ITEM 1. BUSINESS - ------- --------
GENERAL DEVELOPMENT OF BUSINESS
The B.F.Goodrich Company ("BFGoodrich" or the "Company") manufactures and supplies a wide variety of systems and component parts for the aerospace industry and provides maintenance, repair and overhaul services on commercial, regional, business and general aviation aircraft. The Company also manufactures specialty plastics and specialty additives products for a variety of end-user applications. In addition, the Company produces chlor-alkali and olefins products.
On October 21, 1996, the Company entered into a definitive agreement to sell Tremco Incorporated ("Tremco"), its wholly owned subsidiary, to RPM, Inc. The transaction was completed on February 3, 1997, for approximately $230 million resulting in an estimated pretax gain of approximately $85 million, subject to post-closing adjustments. Also during 1996, the Company disposed of Tremco Autobody Technologies, Inc. and an adhesives business. The operations of Tremco, Tremco Autobody Technologies, Inc. and the adhesives business represented the Sealants, Coatings and Adhesives ("SC&A") Group of the Company. The disposition of the SC&A Group represents the disposal of a segment of a business under APB Opinion No. 30. Accordingly, the Consolidated Statement of Income has been restated to reflect the SC&A Group as a discontinued operation.
A further description of the Company's business is provided below.
BFGoodrich, with 1996 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 Richfield, Summit County, Ohio with a mailing address at 4020 Kinross Lakes Parkway, Richfield, Ohio 44286-9368 (telephone (216) 659-7600).
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.
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During 1996, the Company's Specialty Chemicals segment acquired five businesses for cash consideration of approximately $108 million. The aggregate purchase price includes approximately $80 million of goodwill. The purchase price allocations have been based on preliminary estimates, which may be revised at a later date. Operations of these businesses are included in the Company's results from the dates of acquisition.
Four of the acquisitions are part of the Specialty Additives Group. One of the businesses acquired is a European-based supplier of emulsions and polymers for use in paint and coatings for textiles, paper, graphic arts and industrial applications. Two of the acquisitions represent product lines consisting of water-borne acrylic resins and coatings and additives used in the graphic arts industry. The fourth acquisition consists of water-based textile coatings product lines. The Specialty Plastics Group made the remaining acquisition, a small supplier of anti-static compounds.
During 1995, the Company acquired four small aerospace businesses and two small specialty chemical businesses for an aggregate price of $15.4 million. Operations of these businesses are included in the Company's results from the dates of acquisition.
In 1995, the Company sold Arrowhead Industrial Water, Inc., for an adjusted selling price of $84.3 million, which resulted in a pretax gain of $3.6 million.
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 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. Operations of these businesses are included in the Company's results from the dates of acquisition.
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, Tennessee. The service facilities are located in Miami, Florida.
Rosemount Aerospace designs and manufactures aerospace sensors and related equipment in facilities located in Burnsville and Eagan, Minnesota.
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.
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The three Specialty Chemicals businesses acquired in 1993 included a water management business (which was subsequently included in and sold along with Arrowhead Industrial Water, Inc.), 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 chloralkali, ethylene and utilities operations primarily located at Calvert City, Kentucky) 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.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
In 1996, 1995 and 1994 sales to U.S. government departments and agencies, principally in the Aerospace business segment, totaled approximately 10 percent, 10 percent and 11 percent, respectively, of consolidated sales.
For financial information concerning the Company's sales, operating income, identifiable assets, property additions, depreciation and amortization and geographic information, see Note I of the Notes to Consolidated Financial Statements appearing beginning on page 36 of the Company's 1996 Annual Report to Shareholders, which is incorporated herein by reference.
NARRATIVE DESCRIPTION OF BUSINESS
Aerospace - ---------
The Company's Aerospace business is conducted through three major business groups.
Landing Systems Group manufactures aircraft landing gear; aircraft wheels and brakes; high-temperature composites and manufactures aircraft evacuation slides and rafts for commercial, military, regional and business aviation customers, and space programs.
Sensors and Integrated Systems Group manufactures sensors and sensor-based systems; fuel measurement and management systems; engine electrical and ignition system components; electromechanical actuators; aircraft windshield wiper systems; health and usage management systems, electronic test equipment; ice protection systems; specialty heated products; collision warning systems; weather detection systems; standby attitude indicators; aircraft lighting components; and polymer and composite products for commercial, military, regional, business and general aviation customers, and for aircraft engine and space programs.
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Maintenance, Repair and Overhaul Group ("MRO") provides maintenance, repair and overhaul of commercial airframes, components, wheels and brakes, landing gear, instruments and avionics for commercial, regional, business and general aviation customers.
The Company is among the largest suppliers of aircraft systems and components and aircraft maintenance repair and overhaul service businesses in the world. It competes with other aerospace industry manufacturers to supply parts and provide 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 systems and components 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 - -------------------
The Company's Specialty Chemicals business is conducted through two major business groups.
Specialty Plastics Group manufactures thermoplastic polyurethane and alloys; high-heat-resistant and low-combustibility plastics; static-dissipating polymers; and reaction-injection molding resins. Products are marketed and sold to manufacturers for film and sheet applications; wire and cable jacketing; and magnetic media. Specialty plastics are also used in the manufacture of automotive products; recreational vehicles and products; agricultural equipment; industrial 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; 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.
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 - ----------------
Other Operations represent the chlor-alkali and olefins operations located at Calvert City, Kentucky. 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
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market share and, as a result, products produced by this business are sold at established market prices.
BACKLOGS
At December 31, 1996, the Company had a backlog of approximately $1.1 billion, principally related to the Aerospace business segment, of which approximately 60 percent is expected to be filled during 1997. The amount of backlog at December 31, 1995 was approximately $1.0 billion. 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 1997. 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 a focus toward greater environmental awareness and increasingly stringent environmental 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 Q of the Notes to Consolidated Financial Statements appearing on page 43 of the Company's 1996 Annual Report to Shareholders, which is incorporated herein by reference.
RESEARCH AND DEVELOPMENT
The Company conducts research and development under Company-funded programs for commercial products and under contracts with others. Research and development expense amounted to $124.1 million in 1996, which includes amounts funded by customers. For additional information concerning research and development expense, see Note J of the Notes to
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Consolidated Financial Statements appearing on page 38 of the Company's 1996 Annual Report to Shareholders, which is incorporated herein by reference.
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, 1996, the Company had 13,143 employees in the United States and Canada, which includes 1,506 employees of the now divested Sealants, Coatings and Adhesives Group. An additional 1,017 people were employed overseas. Approximately 6,200 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 May 1997 to September 1999. There were no material work stoppages during 1996.
FOREIGN OPERATIONS
The Company is engaged in business in foreign markets. Manufacturing and service facilities for Aerospace and Specialty Chemicals are located in Belgium, Canada, England, France, Hong Kong, The Netherlands, Singapore and Spain. A plant in Korea manufactures specialty chemicals for BFGoodrich. The Company also markets its products and services 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, although the Company is expanding its business in Europe. 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 such 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 I of the Notes to Consolidated Financial Statements appearing beginning on page 36 of the Company's 1996 Annual Report to Shareholders, which is incorporated herein by reference.
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ITEM 2.
ITEM 2. PROPERTIES - ------- ----------
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 - --------- ------------------- Amelot, France* Akron, Ohio Austin, Texas* Antwerp, Belgium Basingstoke, England* Apeldoorn, The Netherlands*** Bedford, Massachusetts Ashland, Ohio*** Burnsville, Minnesota Avon Lake, Ohio Cedar Knolls, New Jersey Barbourville, Kentucky*** Cleveland, Ohio** Barcelona, Spain Columbus, Ohio Calvert City, Kentucky Dallas, Texas* Chagrin Falls, Ohio East Brunswick, New Jersey* Cleveland, Ohio*** Eagan, Minnesota Dijon, France Everett, Washington** Elyria, Ohio Fort Lauderdale, Florida Gastonia, North Carolina Grand Rapids, Michigan Gothenburg, Sweden*** Green, Ohio** Greenville, South Carolina Harrow, England* Henry, Illinois Jacksonville, Florida Hindley, England*** Louisville, Kentucky* Lawrence, Massachusetts Lynnwood, Washington* Leominster, Massachusetts Marlboro, Massachusetts* Louisville, Kentucky Memphis, Tennessee Oevel, Belgium Miami, Florida* Pedricktown, New Jersey Middletown, Connecticut* Somersby, Australia*** New Century, Kansas** Toronto, Ontario, Canada*** Norwich, New York Twinsburg, Ohio Oldsmar, Florida Vernon, California*** Ontario, California* Paris, France Other Operations Phoenix, Arizona ---------------- Pueblo, Colorado Calvert City, Kentucky Santa Fe Springs, California** Singapore* Research Facilities and Spencer, West Virginia Administrative Offices Other Than Taipo, Hong Kong* Manufacturing Facility Offices Tempe, Arizona* ------------------------------ Troy, Ohio Avon Lake, Ohio* Tullahoma, Tennessee Beachwood, Ohio*** Union, West Virginia Brecksville, Ohio Vergennes, Vermont Brussels, Belgium* Wilmington, North Carolina Cleveland, Ohio* Wokingham, England Hong Kong* Zevenaar, The Netherlands London, England* Montrose, Ohio North Canton, Ohio* Paris, France * Leased Richfield, Ohio ** Leased in part Uniontown, Ohio* *** This site was operated by Tremco Washington, D.C.* Incorporated which was divested Waterloo, Ontario, Canada* in 1997
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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.
ITEM 3. LEGAL PROCEEDINGS - ------- -----------------
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 with respect to commercial and product liability claims, should not have a material effect on the Company's consolidated financial position or results of operations.
The Company has been named a potentially responsible party by the U.S. Environmental Protection Agency in connection with 32 sites most of which relate to businesses that the Company has previously discontinued. The Company believes it may have continuing liability with respect to not more than 15 sites, most of which relate to previously discontinued businesses. Sites for which successor companies have assumed liability are not included. Based on information currently available, the Company believes it has adequately accrued for future environmental expenditures. However, management believes that it is reasonably possible that additional environmental costs may be incurred beyond the amounts accrued as a result of new information. The amounts, if any, however, cannot be estimated and management believes that they would not be material to the Company's financial condition, but could be material to the Company's results of operations in a given period.
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 in the Federal District Court for the Northern District of Ohio 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, Connecticut, has been the subject of a suit and consent decree in the Federal District Court for the District of Connecticut. Under the consent decree the Company and a coalition of others have substantially performed the EPA
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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 work has been substantially completed. The Government asserted stipulated penalties for failing to complete the remediation project on time, which penalties the generators disputed. An agreement has been reached to settle the stipulated penalties issue for $600,000. The Company's share of this liability is approximately 41%. The Company believes it has adequately accrued for liabilities arising from this matter.
The Company, among others, has been sued by the State of Oklahoma Department of Environmental Quality in State District Court in Ottawa County, Oklahoma, concerning environmental conditions at the Company's former tire plant site in Miami, Oklahoma. Liability relating to further investigation of potential soil and groundwater contamination at the site have been assumed by The Uniroyal Goodrich Tire Company. Since the Company transferred title to the facility in 1993, demolition without complete abatement of asbestos has occurred at the site due to actions of the past owner or its demolition contractor. The Company does not believe it will have any material liability at this site although the suit does seek penalties for alleged violations of environmental laws which could exceed $100,000 if upheld by the court.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------- ---------------------------------------------------
Not applicable.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED - ------- ------------------------------------------------- STOCKHOLDER MATTERS - -------------------
Common stock prices and dividends are on page 45 of the Company's 1996 Annual Report to Shareholders. The number of common shareholders at December 31, 1996, is included in "Other Data: Common shareholders of record at end of year" on page 46 of the Company's 1996 Annual Report to Shareholders. The discussions of the limitations and restrictions on the payment of dividends on common stock are included in Note D on pages 32 and 33, and Note O on page 41 of the Company's 1996 Annual Report to Shareholders. All of these sections are incorporated herein by reference.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA - ------- -----------------------
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, mandatorily redeemable preferred securities of Trust, 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, 1996, on page 46 of the Company's 1996 Annual Report to Shareholders, are incorporated herein by reference.
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ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL - ------- ------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS - -----------------------------------
Management's Discussion and Analysis on pages 18-24 of the Company's 1996 Annual Report to Shareholders, is incorporated herein by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - ------- -------------------------------------------
The consolidated financial statements and the related notes thereto, together with the report thereon of Ernst & Young LLP dated February 4, 1997, and supplementary data, appearing on pages 25-46 of the Company's 1996 Annual Report to Shareholders, are incorporated herein by reference.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON - ------- ------------------------------------------------ ACCOUNTING AND FINANCIAL DISCLOSURE - -----------------------------------
None.
PART III --------
ITEM 10.
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 7, 1997 is incorporated herein by reference. Biographical information concerning the Company's Executive Officers is as follows:
John D. Ong, Age 63, Chairman - -----------------------------
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, Chairman and Chief Executive Officer in July 1979. He relinquished the title of Chief Executive Officer in December 1996. Mr. Ong has a B.A. and M.A. in history from Ohio State University and an LL.B. from Harvard Law School. Mr. Ong has announced his intention to retire July 1, 1997.
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David L. Burner, Age 57, Chief Executive Officer and President - --------------------------------------------------------------
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, an Executive Vice President in 1993, President in December 1995, and, additionally, Chief Executive Officer in December 1996. 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.
Jon V. Heider, Age 62, 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.
Marshall O. Larsen, Age 48, Executive Vice President and President and Chief - ---------------------------------------------------------------------------- Operating Officer, BFGoodrich Aerospace - ---------------------------------------
Mr. Larsen joined the Company in 1977 as an Operations Analyst. He served in various management positions until 1986 when he became Assistant to the President of the Company. He later served as General Manager of several divisions of BFGoodrich Aerospace. In 1994, Mr. Larsen was elected a Vice President of the Company and named Group Vice President, Safety Systems, BFGoodrich Aerospace. In December 1995 he was elected Executive Vice President of the Company and named President and Chief Operating Officer of BFGoodrich Aerospace. Mr. Larsen has a B.S. in engineering from the U.S. Military Academy and an M.S. in industrial administration from the Krannert Graduate School of Management at Purdue University.
D. Lee Tobler, Age 63, Executive Vice President and Chief Financial Officer - ---------------------------------------------------------------------------
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.
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Nicholas J. Calise, Age 55, Vice President, Associate General Counsel and - ------------------------------------------------------------------------- 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 54, 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 in August 1986 and served in this capacity until January 1997. 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.
Steven G. Rolls, Age 42, 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 58, 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.
Les C. Vinney, Age 48, Vice President and Treasurer - ---------------------------------------------------
Mr. Vinney joined the Company in 1991 as Vice President of Finance and Chief Financial Officer, Specialty Polymers and Chemicals Division. In 1993, he was named Senior Vice President, Finance and Administration, BFGoodrich Specialty Chemicals. In 1994, he was named Group Vice President, Sealants, Coatings and Adhesives Group, and President, Tremco Incorporated, and elected a Vice President of the Company. In January 1997, Mr. Vinney was elected Vice President and Treasurer of the Company. Prior to joining the Company, he was with Engelhard Corporation in a number of senior operating and financial management positions, including Group Vice President of the Engineered Materials Division. He also held various management positions with Exxon Corporation. Mr. Vinney has a B.A. in economics and political science and an M.B.A. from Cornell University.
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ITEM 11.
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 7, 1997, is incorporated herein by reference.
ITEM 12.
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 7, 1997, is incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - -------- ----------------------------------------------
None.
PART IV -------
ITEM 14.
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.
(3) - Listing of Exhibits:
A listing of exhibits is on pages II-1 to II-3 of this Form 10-K.
(b) Reports on Form 8-K filed in the fourth quarter of 1996.
None.
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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 17, 1997.
The BFGoodrich Company (Registrant)
By /s/DAVID L. BURNER --------------------------------- (David L. Burner, Chief Executive Officer and President)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 17, 1997 by the following persons (including a majority of the Board of Directors) on behalf of the registrant and in the capacities indicated.
/s/ DAVID L. BURNER - ---------------------------------- ---------------------------------- (David L. Burner) (Thomas H. O'Leary) Chief Executive Officer, President Director and Director (Principal Executive Officer) /s/ DOUGLAS E. OLESEN ---------------------------------- /s/ JOHN D. ONG (Douglas E. Olesen) - ---------------------------------- Director (John D. Ong) Chairman and Director /s/ RICHARD DE J. OSBORNE ---------------------------------- /s/ D. LEE TOBLER (Richard de J. Osborne) - ---------------------------------- Director (D. Lee Tobler) Executive Vice President and Chief Financial Officer and Director /s/ JOSEPH A. PICHLER (Principal Financial Officer) ---------------------------------- (Joseph A. Pichler) Director /s/ STEVEN G. ROLLS - ---------------------------------- (Steven G. Rolls) /s/ ALFRED M. RANKIN, JR. Vice President and Controller ---------------------------------- (Principal Accounting Officer) (Alfred M. Rankin, Jr.) Director
/s/ JEANETTE GRASSELLI BROWN - ---------------------------------- /s/ IAN M. ROSS (Jeanette Grasselli Brown) ---------------------------------- Director (Ian M. Ross) Director
/s/ GEORGE A. DAVIDSON, JR. - ---------------------------------- /s/ WILLIAM L. WALLACE (George A. Davidson, Jr.) ---------------------------------- Director (William L. Wallace) Director
/s/ RICHARD K. DAVIDSON - ---------------------------------- /s/ A. THOMAS YOUNG (Richard K. Davidson) ---------------------------------- Director (A. Thomas Young) Director
/s/ JAMES J. GLASSER - ---------------------------------- (James J. Glasser) Director
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THE B.F.GOODRICH COMPANY
INDEX TO FINANCIAL INFORMATION Item 14(a)(1)-(2)
Reference --------- Annual Report to shareholders (page) --------- Data incorporated by reference from the 1996 Annual Report to Shareholders of The BFGoodrich Company:
Report of Independent Auditors 25 Consolidated Statement of Income for the years ended December 31, 1996, 1995 and 1994 26 Consolidated Balance Sheet at December 31, 1996 and 1995 27 Consolidated Statement of Cash Flows for the years ended December 31, 1996, 1995 and 1994 28 Consolidated Statement of Shareholders' Equity for the years ended December 31, 1996, 1995 and 1994 29 Notes to Consolidated Financial Statements 30 - 44 Quarterly Financial Data (Unaudited) 45
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 is included in the above listed financial statements or notes thereto.
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 D - "Financing Arrangements" on pages 32 and 33 of the Company's 1996 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) Stock Option Plan.
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.
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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) Senior Executive Management Incentive Plan. This exhibit was filed as Appendix B to the Company's 1995 Proxy Statement dated March 2, 1995 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)(1) Benefit Restoration Plan. This exhibit was filed as Exhibit 10(J) to the Company's Form 10-K Annual Report for the year ended December 31, 1992, and is incorporated herein by reference.
10(J)(2) The B.F.Goodrich Company Savings Benefit Restoration Plan was filed as Exhibit 4(b) to the Company's Registration Statement No. 333-19697 on Form S-8 and is incorporated herein by reference.
10(K) Long-Term Incentive Plan and form of award. This exhibit was filed as Exhibit 10(K) to the Company's Form 10-K Annual Report for the year ended December 31, 1995, 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.
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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.
10(O) Outside Directors' Phantom Share Plan. This exhibit was filed as Exhibit 10(O) to the Company's Form 10-K Annual Report for the year ended December 31, 1995, and is incorporated herein by reference.
11 Statement re Computation of per share earnings
13 Annual Report to Shareholders. The Company's 1996 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, 4020 Kinross Lakes Parkway, Richfield, Ohio 44286-9368, and the payment of $.50 per page (except for the Annual Report to Shareholders which is complimentary) to help defray the costs of handling, copying and postage.
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