11-K 1 l87994ae11-k.txt GENCORP INC. FORM 11-K YEAR END 10/31/2000 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 11-K Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended October 31, 2000 Commission File Numbers 1-1520 and 1-15147 A. Full title of the plan: GENCORP/OMNOVA SOLUTIONS JOINT RETIREMENT SAVINGS PLAN ("Plan") B. Names of issuers of the securities held pursuant to the plan and the addresses of their principal executive offices: GenCorp Inc. P.O. Box 537012 Sacramento, CA 95853-7012 and OMNOVA Solutions Inc. 175 Ghent Road Fairlawn, OH 44333-3300 2 Gencorp/OMNOVA Solutions Joint Retirement Savings Plan Audited Financial Statements and Supplemental Schedule October 31, 2000 TABLE OF CONTENTS REPORT OF INDEPENDENT AUDITORS ............................................ 1 AUDITED FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits ......................... 2 Statement of Changes in Net Assets Available for Benefits ............... 3 Notes to Financial Statements ........................................... 4 SUPPLEMENTAL SCHEDULE: Schedule H, Line 4i-Schedule of Assets Held for Investment Purposes at End of Year .............................................. 14 SIGNATURE ................................................................. 15 CONSENT OF INDEPENDENT AUDITORS (EXHIBIT 23) .............................. 16 3 Report of Independent Auditors To GenCorp Inc. as Administrator and GenCorp Inc. and OMNOVA Solutions Inc. as Sponsors of the GenCorp/OMNOVA Solutions Joint Retirement Savings Plan We have audited the accompanying statements of net assets available for benefits of the GenCorp/OMNOVA Solutions Joint Retirement Savings Plan (the "Plan")as of October 31, 2000 and 1999, and the related statement of changes in net assets available for benefits for the year ended October 31, 2000. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at October 31, 2000 and 1999, and the changes in its net assets available for benefits for the year ended October 31, 2000, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets held for investment purposes at end of year as of October 31, 2000 is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audit of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. Ernst & Young LLP Sacramento, California April 23, 2001 1 4 GenCorp/OMNOVA Solutions Joint Retirement Savings Plan Statements of Net Assets Available for Benefits
OCTOBER 31, 2000 1999 -------------------------- (Dollars in thousands) Investments in Master Trust: Investments in securities of participating employers at fair value: GenCorp Inc. common stock fund $ 48,051 $ 62,317 OMNOVA Solutions Inc. common stock fund 27,203 36,976 Investments in securities of unaffiliated issuers at fair value: Participation in Master Trust commingled funds 279,027 296,326 ---------------------- 354,281 395,619 Participant notes receivable 6,398 9,046 ---------------------- Net assets available for benefits $360,679 $404,665 ======================
The accompanying notes to financial statements are an integral part of these statements. 2 5 GenCorp/OMNOVA Solutions Joint Retirement Savings Plan Statement of Changes in Net Assets Available for Benefits Year Ended October 31, 2000 (Dollars in thousands)
ADDITIONS Net investment loss: Net decrease in value of Plan's interest in Master Trust $ (2,970) Interest on participant notes receivable 709 --------- Net investment loss (2,261) Contributions: Participants 20,965 Employer 10,392 --------- Total contributions 31,357 --------- Total additions 29,096 DEDUCTIONS Benefits paid directly to participants (72,438) Trustee and manager fees (644) --------- Total deductions (73,082) --------- Net decrease (43,986) Net assets available for benefits, beginning of year 404,665 --------- Net assets available for benefits, end of year $ 360,679 =========
The accompanying notes to financial statements are an integral part of these statements. 3 6 GenCorp/OMNOVA Solutions Joint Retirement Savings Plan Notes to Financial Statements October 31, 2000 NOTE A-DESCRIPTION OF PLAN The GenCorp/OMNOVA Solutions Joint Retirement Savings Plan (the "Plan") was initially adopted effective July 1, 1989. Participants first began actively contributing to the Plan effective September 1, 1989. Effective December 1, 1989, the Aerojet-General Corporation Savings Plan was merged into the Plan. Effective August 1, 1994, the name of the Plan was changed from the GenCorp Savings Plan to the GenCorp Retirement Savings Plan. Effective October 31, 1996, the GenCorp Non-Bargaining Employees' Savings Plan was merged into the Plan. Also as of October 31, 1996, accounts of participants in the Aerojet-General Corporation Savings Plan for Bargaining Unit Employees (Aerojet Plan) who were represented by (i) International Association of Machinist & Aerospace Workers ("IAM") Local 946, (ii) IAM Local 812 and (iii) International Union of Operating Engineers, Stationary Engineers Local 39 were transferred to the Plan and became accounts in the Plan. As of October 31, 1997, the Aerojet Plan was merged into the Plan and the remaining participants' accounts in the Aerojet Plan became accounts in the Plan. Effective October 1, 1999, GenCorp Inc. ("GenCorp" or the "Company") spun off its Performance Chemicals and Decorative & Building Products businesses into a separate, independent public company, OMNOVA Solutions Inc. ("OMNOVA"). As a result, the Plan was amended to become a multiple employer plan whereby OMNOVA is a participating sponsor of the Plan and the employees of OMNOVA will participate in the Plan. At that time, the name of the Plan was changed to the GenCorp/OMNOVA Solutions Joint Retirement Savings Plan. GenCorp continues to be both administrator and sponsor of the Plan. The following description of the Plan provides only general information. Participants should refer to the Summary Plan Description and the Plan Prospectus for a more complete description of the Plan's provisions. If there is any discrepancy between the provisions described herein or in the Prospectus or Summary Plan Description, the terms of the Plan as set forth in the Plan document shall be controlling. Copies of the Summary Plan Description and the Prospectus for the Plan are available from the Plan administrator. 4 7 GenCorp/OMNOVA Solutions Joint Retirement Savings Plan Notes to Financial Statements (continued) NOTE A-DESCRIPTION OF PLAN (CONTINUED) GENERAL The Plan is a defined contribution plan available to salaried and certain union and non-union hourly employees of GenCorp and OMNOVA and participating subsidiaries. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). CONTRIBUTIONS Participants may elect to contribute from 1 percent to 16 percent of their pretax annual compensation to the Plan. The Plan provides that the Company and OMNOVA will contribute $1.00 for each $1.00 their respective participants' contributions up to the first 3 percent of a participant's compensation contributed to the Plan during the Plan year, and $.50 for each $1.00 of a participant's contributions on the next 3 percent of a participant's compensation contributed to the Plan during the Plan year. Participants may also contribute amounts representing distributions from other qualified plans. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions and allocations of (a) the Company's or OMNOVA's contributions and, as the case may be, (b) Plan earnings (losses), and is charged with an allocation of certain administrative expenses (see "Plan Expenses" below). Allocations are based on participant earnings (losses) or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. 5 8 GENCORP/OMNOVA SOLUTIONS JOINT RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE A-DESCRIPTION OF PLAN (CONTINUED) VESTING A participant's interests in his or her rollover contributions, if any, and employee contributions that a participant has made or the Company or OMNOVA has made for a participant pursuant to a Salary Reduction Agreement are at all times vested and not subject to forfeiture. A participant's interest in the matching contributions made for his or her benefit is at all times vested and not subject to forfeiture, except such forfeitures as may be required or permitted in order to meet the non-discrimination provisions of the Internal Revenue Code (Code) or other applicable provisions of law. A participant may not, however, elect a voluntary withdrawal of any plan shares attributable to matching contributions until such matching contributions have remained in the Plan for at least two full Plan years. PARTICIPANT NOTES RECEIVABLE Participants may borrow from their fund accounts up to 50 percent of their account balance but not more than $50,000. Company and OMNOVA matching contributions are not available for loans, but are included in computing the amount available for loan. Loan terms range from 1 - 5 years or up to 10 years for the purchase of a primary residence. The loans are secured by the balance in the participants' accounts and bear interest at one percent above the prime rate as published in The Wall Street Journal on the last day of the month preceding the loan request. Loans outstanding currently reflect interest rates ranging from 9.25 percent to 10.50 percent. The borrowing interest rate as of October 31, 2000 was 10.50 percent. Principal and interest is paid ratably through payroll deductions. PAYMENT OF BENEFITS Distribution of the value of Plan shares to a participant who terminates or elects a voluntary withdrawal is made in accordance with the terms of the Plan. 6 9 GenCorp/OMNOVA Solutions Joint Retirement Savings Plan Notes to Financial Statements (continued) NOTE A-DESCRIPTION OF PLAN (CONTINUED) PLAN EXPENSES A proportionate share of fees and expenses of the Trustee, investment managers, and other service providers (including the Company and OMNOVA, if applicable) is charged to each plan participants' account. All fees are deducted quarterly from participants' accounts. Expenses incurred in connection with the purchase or sale of securities are paid from trust assets. All other administrative costs of the Plan are paid ratably by the Company and OMNOVA NOTE B-SUMMARY OF ACCOUNTING POLICIES INVESTMENT VALUATION AND INCOME RECOGNITION The fair value of the Plan's interest in the GenCorp Master Trust (Master Trust) is based on the beginning of the year value of the Plan's interest in the trust plus actual contributions and allocated investment income less actual distributions and allocated administrative expenses. Within the Master Trust, investments in GenCorp and OMNOVA common stock are valued at the closing price of the respective common stock on the last trading day of the Plan's fiscal year. Investments in marketable equity and debt securities are valued at market as determined on the last business day of the Plan's fiscal year. Common trust funds are valued based on the quoted redemption value of units owned by the Plan at year-end. Investment contracts, which are considered fully-benefit responsive, are valued at contract value, which approximates fair value. Participant notes receivable are valued at their outstanding balances, which approximate fair value. USE OF ESTIMATES The preparation of these financial statements in conformity with accounting principles generally accepted in the United States requires the Plan's investment managers and Trustee, who are fiduciaries of the Plan, to make estimates, assumptions and valuations that affect the amounts reported in the financial statements and accompanying footnotes. Actual results could differ materially from those estimates. RECLASSIFICATION Certain amounts in the 1999 financial statements have been reclassified to conform to the 2000 presentation. 7 10 GenCorp/OMNOVA Solutions Joint Retirement Savings Plan Notes to Financial Statements (continued) NOTE C-NONPARTICIPANT-DIRECTED INVESTMENTS The GenCorp Inc. and OMNOVA Solutions Inc. common stock funds contain participant account balances that are both participant-directed and nonparticipant-directed. Because the funds contain balances that are non-participant directed, the entire funds are considered nonparticipant-directed for disclosure purposes. Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investments is as follows:
OCTOBER 31, 2000 1999 ----------------------- (Dollars in thousands) Net assets: Investments in Master Trust: Investments in securities of participating employers at fair value: GenCorp Inc. common stock fund $48,051 $62,317 OMNOVA Solutions Inc. common stock fund 27,203 36,976 --------------------- Total $75,254 $99,293 =====================
YEAR ENDED OCTOBER 31, 2000 ----------------- (Dollars in thousands) Changes in net assets: Company contributions $ 10,392 Participant contributions 2,824 Net decrease in value of Plan's interest in Master Trust (20,258) Distributions to participants (15,032) Net transfers to participant-directed investments (1,965) --------- Net decrease (24,039) Net assets available for benefits, beginning of year 99,293 --------- Net assets available for benefits, end of year $ 75,254 =========
8 11 GenCorp/OMNOVA Solutions Joint Retirement Savings Plan Notes to Financial Statements (continued) NOTE D-INVESTMENTS IN MASTER TRUST The Master Trust is an investment trust formed for the investment of the assets of certain defined contribution plans sponsored by GenCorp and OMNOVA. As of October 31, 2000 and 1999, the Master Trust consisted of all assets (excluding participant notes receivable) of such plans and included ten investment funds, two of which were separate GenCorp Stock Funds, one each for the Plan and the Profit Sharing Retirement and Savings Plan for Salaried Employees of GenCorp Inc. and Certain Subsidiary Companies, and another two of which were separate OMNOVA Solutions Inc. Stock Funds, one each for the respective plans. The assets of the Plan's Interest Income Fund and Diversified Equity Fund are commingled in the Master Trust with the assets of the other defined contribution plans' respective funds to create the two corresponding master investment funds, the Interest Income Fund and the Diversified Equity Fund of the Master Trust. The assets of the Plan's Balanced Fund, International Equity Fund, Diversified Bond Fund and Short-Term Investment Fund are the only assets of the corresponding master investment funds of the Master Trust. These six Plan funds have an undivided interest in the commingled total assets of the corresponding Master Trust funds. Ownership is represented by units of participation. Participation by the Plan's funds in the corresponding Master Trust funds is increased or decreased by the purchase or redemption of units of participation at the unit value established at the end of the day on which the purchase or redemption of units occurred. Income and gains and losses are allocated among the Plans based on their proportionate dollar interest in the Master Trust. 9 12 GenCorp/OMNOVA Solutions Joint Retirement Savings Plan Notes to Financial Statements (continued) NOTE D-INVESTMENTS IN MASTER TRUST (CONTINUED) Financial information for the Master Trust funds is as follows:
OCTOBER 31, 2000 1999 ---------------------------------------- (Dollars in thousands) STATEMENTS OF NET ASSETS Assets: Cash, cash equivalents, money market funds and sales pending settlement $ 31,910 $ 26,434 U.S. Government securities 3,074 14,707 Corporate debt securities 5,563 3,743 Stock and bond fund investments 218,377 230,867 Investment contracts (GICs) 66,469 77,672 Accrued interest and dividends receivable 1,087 935 GenCorp common stock 49,189 65,142 OMNOVA common stock 28,280 38,832 ---------------------------------------- 403,949 458,332 Less: payables (136) (120) ---------------------------------------- Total net assets $ 403,813 $ 458,212 ========================================
10 13 GenCorp/OMNOVA Solutions Joint Retirement Savings Plan Notes to Financial Statements (continued) NOTE D-INVESTMENTS IN MASTER TRUST (CONTINUED)
YEAR ENDED OCTOBER 31, 2000 -------------------------- (Dollars in thousands) STATEMENT OF CHANGES IN NET ASSETS Additions (deductions): Interest income $ 6,381 Dividends 2,009 Net realized and unrealized appreciation (depreciation) (11,017) Net transfers and administrative expenses (51,772) --------- Net decrease (54,399) Net assets, beginning of year 458,212 --------- Net assets, end of year $ 403,813 =========
Net realized and unrealized appreciation (depreciation) of investments for the Master Trust funds is as follows:
YEAR ENDED OCTOBER 31, 2000 -------------------------- (Dollars in thousands) GenCorp and OMNOVA Solutions Inc. common stock $ (23,870) U.S. government and corporate debt securities 827 Stock and bond fund investments 12,026 --------- Net realized and unrealized depreciation of investments $ (11,017) =========
The aggregate of the Plan's interest in the Master Trust funds equaled 87.73% and 86.50% of the total value of the Master Trust as of October 31, 2000 and 1999, respectively. 11 14 GenCorp/OMNOVA Solutions Joint Retirement Savings Plan Notes to Financial Statements (continued) NOTE E-PLAN TERMINATION Although currently neither sponsor has expressed any intention to do so, the Company and OMNOVA each have the right under the Plan to discontinue its contributions at any time and to terminate the Plan as to their employees subject to the provisions of ERISA. In the event of Plan termination, participants would continue to be 100 percent vested in their accounts. NOTE F-INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated January 7, 1997 stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Company believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt. NOTE G-DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5550 The following is a reconciliation of net assets available for benefits per the attached financial statements to the Form 5500:
OCTOBER 31, 2000 ----------- (dollars in thousands): Net assets available for benefits per the financial statements $ 360,679 Amounts allocated to withdrawn participants (3,808) --------- Net assets available for benefits per the Form 5500 $ 356,871 =========
12 15 GenCorp/OMNOVA Solutions Joint Retirement Savings Plan Notes to Financial Statements (continued) NOTE G-DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5550 (CONTINUED) The following is a reconciliation of benefits paid to participants per the attached financial statements to the Form 5500:
YEAR ENDED OCTOBER 31, 2000 ------------ Benefits paid to participants per the financial statements $72,438 Add: Amounts allocated on the Form 5500 to withdrawn participants as of October 31, 2000 3,808 ------- Benefits paid to participants per the Form 5500 $76,246 =======
Amounts allocated to withdrawn participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to year-end but not yet paid. NOTE H-SUBSEQUENT EVENTS Effective December 1, 2000, the Plan ceased to be a multiple employer plan and the account balances of participants of the Plan who are current or former employees of OMNOVA, valued as of November 30, 2000 and totaling $42,598,719, were spun-off and transferred to the separate OMNOVA Solutions Retirement Savings Plan. Effective December 1, 2000, the Profit Sharing Retirement and Savings Plan for Salaried Employees of GenCorp Inc. and Subsidiary Companies (the "Profit Sharing Plan"), including the account balances of all remaining participants of the Profit Sharing Plan, were merged into the separate Plan. Account balances valued as of the close of business on November 30, 2000 and totaling $24,117,140 were transferred into the Plan. Effective December 1, 2000, account balances of participants of the Plan who are employees of Aerojet Fine Chemicals LLC, valued as of November 30, 2000 and totaling $8,282,297, were spun-off and transferred to the separate Aerojet Fine Chemicals LLC Retirement Savings Plan. 13 16 GenCorp/OMNOVA Solutions Joint Retirement Savings Plan EIN 34-0244000 Plan Number 013 Schedule H, Line 4i-Schedule of Assets Held for Investment Purposes at End of Year October 31, 2000
DESCRIPTION OF INVESTMENT, INCLUDING MATURITY DATE, IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, CURRENT LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE VALUE -------------------------------------------------------------------------------------------------------- Loans receivable from participants * Interest rates ranging from 9.25% to 10.50% $ 6,398,566 ----------- $ 6,398,566 ===========
*Indicates party-in-interest to the Plan 14 17 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, GenCorp Inc., as Plan Administrator, has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. GENCORP/OMNOVA SOLUTIONS JOINT RETIREMENT SAVINGS PLAN By /s/ Michael F. Martin ----------------------------------- Michael F. Martin Vice President and Controller Date: April 27, 2001 15