Document 6BO2vDMX94VdmZ3wKLLV04MxE

FILE NAME: Allied Signal Bendix (ASB) DATE: 0000 DOC#: ASB058 DOCUMENT DESCRIPTION: Entry into Moody's Industrial Manual -AlliedSignal Inc. MOODY'S INDUSTRIAL MANUAL ALLIED-SIGNAL INC. '-H CAPITAL STRUCTURE b LONG TERM DEBT Times IHAmount Charges Earned Interest Call Price Range Issue !. S.F. Debenture 9s, 2000................................. Rating A1 Outstanding 1986 1985 29.848.000 Dates A&O 1 Price 1105.50 1986 tOO -90 -1985 86 -75 Ol 2. ELTRA Corp. deb. 8'/js, 2001........................ A1 3. Money multiplier notes.................................. A1 29.025.000 100,181,000 J& J15 None 1105.60 N.C. ro 91 Vi-77 85VS-7IV 4. 6% notes, 1988......................................... .. A1 109.754.000 J&D15 100 ' 99-V-9V ' 92V-8 ' ' rvj 5. 6% notes, 1990................................................ A1 65.108.000 J&D15 100 96 Vi-84 Vs 86yJ-72V 6. Zero coupon serial bonds, due 1985-09.......... A1 99.890.000 OB . . . . . . 100 7. 9.40% notes, 1988 ............................... ; ........ A1 100,000,000 M&N 1 N.C. 105Vi-101'6t 100 -99V* 8. S.F. debenture 97/ss, 1997 ............... ........... A1 200,000,000 J&D15 N.C. 105Vi-100Vr 101V1-86V1 9. Debenture 9'/js 2016.............................. A1 100,000,000 J&D 1 N.C. 10. 8% eurodellar bonds, 2006 ............................ A1 100,000,000 May 15 N.C. 11. The Bendix Corp., 8J5% notes, 1990 ............................... 18.825.000 4.49 2.57 121105.51 12. 6-'/,% euroyen bonds, 1995 .................................. A1 99.000. 000 J a n . 10 100 U. UOP, Inc. s.f. deb. 6%s, 1995 ............................ A1 1.219.000 M&N1 SllOO'/i 89Vi-78V* 85Vm-737* 14. The Signal Cos. Inc. deh. S'/ss, 1997 ................ . A1 12.457.000 M&S15 H) 100.93 82 -68 67 -571/1 15. The Signal Cos. Inc. conv. subord. deb. S'/js, 1994 ................................................................. A2 8.121.000 F&A15 1101.05 145 -125 I29V*-95Vi 16. The Signal Cos. Inc. subord. exchngbl. deb. 8s, 2009 ................................................................. A2 105,428,000 J& J15 HI . . . . IOIV2-86V4 102Vi-8lVi 17. The Signal Cos. Inc. 1lJ/j% euronote, 1992 . . . A1 125.000. 000 Feb. 20 1101.00 lll-V*-106y* 106 -90 18. Environmental Improv. Rev. Bonds and note oblig................................................................... 156.000. 000 1. Capitalized leases............................................. 148.000. 000 20. Foreign currency b o n d s.................................... 190.000. 000 21. Other debt.......................................................... 106.000. 000 CAPITAL STOCK . Par Issue Value 1. Common................................................ SI Rating ............. Shares Outstanding 3175,674,587 Earned per Sh. 1986 1985 @183.26 Hldt5.28 IXvs. per Sh. 1986 1985 [SS1.80 81.80 Call Price Price Range 1986 1985 54Vi-56% 48Vr33'/j Excluding current portion. Subject to change; see text. Based avg. shs. on continuing operations. HSee text. HlAlso paid one sh. Henley Group Inc. {or each 4 shs. held and one com. Stic, purchase right for each sh. held. HISTORY Incorporated in DeL in 1985 as successor to a company originally incorporated Dec. 17, 1920 ', under a perpetual charter in New York as Allied Chemical & Dye Corp.: name changed to Allied [tChemical Corp. Apr. 28, 1958; name changed to VAllied Conx O'Allied") Apr. 27, 1981: present name .adopted Sept 19, 1985 upon acquisition of The Semai Companies, Inc. ("Signal" ), see below. . Originally formed to consolidate by stock owner ship the control of (1) The Barrett Co., incorpo rated in New Jersey. Feb. 6, 1903 as American Coal Products Co. and name changed to T he Bar rett Co. in 1915 (2) General Chemical Co., incorpo rated in New York, Feb. 15, 1899 (3) National Aniline & Chemical Co., Inc., incorporated in New York, May 26, 1917 (4) Semet-Solvay Co., incorpo rated in New York, July 8, 1895. and (5) "file Solvay Process Co., incorporated m New York, Sept. 28, 1881. For details ol above acquisitions,, see Moody's 1949 Industrial Manual. - . ' . ( I- During 1947, General Chemical Co., Semet- Solvay Co. and. T he Sqlvay; Process Co., together with certain minor subsidiaries, were merged. Busi ness formerly conducted by these ty m panies, as' well as business formerly condpi by National ` "'ne & Chemical. C04 Barrett Co. rii was m erged'far 1941; u 1 cted, as: .npanies or the operations faa' JD u rin g 1952 Nitrogen,Dit * --, formedtb Jake over manufacture and smmnnla and other nitrogen' and related, la-.previously Emade by Solvay Process * 'gOM t v Bar Erett Division. , . ff-In 1954 acquired. M u tu a l, o. of America; merged Mar. 1-, 1955- . ,.. , .gin 1955, company fonagdAlDed Chemical'Inter- _ lational Division which specialized far' operations I outside the U.S. and Canada. Organization Was -restructured and merged into die-operating compa- Jnies. ' V 1 Lin 1959, company, started first'pnvately owned Sant for production of uranium hfexa-fluoride from S.nranium concentrates lot' sale tinder -contract to * Atomic Energy Commission a t Metropolis,'HL 1 Feb. 20, 1962, acquired Union Texas Natural . Corp. (Del) (Union Texas- Petroleum) for 352,795 common shares. - |I n Sept, 1963 formed FiberS;Division for fiber am. . . 1 . 1 May 1964, acquired Southern Propane Co. in. . . __Lange for 200,000 common shares. Now oper ated as part of a subsidiary supervised by Union wTexas Petroleum. ,l- . 1 >> :P Jan., 1966, acquired certain assets of Polymer .Chemicals Division ol W.R.-G rate f t Co. , -' -l *73 In Feb. 1966, Company and'A erojet General Corp. agreed to form jointly owned Idaho Nuclear .Corporation for purpose of managing and operat- Jhg a portion of National Reactor Testing station f A*1 Idaho Falls, Ida., under a 5-year contract which , .expired June 30, 1971, for the O.S. Atomic Energy .;M>nunission. In May 1969 the Corp. was reorga- hized. Aerojet General Corp. assuming a 52% ' interest with Allied Chemical and Phillips Petro , {turn sharing the remainder. On July 1, 1971, Allied Chemical entered into a new Contract covering sole v ".numagement of the National Reactor Testing Sta- V. i'tion a_chemical processing plant and related activi- ' s' "**In early 1979, Co. did not renew this contract ,. i Which expired in Sept., 1979. I n 1966 acquired 50% interest in Jiia Robbins '" beat Belt Co. which was increased to 100% on ' -'ifl L '997 (merged into Co. on Oct. 31, 1974). -. On Aug. 1, 1967 sold Barrett building materials business to Jim Walter Corp. for 820,000,000 cash P ,.731,607 82 conv. series I 3rd preferred shares of Jim Walter Corp., which were sold in Apr. 1968 fw 846,969,169. - In Oct, 1967, acquired 50% interest in Daal Spe Effective July l, 1979, AC Holding Corp., a sub cialties Ltd. and Daal Specialties (Collingwood) sidiary acquired 94.8% of com. stk. of Eltra Corp., Ltd. Interest increased to 100% in June 1969. Now a diversified manufacturer of electrical; consumer operated as Daal Specialties (Canada) Ltd. under and industrial goods, for 851.50 per share. On Nov. direction of Automotive Sector. 5, 1979, acquired balance of shares outstanding. On Mar. 2, 1970, company and a Gulf Oil Corp. Total cost of acquisition was about 8598,000,000. subsidiary (General Atomic Co.) formed Allied. In 'Ju ly 1979, Co. sold its Thermosets Business Gulf Nuclear Services, a partnership, for the con and related assets including its plants in Toledo, struction and operation of a nuclear fuel recovery Ohio and Los Angeles, Calif, to Plaskon Products plant at Barnwell S.C. Inc. , In 1971 acquired a group of small seat belt pro In Sept: 1979, Co. discontinued its operations in ducers called Klippan Companies, with plants in coal and coke, paving materials and certain other West Germany, France, Italy, Sweden and Swit zerland (sold and/or shutdown in 1982). businesses which subsequently resulted in the sell In early 1974 Gulf Oil Corp. went into partner ing of the paving materials business, the Detroit, Mich, and Ashland, Ky. coke plants, Motindsville ship with Scallop Nuclear Inc., a subsidiary of the Royal Dutch Snell Group. Subsequently sold a South plant and Shannon Branch, W.Va. coal 50% interest in General Atomic Co., to Scallop mine, a n d .the transfer of the coal mine to Annco I n c :..' .. Harewood, W.Va. Nuclear, which resulted in a name change to AUied-General Nuclear Services (AGNS). General I n .Dec.. 1979 .sold -3 caustic/chlorine plants to Atomics investment in AGNS was subsequentiaDy lin d en Chemicals & Plastics Inc. ' transferred to Valley Pines Associates, as partner In Ja n .-1980, -Co.-.acquired new automotive seat ship between Gulf and Scallop Nuclear. The joint belt mariufacfuripg', facilities thru acquisition of venture built a plant a t Barnwell. S.C. costing, T one Accessories International, Ltd., England and approx. 8250 million to process used nuclear fuel a 50% interest, iq Klippan-SaspaS-A* Spain ,which from nuclear power plants. The Barnwell plant/ was subsequently increased to 100%. '' ' with processing capacity of 1,500 metric tons o f . spent- atotnlc fuel per year, is mutually owned by. Valley Pines Associates and a wholly-owned sub-, sidiary of the Co., Allied Chemical Nuclear Prod-7 about 170,000shs.ofC o:com .stk. . v ' nc.,- ... ticts, Inc. . ' Iri M a r / 1980/ acquired Valley Mineral! Prodl Actions by the federal government have had the Corp.fdrcpmmon: stock; ) ' i-V). --'K"' , . effect of preventing AGNS from obtaining the nee-7 - In ' Apr: r 198(V Eltra' Corp:;''subsidiary/'aotjuifed;1 essary licences to operate, the facility. While the remaining !35% minority interest fat one of its West, ' current administration has stated that it favors German: operations Mergenthaler Linotype GMBH reprocessing, management does not believe that of Eshbom BEI Frankfurt. - ' private operation o f the Barnwell facility is feasible, or commercially practicable. ' , In. Nov.-; I98d, Allied, Chemical Canada, Ltd!. a In 1981 established an 887,000,000 after-tax subsidiary, of Company, announced the acquisition of a 10% equity interest m Bio Logicals, a private; reserve for the AGNS the write-off and eventual facility. However, AGNS shutdown continues of to. Toronto-based biotechnology firm. . . \ believe that the Barnwell plant is a national and international asset that should be used by the ' In Dec. 1980; entered the Mexican aluminum sul fate m ark et through a 49% equity, investment in Government in the management of high level radi Alkamex, S-Au, leading supplier of alum for the, oactive wastes. Mexican m arket i ..'-.. . -4 In Mar. 1985, AGNS filed a lawsuit against the In Jan. 1981, acquired a 49% interest in Federal government seeking damages in excess of Alkamex,&A, , n : - 8500 million as a result of the government's rever In July. 1981, completed acquisition of Bunker sal in 1977 of its long-standing policy of inducing Ram a Corp/ for approximately 8347,000,000 in new private sector entry into the nuclear fuel reproces; series C pin. stock, cash and notes. - - .. . .. sing business. AGNS contends that the govern- Also,:in! July. 1981,,acquired a- 20% interest' in ment's actions in effect constituted a taking over Calgenet-Inc.' <i, -ji..'. ;- . !- of the AGNS facility for public use without just In Aug* 1981- acquired Apollo Lasers, Inc. a compensation in violation of the Fifth Amendment. manufacture of industrial and scientific lasers for The government has filed an answer generally approximately 88,000,000 in common stock. - denying AGNS' allegations and has filed a motion 1 In Oct. 1981. acquired Fisher Scientific Co. for to dismiss the lawsuit. approximately 8311,000,000 fa) new series D pfd.- In May 1984, AGNS filed a' motion seeking stock St cash. ... - - judgment that the Government's 1977 actions con In Oct. 1981, acquired West Coast Refractories stituted a "taking" o f the Barnwell plant as a m at and Mineral Division of Interpace Corp: ,, ter of law and for the Court to dismiss the Gov ernment's motion. , . In late 1981, acquired Gyrex Corp. ' In Oct. 1977, acquired from Gardinier Big River Also in 1981, sold sulfuric arid plants at Buffalo, N.Y. and Chicago, 111. and' its toluene diisocyanate Inc., a co. owned Dy French interest, an ammonia plant in Helena, Ark. The plants principal opera-, plant a t Moundavllle. West Va. and tta two oil and tiona were shutdown in early 1982, gas affiliates operating m Canada. .. , .. In Apr., 1978, Co. sold to Tejas Gas Corp. the Dispositions in 1982. include a sulfuric arid plant Winnie System pipeline for 87,000,000. Purchase in NcwelL Pa,,. Converse Rubber Co. (production, price was a combination of cash and the assump and marketing of. athletic, footwear); Stanley G. tion by Tejas of certain obligations of Co. The sale Flagg, Co; (m anufacturer. o f m alleable. iron ' an d ' includes the 328-mile intrastate leased pipeline con-, brass .fittings); Borg Textiles Co. (manufacturer of tracts, gas-sale contracts and transportation agree knitted deep pile fabrics); various Klippan (seat ments. , belt Cos.) Cos.;' Selexol Process and Independent- In Sept. 1978 Co. sold its vinyl chloride mono Cable Inc., a subsidiary of Prestolite Wire. mer ana ethylene facility in Baton Rouge, La. to In Apr. 1982, acquired Supron Energy Corp. and ICI Americas Inc. Supron's domestic producing properties. Pursuant In May 1979, Co. sold its South Point, Ohio to agreement, Supron's oil and gas properties were plant to Ashland Oil, Inc. transferred to a partnership jointly owned and 10 MOODY'S INDUSTRIAL MANUAL E operated by Company and T he Continental Group, In Jan. 1987, Co. sold to Henley its remaining amounted to *2,477 million. Funded unfilled orders Inc. Co.'s share of purchase pace was $357 million. investment in Henley of convertible preferred for were *4,861 million at Dec. 31, 1986. Including con In Dec. 1982, acquired approx, 39% of the out *465 million. tracts for which funds have not been committed, standing common stock of the Martin Marietta On Mar. 31, 1987, Co. announced it had com the backlog of unfilled orders at Dec. 31, 1986 for Corp. from The Bendix Corp. for approx. pleted the sale of Allied Linotype Co. products and services was *5,437 million. *301,000.000. ' On June 19, 1987, Co. announced that it has Electronics and Instrumentation Sector: The In Aug. 1983 Martin Marietta Corp. repurchased. completed the divestiture of the seven businesses Company's electronics and instrumentation sector 1.8 million shares of its common stock from Co. in its electronics and intrumentation sector. Total consists of tbe following operating units; Amia'x for *95 million. Co.'s remaining 6,981,750 shares of roceeds from the seven businesses were *1.8 bil- Corporation; Amphenol Corporation Allied Lino M artin Marietta common stock were repurchased on in cash. type Company: MPB Corporation; Revere Corpo by Martin Marietta on Oct. 31, 1983 for about *250 ration of America; Sigma Instruments, Inc.; Nep million. S U B S ID IA R IE S tune International Corporation and Endevco On Jan. 31, 1983, Co. completed its acquisition of On Dec. 31, 1986, held or controlled following Corporation. The Co. has offered for sale all these The Bendix Corp. (Bendix). Bendix is a diversified significant subsidiaries: . , business except Endevco, a manufacturer of sen company which m 1982 reported its operations pri The Signal Companies, Inc. sors and transducers that measure vibration. marily In the following business segments: automo Allied Corp. Ampex manufactures professional audio-video tive, consisting of systems and components for the Allied-Signal Canada Inc. systems and recording tape for television-broadcast original equipment and replacement markets; aero Ampex Corporation and production applications, tape for record mas space-electronics, consisting of products and ser The Garrett Coro. tering and data storage, instrumentation recorders vices for the aviation markets and defense and Note: Co. also has numerous other consolidated and core memory systems for government applica space programs; industrial, consisting of machine subsidiaries, which are primarily totally-held indi tions, and video display terminals for the computer tools and accessories for the metalworking indus rectly by the Co., which if considered in the aggre industry. . try, and other products. Each share of common gate as a single subsidiary would not constitute a Amphenol produces a full line of electrical, elec stock of Bendix outstanding on Jan. 31, 1983, was significant subsidiary. tronic and fiber optic connectors for military, aero converted into 0.25 of a share of new series F pre space, business equipment, telecommunications and ferred stock; two separate series of 6% original BUSINESS & PRODUCTS other commercial and industrial applications, as issue discount notes; and 1.3 shares of common Company's operations are conducted under three well as associated cables, cable assemblies and stock. The aggregate value of the transaction business segments: aerospace/electronics, automo interconnection devices. . including the purchase of approx. 55% of Bendix's tive and engineered materials. Co.'s products are Linotype designs, manufactures, sells and ser outstanding common stock from Martin Marietta used by many major industries, including textiles, vices composition products and systems worldwide was approx. *1.8 billion. steel, construction, petroleum and petrochemical through direct sales organizations and distributors In Mar. 1983, acquired substantially all the refining, plastics, electronics, automotive, chemi to the graphic arts industry. Composition products assets of Semi-Alloys, Inc. for a total consideration cals, housing, telecommunications, packaging, mili include text entry and typesetting devices and in cash and shares valued at approx. *97,000,000. tary and commercial aviation and aerospace, and computerized data bases in a systems environ Semi-Alloys was a m anufacturer of components in agriculture and the space program. ment for high-reliability semiconductor packages. In Apr. 1983, acquired Instrumentation Labora Aeroapace/Electronics _ MPB, designs and manufactures a complete line of higb-precision bearings, mechanical and electro tory Inc., a maker of biomedical and analytical instruments for a total consideration in cash and The aerospace/electronics segment is comprised of the aerospace sector, which includes the Allied optical assemblies, spindles, idler pulleys and sprockets, test equipment for instrument bearings common stock valued a t approx. *115 million. In Dec. 1983, Co. discontinued its operations in Bendix and Garrett aerospace business, electronics and instrumentation sector. and the and computer-controlled machining systems. Revere is involved in the design and manufac machine tools and agricultural liquid fertilizers. (Sold substantially all the assets of machine tool Aerospace segment, provides products and ser vices primarily for military aircraft, civil air trans ture of weighing, temperature measurement, and electrical and fluid sensing instruments. business in April 1984 and the agricultural liquid fertilizer business in June 1984.) port, and general aviation markets, and missiles and spacecraft oceanics and command, control Sigma Instruments specializes in the manufac ture of electronic electromechanical control systems In Sept 1984, Ummar Co., a general partnership consisting of subsidiaries of Company and communication and intelligence programs. The Allied Bendix aerospace business is comprised of and sensing equipment; electromechanical switch ing devices; stepping motors and electronic motor Ultramar PLC, completed the acquisition of ENSTAR Corp., an international oil and gas com two companies, the Aircraft Systems Co. and Elec tronics Systems Co. controls; and power sensing, testing and control pany. The Co. share of the cost of the acquisition Principal products of Aircraft Systems Co. are airborne weather avoidance radar systems; aircraft devices. Neptune's fluid measurement and control prod was valued at approximately *153 million. ' In Nov. 1984, Co. acquired Amex Systems Inc., communications; automatic flight control systems; ucts include residential water meters used in hous ing. industrial flowmeters used in the measurement an aerospace company for approximately *45 mil engine and flight instruments; motion sensing and air data systems; navigation and identification of a wide variety of industrial liquids and gases, lion. In Dec. 1984, Co. discontinued one of its opera equipment; electric power generating systems; igni tion and fuel control systems; aircraft wheels and and automatic reading and billing systems, prima rily used with residential water meters, linked by tions which was to be sold in 1985. In Jan. 1985, Co. completed the acquisition of brakes; test systems; electromechanical and hydraulic components; industrial control systems telephone lines or computer system.- television . cables to a central King Radio Corp. for approximately *110 million. and ignition components and checkout equipment In April 1985, Co. merged with its subsidiary Automotive - - ' ' ^ The Bendix Corp. " Products f Electronics Systems Co. are crypto graphic equipment; identification of friend-or-foe Automotive segment, primarily supplies systems In June 1985, Co. sold' 50% of its interest in Union Texas Petroleum Holdings, Inc., the Com systems; radar proximity fuzes; pointing and con trol systems for land vehicles and spacecraft; gyro and components to domestic and foreign manufac turers o f passenger cars, light, medium and heavy pany's oil and gassubridiary. ' ' On Aug. 6, 1985, Allied Com. completed a 1 tender scopes for tactical missiles and aircraft; antisubma rine warfare systems; range instrumentation and, trucks, and off-road vehicles and variety: Of replacement p arts . . . also supplies a offer for 22,000,000 shs< of Signal Companies, Inc: outstg. common stock At *45 per ah. for a total of training systems; ground surveillance equipment;, raeteorlogical d a ta ' systems; chemical detecting C o .a ' principal original-equipment , products for c a rs , 4p<L: light trucks, include disc and drum *990,000,000 and issued) 15,100,000 shs. of its com mon sto ck to Signt exchange for 20.400,000 shs. instruments;.and field -engineering, m a nagemept- brakes,' ndwfrn brakel boosters .and' master cylinderst.ariafedTO.jiraking systems; friction, materials;' of Signal common stock. The'combination resulted and summit services. ' 'Garrett designs, develops and \ ,-< manufactures 4, spark piugsfSteering components; safety restraints in each'share o f the,com m on stock of Allied and Signal outstanding immediately prior to the con wide range of gas turbine engines, including turbo prop, turbofan and turboshaft engines for use as, systems; furpocjiargers a n d h ea t exchangers; tronic* and., engine controls;. engine cooling elec fans summation of the combination ;(other than shares power systems for commercial, industrial and mili and air clesiner assemblies. ' - . . held directly or indirectly by Allied and Signal) tary applications. Garrett gas turbine engines are. For manufacturers of medium and heavy trucks being exchanged! for one share of Company com-., used for primary propulsion and as auxiliary and off-roa(f vehicles, Co.'provides air and hydrau mon stock. Each outstanding shale of each senes power to operate propulsion-start systems, electri lic brake actuation components; air and hydraulic of the preferred stock o f Allied and Signal was cal systems and environmental control systems., drum and disc: brakes; adaptive braking-systems; converted into, one s h a t e b f g substantially similar Garrett continues to fill 'production orders, for a slack adjusters;, air dryers; fan clutches; cruise con senes o f the preferred stq tk 'o f th e Company. The variety of other secondary power systems,,many trol device* and vehicle diagnostic systems; friction Company issued 82,419,682 shres of its common, of them for ground-based military applications.' materials; turbochargers and heat exchangers; and stock and 7,336,517 shares. Of its various series of Garrett is also expanding its activities in undersea steering components. , , preferred stock to former holders of Allied com propulsion and is developing an advanced technol Aftermarket business includes replacement parts mon and preferred stock and 91,676,750 shares of1 ogy steam-turbine propulsion system for the U.S.' for most of above terns and air, oil and fuel filters; its common stock and- 898,028 shares of its pre Navy's next-generation lightweight antisubmarine and wide and cable products. , . ferred stock to form er holders of Signal common torpedo, the Mark 50. ' Automotive operations are located in the United and preferred stock. Garrett control systems are used on a large per States, Australia, Brazil, Canada, France, West In Dec. 1985, formed Allied-Signal International, centage of the world's commercial airliners, as well Germany, India, Italy, Japan, Mexico, Portugal, Inc.- -I- "cv - - as on many military and generaf aviation aircraft Spain and the United Kingdom. Distribution and In Jan. and Feb. 1986, so ld . North American These systems include air conditioning and pres m arketing'are conducted in many other countries Refractories Co. and C&D Power Systems; -, surization. The Garrett environmental control sys as well. Products are marketed under Bendix, In April 1986, sold Prestolite Motor and Ignition. tem supplies conditioned air for cockpit and avon-- Fram, Autolite, and other trade names. On May 27, 1986, Co. paid a special dividend of ics cooling. Garrett also produces pneumatic .F o r-y e a r Dec., 1986, worldwide passenger car 1 share o f,common stock of the Henley Group, control systems to govern engine speeds and tem and truck original' equipment sales accounted for Inc., a new company consisting of approximately peratures, and actuators for such components as 63% of automotive segments net sales, with 35 former business units of Allied Corporation and thrust reversers, trim controls and engine synchro^ aftermarket 37% and sales to operations outside the Signal Companies, Inc., for each 4 shares of nizers. * ; the U.S. accounted for 49% of worldwide sales. , Co. common stock held of record on May 16, 1986. The Co. retained preferred stock of Henley after Garrett's other aerospace products and services include heat transfer equipment, which is used in Engineared Materials the dividend refereed above representing approx. 15.6% of equity and voting power of Henley after most of today's commercial airliners arid military aircraft, and a number of business and general avi - Segment is composed of four divisions: Fibers; Fluorine Products; Plastics and Performance giving effect to a *1-3. bubon public offering of ation aircraft. Garrett is also a leading producer of Materials! and Specialty Products. Henley Common Stock. ' ' " , In June 1986, sold the Fftioropolymer business aircraft engine oil cooling systems, having built the first multi-contoured surface oil cooler. Other Gar Fluorine Products: Major products are fluoro carbons. hydrofluoric acid (HF), sulfur hexafluo units. 1 ' In May 1986, Co. acquird Materials Group of rett heat transfer products include electronic cool ing systems, cooled mirrors for high-powered ride (SF6), and uranium hexafluoride (UF6). C o .' is world's largest producer of (HF) and Oak Industries, Inc. for *152 million in cash. lasers and infrared radiation suppressors. Garrett industry leader in production and sale of products In Dec. 1986; Co. offered for sale seven operat also has long-term experience in cryogenics, both derived froqi HF- ing units that make up the Electronics and Instru components and systems. M ajor programs include Fluorocarbons are sold mainly as refrigerants, to mentation sector, included 'in the' aerospace elec design and manufacture of miniature cryogenic original equipment and replacement manufacturers - tronics segment The businesses offered for sale refrigerators,' liquid nitrogen cooling systems for. of air conditioning and refrigeration equipment and are: Ampex Corporation, Amphenriol Corporation,' commercial aircraft galley refrigeration and' sys as solvents in precision cleaning applications such Allied Linotype Company and the Engineered tems which supply hydrogen and oxygen reactants' as electronics, optics and aerospace applications. Components Group, including MPB Corporation, for spaceborne fuel cells. Garrett pioneered in Co. processes uranium ore concentrates into Neptune International Corporation, Revere Corpo developing supercritically-stored cryogens for UF6, which is an essential intermediate in produc ration of America and Sigma - Instruments, Inc. spacecraft applications. ' tion of fuel elements for nuclear power reactors, The combined 1986 sales for these businesses were For the year ended Dec. 31, 1986, sales to the for domestic and foreign customers. . about *1.5 billion, net income was *54 million and U.S. Government, acting through its various T h e Co. is on e of tw o dom estic p ro d u c e rs of total assets were approximately *1.4 billion. departments and agencies and prime contractors. SF6, a g a s used b y utilities because of its electrical rdcrs conllted. Id for The lector mpex UnoorpoNe|>aevco these :,sen- yideo udcast tnas>rders licatbuter ,'elecaero* IS and id, as p and aeridwide butors iducts s and viron I* line lectro> and ^rings r" facand iufacterns qvitchtnoyor :pntrol &avy -United West irtugal, an and 'Untries Ijendix, er car ted for ,, with outside s- i Fibers; rmance fluoroixafluo- ants, to tcturers ent and ns such ans. , es into produceactors. MOODY'S INDUSTRIAL MANUAL 11 to ry properties in circuit breakers, switches, * non lines and electronic minisubstations, and Performance Materials: Major plas- tions: A-C polyethylene products for floor a , rubber and plastic additives and textile ; and engineered plastics which are for a _ of industrial applications. J a r products include Under pitch for electrodes, |gr'alum inum and carbon industries, creosote oils i w ood products industry for preservatives, oils / carbon black market or fuel markets, refined ipthalene as chemical intermediates, driveway __aler tar, and for roofing pitch for the construc tion industry. , T he Engineered Plastics group manufactures Inihd m arkets engineering- plastics and packaging pfastks. The Capron nyfon engineering plastics, Capron nylon-6 thermoplastic film and Adair film m arkets consist of a large number of custom h f t . fabricators, manufacturers of power tools, appli '. - J^iaannces, electrical con-n-e--ct---ors, -a-u--t-o-m---o-t-iv--e---a-n-Jd indu-s1 i i^-trtriaiall ppaarrttss,, tthhee mmeeaatl and food packaging industries i,i'$Land' sp. eci`al' aerospaceeaappplica.ti_o_n_s. Specialty Products: The division is composed of three principal businesses: Norplex/Oak Division, , V UOP Inc. and Frye Copysystems, Inc. -. , Norplex/O ak manufactures circuit board lami . nates for the electronic and electrical industries, f The. Company's product line includes copper dad ; ' ami unclad plastic laminates used in computer, tel- communication, instrumentation and military ; <' .applications. j OOP designs and licenses process technologies K i^Jahd produces catalysts for petroleum and refining i Jjfogasjprocessinjf, petrochemical and food industries, is-U O P has designed and licensed more than 4,100 -process units located in over 85 nations, including i '-'those th at upgrade gasoline, break down petro ; .|j',leum components into gasohne or distillate, pro " M duce base materials for the manufacture of deter- X;gents, produce high quality diesel oil, jet fuel and naphtha from heavy oils and produce pure parax- k.ylene. UOP also provides diverse engineering ser- f;viceS and technical assistance to its customers and 1JOP manufactures a wide range of catalysts and `alty products used in the processes that it Copysystems is a producer of one-time car _paper for business forms and information sys- |ttm S and of "carbonless" reproduction paper. Frye ~ lystems also manufactures products for the ite r supply market. Major products include etic ribbons used to encode and ' process - money orders and other financial docu- and film and fabric- ribbons, for printing that are p art, of computerized word ig. and I information systems. Frye itemsjmarkets its products under the Frye items1? , F ryem arkTM . and Impact11. In y 1987 the company announced that it has :ot sale the Frye Copysystems business, principal raw: materials used in the engi- , materials segment are generally readily Meiand include cumene- natural gas, sulfur,- thali add, ethylene and ethylene glycol, flu r, hydrofluoric a d d ,, carbon tetrachloride, form, nylon resins, fluorocarbons, and coal itch,;.. . v 1. . - , , : Co. is world's largest producer of nylon-6 ,,third largest producer of nylon in. the United Co. is; also largest domestic producer of Olactant; primary intermediate for nylon-6, which.,it produces fine and heavy denier '.yams,, arid (holding compounds and film. yam s . are sold, undet trademarks Anso, <>, AjisoIV, and Caprolan. Fine deniers /.Bold to textile industry chiefly for use in manu r e of fabrics for apparel. Heavy deniers are principally in carpet yam , industrial fabrics, r'automotive seat belts and tire cord. In addi- --J i' Co. produces heavy denier polyester yams Much are used in industrial fabrics, cordage, seat MtS and tire cord. , [Sources of Revmre: N et sales in millions ,of l by ,segments follow. ._ , , -- -19 %of Rf-"' o'- - ' ' . -Rev. Total Wispace/Electronics . 6.068 51 fnotive .... ............ : 2,874 24 tymeered Materials . . . . . 2,819 24 Eorp. &Unallocated ... J 3S r ----1985 %of Rev. Total 3,593 39 2,428 27 2,081 23 t,0U 11 T otal........................ 11,794 100 9,115 100 ^Concludes amounts for businesses sold and; mlon Texas, the Co.'s oil and gas affiliate. MNCIPAL PLANTS & PROPERTIES ,, ' Comip any operates plants, research laboratories, p tn d .oidthLe.r facilities throu_ghout the U.S.,. C an ad a l and Europe. .Plants are generally located to serve jo marketing areas and*to provide accessibility aw materials and labor pools. , - . ' nripal plants, which are owned in fee, unless ' ndicated, are as follows: . Engineered M aterials .. -- opolis, 111. .Hopewell, Va. , i Baton Rouge, La. , Philadelphia, Pa. I Geismar, La. Shreveport, La. Moncure, N.C. Columbia, S.C. -,, Chesterfield, Va. - - f Creenville, Ala. Automotive Chatham, Ont., Can., * We expanded our network of regional business development offices to include China, India and Torrance, Cal., Newport News, Va. Singapore which extends our reach into those h Harbor City, Cal. Glinde, W. Germany emerging markets and furthers our globalization. Sao Paulo, Brazil St. Joseph, Mich. t * And we completed the spin-off of J5 non-stra Fostoria, Ohio Greenville, Ohio tegic businesses to The Henley Group, Inc., a Sumter, S.C. Jackson, Tenn. move that amounted to a billion dollar special div . Aerospace/Electronlcs idend of Henley stock for our shareholders. In addition, the Corporation realized 8300 million and elika, Ala._ iompton, Cal. , Colu_m__bliaa., MMdd.. Towson, Md. retained 19.5 million shares of Henley preferred stock. . North Hollywood, Cal. I'lL o s/Ang;ekies, Cal. 1liPhoenix, Ariz. Kansas City, Mo. In January 1987, we sold those shares back to Sylmar, Cal. Eatontown, N J. Henley for 5465 million and we adjusted several support agreements for which Henley paid Allied- rTorrance, Cal. Teterboro, N.J. Tempe, Ariz. f3Tucson, Az. Signal an additional 865 million. All of these trans Fort Lauderdale, Fla. Sidney, N.Y. actions, resulted in Allied-Signal and its sharehold ers receiving value of 81.9 billion. We believe this Jacksonville, Fla. Olathe, Kan. Colorado Springs, Colo. South Montrose, Pa. sum exceeds what we might have realized had we South Bend, Ind. Eschborn bei Frankfurt, sold the 55 businesses each on an individual basis. The Henley spin-off represented another major Germany step in our seven-year journey from a cyclical I'Leased. chcmical/oil and gas company to an advanced 3Owned by U.S. Govt, and managed by Co. technology enterprise. For those of us in manage ^ Partly-leased plant. ment, 1986 was particularly gratifying. It was the year when the new company we envisioned back . Union Texas Petroleum in 1979 actually emerged: a dynamic enterprise Union Texas Petroleum Holdings Inc. (``Union prospering through strong, growth businesses serv Texas") had been a wholly owned subsidiary of ing vital industries worldwide. Co. until mid-year 1985, when Co. sold 50% of its We have come a long way in altering the profile interest in Union Texas. Union Texas is engaged of the organization whose sales in 1978 were 83.3 in oil and gas exploration, development and pro billion and whose total investment in research and duction, natural gas processing and petrochemical development (R&D) was 858 million. T hat year 87 manufacturing. percent of net income was derived primarily from Union Texas holds various interests (leasehold, two foreign oil and gas joint ventures with the bal contract or others) in producing oil and gas ance from commodity chemicals, fibers and plastics properties located in the United States, British Sec as well as a small automotive seat belt operation; tor of the North Sea, Argentina, Spain, Pakistan, several businesses were losing money; tne Com and Indonesia. Additionally, Union Texas has vari pany was involved in major litigation, including a ous interests in or rights to conduct exploratory series of cases that prompted a qualified opinion activities on undeveloped acreage located in the from its independent accountants, and a down United States and 6 countries throughout the grade by the major credit rating agencies was a world. distinct possibility. In 1979 `we embarked on our Union Texas has 37.81% interest in a joint ven ambitious course. We discontinued or sold the ture which is developing oil and gas fields in East unprofitable operations, resolved the m ajor litiga Kalimantan, Indonesia; and 20% interests in both tion to such an extent that the accountants' qualifi Piper and Claymore Fields in the British Sector of cation was lifted, accelerated R&D spending and the North Sea. - launched an aggressive asset redeployment pro At Dec. 31, 1986, Company's 50% interest in gram, over the next three years buying various Union Texas' worldwide net proved reserves were companies to gain access to the electronics m ar estimated to be 69 million barrels, of liquid hydro kets we had targeted as high potential. carbons (crude oil, condensate and natural gas The first major acquisition was Bendix in 1983. liquids) and 1.1 trillion cubic feet of natural gas. It not only augmented our electronics capabilities but provided our entry into the aerospace indus-. Other Properties: , try. It also made us one of the largest independent An administrative and research and development suppliers to the worldwide automotive industry. complex is located at Morris Township, N.J. In The 1985 merger with -Signal added the critical addition there are- approximately 100 other mass we needed to become an even more impor research laboratories and facilities which primarily tant competitor in aerospace markets while also provide direct support to the operating segments. > adding Strengths to our automotive and engineered Company owns or leases warehouses, airplaneA, materials sectors. ' railroad cars, barges, automobiles,- trucks ' and Althbhgh our ''restructuring through so many material handling and data processing, equipment. acquuisitions And-divestitures was fast-paced and It also leases space for administrative and sales perhi staffs. Capital Expenditures (in 8000):, ' f ______ ________ ____ ________ .'lped 1986: ' ' ' ''l*' " ' V w :r, pav.6 the'w ay to our, becoming what we are today: a composite of'the very best of "old" Allied, Ben- LandStimprov. 14,000 dfothnd SignaL' a new company that is focused in Mach. & equip. **"15,000 thrttf'Weas^with leading trorid positions in m an Buildings........ '___ : /.V.1- . . v . . ,W ., >'141,000 roduct lined; And the Comjiany'is well balanced; Off. furniture &equip: . ji.. . 7 ; l l , 'jvd'68,000' t-takes* the collective contribution of the top seven Transpor. equip.... ..V , . \ , i \< 12,000. businesses t o provide more than 50 percent of our. Construction in progress' .V. i i ' ' 58,000 income. a, l i i . -. Total i : i . , .'j.. jyij-.ve? * ; *. < 1 j, '708,000 ,. v i Thrtfe o f 'those(businesses are part of our new Aerospace-Company, - tvhich provides one of the broadfstiSystepis- product lines in the entire aero LETTER TO STOCKHOLDERS ; / , space industry;-'ranging from 'Bendix electronic-' The following Is the letter to stockholders by.< based /cockpit avionics to Garrett primary propul- Edward L Hennesay, Jr, Chairman and Chief siom. powerpfantS; tot a wide >range of subsystems' Executive Officer, of Allled-SIgnaL Inc, sa lt and;components: for missies, military land vehi appeared In Company's1886 Annual Report: *' - cles, spacecraft and .undersea weapons. In 1986 our . , ,' ' . *. . `a i*t, - 'aerospace/electronics businesses ' contributed 52 To Our Shareholders:. ' : . . . . * percent to the' Corporation's sales and 52 percent 1986 was an excellent year for Allied-SignaL In to' its operating ,net; income. The creation of this the first full year since the merger with The Signal neW company! id November ' 1986 -- and the Companies, In c, sales and income from our aero recruitment -or R o b ert' L. Kirk to lead it -- is a space and electronics, automotive and engineered, " " reviously materials businesses reached record highs, aided by a relatively strong economy m the United States, growth in our key.industries and the decline of the 30 years' experience In the industry. He wilt spear dollar's value in some pf .our overseas markets head the further growth of Aiiied-Signal's aero which helped boost exports and limit imports. space interests, .building on the complementary Moreover, we won valuable new contracts that will skills' and expertise- of Bendix and Garrett to reap rewards for the Corporation into the 1990s advance our participation in a <rapidly changing and beyond, ... .< i n d u s t r y . ! . . , - . The outstanding operating results were partially- W ith Bendix and Garrett we have an excellent offset by substantially reduced profits from our oil base on which to build this new company and over and gas interests a s . the price of. crude declined. time we expect to accelerate the process through Although disappointing, the situation emphasized carefully selected' acquisitions that will further the wisdom of our strategy to reduce our exposure expand our market penetration or fill product or in oil and gas which, as recently as 1984: produced technology gaps. - ' . - , 43 percent of the Corporation's net income. > - Growing our automotive and engineered materi In the kaleidoscope of events that marked 1986; als sectols is also a high priority. These operations four were central to the achievement of our goals each provided 24 percent to our 1986 sales and 19 to accelerate the growth of .the Corporation and and. 29 percent, respectively, to our operating net improve its profitability;.. . , , / iheome, . ' . . * We created the Allied-Signal Aerospace Com ' T hrough a-global network of plants and techni pany, appointing one of the industry's most capa cal centers, our Automotive businesses are serving ble executives to maximize, the -potential of the; virtually ever m ajor vehicle manufacturer in the aerospace businesses we acquired through m ergers: World, providing advanced braking' systems, turbo with The Bendix Corporation and SignaL. - >-. . chargers'hd electronic systems and components. * We offered for sale, the seven diverse busi With outsourcing a key trend in the original-equip nesses of the Electronics and Instrumentation Sec ment market -today, we continue to collaborate tor, which among other products manufacture con with automakers in the development of technolo nectors, professional video recorders and gies for their -vehicles of tomorrow, increasingly phototypesetting equipment, to streamline our using computerized design, engineering and m anu portfolio and sharpen our focus on our primary facturing methods to supply reliable, high-quality, operations. cost-competitive products.