Document NEeZbyEOJYKbEOdR3MjzJ7228

/ The Bendix Corporation Annual Report, 1969 :i3sn Bendix Table of Contents------------- 2 Financial Highlights 3 Chairman's Letter to the Shareholders 5 Major Markets 11 Financial 15 Financial Summary 16 Consolidated Balance Sheet 18 Statement of Consolidated Income 19 Statements of Surplus 20 Notes to Consolidated Financial Statements 22 Accountants' Opinion 23 People at Bendix 24 Bendix Aerospace-Electronics Company 28 Bendix Automotive 8< Automation Company 32 Bendix International 35 Directors and Officers 36 Divisions and Subsidiaries Financial Highlights------------ FISCAL YEARS ENDED SEPTEMBER 30 1969 Our Net Sales, Royalties and Other Operating Income, -were . . *1.467.917,000 1968 Aerated to* PooMnes of Inter*Ms *1.430,191,000 1968 a erexiowtti Reooffwf *1,388.691.000 We Earned.................................................................................................. 50.766,000* 43.949.000 43.801.000 Per Share of Common Stock after Preferred Stock dividend requirements.......................................................................................... 3.71* 3.19 3.30 No. Common Shares Outstanding September 30 ... 12.493.214 12.336.740 12.232.740 Dividends per Share on Common Stock...................................... 1.60 1.40 1.40 Stockholders* Equity at September 30............................................. 495.758.000 459,557,000 444.600,000 Per Share of Common Stock............................................................ 32.25" 29.68" 30.79* * We paid Our Employees in Wages and Salaries .... 611.474.000 588.499.00U 574.671.000 Unfilled Orders September 30 (Including Engineering Projects) 611.000.000 731.000,000 635,000.000 'Exclusive of 55 416.000 extraordinary income (net of taxes) equal to $0.44 per common share. "After allowing for Preferred stock at liquidating value of $60 per share, cr $92,361,520 in 1969 and 1968 restared, and S67.927.620 in 1968 as reported SALES BY MAJOR CLASSIFICATIONS 1369 COMMERCIAL-INDUSTRIAL Automotive............................................. Automation -- Sc-ennhc . Av.ttion ... .... F.iectromcst . . .... Cceani'ts M.scellaneous .... .... TOTAL' . ... $ 390.662,000 170,295,000 116.229.000 22.325.000 4.886.000 90.697.000 S 795,094.000 21% 12 8 1 -- 6 54 % GOVERNMENT A'tdiion............................................. Space .................................................... Missile.................................................... ElectromcsT............................................. Oceanic*:............................................. Automation--Scientific . Miscellaneous ...... TOTAL'............................................. GRAND TOTAL'.............................. . S 338,547.000 176.910.000 50.850.000 45.489.000 22.735.000 4.628.000 22.677.000 23% 12 4 3 2 -- 2 . * 661.836.000 46% . *1.456.930.000 100X 'Excludes royalties and other operating income. TNot included .n other classifications. 1968 Restj'ed lor Poo<m<)* of Interests 0 330.790.000 147.173,000 11 3,201.000 20,910.000 5,166,000 80.027.000 $ 697.267.000 23% 10 8 2 -- 6 49% $ 351.021.000 1 06.305,000 58.62S.000 46.726.000 35,014.000 3.176.000 30.424,000 $ 721.294,000 '.418.561.000 25% 14 4 3 3 -- 2 51% 100% 1968 As Previously Reported $ 330,790.000 105,674.000 113,201,000 20.910.000 5,166,000 80.027.000 $ 655.768.000 24% 8 8 2 -- 6 48% $ 351,021.000 196,305.000 58.628.000 46,726,000 35,014,000 3.176,000 30.424.000 s 721,294.000 *1.377,062.000 26% 14 4 3 3 -- 2 52% 100% ! Chairman's Letter to the Stockholders year marked {he fortieth v'-r;-/v of me formation of The :> C mooru'ion performance indicates that ft. Corporation is m robust 3no like many individuals at that is entering ~i period of peak proiv.tv -md mature development u-'t ana eirmngs during me year n'.^-ea new records for the Corpon Yore important to you as a mo :-r and to us m management ejrnm^s per share also reached an i --e rr.m Our consolidated revenues totaled SI .468.000.000. an increase of 5.7 per cent over the SI,389.000,000 reported last year. Net income was $50,766,000 or S3.71 per share in 1969. compared to $43,801 000 or S3 30 per share reported in 1968 In acdition. the Corporation recorded extraordinary income of 55,416,000 or 44 cents per share resulting from the sale of stock n Computing Devices of Canada. Ltd. Much of this earnings improvement resulted from the success we have achieved in expanding our role in com mercial and industrial markets In the fiscal year, our sales to commercial markets exceeded our government sales by a propottion of 54 percent to 46 percent. In view of the substantial reductions in government procurement of the type of products ai;J services we supply, our commercial markets plaved a maior role in the yea s healthy performance. This reduction m government spend ing whicn became especially significant in the last Quarter of the year, shows the importance of our decision to con tinually inc.ease the commercial portion of our business At the same time, we are intensifying our efforts to select government business that will produce satisfactory profit levels and will con tinue to enhance our technological and scientific capability Our growth by any standard during the past decade is impressive. Less impressive. but perhaps more meaning ful in its effect on our future, is the cnange tha* has been accomplished in the character of vcur Corporation As we entered the 1960's the 32 divisions and 50 000 employees of The Bendix Aviation Corporation were principally engaged m supplying military systems a.' j equipment Products for military airofanes alone nude up almost half of the Corporation's total revenue Recognizing the vital necessity to broaden the base of our business so as to be less dependent on the government sector, we intensified our efforts to expand m other commercial and indus trial markets To provide direction for this effort, in 1965 we established new goals and objectives for the Corporation which not only described the character of the company that we wished to become, but also tracca in some detail the steps we would take to accomplish this purpose. Since 1965 we have reviewed and revised these growth plans annua'iy. steadily raising our sights as we reached or exceeded our targets. It is evident that this effort has borne fruit and that tne future looks increasingly promising. Nowhere does the changed character of our Corporation oecome more apparent than in a comparison of the manage ment organization of today with mat of 1959. Tne Bendix management orga~ izat'Ou in 1959 included five group executives who held 'he operating responsibility for all domestic operations The divisional groupings were e^>nbluhrsfl generally on a geographical basis Through a pfanned regrouping of divisions and reassignment of executives e icn of the Corporation s groups ana subgroups is now composed of divi sions and subsidiaries which employ s;m.`3r technologies and operate >n similar manners Our p'ogram of realign ment of divisional groupings and reassignment of executives was cul minated in June with the restructur ing of the Corporation This move is described in greater detail m me follow ing pages, but I mention it here as being one of the most sigmhcanr aspects of the changed character of the Corporation The development of our internarjor:a< business in the last ten years has been very satisfying and offers another example of a significant change in our business philosophy. in 1959. our international business accounted for some $19,000,000 of our total s?lrs, exclusive of soles in Canada This has grown to S55.000 000 m tne current year. In ten years, our export sales have grown 189 percent. 3 i: our income from licensees has grown corporate structure. Our Semiconductor are indicated in the listing of officers I 6? percent, and our dividends from Division and our Foundries Division, on cage 35 of this report. 'oreign cffitiates have increased 452 both operating in markets not included In addition, Allen M. Harrelsor. was percent in our long-range plans, were sold. Our elected Executive Vice-President-- in establishing our position as a Scientific Instruments Division in Finance, and Charles F. Donnelly was worldwide Corporation, we have recog Cincinnati. Ohio and Vacuum D:/ision elected Executive Vice-President and nized the necessity and the desirability in Rochester, N.Y were consolidated General Counsel of the Corporation. of taking equity positions in compatible into a single Scientific Instruments & Other corporate officers elected by 1 companies abroad. We have grown Equipment Division, operating in a the Board of Directors during the year I since 1959 from ownership mil com- modern plar.t in Rochester. The Missile were Gerald A. Pollack, Harry Stoiar, | pames in five countries to complete or Systems Division in Mishawaka. Indiana F. J. Borheck. James B. Treacy and partial ownership of 24 companies in was made part of the Aerospace Sys E. R. Eggers. alf to Vice-President; II nations today tems Division m Ann Arbor, Michigan Donald R. Hibbert, Treasurer; and In short, our approach to international in keeping with the role we expect it Harold S. Barron, Secretary. business mirrors the philosophy of the to play in the future. James F. Miller, President of Bl/th & entire Corporation --establish ^compre As I have reported previously, our Co. Inc. and R. D. O'Neal were elected hensive plan, but maintain the flexibildv earnings in recent years have been re to the Board of Directors during the | needed to approach specific objectives duced by losses on a multiyear fixed- year. Malcolm P. Ferguson was named j and market areas on an individual basis. price government contract at our Com Director Emeritus, honoring his long Acquisitions have played a significant munications Division m Baltimore, and deaicatea service to the Corporal.on 'ole n the growth of your Corporation Maryland. These losses continued While i: Is interesting to review out during 'he past decade Our highly during 1969 During the year, nowever, development m the past ten years. *r ; selective acquisition program was we filed a claim with the U S. Govern of course, the decade ahead of us thjt hampered during the past fiscal year ment for an increase in the contract demands our complete attention There by market conditions that made acquisi- price. While n is too early to estimate is no reason to doubt that the decade i ton$ of the rype we seek less attractive the amount of money that might be of the 1970's will see growth and than :nev a ere formerly We are looking recovered as a result of this claim, it is changes m the Corporation at least as forward. hQAever, to continued the opinion of counsel that the govern profound as the 60 s d'd. it is in antici improvement in our market position and ment is liable for a portion of the cost pation of this growth and cnange that a renewed acceleration of our acquisi increase experienced. we ra\.e established the present cor tion program in September, an examiner appointed porate structure which will maintain Despite unsettled conditions in the bv the Federal Trade Commission to continuity of purpose wn;le providing market, three acquisitions were con review our acquisition of Fram Corpo the flexibility needec to meet changing summated mat wifi improve our degree of diversification Ou. newly acquired ration filed an initial decision ho'dtng that the acquismon was not illegal. We conditions I woulc like to express my tranks, units include Skagit Corporation, a were pleased with this confirmation of both personally jro n behalf cr the maker c* materials handling equipment our position, of course, and will con Corporation, to tne tnousanos of dedi especially active m the logging indus try. Buhr Machine Tool Corporation, a designer and builder of automated machinery and equipment for the metalworking industry; and American tinue to press for final dismissal of the Case by the FTC. As a result of our restructuring, the past fiscal year saw more executive appointments than usual Through a cated emuiovees ecntives and cP<cers whose generous contr-botions hav,e made the progress of the past decade possible 1 3m conhqent tnat the same dedication wi:: accelerate our rate of Abrasive Corporation, a manufacturer change m the bylaws approved by the growth during t^e decade of the 70 s. of abrasives and grinding wheels We also purchased the remaining Board of Directors in May, three men now carry the responsibilities of Presi December 19 1969 49 percent owr.ershio of Bendix- dent and Chief Operating Officer, each Westinghouse Automotive Air Brake responsible for an operating group or f Company we had not held formerly "company " They are W. Michael In addition to the acquisition oppor Blumenthal. Bendix International, Charles tunities we identified during the year, E Hettman. Bendix Automotive & Auto we were able to sell two of our divisions maton Company; and Russell D O'Neal. and to consolidate two others in a Bendix Aerospace-Electronics Comnany. ' continuing program to strengthen our Reassignments within these companies A P Fontaina Chairman and President and Chief Executive Officer 4 In Aerospace Technology at work in 3*e crewicn, development and production of sophisticated products, techniques and systems such as the complex* scientific experiments deployed on the moon by the astronauts of Apollo 11 and 12. / In Electronics Knowledge and stature. gamed through decade*: of leadership in electionics. are now being applied to the mveszrgation of laser holography techniques with future applications in jhree-cfcmen&ional. headup displays frr aircraft. 6 In Automotive A leading position as an innovative contributor and problem solver exemphfiec by the new Bendix Electronic Fuel Injection System In Automation Industry's most advanced machining ;ysiems capability now being applied to r.e development of adaptive controls for automated mac* ine tools. ' V International 'Vcocao* sro-Atn ibrouyh flexibility enc oc**jtsCjcos D<annny l In Research Research and development leadership through the years provides the scientific base for corporate growth '0 \ .* - Financial The 'nancial statements. contained herein snoA comparative data for 1968 js previously reported and also as restated to include three companies acquired on a pooling of interests ` basis. Sales Set New Record for tho 4th Consecutive Year Tiet s2'**s. royalties and other operating income for the 1969 fiscal year were SI.467, 917,000. a new high for Benriix and an increase of about 65o over sates, etc . of SI 388.691.000. as previously reported for 1963 and an increase of about 3:o over sales, etc . for 1963 of SI .430.191.000 as restated The toial for 1969 includes royalties and oi^er operating income of >10 387 000 Our corn^rnai tudustn:?! sales increased from S655.768.COO m 1966 js reported to $795 094 000 m 1969. in ircr-use o' $* 39 326.000 Cor r* -*cia! m tustrul sa'es accounted or 54 ; jt :u.Mi n 1959 c&`"par*-c .v:tt. 43'-j m 1968 The increase .n rate" '/ more than offsets a dec'me ~ ;cvrrr*m~ot sales to S66` 336 000 `rom 5721 294 000 m 1968 as repcrteo Earnings for 1969 Also Set a New Record Earmras for fiscal 1969 .vere S50.755.000. an increase of 163 over earnings of SJ3 801 000 as previous^ reported for 1968. and an increase of 15V above restated 1968 earnings of S43 C49.000 After allowing fcr annual divicend requirements on our preferred stock. earnings per common share wefe S3 71 in 1969 compared with S3 30 m fiscal 1968 as reported, and S3.19 m 1968 as restated, based on the average number of outstanding shares m each year Assuming full conversion of the convertible preferred stock anc exercise of all outstanding stock options, eaminos per share would be S3 38 m 1969 compared with S3 09 m 1968 as re ported, $2 95 m 1968 as restated The 1969 earnings, as stated above, do not include extraordinary ircome ings retained for use in the business were S32.489.000. of which S14.37T.000 was used for plant additions and im provements (over and above S27.487.000 set aside for wear and tear) and tne balance was used for working capital and other corporate needs Issuance of Stock Distribution rf total income dollar for 1969 b Materials f u --v c ?.< '4*ec $ .' ft. zcecitl Tools. $ .5; Su'div Taes riuftiiv; sr; <t 5; ./ ' jnrJ j;-er Costs d -j S S for*i e jin;- ;$ -i- t 3 i < f Business } C 2 . oe- * ~;c Vhc.'.ers g Set -$*'?<* ' e o/i) t/i! ' 3; tor-r: j- :g tnei of toxe^) r'c^''ng to S5 416 000. cr 44^ per common snare, resulting horn the rale of our -nvestrr.ent m Computing Devices of Canada. L.d Earnings for 1969, including extra ordinary income, were S56 181.0C0. or s4 15 oer common snare, on average shares outstanding. Dividends and Retained Earnings In November 1968 vour Directors voted to increase the Quarterly dividend on the common stock from 35c to 40c. beginning with the quarterly dividend payable m Oecemoer 1968. As a result of this, during the 1969 f*scal year four quarterly dividends of 40c a share each were paid on the common stock, for a total of SI 60 per share, or SI9 819.000 Quarterly drvrdends of 75; per share we.e paid on the $3 preferred stock for a total of S3.766.000 After payment of cash dividends, earn During the 1969 fiscal year. 415.565 shares of preferred sock were issued m connection with acquisitions, and 260.474 shares of common stock were issued. 164.000 shares for acquisitions and 96.474 shares under the Corpora tion's stock option plan. Unfilled Orders Down Slightly Unfilled orders, including engineering projects. were $611.000.000 at Sep tember 30. 1969. compared with $695 000 000 reported at September 30 1968 Including unfunded ct.n orders were $742,000 000 m * 969 and S805 000 000 reported in 195c A decline m the government crcrrs category o ore than offet a 1 5'-. ncrease n Oui commercial inp^str backlog. Taxes and Renegotiation Total direct taxes of all kings :jr nscjI 1969 were S87.339.000. including $46 293.000 for U S. and -oreign income taxes which in turn includes S3.993 000 for the I0c surenp-ge. In addition, raxes applicable *o profit on sale of cur investment in Computing Devices of Canada totalled $2.116 000 The Corporation's accounts reflect tax provisions wmch management considers adequate to cover ill income tax liabil ities. Feaeral income tax returns for fisca' 1965 to 1967 inclusive. are m process of examination by the Internal Revenue Service. Prior years have a*i been examined. It is net believed that there are any refundable profils under the Renegotia tion Act of 1951 for our 1969 fiscal year Renegotiation proceedings have been completed through fiscal 1968 \l T / l Pension Funds Oaring 1969 we adjusted our actuarial assumptions to reflect the continuing favorable earnings achievement by our pension fund trustees. Recognition of the favorable earnings trend for our pension funds permitted us to reduce *he direct charge for pension expenses for the fiscal yean which had the result of favorably affecting net earnings by $2,630,000. The market value of the assets m our pension funds at September 30, 1969, exceeded $300,000,000. Salaried Employees' Savings 3nd Stock Ownership Plan L"der this plan, which was inaugurated as "f uanjary 1. 1969. eligible ; : 6r.ec employees may elect to con trol:- _p to 3% of their base salary, rc !'i* Corporation will contribute 50c or eacn ST 00 contributed by the emL'cvee Employee contributions are ".es'ej either entirely m Bendix com"-n <'jck entirely in U S Government secur-'.rs or 50% m each, whichever e -- z oyee orects Bendix contnbu: .ns -'-r >nvested entirely in Bendix :stock At September 30. 1969 o' aM elicj bte salaried employees /.rre oj'ticipants m me plan Contno',,'icn> nv Btinaix for the .ear were iJprci.-'-jtdy S3.600.000 Financing In J.jl, 1969. vour Corporation formed n-.v subsidiary, Bendix International "oance Corporation wnich issuea n 1 5 GC0 000 par vaue 8% debentures Jw.y 1 1979 These debentures. -icr are guaranteed by The Bendix Coiocntion, were said abroad in the Eurodollar market The net proceeds .mII be used for foreign investments anq acquisitions Tne amount of 560.963.000 shown on the balance sheet for notes payable to banks includes notes and loans of subsidiaries and also includes Joans of former subsidiaries assumed by Bendix Otrer notes payable shown on the balance sheet include $21,000,000 payable to Westinghouse Air 8rake Company, issued m connection with our acquisition of the 49% minority interest in Bendix-Westinghouse Auto motive Air Brake Company. In October 1969, management decided to enter the commercial paper market as an issuer, tn order to make use of this very large market as a supplemental source of funds. Accordingly, our initial issue of $5,000,000 commercial paper was sold in October 1939. Financial Position Net working capital was S349.788.000 at September 30, 1969, compared with S359.733,000 a year earlier as reported. The principal items affecting working capital are set forth in the Statement of Source and Application of Funds Total stockholders' equity at Sep tember 30. 1969. was $495,758,000 compared with 5444.600.000 at Sep tember 30. 1968. as reported Of the increase, about 63% results frem nam ings retained in the business After allowing for preferred stock at its liquidating value of S60 a share, or 392 862,000. common stockholders' equity per share was $32 25 compared .*.ith $30 79 a year earlier as reported Assuming full conversion of preferred stock into common and exercise of all outstanding stock options, equity per common share would be $33 5u in 1969 compared with $31 91 reported m 1968 At September 30. 19C9, there were 4.016 preferred stockholders and 37.451 common stockholders Capital Expenditures In the 1969 fiscal year your Corporation spent $41.858 000 for plant improve ments and additions, and we had addi tional capital commitments of $19,700,000 at the end of the fiscal year. Of the 1969 total, approximately $27,487,000 was provided by amounts set aside out of earnings for wear and tear {depreciation and amortization charges) The balance of $14,371,000 came front retained earnings. At Sep tember 30. 1969. the Corporation had in use. a total floor area of $17,700,000 square feet, consisting of 13.800,000 square feet owned and 3,900.000 square feet leased. These figures are exclusive of the Kansas City Division, which Bendix operates for the Atomic Energy Commission. Acquisitions The Corporation completed four acqui sitions, three of which have been accounted for on a "pooling of interests" basis and one as a purchase. In April 1969. we acquired the Buhr Machine Tool Company of Ann Arbor. Michigan for 246.550 shares of Bendix Series A S3 cumulative convertible preferred stock. Buhr manufactures automatic transfer machines. In May 1969, we acquired the American Abrasive Com pany of Westfield, Massachusetts, for 124.000 shares of Bendix common stock American Abrasive makes abra sive grains, powders and wheels. Or. October 1. 1969, we acquired the Skagit Corporation of Sedro Wocfiev. Washington, for 169,015 shares of preferred stock Skagit manufactures logging equipment and systems and other materials handling equipment Depending upon future earnings of Skagit, up to an additional 42.272 pre ferred shares may be issued :n con nection with this acquisition. In Marcn 1969. Fram Corporation, our wholly owned subsidiary, acquired Superior Fiberglass Corporation of Murfreesboro, North Carolina, for 40.000 Ber.dix common shares During the fiscal year, your Corpo ration purchased the minority interest of two subsidiaries wnose accounts have been consolidated with Bendix beginning in 1966 In January 1969. Bendix purchased from Westinghouse Air Brake Co. the 49% minority interest in Bendix-Westingnouse Automotive Air Brake Co This transaction was for cash plus $21,000,000 in promissory notes, of which $10,500,000 mature in January 1970 and $10,500,000 in July 1970 This purchase accounts for most 13 T7T / of (he increase in goodwill, etc., shown on the balance sheet. In May 1969. Bendix purchased for cash the remaining minority interest of 18% in Aviation Electric. Limited. Sale of Subsidiary and Divisions In August 1969, Bendix sold its 66.75% interest in Computing Devices of Canada. Ltd., to Control Data Corpora tion for 103.462 shares of Control Data common stock. This transaction resulted in extraordinary income to Bendix of $5,416,000. after Canadian and U S. taxes. In May 1969, the Corporation sold for cash the business, inventories and certain equipment of the Semiconductor Division, retaining the plant and office buildings of approximately 100.000 square feet. Also during the fiscal year, our wholly owned subsidiary, United Geophysical Corporation, sold its Houston Data Center to Geocom for 300,000 shares of the latter's stock. In April 1969. our Scientific Instruments and Equipment Division sold its dos'-neter business to Eon Corporation for 43.750 shares of Eon stock. Source and Application of Funds For The Year Ended September 30. 1969 Source: Operations. Net income .......... itf|ustmems to net income for transactions not requiring funds Provision for depreciation and amortization increase in deferred income taxes . . Other .... ... ... ... $ 56.181.148 27.v; 324 6.264,854 i 729,958) $ 89.203,368 16.344.924 2.656.026 1 695.000 21.092.389 Application: Purchase of interests m consolidated subsidiaries ... Cash dividends ... Net additions to land, buildings and equipment ......................... Increase in investments in and advar-es to nonccnsoiidated subsidiaries and associatedcompanies .... Increase in miscellaneous investments and receivabhs . Decrease in reserves ............................................................ Increase m prepaid expenses anddeferred charges $ 47.922,529 23.692.423 36.502.320 9.730,861 9.232,743 1,520.769 2.390.062 Total..................................................................................................... $130,991,707 Financial and Statistical Summary All figures have been restated to include Canadian subsidiaries and partially owned domestic subsidiaries m ail years. Companies acquired on a pooling-of-interest basis are included for the fu'l year beginning with the year of acquisition. This summary has not been examined by Haskins & Sells, (he Corporation's independent public accountants. Financial Data 1969 1968 Rnutrd fot Pooling* ol InttiMtt 1968 At XNwotlv Reported 1967 1966 1965 Net sales, loyalties and otter operating income . $1,467,917,000 $1,430,190,000 $1,388,691,000 Earnings before U.S. and foreign income taxes and before minority interest.................................... Per $1 QC of sales, etc....................................................... U S. and foreign income taxes.................................... Minority Interest................................................................... Earnings after minority interest and income taxes Per si.00 of sales, etc....................................................... Cash OivuJends' Preferred.............................................. Common .............................................. Earnings Retained.......................... ..................... Stockholders' Equity at September 30 . Net Working Capital at September 30............... Net plant and equipment September 30 ... . 97.97Z.000" .067 46.290.000 901.000 50.760.000" .035 1.766.000 19.926.000 32.489.000 495,758.000 349.788.000 207.107.000 90.343.000 .Ob* 43.993.000 2.401.000 43.949000 .031 3.397.000 17.282.00023.270000 459.557.000 370.880000 198.092.000 89.379.000 .064 43.208000 2.370000 43.801000 .032 3.397000 17.073.000 23.331000 444.600.000 359.783.00C 186.199.000 M'vlusik- of sloc< T.wdenrls of pooled companies prior to acqu silion "Excius.ve of $S 4* 6 jOO extraordinary income (net of taxes) $1,274,023000 $1,051.536000 82.994.000 .065 36.965.000 2.294.000 43.735.000 .034 850.000 18.20600024.679000 418.446.000 233.154000 1S5.603.000 78.970000 .075 38.667000 1.554000 38.749000 .037 - 14.688.000 24.061000 365.514.020 225.941.030 127.747.300 $ 843.136000 58.996000 070 26.873000 2.540000 29.583.C00 035 13.343.000 16.235X90 325.431.C30 218.985.000 107.154:30 Per Common Share Data, adiusfed for 2-for-1 split in 1366 Earnings at t=r mmont.i nterest and income t3xes* Cash Oiv* ends per S -,ae . ................ StOCxhOlCr :s' Eqinf* . September 30" . . . S 3.71"* 1.60 32.25 S 3 13 1 40 23.66 5 3 30 1 40 30 73 ' -*- ; .mm : - ... i-nit-'Mi on Pr-if.-ri-;d slCcV.. .n : j* 1 *.363 an J *367 `" A**-r ; OWM-q ` =*-lefr-5U sloek al .tqutdntmg vd.iji ol ->60 p-.-r stare. <n 1369, 1963 and 1967. cl 5 J -. * -xtl.lOfOi.n iry incom-*. s 3 33 1 40 23 39 s 2 22 ' 25 :: si s 2 63 i :o 22- 33 Statistical Data Number ;f stockholders at September 30. Preferred.................................. Commci .............................. Number of shares outstanding al September 30' Preferred ............................... Cpmrrca...................................... Atr.-aJ....................................... Ad|. for 2-for-l split in 1966 . Number of employees at September 30' ... . Wages and salaries.......................................... Total taxes.......................................................... Amounts spent for new pla.it and equipment . . Unfilled orders (funded! at September 30 . . . 4.016 37,451 1.547.692 12.493,214 12.493.214 63.495 $511,474,000 87.939.000 41.858.000 611.000,000 Not including orro*oyees at Kansas City Oivcsion. 3,975 38.129 1.547.692 1 2.356.740 12.356,740 69.759 $ 588.499.000 81.275.900 44.740.000 731.000.000 3.975 33.129 1.132.127 12.232.740 12.232.740 69.226 $ 574.671,000 80.099.000 43.200.000 635.000.010 3.717 37.379 1.133.443 12.130.025 12,1 30.025 69.192 S 550.337.000 71.151.000 43.200,000 782.000.000 35.432 -- 11.800.736 11.800.726 61.730 $ 461.768,000 65.919X00 31.900.000 709.000.000 35 _ 5.524 732 11.249.464 51.583 $ 35c.5X7.C-0 47 151 cca 13 7-G.CC0 512X00 0C0 15 The Bendix Corporation and Consolidated Subsidiaries Consolidated Balance Sheet September 30. 1969 and 1968 Assets Current Assets: Cash ... M jrkeMbirt aecjnues (at cost, which approximates market) Receivables (including unbilled charges)' United States Government departments or agencies Otner -- Toi-il Less allowance for doubtful receivables . . . . Rote'V.lbleS -- net ... Inventories (\cte 2) ..... Total Current Assets 1969 1968 K .1 IPnci.i-oi'-i..ntsq,t 1968 A-'pric-sj 1 Not* 11 S 41,067,325 3.726,905 77.655.830 197.013.765 274,669.595 1,283.465 273.386,130 338,458,705 656,639.065 S 43,604.422 8.155,315 94,218,745 200,830,343 295,049,088 1,316,222 293.732.866 336,568,232 682.070.835 S 41,513,371 8,141.006 94,218.745 192.847.137 287.065.932 1 259 434 285,806,448 318,844 8-60 654.305.635 Investments and Miscellaneous Assets: Investments in and advances to nonconsohdated subsidiaries and assi>ci r-.": cj "pames fnves: "-*n-i ---;i cos- ' ~".e 3) . Advances Me>c<`ll in.;Cii s rvest,ne''*s ana receiv -ole* Total Investments and Miscellaneous Assets 33.977.1E! 5.767,394 14,352.743 54,097.323 26 715.1 10 3 298 604 5,120 005 35 133 71 9 26 464 5r4 3 2j8.6C 4 4 352.740 2.-11_5 35 3 Land. Ouildmgs and Equipment ' Note 4)- Ljn.j ana mpr c\-'-m. Bi i ildin--s MJCnin-,-tv ir-., ui u ' ~: Construcaon progress Total Less '.ccunui1 depreciation and amc.nation Land, 8uildmgs and Equipment -- Net 14.771,758 103.050.882 220.945.013 14.326.067 353,093,720 145,986,907 207,106.813 i 3 910 988 97 471 909 21 C. 532 059 1 3 05VG4C 341 270 036 142 1'3 209 198 091 51 7 13 415 31 3 51 81 1.256 2C6 3-2 531 i 3 934 073 2 24 504 123 126 31741 2 1681S6 710 Goodwill nd Patents (\:: 5) 46,647,842 18 343,534 16.140 083 Prepaid Expenses and Deferred Charges Total 15.652.363 $980.143.406 S---' So!-.-s to Ci''SO'-ijl'-l f ~j^col Sut -'r- ots cji"-Mui>: jn i . `-'jfa: uin ol tins iMt-.'ru-nt 13 262.301 SS44.902.206 12.431.279 $505.179 655 13 Liabilities. Reserves and Stockholders' Equity 1969 1968 ".1 < 1968 A . P-.-. S 1 Current Liabilities: Note* oayable. Banks (Nofe 6) . .................................... .............................. Other (incuding current maturities on long-term debt) (see below) Accounts payable....................................................................... Customers' advances on sales orders (Note 7) U S ind foreign taxes on income (Note 7) ... Otrpr taxes, payrolls and * ndry accrued liabilities................................... Totai Current Liabilities........................................ S 60.963.197 24,120.267 75,101.825 49.791,435 17,818.130 79.056.174 306.851.028 Long-term Debt (Note 6) S'. Debentures, d'.e 1992 ... .... Barks and insurance companies -- 4VS to 9Vo (maturing at various dates f'cm 1970 to 1982' ............................................. C-'-r' Total Long-term Debt Deserved Income Taxes (Note 7) ... 125.000.000 8.191.701 26.224.447 159.416.148 14,699.235 Reserves. ~ ' : jntmo-rncios Total Reserves ........................................ 2,640.000 778,745 3.418.745 Minority Interests ... - Stockholders' Equity (Notes 6 and 8) 3'.-terr.'d stock, no p-.r 'authorizes 7.000.000 shares, issuable in senes)5. - . s .1 $3 Cu-vu'e'ive Convertible Preferred stock (1969. authorized :.t35.-07 shares ?7 50 s'ated value each, outstanding. 1 547.692 - .ntit'od to 50 per share, or S92.361.520, in liquidation, -eserved -2 272 shares) C "on stock (1969 authorised 25.000.000 shares of S5 pa' value tocn. jtstandmg, 12.4.92.21*1 snares: reserved 3.143.700 shares) Surplus Capital (arismo from capital stock transactions).............................. Earned Total Stockholders' Equity . . ...... lota1 .......................................................................................... 11.607.690 62.466,070 47,811.165 373,873.325 495.753.250 S980.143.406 S..f Nct"$ To Con$clnJit-r-5 Financial Stjt^rnqnts which constitute an irT-rjra: p-*M of this slatvme.-L s 75.709.377 2.798.470 72.768,289 52,106,714 23.018.485 84.789.074 311.190 409 1^5,000,000 5,232,726 8 338.493 143 071,224 3 434 381 2 940 000 1 999514 4,939,51 4 1 7.709 51 1 1 1,607 690 61.783 700 44.051,219 342.1 14,558 459.557.167 5944.902.206 s 67,891 --4 2.08C 74] 67.239 992 51.969 .'c3 22 531 V3 82 759.'43 294 522 351 1 25 cco : ( 3 6.1 C? 1 * * 4 254 ?19 1 33 264 442 _ 2 4- = - 2 3 *4. .: 575 ' * 1 61 5 * 10 "6:5 615 61 7 6: -'lO 46,955 293 327.99'.503 444.559 539 S905.1 79 55 17 The Bendix Corporation and Consolidated Subsidiaries Statement of Consolidated Income for the Years Ended September 30, 1969 and 1968 1969 1968 Resutd hit Pi>ohrqt o* I'lle'Mts 1968 As Aittvaously X9Q(ld (*< f ) Net Sales. Royalties, and Other Operating Income.............................. Less: . Cost of sales.................................................................................................................... Seeing, service, patent, administrative and genera/ expenses ... Provision for depreciation and amortization ... .................... Total......................................................................................................................... Profit From Operations....................................................................... Other Income: Otvicends from nonccnsohdated subsidiaries and associated companies Miscellaneous........................................................................................... Total ... ....................................................... Gross Income........................................................ Other Deductions: interest expense (including amortization of debt discount and expense1969. $84,575; 1968. $63.213)....................................................... Miscellaneous ... ............................................................................ Total ............................... .... Income Before Provision for U.S. and Foreign Taxes on Income Provision for U.S. and Foreign Taxes on Income (Note 7) Current............................................. ......................... Defied .................... Denned investment credit ... ... Total .......................................................................................................... Income Before Minority Interests .... Minority Interests Income Before Extraordinary Item ... .................... Extraordinary Item --Gam on safe of Computing Devices of Canada. L.mited common stock, less income taxes of S2.11 6.00C . . Net Income for the Year .... .... SI .467.917.091 $1,430,190,514 1.175.432.829 161.781.039 27,487,324 1,364.701,192 103.215.899 1.154 777.898 150,512,442 25,181 ,c69 1.330.473.009 99.717.505 3.114.663 7.546.494 10.661,157 113.877.056 2.188.727 2.165.033 4.353.760 104.071.265 15.180.935 724.106 15.905.041 97.972.015 12.387.426 1.340.474 1 3.727,900 90 343.365 40.033,216 6.420,182 (155.328) 46.298.070 51.673.945 908 383 50.765,562 42 712.41 3 .235 654) 1 516 675 43,993.434 46,349 931 2 400,626 43.949.305 5.415.586 _ $ 56.181.148 S_ 43 949,305 SI .388.691,337 I.1 20.043,641 146.266.500 24.414.356 1.290,724.497 97.966.890 2.188.349 2.165.033 4 353.382 102.320,272 ' '2.089.491 733.134 12.872.625 39.447.647 41.996.206 (235.654) 1,51 6,675 43.277.227 46.1 70.-120 2.369.590 43.800.830 _ S 43.800.830 Per Share of Common Stock (Computeo in accordance with Opinion \c 9 issued by the Accounting Principles Board of the Amencan In st.tut e of Certified Public Accountants) I'come before extMordinery item ................................ ttraordinary item, net of income Taxes ....................... ... Net income per share............................ .... $3.71* .44* "54.15* $3.38t $3 19* .361 - $3.74t S3 19* $2 95f - s2.95t $3 30* - S3 30* S3.09? - S3 09: {*) Based on averse shares outstaying. (f) =>,o forma, assuming full conversion of convertible preferred stock aid exercise of all outstanding stock options. Se*> Notes lo Consofrdated Fmanciai StaTe-^-nTs <vnch const-tute an integral part of this statement. Statements of Surplus for the Years Ended September 30, 1969 and 1968 1969 1968 As hetiouslf Capital Surplus (Note 1): Balance at beginning of the year: The Bendix Corporation and consolidated subsidiaries, as reoorted ......................... $ 46.953.293 S 44.634.245 Deduct -- Excess of par value of common and cumulative convertible preferred stock of The Ben dix Corporation issued over par value of capital stock and capital surplus of pooled companies Remainder................................... .... .............................. 2.902,074 44,051,219 _ 44.634,245 Add --Capital stock transaction of pooled company between October 1. 1968 and December 31, 1968. the end of its 1968 fiscal year .................... .............................. Balance at beginning of the year, as restated . . ............................................. 90.000 44.141.219 _ 44.634,245 Add Excess of sales price ever oar value of common stock soic under Stock Option Plan .... 2.173,656 1.705.425 Excess of market value over par value of common stock issued m connection with the acquisi tion of purchased companies........................................................................... .............................. 1.495.000 613.642 Other ... ... .... 1.290 Total......................... ........................................ , .... 47,811,165 46,953.317 Deduct --Cash paid in lieu c* fractional shares of common stock upon conversion of cumulative convertible preferred stoc* .... _ 24 Balance at end of the year ...... S 47.811.165 S 46,953.252 Earned Surplus (Notes 1 ind 6). Balance at beginning of thi year: Toe Bendix Corporation end consolidated subsidiaries as reoorted .................... Pooled companies --A: the end of their respective 1S63 `.seal v-ar-enas ... Total ................................................................................ Deduct--Earnings, less dividend- of pooled compares from Octcoer 1. 1968 to the end of *-,eir respective 1968 fiscal year-ends ... Si'a^ce at begmn ng of the year, as restated . .... . .. Add--Net income tor the year .................... Total.............................................. ............................................................ ............................................. 2 ^act --Dividends- The Bendix Corporation Common stock --1969. SI 60 per share; 1968. SI.AO per share . ... . . . Cumulative convertible preferred stock --S3.00 oer share ......................... Pooled companies (declared prior to pooling with The Bendix Coroorahon).............................. Total .... .... ... .... ... .... Baljnce ar end of the year .... ......................... ......................... ................................... S327.991.593 14.122.965 342,114.558 729.958 341.384.600 56.181.148 397.565.748 19,819.060 3.766.206 107.157 23.692.423 5373,873.325 $304,660,825 304.660.825 _ 304.660.825 43.e00.82 7 248,461,6c5 17.C72.829 3,397.222 20.4 70.082 S327.991.552 S-r? \ct-s to Consolidated F-nancial Statements which constitute an integral par: c.} statements Notes to Consolidated Financial Statements 1. Principles of Consolidation and Acquisitions The consolidated statements include al. dcmestc and Canadian subsidiaries arc only minor foreign subsidia.y. other foreign subsidiaries <re included in nvestments (Note 3) Reference is made o page 4- of this report for information re'atma to the F-ceral Trade Commission action with r-soect to the acauismoo of Fram Corporation .n 1967 During the year, the Corporation acquire, the net assets and businesses of American AbMiive Compar.v and 3uhr Machine ''uc! Comoany in e<- change for 124.000 shares of the Cor- pcri:t on's cr-'mon stock and 246.550 s^jres of me Corporation's Senes A S3 Cumulative Convertible Preferred stock, respectively As of October 1 1969 the C rporancn acquired the net assets an j ousmess of Skagit Corporation <n evmange rcr 169.015 shares of ;re C- oration's Series A S3 Cumu'at.ve C '.tock., f,,r:~ arc acrr rnal scares cf :f'e Corpc'vrn ? S-'.-s A >3 C/i'vir.: ,e Convcf a p,. fj t' ck n-.av !>.* issued '~rOu.:h *9"3 to r e fcmer $tookno!<u-'> A S*agu Corporation jp to a -- ~ m 42 272 snares contingent upon specdied fjtur-.* -Timings ii Jr' ~-.z n tne Purer-?^e agreement T'ese acquisitions were accounted ;cr ns poolings of interests ano. jccurdinql/. me iccomonnymg state* mervs o! income and surplus for the ,~?r ended September 30 1969 mclude : e results of ooeratiors of the merged companies for the entire year then rndeo For comparative purposes, the . -cunts r.-oofted m the accompanying ,..jncial 5i-ne(u-m> for the yea* ended September 30. 1966 n,tv been restated to include the accounts ' f American Aprasive Company. Buhr Machine 'ool Company, and Skagit Corporation for tnetr fiscal years ended September 30. 1968. December 31. 1968, and October 31. 1968. respectively In addition, during 1969. the minority interests in two previously partially owned subsidiaries. Bendix-Westmghouse Automotive Air Brake Company and Aviation Electric Limited, were purchased, and Fram Corporation purchased the common stock oi Superior Fiitergfass Corporation in exchange for shares of The Bendix Corporation's common stock. The excess of the pur chase prices over the equities acquired. $30.318 683, has been charged to goodwill in ir e accompanying consoli dated balance sheet. Also during the year, the Corporation orqanized a wholly owned subsidiary Bendix International Finance Corpora tion; this subsidiary had no significant operations n the current year. Certrm cf the account classifications at September 30. 1968 have been restated to conform with :ne account presentation at September 30. 1969 2. Inventories inverrqr.es are stated at the lower of cost ' suos'aniirtily f.rst-in, f:rst-out or average) or market By tr.e terms of agreements with United Stares Government departments funder which the Corporation has received advances and partial payments on soles orce's). inventories and non durable tooU acquired for such orders were suo;ec: 'o 1 cn at September 30. 1 969. 3. Investments in Nonconsolidated Subsidiaries and Associated Companies Based upon the latest available financial statements, the investment and equity in the net assets of tne nonconsolidated subsidiaries and associated companies are summarized below LoCttlOl Euiupe . . Ldtin Arenca Austral.a . Other Total Equity < Xtt Amts J15.304.192 13.291. S70 3.250.670 2.430.649 $32.301.000 12.967.000 3.457.000 2 560.000 S33.977.131 S51.295.000 The equity in net assets of foreign companies was determined generally by usino approximate rates of exchange provailirg at September 30. 1969. During tire year, dividends of $3,114,663 were rec ived. 4. Land, Buildings and Equipment Land, buildings and equipment are stated at .ost. Depreciation is generally provided >r\ a straight-line basis over the estim; ted service lives of the respective classes of property. Fully depreciated assets still in service are not mefud'-d in the property accounts. 5. Gcodw.M and Patents Goodwtf* or $46,647,641 represents the difference between the purchase price and th value ascribed to the net assets of going businesses purchased since 1956 a id is not amortized Patents are s'ated at $1. 3. Notes Payable and Long-term Deot Under the s.nkinq fund provisions of the indeniut for the 6%% deben tures due 1997 cash payments of s6.250.000 will be required each year beginning 1974 or. m lieu tnereo*. the Corporation ma\ deliver reacquired debentures to tM sinking fund agent The debentuies . re also callable, under certain condition ., at tne option of the Corporation, at prices ranging from 1067*% at Septet ber 30. 1969 to 100% at December 1. 1987. Under the term ; of a bank credit agreement dated vlarch 1. 1968. under which loans aggrt jatmg $33 000.000 were outstanding . t Septemoer 30, 1969. the Corporation has agreed that it will not pay dividends (except stock dividends) or make certain other dis tributions on or in .cquismon of its capital stock m an ..mount in excess of its consolidated i et earnings sub sequent to Septembir 30, 1967, plus $25,000,000. Under the terms of the agreement the amount availabfe for 20 i such purposes was approximately $80,800,000 at September 30. 1969. The Corporation also has agreed not to permit consolidated net current assets to dec...-.c Delovv s200.00C*.000. Durmo t?69. Bendix international Finance Corporation sold $15,000,000 principal amount of 8% guaranteed debentures due 1979. Annual sinking fund payments to retire tne debentuics are requited as follows: $750,000 on ,'ulv 15. 1970 and 1971; $1,000,000 on rich July 15 from 1972 through 1975; 51,500.000 on July 15. 1976 and 1977. and $2,500,000 on July 15. 1978. 7. United States and Foreign Taxes on Income The Corporation and its consoliria.ed subsid a'-es follow tne practice of pfOvidr-7 deterred ncome taxes on cdfererces between fmcnci I and ncome The C arporatron and \xz consolidated dqms! c subsidiaries generally follow me oractice of Ocferr.nq and - me m*.estmeot credit uver estm'atro useful !>ves the assets ' ' m. me aer.,\ apo-.-s For the ended $ept-n'h.-f 30. 1959 tu,e prevs-on `or On,ted States 3nci foreign on -room* r.as been 'educed Dv 30 nvesrment credit of approximately SS50 0Q0. and me accu'-'u-ated : .er'ed investment creed ncluoed m Or^erred income Taxes a: Seyr*m'ber 30 1369 aggregated $5 064 344 8. Capital Stock Under the Corporation's Stock Option Plan, as amended, certain empiovpas are eligible to purchase co^- '-on stock at ormes .vmch represent 1002 (95% tu' options granted nnor to January 1. 1964) of the ta-r market value as adjusted for stock dividends and itock spins, on the dates tne options were granted Options granted prior to January 1. 1964 may be exercised over a period of ten years from date of gram. and tnose issued subsequent to December 31, 1962 mav be exercised over a period of five years from date of grant. Certain information with respect tc the plan is summarized below: Nvwfcei af Pnen Skint* (if Skut Shares under option at September 30.1969 . . . . 390.199 $20.41 to $51.75 Options exercised during the year......................................... 96.474 $17 41 to $44 25 `Indudlt iharvi under cptt:n md sMret fiermed el H Z7t >i* 4.99$ . titt. resp*cti*il. i the result si tf>* jltump'isn by '*k Cottar-`.ion ol tit* (nm Corporation irock option plant The difference between the option price and the par value of shares exercised is credited to capital surplus. Common stock and Senes A $3 Cumulative Convertible Preferred stock reserved for various purposes at September 30. 1969 is summar.zed below* Common Stock Shares Conversion ol Senes A $3 Cumulative Con vertible Preferred Stock Stock Option Plan . . Supplemental Compensation Plan Salannd employees' Stock Purchase Plan Purchase Agreements* Sxagit Coroaraticn See b!ov, Geo Prospectors. Inc. . . . Total .. 2.321.538 539791 190.000 100.000 3.433 __ 1 3 963 3.1437C0 Ser.es A $3 Cumulative Convertible Preferred Stock Skagit Corporation Purchase Agreement 42.272 9. Employee Pensions The Corporation anc certain of ns consolidated subsidiaries have pension plans for eligible employees. Pension expense for the year was approximately $19,600,000. which includes amortiza tion of prior service costs over a period of 30 years. A change during the yea: m tne interest rate assumption used in computing pension cost had the effect of increasing net ince me for tne year by approximately $2,630,000 The Corporations' policy is to funa pension costs accrued. As of the latest date of determination, the actuana'iy computed value of vested benefits for certnn of these plans exceeded the total assets, at market, of the pension funds and balance she^t accruals by approximately $10,250,900. For the remaining p!ans, the total assets, at market, of the pension funds and balance sheet accruals exceeded the actuarally computed value of vested benefits by approximately $85,000,000. 10. Government Contracts and Subcontracts Inventories of fixed-price type con tracts are stated at the accumulated cost of material, labor and manufac turing overhead, 'ess costs proportionate to amounts billed, but not r excess of amounts estimated to be recoverable. Research and development and selling and administrative expenses are generally charged to 'ncome as incurred. Profits on contracts are taken into income in proportion to billings made in accordance with the terms cf the contracts. The profits are subject to renegotiation under the Renegotiation Act of 1951. Proceedings for the pur pose of establishing the amounts of refundable profits have not b-'en com pleted for the year enoed September 30. 1969. dnd the amp-ant. it any. whicn may be refunded uncer such pro ceedings is not detern'in2at tn,s time 11. Contingent Liabilities At September 30. 1969. *ne Cor pnration and ns consolidated subs car es were contingently liapip in the omoun: of approx.mately $9.400.000 ac guar antors of loans made to nonconsolidated foreign subsidiaries and associated companies There are various suits per ding against the Corporation and its con solidated subsidiaries, some of which are for substantial amounts. It is the opinion o. cffic'ais cf the Corporation, on the basis* of information furnished by counsel, that tne ultimate liability, tf any, resulting from such suits will not materially affect the consolidated financial position or results of oper ations of the Corporation and its consolidated subsidiaries. 21 Accountants' Opinion I HASKINS &. SELLS CERTIFttD FdBLir. ACCOUNTANTS tsoo guardian uuil.ong OCTROIT * To The Board of Directors and Stockholders of The Bendix Corporation: November 17, 1969 We have examined the consolidated balance sheet of The Bendix Corporation and its consolidated subsidiaries as of September 30. 1969 and the related statements of consolidated income and surplus for the year then ended. Our examination was made m accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances; it was not practicable to confirm receivables from United Slates Government departments or agencies, but we carried out other auditing procedures with respect to such receivables. In our opinion, the accompanying consolidated balance sheet and statements of consolidated income and surplus present fairK tho financial position of the companies at September 30. 1969 and the results of their operations for the year then ended, in conformity with genera'iy accepted accounting principles applied on a basis consistent with that of the preceding year. HASKINS Be SELLS CE R T I F 1 E" P ACC'. .v.TA'.r<^ 1300 guardian builoing DETROIT J8'.'6 Suppie'^en.ai CompencM:on Committee of The Bendix Corooratior Bend'< Center. Southfield. Micrvyan 4^0.5 Dear Sirs November 17, 1969 We have eom.inec me consolidated fmancal ,!a:e~'er,s _t ~~e Bendix Corporation and its domestic and Canadian subsidiaries and one cnylis' s^pMdcry as ol Sebtemoer 30 1969 me m mv yearthen ended, and have rendered our opinion, dated November T7 T969. tr.^r-ron Upon the basis or mese fmanc.at s:at-r'"ent5. we have computed rre maximum amount whicn may be credited to the Supplement?! Compensation F^nj for me .ear enc-o Seote^'cer 30 1969 under me provsions of the Supplemental Compensafcn P'j? of The 3encix Cm cor anon aoooteo by me stockholders at their annua! meeting on ay 18 1947. as amended by me iteexno cers ?n February 23 1249 P-cu.m, 26 1958. and February 23 1567 Tne maximum amount of $5.143 036 is ccmpu'eo as to'lo.vs. C-'fji'Cs'ri s' - - n -'u'.. .it S-pi -nio- f I*t 069 s-io.'1 it : -t _ ~ ~ - rT.' c y-;p'> itcr~ i : *:rO ' - : o' r. ;> o!b--Qi u i 2. cr-.-c ;-.d *c 1 96i c ` t-- Increase Add Cvp'.ra* c-1 _ o >{> par: c eating n--s; c suus-U'af--s gfv-r prciu mj <i - r _- t ` :r v: jf tmct-a s~9:*-rrp..f 30 t So? C i ':-r i1 i" j--a :< p.v: c o M.ng oo^-.'si c s aoi'd'j"6s i> ao ust-d Son : 476 2z.2 0_t 3 5J4 3^24^*352 s,ov> o" * i i . l 't<il cr.movns.n Total - S-o1- --i r 3C 1 369 r- cora^a in ooos Deductions P , 1 '<rC n nonpar: r ycil.'- -J Tirt'. : C *uf:S y.f'v rorporai'Of'S wit i'* r t z.' .. , o', `or Federal incon- - ta^s result ~ g i-- ic ;i j.<! of suppi-r^mai ca^'p-nsatiO'i a-varns Total .... Net r~ - :s js c- <: i me Supj li.m- r :a: Co^'pe*'at on Plan l :>> 5 ~ r ip T if r'T')*oyi 1 if' " - r. J-Siness t`v m- C .rpor.if tm A-co-r .z.` ,,pplem-'.tal cor-o-r''',ation 1$ comput'd <'l rs Ojrr C 0 tr.ng acn'e^t'C SUDb <ttjnn V - -J-- J -- a - .c*. "jy Dj credit-d to in- S app'-n-^-tal C C'^ptr'sat on F -- 1 2' '> . O'iS z 0 2 7a - -,0 509 549 3 294 243 60.703 cTrj 19 053 734 > 4i i.;t 291 r 5 1 4To3C The amount r--",.;ir.tmj m the Fund iX September 30 196S was SI,277.349 after debiting the Fund with all awards previously made but before crediting it with any supplemental compensation for the year ended September 30. 1969 Yours truiy. v- xX^iL People at Bendlx In the past decade, noteworthy changes nave occurred m the level of employ e compensation and the methods bv which our Corporation compensates its people While wages and salaries have advanced steadily in line with both improvement of skills among our employees, and a continuing high level of demand m the labor marker, a more spectacular change has occurred -n t~e area of nonwage payments. commonly referred to as fringe benefits. As shown on the cr.c.rt. ;Ke average package of *nnge benefits provided to our domestic employee has grown in value from 51097 in 1360 to S1870 in 1969an overall increase of approximately 70 percent in ten years. This has re sulted from not only a growing emphasis on varied forms of compensation, but also an increased awareness by the Corporation of the broad needs of employees and the:r families. We believe this represents, in another way. :ne continuing interest of Benaix in its most vital resource, people. Gearing up for the '70s As you know 8-not< ras completed a m,j;or realionm-r: ot us corporate structure during tne past year And because it represents the most for reacnmg organs Vi.; n.il change m the Corporation s -TO-.-rar uistorv. it is r"ooctant that tnose interested >n Bend.x understand its o^rpos-r nmure and Nigmhcarce fne -"O', e iPvCi .es a real.onment of top management nc tne creation bv t"e Board of Directors of three new costs of President ana Chief Operating Ghicer--one for each of Benai* three principal businesses Although The Eeodix Corporation cont.nues as a i ngle !egal entity, its new structure creates, m effect, three autonomous coerating companies "~e three conv ames operate as separate _mrs as f3r as possible Tms is a major lurpose of the restructuring Bendtx has done this tc strengthen the total Corporation by strengthening its In short, we have redeployed o.ir nan agement strengths to enaole us to better manage a Corooraticn of the scape we envision for tKe coming . :'( The following tabie shows the t.-an cial performance of the tnree come nu during fiscal 196S compared to th-.r restated performance for 1 A68 The Bendix Corporation and Consolidated Subsidiaries Net Sales, Royalties, and Other Operating Income 1969 Oomestic intern'!. Total 1968 -a p > Oomestic lntern'1. Total Bemhx Aercppuce t'^ctronics Company 3en:n - >;Tor" jtr. ? & Ajtcmavon Company Semin international S 776.253 632.777 Intercompany sales and olher eliminations Total 1.409.030 (2.105) SI.406.925 Profit From Operations 3en6x Aerospace Electronics Company Bendix Automotive & Automation Company Bendu International $ 34.878 63.733 Corporate items not allocated, reclassificaticns and ,ntercornpany eliminations 98.611 (1.505) S 97.106 S 42.793 11.66b 6.514 60.473 519 S 60.992 S 3.471 3.653 1.433 8.557 (2.447) S 6.110 S 818.546 644.443 6.514 1.469,503 (1.586) SI.467.917 S 33.349 67.386 1.433 107.168 (3.952) S 103.216 s 333 434 539 373 1 373 277 692 si 373 969 s -i5.no 43 442 84 552 (1.646) S 92.906 S 33 354 10 733 5 5:4 56 2d s 55:21 s 3 173 3 S37 1 652 3.632 (1.870) s 6 812 s 2?: :e uu:;- si s 45 ;g 53 2 71.5:' 1G3.2 3-1 (35r S 99.71 23 ti- ?r t v. Bendix Aerospace-Electronics Company The Bendix Aerospace-Electron.cs Company serves five of the Corporation's principal market areas, and is a major internal source of new technologies and new product developments for other operating companies of the Corporation Approximately 70 percent of the com pany's business is electronic m character. The company is uniquely structured to transfer advanced technologies and new products within its own divisions, as well as to the Bendix Automotive & Automation Company and Bendix International Sales and other operating income of divisions that make up the new Bendix Aerospace-Electronics Company totaled S819 000 000 in fiscal year 1969 The decrease of 6 percent from the pieceediruj ve-' 'esmted from t`'e sae durmg the y-ar of *hree operating units, as well as from a reduction m federal spundmt; in defense and space, which h.td be*--n previously anticipated Profits fro - op cions were 538.000 000. comp : to 548 000 000 m 1 968 Apotj<imatv(v 78 percent of t~e ccm-pcn. s saies m fiscal 1969 were to t.* wverm'-em rather ;!ir.;ct!y or tnroug'' subcontracts vljnagen-'n? expects its vr luive of government busm-ss to continue to cf*c!me som*.what .n fiscal 1 970 out foresees .vprcvv't'ent m profitabii'tv through deeper penetration of com.merc-al market sectors, accompanied bv costreouctiun programs Co "meicia! salys increased slightly in fiscal 1969. and the company's commercial markets are expected to provide a major opportunity for growth in volume anp profits m the future. during the year, management con tinued to stress the transfer of tech nologies developed in serving govern ment markets *o the company's commercial 3nd industrial markets. Among products that are beginning to emerge from s^ch unnsb r is a new line of advanced c^s chromatographs, used for process control in the chemical industry This represents a direct spin off of technologies developed to eouip NASA for the scientific exploration of Mars Commercial applications are also planned for pretogrammetne. or auto matic mappmn nstruments for rjos-rn w-.-nt and irp^stry This work has mciuced the cesign and ccn^truction of stereo-plotters, electronic imane scanners ana coherent, optical processmg systems that have application in : ".appmg systems and jSbific.nun of image oniicnucns of finer :.es were also exp.mrf. ri Cenvr-d from tech :;*d to supply mg1': 0 the military, toe Optics products a'-' b-mg applied } computer readout syst-.-ms anc .cm-inspection devices in July, tne comoanv announcer: establishment of an Advanced Tech nology Group, whose mission is to 24 MAJOR CONTRACTS to 3fO'tir- flight control systems fof tn-: VcDoan.-H Dougl - DC - f 'III'- f ; ' rlA.lf!-r| tO E-'.Ok 'h.ve'op .1 nr| nurture new products and mm. dl-m.-ss-ts and :c facilitate the -f ac*. anced tech nologies anc: -mcc '-".t.:! new ousim.-is ventures to O. - r `11 r : units mrO.. meet rre tu !h>- company S high vol m tr n j profitable line c> electrical conr-:f,r' Tu-uv .oclucieo c:-'" "umcation t:on mu Ihrin: somrul system, < o -re. a mu ;.r/ aircraft in---* "" " .v'. o-.- iremed to.vara ' 'i "i 1d / in': nif: n 'm;rn o i ' - " c -s-.uf-/ \.- >. : jnr.-- . .-. ' `rC ' r:-r,K --j .c n i (! o--,v products tvrren*,, _ ' ' ' a'.'! i-:,vv:oc'"en: mc!-.:-.' ' . . " '-rr'jr--' ruuipmen* '- ': itors 'or o,j:o^i.i: o od ctro - oj''C s ana r ' .m v- --- 1.*T-1C0 :ma pj-iOO t :i:'u'-.rs were otrcduC^c ...........: - Benoit r'| -Ciclr'.'' ; : d 't t'ai'ucrs olftff significant ~r".' conv-^'icinal nw.-c- . c-- oi;'tina t wo-aimer - -- i `I nto comou1- r, ' 'f'jn.c cat"i;on`-n! , 5 ' >n ,t,i;.v.f"!l ana - pv 3-r D-.nspace El--stromr , Cor,oar. <n t mu ',363 ranged '-on' v',n w.-d n<ure,--n , p'aced on "m A;)a;|.j 11 van 12 astronauts -m.iu s ud-.-s ncl.-ding S an , m.t :Ocou -mar -vste-'s : cv C.noirt , Cjnt-^eu os v. m : C.-'mtrica1 c'--C" cal O" r>~- mar s ..'C"1 C.r -a ; co"'iJ.inv m'm -ovine-..' - oriels of cv ; <: 'r"`ec'urs mo *panged its hn- p? r c` ana a1-'1 ^onr^ctors m era-;' 'a c" r -per cerefrat.on of m-r total "arket '.York also 'A.h '' on conn-ctor c.tp.a.'-r )l . - * t connecter, ana disconnect-d " te'.sater. as aoII as a connec'or -.-a'lf'cally a-fs.nn.jU for use bv js'ron.iuts m space T"- conipany iniroduc.tci a lm*- <j\ Cuntic connecr-ars tCal co.vpieo-.rnt i ds nearly con-plefe line of digital fluidic elements. These circuds are capable of performing sensing, computation and actuation control functions Bendix' analytical instruments, primarily advanced mass spectrometers and gas chromatographs, are sold to research laboratories in government, industry and academic institutions. Process instruments, as well as an extensive line of tensile-testing instru ments. are sold to the chemical industry and the textile, p'astics and rubber industries. Contributing to the projected growth of the company's scientific instruments sales is the spe^d with which laboratory instruments are moving into moLStuj! applications Bendix souttenng dev-rei. for example, long established as labo ratory equipment nr-: finding applica tion m the production of a u recstant finishes for razor blades, surgical knives gear surfaces and o'ner products. The Bendix Aerosoace-Eiectron.cs Company staves ail sectors of :ne aviation market --general airline and miVary T: e comrnercvll sector,nfin-, mu .j-pf-ni avrapon-.<-;*`vr the -'-ost promising qrp.uh potential In h-;a; 1953 'res-: urkets account;-.1 for a -'jjvr :;cnon <J the co'- pan, s conmuacial aru mdvjstrial sales Vi iifury av-ation ,a'es declined .n fiscal 1969 as a resu.i of reductions m d.-f-.-nse speramg for production a.rcrpf* and deescalaunn of tne war in Vietnam However J number of new military aircraft iiave rvcently entered or are about to enter development, and the com.pany ant.cipates trat it; military aviat.on business Ailf resun e its orr/.m trend as these aircra.'t are l.v unt into production. For mmpie, :r,c company -aas recently awa'ded a contract to supply landing gear and other equipment for the Grumman F -1 4 and is well pnsittoned to participate m development and manufacture for the F-15, AMSA (Advanced Manned Strategic Aircraft) and the heavy-lift helicopter A contract has also been received for the flight control system 25 fcr the S3A antisubmarine aircraft. Bendix is currently under contract to c >velop an electronic propulsion control system fur a jet engine that is in com petition for specification on the AMSA. There was a softening of advanced bookings in the airlines sector that is attributable to the current tight money situation and general economic uncertainty Management expects this situation to -niprove as work progresses on the new generation of jet aiicraft now m the development and early production stage* The company's flight control systems, a^cnics and its line of aircraft wheels ar-1 prakes contributed the largest sales volumes to the airline sector of the aviation market Expansion of the latter business in nscal 1969 was significant because it assures continuity in the replacement business Work continued during the year upper major contracts to produce flight control systems for the McDonnell* Co.jglas DC-10 and the Boeing 747 A contract was received to install Bendix autopilots on American Airlines' Boeing 707 fleet. Progress was also made in expanding the market for the company's lines of air data computers and airborne weather radars. The general aviation sector has the highest projected rate of growth in the total aviation market, and the company continued to expand its sales to this sector during the year. The sector is generally defined as including all com mercial aviation ether than the airlines. General aviation is an area of the business in which the company has dramatically demonstrated its ability to ransfer technologies and adapt products .o profitable commercial applications. An example is the company's new line of general aviation transponders that has evolved, through airlines varieties, from military identification devices The new transponders, selling in a price range attractive to the general aviation market, enable air traffic controllers to accurately identify and pinpoint the location of a plane. Bendix was selected to supply the flight guidance system for the Cessna Citation fan jet executive aircraft. Tne system, known as the FGS-70, consists of an autopilot and flight director com- FLUIDIC DEVICES which promise 10 replace electronic and electromechanical equipment m many products and systems are m full-scaie production at 8endix. NEW TIMEOF-FUGHT Mass Sp*ctfom~t.r Gas Chromatograph developed by Bondi* w.U pt-rmti faster study of such compounds as atmospheric contaminants, narcotics. pfStic.o-^ and biological to*ns. as well as l-rnip-ratu*- s-`nsuivr and unstable -Oi'ipuur s bination that makes use of a common command computer. During the year, the company also introduced an inexpensive flight director system for general aviation aircraft anc fi.ght-tested a new autopilot A second-generation. smalt-aircraft weather radar also went into production during the year. The company provides a wide range of products, systems and technical support services to the National Aero nautics and Space Administration ana ranks sixth in NASA's list uf major contractors. Bendix products used in the space program include inertial guidance plotforms for Saturn V launch vehicles. LEM descent engine controls and range rate instrumentation Company personnel operate Com plex 39. NASA's Apollo launch facilities at Cape Kennedy, staff many of the stations m the worldwide tracking net work. and provide support services at the Manned Space Flight Center in Houston, Bendix designed, fabricated and tested the scientific instruments packages successfully deployed on the moon by the Apollo 11 and 12 astronauts. The 26 ! m. X company is continuing the development f scientific equipment that will be sec! in further exploration of the moon 3 > \.ell as conducting studies for the design of instrument packages to be i-:iced on Mars. Bendix missile business dates back to the 1940`s and the company has supplied systems or components for virtually eve'y miss`le in the U.S. arsenal. Sales have declined in recent years as a result of the completion of major contracts and a continuing slowdown m the development of new government programs. The company continues to be one of two suppliers of the basic inertia! g ji'jance components used in alt U S. baiiistu s missiles and space work During the year, the cc cany received additional contracts to produce guidance computers and in?rtial guidance plat forms for the Perching missile and medial compo: ems tor the Poseidon fissile it also received new contracts to produce various suosystems for tre Mmutem.afi anc. SRAM (Short Range Attack Miss le) it is aiso a major supplier of centre1 systems, auxiha.-v itGAftr systems, propulsion systems 3rd i ussile support equipment and is the onmt- contractor roi the Navy's 'jlos ''issile The Bendix Aerospace-Electronics Company's oceamcs sales are primarily military in chancre', although other ^perot-ng units of the Corporation supply produ :s and techn.cal serv.ces to the comn-i^ c-1. sector of the oceamcs m.jik.t. The company's objective, at a time when the commercial sector of the oceanics market ;s still relatively small, is to participate in the advancement of state-of-tne-ar: technologies through selected business ventures, without committing large sums of investment capital. Many of the company's aerospace and electronic technologies can be applied to the solution of transportation, navigation and control problems in the oceamcs market Examples of such FIRST ALL-ELECTRONIC DIGITIZER capable of recording g*aphic iric~''3,ion from an area of virtually unfrmiiert sue has been Urv-iooed oy Sendm. applications include development of a complete communications system for me Makai Test Range, an undersea testing facility in Hawaii; acoustical locating systems for underwater equip rrent used in the petroleum industry; and underwater communications equip ment used by Navy divers in Sealab III. An unoerlying business philosophy and capability of the Bendix AerospaceE'ectronics Company is to maich technologies looking for a market with markets looking tor technologies Among significant areas in which con current business and technical studies are going forward are lasers, holo graphy. electro-optics, pollution control and photogrammetry or automatic mapping. The company is applying highly stabilized lasers to precision measuring oevices and as alternates for radars in range determination. Lasers are also in common use in holography, bui * this field tne company has pioneered the use of acoustical energy to produce holograms This development permits the creation of holograms (three dimensional images or pictures) o* objects under water. In the area of pollution control Bendix has developed an airborne infrared scanning device called a thermal mapper that i be.r.g usee example, by the Slam of New Ycrs *j determine sources of t ctent'.il wy.t-r pollution The company also equipped a mobi'e an.* capable c' Lm duemg on-the-scot ~e2v..re'"eo:s ;? wide variety cf a>* pollutants. 27 Bendix Automotive & Automation Company The Bendix Automotive & Automation Company continued to increase sales and profits in both the automotive and metalworking industries during the 1969 fiscal year The operating units of the company reported sales and other oper ating income 'or the year of S644,000,000 compared to S551.000.000 for 1968 restated. Profit from operations was S67.000 000 compared to S53.000.000 m 1968 also restated These figures reflect increasing pene tration of all major market areas through rising sales of existing products and tne realization of new marketing oppor tunities through acquisitions, new prod uct development and the application of Bendix know-how to new market areas The acquisition of three subsidiary companies gave the automation arouo a well-rounded systems capability, wmle new marketing horizons were opened for the automotive group with the development of such products as a mm (t.$c brake, electronic fuel injection ana Bendix entry into the burgeoning recreat-cnal vehicle field. The many ne.\ products introduced cturinn '"e year and the company s aptlic.von of advanced technologies tuv O'ds the solution of problems mcntj neo the Bendix Aulomot've & Auto mation Company's reputation as an innovator and contributing supplier to the many industries it serves. Sales by the company's Automotive Group of divisions rose 17 percent m fiscal 1969 from S293.351.000 reported in 1968 to $343,8-3 000 These sales gains, m the face cf continued threats of integration by the a^:o'"obile builcers demonstrate the important role Bendix plays as an innovative contributor and problem solver for t->e automotive industry, an industry in which the com pany's principal compel.tors include its custqmers Principal elements m these sales ad vances have been the increasing pop ularity of established product lines ara the success cf new s.fety and conven ience devices whch tre company has introduced Established preduct lines include brakes and oo/.er brakes, brake linings r jdios and Meeting and fjel- metering systems. Recently introduced products enjoy.ng :cceptnnce on the market are stereo AM FM radios, elec tronic speed centre s and automatic tempera*jre control Many new products undergoing development during past year, in anticipafon of marfc-r ~*'0<luc!i0n. in clude adaptive brak no electronic fue1 injection miniaturized -'dios. disc brax-.-s for bom compact c-trs and heavy-duttrjeks. a horizontal carburetor for reem-- Mio.nul \e-n-cles and new development m brak- ryorauhe systems Resea-cn and bnveopment programs led by tne Advanced Automotive Con cepts program, are concentrating on ;n~ .vclopmert n<| t-vti-vj was contiru-U by Jion Cun'p.-'v muvfrv l-.to*-r of i; v*t- f' ir * B f? 1 d c* accident avoidance. This field w escec 311y appropriate for Bendix been1,?- :~e comoany speciauzes <n v-.-rnc -r romroi --especially prakinct z foeeb controls T^e neve ,.u ' u: adaptive controls i:h m-r . j* -- ~;0! of jo automate n,ghwe. - wind h,i-. been a p-mcipai '.r con .p ;.nv engine-, s WoA to d..'-- ;s included the deve'op -^r* n : m-otive speed centre1 hict~ o-r : - . " r.d'JvS to measure rnj in: -- - - or' ozmicles ahead of a v-rwrie j~j "e speed accordingly 0-'-r : ; ::'t' mud significant new pr. y ;.c:. :-w dev-doo ment dun-g 1959 Pv 5-mdix 9(.1,to'"oiiv-- ?j Autu ' -1>-j9. "dany was tre - -.-wromc i." - ; on f - * 11 This be ') me automotive etr;:,s* e.m-o ."S problem because d greatl/ 'ou.;-; uififul .''vissions i'''.P'd'.-- - performance and m-rl r;onc.~'. at a price that is ec unomic *, , r-.-as'O - A new market opportumt/ tt.mkim-' itunnij -969 with the advent of me Ail-Terr sin Vehicle (ATV) and the FueDevices Division has launched a pro gram which is capturing a m gor share of the ATV carburetor rrarke' .m'i the division's horizontal carb .refer Bendix broad systems cap ninv < ^ the jutomo'ive field was ref'- cted h tn- -,.,cc-w'>tui ud/p-.pion of r,e d'-: ,jr ... w-sign of Ben n* DBA .a F-- - - . W It-* for the Cm;/. `".ubcn'np.T/ c 1n c-j-.rv: j A n-- w * w . r .. r ikes for U 3 C irs m f-j n : .. . ..-- t fro-'' ! 1-sign bv -nr;"'.-..-. - - r. k*- & St""' r r; j.v.M' O Wv *f i ii't-i j.; *'on * - tuisions 'b'. ",:'od..o.d : ' -- i / c.''"bir, ;t jit \ ' o'.i.:--'- 'w- ^ vaN-*- in d SC C' `ke hyd' -j> c iv -leio : r-` B-.ndix :ol-* i, : rq :w.v,bc-.'r o power peak' s ; :r Tt- \ .Ifi A-"enc n I'.jf'i' fiv-` "\:r,v- " - proif r.n a'1 --d ;n^ -'<"bu-va b, * - *m: *.- - me C me.ban subsidi W , * r.y r i n_. - - s r t .n brakes in a sw<: year ~ r. j'l-p.-r t ex;:an->rjn pro;)ia.'"S ;.-fv unoe: .*.,iy during 1939 at venous < perating units of the company Benciix -.a * votive of Canada .t I > ompl-rb.-d two auditions and beejan work cn a third, the Friction Materials Division completed additions at the Cleveland. Tennessee and Trov Mew York plants and began another at Trov and the Automotive Electronics Division announced plans Jo erect a new (manu facturing facility at Newport Mews. Virginia The Automotive Service Division con tinued to expand :> ttaier uam-nj programs witn me introduction of`a n'obi'e 'ramirn unit and to exmnu its wsmbution outlets ; TitroduC^d 1 r'--.\ OCA-r ora- ^--r-'C- wp! k t a o <c-or;x- Pud and :.vi;;-.-' 'eo icsm-mt k "Uttsicpary a.nro *969 Benri,x tiad 51 - subS'diarv ~ `969 n-v-.-Vcp-'ent > ut Bendix-We-'-nu ' ku .i'C1 . t-- i ne.\. line r. f spnn.i dv.ii'ob in air dryer C.r t ' Co ' ' rc1.ii v-'ue'e inafustry and 'n ad.'ipjive braking system for hejvv-dutv vehicles Fram Carporatio.i a subsidiary, began produennn of uu'o^'otrve filters : t a new pl.mt in Dex'er. Missouri, and is t.vjiUPng a n^w plant at Henderson, Vv:n Carolina for its General Products t'nvivon. wnic.fi acrjuired the Superior cil,-;-r ilass Crjrporanun during 1969 cra-u research and c:eveloj)nmn: m. clu-d-.-d pr-'gr-'ss ir. developing a sanitary waste disposal system for ships and pleasure craft and a system for treating textile plant waste. 29 I -'P'!- < vi'eS to ! I'-} n: ifr,r'' y >c ^ " ' V t .i' n rO'Aing .a a cc"ct jvi . ; rate of 13 ourcen* .<- ': ' -* 10 ..Or, "CO ~ C O f * A V nc -'-v"' .r o:| 1959 `or tms <.;rouo. v. ,,-s *.n acnu.sitio" zoom >.\hicn cg.-i B-oom ------- ; ..,Pcr - p,* vo'-no cooo `j Tre Bono* Ai^r.y,,- i ''..'cm ' ; o ,r,e ferestry and 'n cop '.."coon `.-.rtr, the company s 'o :-oo'y ovanceo tc-chnolociv *u "wlip:: 'CuilrAi f.;tur0 needs an A0v, anC: Gcoc-jpts ^rnjrani como.v reive : ) -...ccess'ui Autcmotive A:", -me Cy.;co Pr kk jm was imn .a '-_r . A, :r-",non Group T-e Aw:o-'-,yion Grojp Cjntir.ieo as .Ci"1 ; - o >- t ri oz -S .iru) If. f 1 -; O ,J _r 1C j'i v cor.';ol!ed m.ichi:v : Vji 'VS!`:'"5 autJ'O'iC Jssen- '(.mm; .m,;j v/sn'O ovo-amo r\',cr mes ' ` 1C.1' f.Too! Corner.:!iL n Apt Arbor V cn ; i'' i icmn uiier o' Tjnsfer .com-.'i an.: v,>:c.Mli/ea tool o-, A -:'IC 1(1 Apr ,isi V* C . r cor.ilion, V. \1 r-oachu-OK ,1 L'rOO'Jfr.-f tjf : -- i!, r i ,iv....... .icoinmii marke'. and to-* i<n: Cor-jor man S-bro Wu-cOey nPni;:on i .i:;jri-II h.mcliru, firn r or so i u!-.'S a cu."pJei'_- D'O i j i: * i ,\s .iuio'T.vic.il!'. With 79 r/ahon, n k an-; 30 C*> I INTERNAL CRUSH GRINOER. the first me worlc. ak introduce by lit- AutO'',/?t _ ~ !. \ Divsion of in*'? larue^' single product) :m cut'mg :-;c res jr. existence 7b- ~w".' :* 'jn & Measur-.D:\iSiOn C:` r U0 Witn a nu.'^Or! r>:s for :"t " etal .\ orkmy in-j. ;>'/. : r.-; "'e .r'-' They include m- r Pur'--' cj'ly Coif, oiled C'J.'r on ,re isu,,n ; -jC'ine toe f rs: mm* p program controlfer is 3 modification for the Dynapath numerical control svstem which stores the pars program *.t a small digital computer, eliminating the need for an integral tape readfr. The divis.on also introduced tne Series 600. a numerical control system for 3-. 4and 5-axis machining centers. A volume production order was received for this system during 1969 The Industrial Metrology Division imroduceo a versatile new gaging system, tre lndi-Ai AT .tn an alltransistor amplifier tne: measures m both American ana metric units Specialized developments reflect ng me division's advanced capabilities >n measurement included a co^iputenceo jet engine par! anaivZTf /.nicn jses -n Ir.oi-fton rounpre-s and geon -:*v measuring 'in<td to 5 computer for e* m ~:j and analyz'g jet engine cexponents The Scully-Jones Company, a sub sidiary, became the Machine Accessories Division. This division's 1969 activities included the introduction of a new line of modular hydrostatic way beatings and new types of floating holders The Industrial Tools Divis'on began manufacture of end mills, a promising new product line, and built the world's largest double disc grinder The United Geophysical Corporation, another operating unit of the Bendix Automonve & Automation Company, was engaged m several Alaskan and Canadian petroleum search ope at.ons during 1969 They included three seisnvc field parties operating on the r.ortn slope cf Alaska and a party work.ng on several of Canada s Arctic Islands foi oil company clients United also is stamnci geophysical surveys offsrore South Korea nPwStfiai Merrcioo# :-Ac expanded .'i plum faci'ittes as c o t'e Abrasives D'vSicn jr;i the A re' c=n Abrasive r r-- A'.-re in Abrasive 'r'.c_ced a coma'-r'e fme cf rumbling -- emu curing the r ri e tne Abr as.. e > D.vision puri-.o r-.-sea^ch progra -- s eg 'e.v ai s and processes tre ors: < - * r ^ 31 multiform ;r i nr: *-r ; . - c~ " -r A or -;^iv-s Divis'on if, pi o . c - ; ' e i; ? i n t j i ru i ,v n - ' T - .. ir , ; - o ntf.ouCed a !as-;r ' . uO : rjv 1P iC\n :< > a- : :c ois m lor u! I raSun i: -arr cutting of automotive n- n ; .v m:--:? -no ? range of oi~--r J. 3 Tre 'r:.s*nal Controls Division con- c-,-r:nred *s efforts during 1969 on pro- o^c'ion applications of control svs'ems deveiooec oy the civisicn These include re divi:-_r s adaptive control system ; ,r mac n r r tools and tne Stored pro gram ccrr:l Adaptive control mcou- ,ates mac'me operation in relation to crang.ru; .\ork conditions The stereo 31 r.JVSSTHAL Bendix International t Bendix International is responsible for management of most of the Corpora tion's export, foreign licensing and foreign manufacturing activities. Results comparable to those shown in former annual reports, including additional foreign activities of the Cor poration are reflected in the final para graphs of this section of the report to facilitate comparison. Because of its three alternate methods of servicing cur foreign markets -- exporting, ^censing for manufacture and local manutacturing by an affiliate -- Bendix International can opeiate w:th a high degree of flex.bility A multiyear business plan has been carefully prepared to dentify those markets which provice further opportunities. International Planning Boards for each major proa.ict area, composed of representatives of domestic divisons and our various business affiliates around the world. are operating to establish priorities regarding markets ana products as vveil as investment .censing a~c export copc.tumties in all areas of m e .\crld fre most mount results of tnis accroach :c ocen-j'.r.g -n international -wkcts at ynligmed below They nmcate mm -.ach of the three Bendix imiration j scf'vities acmeved recorc \.oh.*v,c <n f seal 1 969 totjl exocrt sales o.' Eendix Inter national .n f seal 1969 ''mounted to $55 000 COO a 9 percent .ncrease over 1 962. coreign licensing revenues of Bendix International totaled 100,000, or 5 percent over 1968. P- sales equiv alent of this royalty income in fiscal 1969 is estimated at $222,000.000. versus $214,000,000 in 1968. Of the sales equivalent for 1969, $166.000.000 was accounted for by nonafhliated licensees. * Aggregate sales of affiliated com panies in which Bendix owned 25 percent or more equity irrerest, increased sharpfy to $276,100 000, or by 25 percent over 1968. This increase reflects acquisitions as well as growth of existing affiliates. Collectively, the three activities produced a 7 969 foreign sales volume (for Bendix products --in markets served by Bendix International) of S497.000.000, a 17 percent increase over 1968. Of th s amount. $61,000,000 is included in tne consolidated revenues of the Corporation for fiscal 1969 and S56.000.000 was included in 1968 3enoix continues to operate under the U.S. Government's mandatory foreign investment control program To supplement me revolving Eurodollar credit facilities changed in 1968. the* Corporation for-'ed Bendix Inter nationa! Finance Cor^oranon at mid year and. through mis wholly owned subsidiary sold si 5.000,000. guaran teed. sinking fund. Eurobond deben tures due m 1979 It is expected p ... the above arrangements, coupled w tf guaran'eed local-currency borrowings, wifi permit planned foreign investments and acquisitions 2 1 In fiscal 1969. Bendix achieved a net favorable contribution to the U.S. balance of payments of approximately $97,000,000. a 7 percent increase over 1968. D'rect export sales of Bendix Inter national reacnod a record level of 555 000,000 in fiscal 1969. an increase of 9 percent over 1968. Sales of com mercial products were largely responsible for ims increase and continued to account for well over one-half of total exports. During 1969. Bendix continued to he a major supplier of airborne naviga tion. communication and flight control systems to the German. Belgian. Italian. Argent ne and Brazilian air forces. Anfrcme and foreign commercial airline c~\*o*~.er3 specified the new Bendix lines cf navigational weather radar ano automatic flight control systems Exports of general aviation products for exec utive and erasure aircraft continued their 'ecen: **vorable trend. Delivery cf heavy radar equipment to 'ran and modernization of several n : --r s.tes m Spam duriry the year con:- zuted to improved radar defense jyitT *' nc:.vorks in these countries Sa'es cl ec^ qmenr and technical Sucpc 1 cc~t nue for a similar network m jjpj.i Bencix '-ternational's receipts from fcr~-nn !'C = ~Eees amounted to * "OOCO n fiscal 1969. a 5 percent increase `re-- tne 35 800.000 received in *955 Au*'motive licensees continued to provide t"e larger sharj of these *.*> S' 53 revenues, accounting for 67 percent of 1969 receipts. Royalty payments from Japan increased notably. As of year-end. Bendix International was admimsiering a totaf of 467 indivi dual agreements with 164 licensees in 20 foreign countries. During the year, 27 new agreements were initiated and 23 were terminated. Foreign licensing activities during the year centered significantly on automotive products such as electronic fuel-injec tion devices which are being widely adopted in Europe, adaptive braking systems and full-power hydraulic brakhg systems. In addition, several combination technical development 3nd license agreements were entered into with Japanese firms involved in local aircraft programs As of year-end. Bendix international administered direct and indirect equity interest* in 26 foreign manufacturing affiliates located in Europe. Latin America. Austral.a. Taiwan and Japan. Total employment of these affiliates exceeded 25.000. Sales of affiliates ;n which Bendix held more than a nominal equity interest totaled S27S.OOO.OOO for the fiscal year ended September 30, 1969. a sizeable year-to-year increase of 25 percent. These sales are not included in the Corporation s consolidated revenues for the year. The largest overseas manufacturing activity Societe Anonyme D.B.A and its affiliates located in France, achieved a snarp recovery following the political uncertainties and labor difficulties of early 1966 and recorded a 15 percent increase m sales volume in the period comparable to the Bendix 1969 fiscal year. Largely dependent on the Frrnch automotive .r.dustry, the group has benefited from significantly higher vehicle production during this period. This company's lctect series cf auto motive disc brakes has proved to be quite successful in both French and world markets. It has been adopted by Fiat m Italy, as well as by one of the leading U.O automotive manufacturers THIS SE CON O-GEN ERATtON DISC BRAKE wj> oev.'lopfrt by the Bena** French jtM.j:Socivl* A lonyr*'- O B A., arc r*a lv**n ;* --o 5y an America" producer *cr = ut*COitiD.` C* H ' ;nq-c cars ft -% <H be P'C(3l.C-<1 at the H. :. ,, Sr. Joseph, and now appears to have a S'anific^"'. potential for manufacture by Benc.x affiliates in Sonin and several Ljfin American ccuntr.es Higher automotive production wr> also the iti--ulus for the improved * 969 results and outlook of cur affiliates r Germany ina Spain Teioix G m b r- n heioeiberg. Germany. v.-'ich to d.ve has been large'1/ a manufacturer of jirbome j,-ici 'and navigational dev .res has receivec tne first order for us ir*-rnally developed auto rotive adapt.vbrakmg system, an antt skid device Bendibenca. 5 A . 2 Soamsh affiliate both Bendix and Societe Anor-mie DBA achieved a reccro sales volume m 1969. up *16 oercenr over the pro* year. Bendix and DBA increased r/r ownership interests in the company durirg 1 969 During the year. Bendix acqured a 3 49 percent eQjiry interest ir. June Werke GmbH of Hamburg. German/, a leading suopher of friction materia s m Germany and South America. This 33 BENOIX TAIWAN. LTD.. is the (liwei: foreign a'fihate and is currently producing pnnted-circuit boards for automotive radios. represents the largest single foreign acquisition by Bercix in several years and is expected to serve as a base for further expansion in Germany and other European markets Thorn Bendix. ltd in England, a manufacturer of electrical con.lectors, industrial and scientific instruments a.ngauges. comple*ec its consolidation phase during the vear and is achieving improved cp^ra'mg results During tre year, it acquiree :*'? larges* suooiier electrical radio `'-cuency connectors ~ the United Kmgjtm to complement its existing line of Eenoix-licensed connectors Largely due to higner local produc tion of automotive vehicles, each of c_three automotive manufacturing affil iates m Latn America achieved higrer volume j"o improved operating resu 's in 1969 Sixty percent ;ne shares of Frenome*. our Mexican affiliate, was placed in trust pending a suh^emiem public offering to Mexican citizens In Ausr'aha. the conso'idation o? three cf our four local affiliates is pro ceeding as indicated last year. Due to changing market conditions, the aero space activity has been reoriented to tre manufacture of electronics products The automotive activity now producing carburetors, filters, ana fuel pumps ;s currently initiating the manufacture of a newly-designed and technically advanced integral Varamatic power steering unit. Although production is now contemplated for only the Australian market, the unit appears to have a potential in the United States and Europe. Our newest foreign affiliate is Bendix Taiwan. Ltd. which recently began pro duction of printed circuit boards for automet'/e radios. Tr^ iccihty provides a base ror additional p.c.c'jct lines destined for non-U.S. markets. Negotiations have been completed for tr.e burenase of a 13-percent interest i.o Jiccsna Kiki. a Japanese licensee for j-tc-mcove nycrauiic orake ?qu'pment. Fcr :re 1969 fiscal year. Bendix share o The cpo'pmed net income of the `c-eico adiiiates totaled S6.000.0C0. a 111 percent increase over 1968. This :s not refected in the Corpcra:.cn s ccnso'idated financial results except to the extent of dividend distributions Div.Jends received from these affil iates Curing 1969. and therefore mciuced m tne Corporation s consoli dated statements, totaled S2.500,000 and tn" ju.cjm is largely free of U S income taxes due to allowable credits fcr foreign taxes. For the 1968 fiscal year, dividend receipts amounted to si 9C0 000 Results comparable lo those shown :n previous Annual Reports are summarized below: These statistics include additional foreign activities of the Corporation not under the management responsibility of Bendix International but continue to exclude the fnre.gn source revenues of the United Geophysical Corporation. Bendix Field Engineering Corporation and the Fram Corporation. Total foreign sales of Bendix products -- exports, sales of foreign manufacturing affiliates plus safes of licensed products by nonaffihated licensees--aggregatec approximately S608.000,000, an increase of 14 percent over fiscal 1S68 Of tne above indicated amounts, only $154.000,000 is reflected m the consolidated revenues of the Corporation for fiscal 1969. Total direct export sales increased from $88,000,000 in 1968 to a record level of $92,000,000 for the current fiscal year cr by 4 percent Consolidated royalty receipts from foreign licensees amounted to a record level of $7,300.0C0. an increase of 3 percent over the previous fiscal year. Total sales of foreign affiliates in which Bendix owrt-d 25 percent or more equity interest aggregated $347,000,000 for the twelve month period ended September 30. 1969, an increase of 26 percent over the adjusted level for the comparable 1 968 period. 34 Directors and Officers 5 Directors W. MICHAEL BLUMENTHAL HARRY B. CUNNINGHAM* C. F. DONNELLY RICHARD G. FOLSOM A. P. FONTA'NE* A. M. HARRELSON* PAUL F. HARTZ C. E. HEITMAN HARRY J. LOYNO* JAMES F. MILLtR C. S. HARDING MOTT* R. D. O'NEAL LOUIS F. POLK* R W. PURCELL WALTER E. SCH1RMER Corporate Officers A. P. FONTAINE Chairman and President and Chief Executive Cfhcer C. F DONNELLY Executive Vice President--Geneial Counsel* A. M. HARRELSON Executive Vice Presideni --Finance R E McGRUTHER Execute Vice `**esidet -- Co*pofavt Stalt R. C. FULLER Senior V'ce s,es<dent -- Invesior Relations ( J. R COOKE V.ce Presdert- industrial Relations G. A. POLLACK V.ce P'es'Oenf --Coipo-'a'e Ceveiopment D. R. HI3BERT Tieasu'e H C. KOEMGSMARK Contro`-9f H S. BARRON Secretary Bendix Automotive & Automation Company C f HEITMAN* P-esifleni and Chief Operating Olticer W L MIRON' Executive Vice President --Automotive R. A. HEDDEN* Executive Vice -President--Automation W. B. PAINE praidMK-- Bendix -WMlinghouM Air BrUt Cnmpany H. R. FORD* Vice-President--Marketing H. STOLAR* Vice-President and Group Executive R. S. JOHNSON Vice- Pres.-*mt and Group Manager H. L BOPPEL Vice-President and Group Manager I. C. MAUST Vice-President and Group Manager E. F. PESLAR Vice- President--Mamjfacluring B. W. BAKER Controller Bendix AerospaceElectronics Company R. D. O'NEAL* P/endent and Chief Operating Officer J. E. BEVINS* Executive Vice-President D. S. JONES* Executive Vies-President C. B. SUNG*t V<e-President and Group Executive H. G. TARTER* Vice-President end Group Executive E. C JOHNSON't Vice-President--Engineering and Research W. E. KOCK'f Vice-President and Chief Scientist J. L. HELMS' Vice-President and Group Manager W. C. PURPLE* Vice-President and Group Manager C. E. ROWETT* Vice-President and Group Manager L. B. YOUNG* Vice-President--Marketing F. M. JENNER Vice-President ar J Group Manager G. A. LEWTHWAITE Vice-Piesident and Group Manager D. B. MORSE Vice Preside'.' _.xl Group Manager R. J. QUIRK 7<e-Presidant --Kansas City Orvision E. E. EVANS Vice President-- Manufacturing W. R. CRANE Controller Bendix International W. M. BLUMENTHAL* Prewdent and Chief Operating Officer E. R. EGGERS* Executive Vice-President J. B. TREACY* Executive Vice-President F. J. BORHECK* Stow Vice-President--International Marketing and Licensing H. N. FRIESEN Senior Vice-President--International Staff J. V. V. 8RYAN Vice-President--International Planning J. L O'BRIEN Vice-President--International Licensing 0. A. PROECHEL Vcs- President--Finance D. A, BOETTCHER Controller Counsel HUGHES. HUBBARD Si REED New York. New York Transfer Agents BANKERS TRUST COMPANY New York. New York OFFICE OF THE BENDIX CORPORATION South Send. Indiana Registrars Common Stock MORGAN GUARANTY TRUST COMPANY OF NEW YORK New York, New York FIRST NATIONAL BANK OF CHICAGO Chicago. Mliruos Preferred Stock CHASE MANHATTAN BANK. N A. OF NEW YORK New York. New York Trustee--6%% Debentures MANUFACTURERS HANOVER TRUST COMPANY New York. New York 9Also member of Executive Committee A/so officer of The Bendix Corporation tAlso serves Corporation es e whole -1- f: i r f t i, 35 Divisions and Subsidiaries Corporate The Bendi- Corporation. Executive Offices Bendix Center Southfield, Michigan Bendi* Aerospace-Electronics Company Bendix Center, Southfield, Michigan Bendm Automotive & Automation Company Bendix Center, Southfield, Michigan Bendix International New York. New York Advanced Technology Group Bendix Research Laboratories Bendix Center, Southfield, Michigan Advanced Products Division Bendix Center, Southfield. Michigan Bendix Aerospace- Electronics Company Products Group Electric Power Division Eatontown. New Jersey E'ectncal Components Division Sidney. New York Electro-Optics Division Ann Arbor. Michigan Energy Contro's Oivtsicn South Beno indiara F'Her Qiv^s.on Madison Heignts. Michigan c u.u Power D-vision Ltic.i New York Vicfwav1 Devices Division P'j'ixim Indiana Mosaic Fao-ications Division Stj't)fdne Massacnusetts rorL-st msi-umenis Division Pom.ove'te West Vnqinia Sr .-> V: Tsiru'nerts & Equipment D'v.Sion ?-r"*St?r NflA T'crk. $>. V. -"'ters (nc 3 -y !""cp Rhode Island Systerr:, Group .jcj Systems D.vision O' r -roof Op-Jf-lti-jns A- - Aibiv. \*iCO uan ViuHwaka Operations Vshay. lka. i'Ncii3na A:j11on h-.-c'nc. Limited Montreal. Quebec. Canada AvionTs Division Fon Lauderdale Florida Se'Mii* ci*tin EnaineenriQ Corporation Bendu Comme'cul Service Corporation 0ai.-.,s Mills Maryland Conir-.jmcjtions Division Towson Plant Baltimore Maryland York Plant York. Pennsylvania Electrodynamics Division North Hollywood California Environmental Science Division Baltimore Maryland Flight & Engine Instruments Division Soutn Montrose. Pennsylvania Instruments & Life Support Division Davenport. Iowa Launch Support Division Kennedy Space Center. Florida Navigation & Control Division Teterboro, New Jersey Kansas City Division Kansas City, Missouri West Coast Aerospace Support Division Burbank, California Bendix Automotive & Automation Company Automotive Group Automotive Development Center New Carlisle, Indiana AutomotSre Electronics Division Baltimore. Maryland Automotive Service Division South Bend. Indiana Bendix Automotive of Canada, Limited Windsor. Ontario. Canada Brake & Steering Division South Bend. Indiana Friction Materials Division Trov. New Yorx Cleveland. Tennessee Fuel Devices Division Detroit. Michigan Hydraulics Division St. Joseph, Michigan Motor Components Division Elmira. New York P & D Manufacturing Company. Inc. Long Island City. New York Bendix-Westmghouse Automotive Air Brake Company Elyria. Ohio Refrigeration Products Division Cullman Alabama Automation Group Abrasives Division Jackson Micnigan American Abrasive Corporation Westfield. Massachusetts Automation & Measurement Oivision Dayton. Ohio Buhr Machine Tool Company Ann Arbor. Michiqan Industrial Controls Division Detroit. Michigan Industrial Metrology Division Ann Arbor. Michigan Industrial Tools Division South Beloit. Illinois Greenfield. Massachusetts Machine Accessories Division Chicago, Illinois Skagit Corporation Sedro Woolley. Washington Geophysical Group Marine Advisers. Inc. Soiana Beach. California United Geophysical Corporation Pasadena. California Other Consolidated Subsidiaries Fram Corporation East Providence. Rhode Island Indurtrnl Fabricating Company Tulsa. Oklahoma Texas Pipe Bending Company Houston. Texas 36 Bendix International Overseas Manufacturing Subsidiaries & Affiliates Argentina Industries Bendix A.S.I.C.y.F. Australia The Bendix Corporation Australia Pty. Limited Rockdale. Australia Bendix Corporation Australia (Automotive) Pty. Limited Rockdale. Australia Bendix Vintex Pty. Limited Victoria. Australia The Sheffield Corporation of Australia Pty. Limited Clayton, Victoria. Australia Brazil Bendix do Brasil Equipamentos Para Autovehiculos Ltda. Campinas, S.P, Brazil England Thorn Bendix Limited New Barnet. Herts.. England Greenpar Engineering Limited Harlow. Essex. England John L. Green (Engineers' Merchants) Ltd. Harlow. Essex. England Frar. ~-i Socieie Anonyme D.B.A. Frs. France Ouceilier et Cie. Pans, Frarce Societe Frjncatse d'Equipments pour !e Navigation Aerienne NueiHy. France Sccieie Industr.elle des Comi-iimes de ('Guest Le Mans. Crance Societe Rcto-Oiesel BiO'S France Socete STOP Saint Ouen. France Germany Jund Werke G m.b H Hamburg. Germany Nieberdmg & Co. G m.b H Neuss. Germany Teldtx G.m.b H. Heidelberg, Germany Textar G m.b.H. Levekusen. Germany Japan Akebono Brake Industry Co , Ltd. Tokyo, Japan Jidosha Kiki Tokyo. Japan Mexico Frenomex S.A. Mexico City, Mexico Spain Bendiberra S A. Barcelona. Spam Taiwan Bendix Taiwan. Ltd Taipei, Taiwan, Republic of China