All officers listed above are citizens of the United States of America except for Mr. Lambert who is a citizen of the United Kingdom. Officers are elected annually but may be removed at any time at the discretion of the Board of Directors. There are no family relationships between the foregoing officers.
PART II
The information required by Items 6 through 8 is incorporated by reference from the Company's Current Report on Form 8-K dated December 8, 1995.
PART III
All information required by Items 10 through 13 of Part III, with the exception of information on the Executive Officers which appears in Part I of this report, is incorporated by reference from the Company's Proxy Statement for its 1996 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year.
PART IV
The information required by Item 14 is incorporated by reference from the 1995 Annual Report to Shareholders reported on the Company's Current Report on Form 8-K dated December 8, 1995.
All other schedules are omitted because they are either not applicable or the required information is shown in the financial statements or notes thereto.
Financial statements of 50% or less-owned companies have been omitted because the proportionate share of their profit before income taxes and total assets are less than 20% of the respective consolidated amounts and investments in such companies are less than 20% of consolidated total assets.
(3) Exhibits
* Represents a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.
(b) Reports on Form 8-K
(1) Current Report on Form 8-K dated September 1, 1995 relating to the Company's discussions with Dobson Park Industries plc concerning the possible acquisition of Dobson's outstanding shares.
(2) Current Report on Form 8-K dated October 11, 1995 relating to Harnischfeger and The First National Bank of Boston, as Rights Agent, amending the Rights Agreement dated as of February 8, 1989.
(3) Current Report on Form 8-K dated October 26, 1995 relating to Harnischfeger Industries news release announcing that the Dobson board unanimously recommended that its shareholders approve an offer by Harnischfeger Industries to purchase all of Dobson's outstanding shares.
(4) Current Report on Form 8-K dated December 4, 1995 relating to the pro forma financial information relative to the acquisition of Dobson required pursuant to Article 11 of Regulation S-X and the Company's five-year historical computation of Ratio of Earnings to Fixed Charges.
(5) Current Report on Form 8-K dated December 4, 1995 relating to the 1995 financial statements of Dobson.
(6) Current Report on Form 8-K dated December 8, 1995 relating to the Company's filing of its fiscal 1995 financial statements and notes thereto, Management's Discussion and Analysis, and related schedules and exhibits.
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, in the City of Brookfield, Wisconsin, on the 29th day of January, 1996.
HARNISCHFEGER INDUSTRIES, INC. (Registrant)
/s/FRANCIS M. CORBY, JR. Francis M. Corby, Jr. Executive Vice President for Finance and Administration
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on January 29, 1996.
- ------------------------- (1) Jeffery T. Grade, by signing his name hereto, does hereby sign and execute this report on behalf of each of the above-named Directors of Harnischfeger Industries, Inc. pursuant to powers of attorney executed by each of such Directors and filed with the Securities and Exchange Commission as an exhibit to this report.
January 29, 1996 By: /s/JEFFERY T. GRADE Jeffery T. Grade, Attorney-in-fact
Item 5
Item 5
MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
THE ANNUAL MEETING
The annual meeting of the shareholders of Harnischfeger Industries, Inc. will be held at Milwaukee's Wyndham Hotel, 139 E. Kilbourn Ave., on Tuesday, April 9, 1996 at 10:00 a.m.
ANNUAL REPORT ON FORM 10-K
Copies of the annual report on Form 10-K, filed with the Securities and Exchange Commission, will be available to shareholders after February 15, 1996 without charge on request to:
Secretary Harnischfeger Industries, Inc. P.O. Box 554 Milwaukee, WI 53201-0554 Telephone: (414)797-6480
TRANSFER AGENT AND REGISTRAR
Bank of Boston c/o Boston EquiServe Mail Stop 45-02-09 P.O. Box 644 Boston, MA 02102-0644 Telephone:(617)575-3400
MARKET AND OWNERSHIP OF COMMON STOCK
The principal market for the Company's Common Stock is the New York Stock Exchange, where its trading symbol is HPH. As of October 31, 1995, the approximate number of holders of record of the Company's Common Stock was 2,100. In addition, there were an estimated 10,000 beneficial owners of shares held of record by brokers and fiduciaries.
CORPORATE HEADQUARTERS
13400 Bishops Lane Brookfield, WI 53005
MAILING ADDRESS
P.O. Box 554 Milwaukee, WI 53201-0554
SHAREHOLDER SERVICES
Annual Report Requests and General Information Corporate Communication: (414)797-6626
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