ITEM 1. BUSINESS. - ------------------ GENERAL
The Geon Company, together with its subsidiaries (the Company), is the world's largest manufacturer and marketer of polyvinyl chloride (PVC) compounds and a leading North American producer of PVC resins. PVC is the world's second most widely used plastic. It is an attractive alternative to traditional materials such as glass, metal and wood and other plastic materials because of its versatility, durability and cost competitiveness. PVC's largest applications are associated with infrastructure development, building products and consumer durable goods. The Company also produces and markets vinyl chloride monomer (VCM), an intermediate precursor to PVC. The Company operates in one business segment with operations primarily located in the United States and Canada. On October 31, 1997, the Company acquired Synergistics Industries Limited (Synergistics), a manufacturer of a broad line of plastic compounds and liquid plasticizers (see "Products" below). Synergistics has approximately 500 employees and six manufacturing sites in the United States and Canada. The Company sells its PVC resins to third parties who produce their own compounds for use primarily in larger volume construction applications, such as pipe and pipe fittings, vinyl house siding, flooring, wall coverings and window components. The Company also manufactures its own PVC compounds for sale to third parties who use such compounds in a variety of applications, such as electrical conduits and wire insulation, packaging (including film, bottle and specialty packaging), residential windows and higher-performance applications, such as business machine housings, application components and medical devices. As of December 31, 1997 the Company's North American nameplate PVC capacity was approximately 2.8 billion pounds, or approximately 18% of total U.S. and Canadian PVC capacity.
PRODUCTS The Company's products include PVC compounds, PVC suspension and mass resins, specialty dispersion resins, and vinyl chloride monomer (VCM), an intermediate pre-curser to PVC. In addition, the Company offers its analytical, testing and problem-solving capabilities to customers and suppliers through Polymer Diagnostics Inc., a newly formed business venture. The Company also produces chlorine for use in its production processes through a joint venture arrangement. Chlorine is an essential raw material in the production of VCM and PVC. Compounds are made by combining vinyl resin with additives. Depending upon the additives used, the compound can be either rigid and impact-resistant or soft and flexible. Compounds are fabricated by customers of the Company by extrusion, calendaring, injection-molding or blow-molding. Flexible compounds are used for wire and cable insulation, automotive interior and exterior trim, packaging and medical devices. Rigid extrusion PVC compounds are commonly used in window frames, vertical blinds and construction applications. Injection- molding PVC compounds are used in specialty parts like business machine components, application parts and bottles. The Company's development of compounds that can be injection-molded into thin-walled complex parts or that have other unique characteristics has opened new applications and markets for PVC products. With the acquisition of Synergistics, the Company added plasticizers and additives that give flexibility to PVC, to its list of products. These are produced for both internal use and for sale to third parties. In addition, Synergistics produces non-PVC compounds including thermoplastic elastomers and cross-linked polyethylene. The Company supports its compound products by providing service to customers through enhanced customer support. The Company's sales force works with engineering and marketing experts of original equipment manufacturers in addition to purchasing agents to create new uses for PVC products and to replace more costly plastics and other traditional materials such as wood, glass or aluminum through the development of cost-effective solutions that meet specific customer needs. In addition, the Company uses a combination of material science, computer-aided design and prototype part production capabilities to assist customers in the development and application of new uses for higher-performance PVC compounds. PVC suspension and mass resins, named for the different processes used to produce them, are powders that cannot be used without the addition of ingredients to form a vinyl compound. Suspension/mass resins can be further categorized as general purpose and special purpose resins. General purpose resins comprise the largest segment of resins by volume and are typically used in rigid applications such as pipe and exterior siding. Special purpose resins are a broad category of resins possessing unique characteristics such as color and clarity and are used in a wide variety of applications such as film, medical and automotive products. Geon's PVC resin production supplies the Company's compounding operations. In addition, the Company sells PVC resin to third party trade customers. Similarly, VCM is used primarily internally for the production of PVC resin. The Company supplies approximately one-third of its chlorine requirements through a joint venture arrangement with Olin Corporation. Specialty dispersion resins are much finer in particle size than suspension resins. Compounded with plasticizers they take on soft, flexible characteristics. They are used primarily in wire and metal coatings, vinyl flooring, vinyl wall coverings and automotive interiors, as well as in consumer products such as toys.
In 1997, 40% of the Company's total revenues were attributable to compound sales, 44% to suspension and mass resins, 9% to specialty and dispersion resins and the remaining 7% to VCM sales and other revenues. Approximately 66% of the Company's PVC shipments (in pounds) in 1997 were sold as suspension and mass PVC resins, with 25% sold as PVC compounds and 9% as specialty dispersion resins.
COMPETITION The Company competes with major U.S. chemical manufacturers and diversified companies, some of which have greater financial resources than the Company. Competition in the industry is based upon factors, the importance of which vary depending on the specific characteristics of the product and the applicable market, ranging from price and availability to product performance and customer and technical support. With respect to PVC resins, the Company competes primarily with seven major North American PVC producers: Borden Chemicals and Plastics Limited Partnership; CONDEA Vista Chemical Company (a subsidiary of RWE-DEA Hamburg, Germany); Formosa Plastics Corporation U.S.A. (a subsidiary of Formosa Plastic Group, Taipei, Taiwan); Georgia Gulf Corporation; Occidental Chemical Corporation (a subsidiary of Occidental Petroleum Corporation), Shintech, Inc. (a subsidiary of Shin Etsu Chemical Co., Ltd., Tokyo, Japan) and The Westlake Group. The key competitive factors are price, product availability and performance. In 1997, the eight largest resin producers (one of which is the Company) accounted for approximately 92% of the total estimated resin capacity. None of the producers had more than 20% of total resin capacity. With respect to PVC compounds, the Company competes with certain of the foregoing entities along with many independent custom compounders. Because there is no single PVC compound market, the manner in which the Company competes varies from market to market, although in each market the Company competes primarily on the basis of product consistency and customer service in addition to price. In certain PVC compound markets, such as pipe fittings, wire and cable, and bottles, the Company competes with other PVC resin manufacturers. In the markets for higher performance PVC compounds, such as extrusion and injection molding compounds for business equipment, appliances, telecommunications and construction, the Company competes less with traditional PVC manufacturers and more with other non-PVC plastic manufacturers, such as General Electric Company, Bayer AG and The Dow Chemical Company. Manufacturing margins and prices in these markets tend to be higher and more stable than PVC resin and other compound markets, although such areas have higher support costs comprised of sales, marketing, technical service, customer support and research and development. In the other PVC compound markets (rigid extrusion compounds for custom profiles, window lineals and vertical blinds), the Company competes with other PVC manufacturers and custom compounders.
RAW MATERIALS The Company produces the majority of the VCM it requires for the manufacture of PVC at its plant in LaPorte, Texas. In April 1996, the Company expanded the capacity of the LaPorte facility by 800 million pounds, bringing its capacity to 2.4 billion pounds. In addition, the Company has a long-term Canadian VCM supply contract providing substantially all VCM requirements for the Company's Canadian PVC resin production located in Scotford, Alberta. The Canadian supply contract remains effective through 2000. The two principal raw materials used by the Company to manufacture VCM are ethylene and chlorine. The majority of the Company's ethylene requirements are provided under three long-term supply agreements with the largest having an initial term through December 31, 2000, and continuing thereafter unless two years prior notice of termination is given by either party. The other significant long-term supply agreements expire at the end of 1998 and early in 2001. The Company has over 90% of its anticipated ethylene requirements under contract for 1998. With the expiration of one supply agreement at the end of 1998, approximately 65% of the projected 1999 ethylene requirement will be under contract. Supplies of ethylene are expected to be readily available at competitive pricing over the next few years following recent industry capacity expansions. The Company continues to explore alternatives which would provide ethylene at or near producer economics. The Company sources its chlorine requirements three ways: (1) chlor-alkali joint venture participation; (2) agreement with Bayer Corporation for hydrogen chloride; and (3) third party purchases. Late in 1998 each of these sources will provide approximately one-third of the Company's requirements. The Company has a 50% participation in a chlor-alkali plant under a joint venture agreement with Olin Corporation. The plant, which began operations in the fourth quarter of 1997, has a capacity of 250,000 tons. A future plant expansion to a capacity of 400,000 tons can be accommodated. The Company has an agreement with Bayer Corporation under which Bayer will build and operate a pipeline to transport by-product anhydrous hydrogen chloride from its plant to Geon's nearby LaPorte, Texas plant. Geon is building an oxychlorination facility that will convert the hydrogen chloride to chlorine for use in the VCM production process. Completion of this project is expected in the third quarter of 1998. The remainder of the Company's chlorine requirements are purchased from third parties through long-term supply agreements (other than those discussed above) and on the spot-market. The Company's primary long-term chlorine supply agreements are with three different domestic suppliers which expire through 2005. All projected third
party purchases are contracted through 1999. These supply agreements generally contain volume commitments and various pricing mechanisms which management believes provide a cost-effective sourcing of chlorine. Historically, chlorine and ethylene have been produced in the United States at a lower cost than elsewhere in the world. This cost advantage has resulted in U.S. producers of PVC having lower raw materials costs than their counterparts in many other parts of the world. In addition to the raw materials for VCM, the Company purchases a variety of additives to manufacture its compound products. These materials generally have adequate alternative sources of supply and are not purchased under multi-year contracts.
RESEARCH AND DEVELOPMENT The Company has developed substantial research and development capability. The Company's efforts are devoted to (i) providing support to its manufacturing plants for cost reduction, productivity and quality improvement programs, (ii) providing quality technical services to assure the continued success of its products for its customers' applications, (iii) providing technology for improvements to its products, processes and applications, and (iv) developing new products to satisfy defined market needs. The Company operates a research and development center in Avon Lake, Ohio. The laboratory is equipped with modern analytical, synthesis, polymer characterization and testing equipment and pilot plants and polymer compounding operations which simulate the production facilities for rapid translation of new technology into new products. Expenditures for Company sponsored product research and product development in 1997, 1996 and 1995 were $17.1 million, $17.5 million and $18.0 million, respectively. Expenditures in 1998 are projected to remain at approximately the same level as in 1997.
EMPLOYEES As of December 31, 1997, the Company had approximately 2000 full-time employees of whom approximately 180 employees are covered by collective bargaining agreements which expire in November 1998, July 2000 and July 2001. The bargaining unit employees are employed at the Company's plant in Kentucky and the acquired Synergistics plants located in Canada. The Company considers its employee relations to be good.
ENVIRONMENTAL, HEALTH AND SAFETY The Company is subject to various federal, state and local environmental laws and regulations concerning emissions to the air, discharges to waterways, the release of materials into the environment, the generation, handling, storage, transportation, treatment and disposal of waste materials or otherwise relating to the protection of the environment. The Company endeavors to ensure the safe and lawful operation of its facilities in manufacturing and distribution of products and believes it is in compliance in all material respects with applicable laws and regulations. The Company maintains a disciplined environmental and occupational safety and health compliance program and conducts internal and external regulatory audits at its plants in order to identify and categorize potential environmental exposures and to ensure compliance with applicable environmental, health and safety laws and regulations. This is an effort which has required and may continue to require process or operational modifications and the installation of pollution control devices and cleanups. The Company's capital expenditures related to the limiting and monitoring of hazardous and non-hazardous wastes totaled $4 million, $3 million and $7 million in 1997, 1996, and 1995, respectively. In addition, the Company estimates capital expenditures for future environmental improvement programs to approximate $3 million to $5 million in 1998. The projected future capital expenditures are associated with a wide variety of environmental projects such as compliance with anticipated new regulations, achievement of internal company programs and improved operating efficiencies, and expenditures to remediate the Synergistics facilities to the historical environmental operating practices of Geon. The primary areas for future environmental capital expenditures can be broadly categorized as solid waste, air quality, waste water and ground water improvements. Expenditures for remediating various sites were $5.0 million, $6.1 million and $3.0 million in 1997, 1996 and 1995, respectively. 1998 expenditures for remediation of these sites are projected to be $5 million to $7 million. The Company has been notified by the United States Environmental Protection Agency (EPA), a state agency, or a private party that it may be a potentially responsible party (PRP) in connection with seven active and inactive non-Company owned sites. The Company believes that it has potential continuing liability with respect to only four such sites. In addition, the Company initiates corrective and preventive environmental projects of its own to ensure safe and lawful activities at its operations. The Company believes that compliance with current governmental regulations will not have a material adverse effect on its capital expenditures, earnings, cash flow or liquidity. The Company has accrued $51 million to cover these future environmental remediation expenditures which are projected to be $25 to $30 million over the next five years. Of this amount, approximately $18.2 million is attributable to future remediation expenditures at the Calvert Facilities and less than $.1 million is attributable to offsite environmental liabilities, including the four sites mentioned above. An additional $25 million is attributable to the properties acquired as part of the Synergistics acquisition and is related to estimated future costs to remediate these facilities to Geon's historical environmental operating practices. The remaining balance is primarily other environmental remediation projects at Company-owned facilities. Pursuant to consent orders signed with both the EPA and the Commonwealth of Kentucky Department of Environmental
Protection and the terms of a Resource Conservation and Recovery Act (RCRA) post-closure permit, the Company is required to provide for a site-wide remediation program at the Calvert Facilities, the cost of which is included in the $51 million accrual as of December 31, 1997. The Company participates in the EPA 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 conducts an audit of its files and reports 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. 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 EPA issues guidance concerning the kinds of environmental information that it believes are reportable. The Company does not believe that its portion of any civil penalties arising from this portion of the CAP will exceed $.2 million. The risk of additional costs and liabilities is inherent in certain plant operations and certain products produced at the Company's plants, as is the case with other companies involved in the PVC industry. There can be no assurance that additional costs and liabilities will not be incurred by the Company in the future. It is also possible that other developments, such as increasingly strict environmental, safety and health laws, regulations and enforcement policies thereunder and claims for damages to property or persons resulting from plant emissions or products, could result in additional costs and liabilities to the Company. A number of foreign countries and domestic local communities have enacted, or have under consideration, laws and regulations relating to the use and disposal of plastic materials. Widespread adoption of such laws and regulations, or public perception, may have an adverse impact on plastic materials. Although many of the Company's major markets are in durable, longer-life applications which could reduce the impact of any such environmental regulation, there is no assurance that possible future legislation or regulation would not have an adverse effect on the Company's business. In previous years there have been efforts by environmental groups to ban chlorine - one of the Company's key raw materials. Proposed legislation to ban chlorine has garnered little support in Congress. Research does not support categorizing all uses of chlorine as harmful to the environment. Although the Company believes that PVC is not harmful to the consumer or the environment due to the stability of its chemical structure, PVC could not be produced if chlorine and chlorine-based products were prohibited. Another issue being addressed is the presence of dioxins in the environment. Dioxins are produced by many types of combustion and the EPA has cited municipal, medical and industrial incinerators as major sources of dioxin. Data generated to date by the American Society of Mechanical Engineers and The Vinyl Institute indicate that vinyl and vinyl production processes are at most minor contributors to overall dioxin emissions. The Company does not believe that there are any new laws which will have a material impact on the industry or the Company's capital expenditures, cash flow or liquidity. The Company conducts a comprehensive occupational safety and health program. Industry data shows that the Company's safety record is among the best in the chemical industry.
Cautionary Note Regarding Forward-Looking Statements This report contains statements concerning trends and other forward-looking information affecting or relating to the Company and its industry that are intended to qualify for the protections afforded "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from such statements based on a variety of factors which are discussed on page 37 of the Company's 1997 Annual Report to Stockholders under the caption "Cautionary Note on Forward-Looking Statements" and such factors are incorporated herein by reference thereto.
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ITEM 2.
ITEM 2. PROPERTIES. - ------- ----------- The information required by this item appears on page 38 of the Company's 1997 Annual Report to Stockholders and is incorporated herein by reference thereto.
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ITEM 3.
ITEM 3. LEGAL PROCEEDINGS. - ------- ------------------ In addition to the matters regarding the environment described above under the heading "Business Environmental, Health and Safety", there are pending or threatened against the Company 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. The Company believes that any liability that may be finally determined should not have a material effect on the Company's financial condition.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. - ------- ----------------------------------------------------
None.
EXECUTIVE OFFICERS OF THE COMPANY. (INCLUDED PURSUANT TO INSTRUCTION 3 TO PARAGRAPH (B) OF ITEM 401 OF REGULATION S-K) Executive officers of the Company are elected by and serve at the discretion of the Board of Directors. Except as otherwise noted in biographies below, the executive officers of the Company were elected to their respective positions immediately following the formation of the Company. Their ages and positions are as follows:
Name Age Position with Company - ---- --- --------------------- William F. Patient 63 Chairman of the Board and Chief Executive Officer Thomas A. Waltermire 48 President and Chief Operating Officer Donald P. Knechtges 56 Senior Vice President, Business and Technology Development Louis M. Maresca 47 Vice President and General Manager, Resins V. Lance Mitchell 38 Vice President and General Manager, Compounds Clarence J. Nosal 60 Vice President and General Manager, Intermediates Gregory L. Rutman 55 Vice President, General Counsel and Secretary W. David Wilson 44 Vice President and Chief Financial Officer
William F. Patient - ------------------ Mr. Patient received a degree in Chemical Engineering from Washington University, St. Louis. Prior to the April 1993 Geon Initial Public Offering (IPO) by BFG, Mr. Patient served as Senior Vice President of BFG and as President of BFG's Geon Vinyl Division since May 1989. Prior to joining BFG, Mr. Patient had been associated with Borg-Warner Chemicals since 1962, most recently as Vice President.
Thomas A. Waltermire - -------------------- Mr. Waltermire received a B.S. in Biology from Ohio State University in 1971 and an M.B.A. from Harvard University in 1974. Mr. Waltermire joined BFG in June 1974. In April 1993, he became Senior Vice President and Treasurer of the Company, and in October 1993 became Chief Financial Officer. In May 1997, he was appointed Chief Operating Officer, and in February 1998 Mr. Waltermire was named President and Chief Operating Officer.
Donald P. Knechtges - ------------------- Mr. Knechtges received a B.A. in Chemistry from Marietta College in 1963 and a B.S. in Chemical Engineering from Case Institute of Technology in 1965. Mr. Knechtges joined BFG as an engineer in June 1965 and became Senior Vice President, Commercial in December 1991. In August 1995, Mr. Knechtges was named Senior Vice President, Business and Technology Development.
Louis M. Maresca - ---------------- Dr. Maresca received a B.S. in Chemistry from Brooklyn College in 1972, a Ph.D. in Physical/Organic Chemistry from Columbia University in 1976 and an M.B.A. from the Weatherhead School at Case Western Reserve University in 1995. Dr. Maresca joined BFG as Vice President, Research and Development for the Geon Vinyl Division in April 1991. In August 1995 he became Vice President, Operations, and in 1997 Vice President and General Manager, Resins. Prior to joining BFG, Dr. Maresca served General Electric Company in several capacities, most recently General Manager, America's Product Technology.
V. Lance Mitchell - ----------------- Mr. Mitchell received a B.S. in Marketing in 1982 from Bowling Green State University. Mr. Mitchell joined BFG as a Product Manager in 1989. Since then he has served as a Market Development Manager, Regional Sales Manager, Extrusion Business Director and Compound Business Director. In May 1997, he was named Vice President and General Manager, Compounds.
Clarence J. Nosal - ----------------- Mr. Nosal received a B.S. in Mechanical Engineering from the United States Naval Academy in 1961 and an MBA from Golden Gate University in 1967. Mr. Nosal joined BFG in 1979 as a Plant Manager. In 1988 he was named Vice President of Operations for the Geon Vinyl Division of BFG, and after the IPO in April 1993, he became Vice President and General Manager, Intermediates.
Gregory L. Rutman - ----------------- Mr. Rutman received a B.A. in Business Management from Baldwin-Wallace College in 1964 and a J.D. degree from Cleveland Marshall College of Law in 1969. In 1987, he completed the Executive Program at the Darden Graduate School of Business Administration, University of Virginia. Mr. Rutman joined BFG in October 1974. From 1985 until the IPO, he functioned as Staff Vice President of BFG and Counsel to the BFG Geon Vinyl Division. Since the IPO, he has served as Vice President, General Counsel, Secretary and Assistant Treasurer of the Company.
W. David Wilson - --------------- Mr. Wilson received an A.B. in history from DePauw University in 1975, and a Masters Degree in International Management from The American Graduate School of International Management (Thunderbird) in 1977. Mr. Wilson joined BFG in 1978 and served in a variety of financial management positions within the Chemical Group. He was named controller of the Geon Vinyl Division in 1985 and later became Director of Marketing. He served as General Manager for Auseon Limited, Geon's wholly-owned Australian subsidiary and Director of Business Management for Geon's Resin Division before being named Vice President and Chief Financial Officer in May 1997.
PART II - -------------------------------------------------------------------------------
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. - ------- ----------------------------------------------------------------------
The Company's common stock, $.10 par value per share, is reported on the New York Stock Exchange. The information appearing in the table on page 35 of the Company's 1997 Annual Report to Stockholders is incorporated herein by reference thereto. At March 20, 1998, the Company had approximately 7,000 stockholders.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA. - ------- ------------------------
The information required by this item appears on page 36 of the Company's 1997 Annual Report to Stockholders and is incorporated herein by reference thereto.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS. ----------------------
The information appearing under the caption "Management's Analysis" on pages 20, 22 and 24 of the Company's 1997 Annual Report to Stockholders is incorporated herein by reference thereto. This report contains statements concerning trends and other forward-looking information affecting or relating to the Company and its industry that are intended to qualify for the protections afforded "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from such statements based on a variety of factors which are discussed on page 37 of the Company's 1997 Annual Report to Stockholders under the caption "Cautionary Note On Forward-Looking Statements" and such factors are incorporated herein by reference thereto.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. - ------- --------------------------------------------
The information required by this item appears on pages 21, 23 and 25 through 35 of the Company's 1997 Annual Report to Stockholders and is incorporated herein by reference thereto.
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. - -------- ---------------------------------------------------
The information regarding the Directors of the Company appearing under the heading "Election of Directors" on pages 2 through 5 of the Company's Proxy Statement for the 1998 Annual Meeting of Stockholders is incorporated herein by reference thereto. Information concerning executive officers of the Company is contained in Part I of this Report under the heading "Executive Officers of the Company".
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION. - -------- -----------------------
The information regarding executive compensation appearing under the heading "Executive Compensation" on pages 11 through 20 of the Company's Proxy Statement for the 1998 Annual Meeting of Stockholders is incorporated herein by reference thereto.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. - -------- ---------------------------------------------------------------
The information regarding security ownership of certain beneficial owners and management appearing under the heading "Ownership of Common Stock" on pages 7 through 10 of the Company's Proxy Statement for the 1998 Annual Meeting of Stockholders is incorporated herein by reference thereto.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. - -------- -----------------------------------------------
The information regarding certain relationships and related transactions appearing under the heading "Compensation Committee Interlocks and Insider Participation; Certain Other Relationships" on page 21 of the Company's Proxy Statement for the 1998 Annual Meeting of Stockholders is incorporated herein by reference thereto.
PART IV - -------------------------------------------------------------------------------
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. - -------- ---------------------------------------------------------------- (a)(1) and (2) and (d) - The response to these portions of Item 14 are submitted as a separate section of this Report beginning on page of this Report. (a)(3) and (c) - An index of Exhibits filed as part of this Report is located beginning on page I-1 of this Report. (b) Reports on Form 8-K Filed in the Fourth Quarter of 1997: - Forms 8-K filed on October 6, 1997; October 9, 1997; November 14, 1997; and November 19, 1997, relating to the tender offer, lock-up agreement, and completion of the acquisition of substantially all of the outstanding shares of Synergistics Industries Limited by The Geon Company. - Form 8-K filed on December 10, 1997, announcing the retirement of Ed Martinelli, Senior Vice President for Corporate Development, effective January 31, 1998.
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 March 24, 1998.
THE GEON COMPANY
By: /s/GREGORY L. RUTMAN --------------------------- Gregory L. Rutman Vice President, General Counsel and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities indicated on March 24, 1998.
ANNUAL REPORT ON FORM 10-K
ITEM 14(a)(1) AND (2) AND (d)
INDEX OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1997
THE GEON COMPANY
ITEM 14(a)(1) AND (2) AND (d). ------------------------------
THE GEON COMPANY AND SUBSIDIARIES - ---------------------------------
INDEX OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of The Geon Company and subsidiaries, included in the Annual Report of the Registrant to its Stockholders for the year ended December 31, 1997, are incorporated by reference in Item 8.
Consolidated balance sheets - December 31, 1997 and 1996. Consolidated statements of income - Years ended December 31, 1997, 1996 and 1995. Consolidated statements of stockholders' equity - Years ended December 31, 1997, 1996 and 1995. Consolidated statements of cash flows - Years ended December 31, 1997, 1996 and 1995. Notes to consolidated financial statements - December 31, 1997. Quarterly data (unaudited) - Years ended December 31, 1997 and 1996.
The following consolidated financial statement schedule of the Registrant and its subsidiaries is included in Item 14(d)
Schedule II Page Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
SCHEDULE II THE GEON COMPANY AND SUBSIDIARIES SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 (DOLLARS IN MILLIONS)
Notes: ------ (A) - Accounts charged off (B) - Represents cash payments during the year (C) - Translation adjustments and other accrued expenses (D) - Represents the additional reserves related to Synergistics Industries Limited on the date of acquisition.
F - 3
THE GEON COMPANY INDEX TO EXHIBITS (Item 14(a)(3))
I-1
I - 2
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