FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
X Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934 [Fee Required]
For the Fiscal Year Ended December 31, 1996
___ Transition Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the Transition Period From ___________ To __________
Commission File Number 1-5502
ELJER TAX REDUCTION INVESTMENT PLAN
(Full title of the Plan)
ZURN INDUSTRIES, INC.
One Zurn Place, Erie, Pennsylvania 16505
(Name and address of issuer of securities held pursuant to the Plan)
-1-<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Participants and
the Pension Committee of
Zurn Industries, Inc.:
We have audited the accompanying statements of net assets available for
benefits of the Eljer Tax Reduction Investment Plan (the "Plan") as of
December 31, 1996 and 1995, and the related statements of changes in net
assets available for benefits with fund information for the years then ended.
These financial statements, and the schedules referred to below, are the
responsibility of the Plan's administrator. Our responsibility is to express
an opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the administrator, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1996 and 1995, and the changes in net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets
Held for Investment Purposes as of December 31, 1996, and Reportable
Transactions for the year then ended, are presented for purposes of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the changes in net assets available for
benefits of each fund. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
Dallas, Texas,
September 26, 1997
-2-<PAGE>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
ELJER TAX REDUCTION INVESTMENT PLAN
(Thousands)
December 31
1996 1995
ASSETS
Investments, at fair value:
Fixed Income Fund $ 7,420 $ 7,249
Managed Balanced Fund 2,618 3,003
Managed Growth Fund 3,747 -
United States Stock Fund 3,861 3,900
International Stock Fund 1,316 -
Household International Stock Fund 2,581 1,885
Eljer Industries Common Stock Fund 11,317 5,009
32,860 21,046
Participants' loans 1,121 1,092
Contributions receivable:
Employers' 686 178
Participants' 153 156
TOTAL ASSETS 34,820 22,472
PARTICIPANTS' REFUNDS 32 15
NET ASSETS AVAILABLE FOR BENEFITS $34,788 $22,457
The accompanying notes are an integral part of these financial statements.
-3-<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
ELJER TAX REDUCTION INVESTMENT PLAN
Year Ended December 31, 1996
(Thousands)
<CAPTION>
Fixed Managed Managed United
Income Balanced Growth States International
Fund Fund Fund Stock Fund Stock Fund
<S> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Dividends and interest $ 445 $ 148 $ 270 $ 326 $ 21
Net appreciation (depreciation)
in value of investments 238 (19) 353 82
445 386 251 679 103
Contributions:
Participants' 644 372 312 574 136
Employers' 659 307 388 391 153
TOTAL ADDITIONS 1,748 1,065 951 1,644 392
BENEFITS PAID TO PARTICIPANTS (514) (140) (46) (384) (22)
TRANSFERS (1,063) (1,310) 2,842 (1,299) 946
NET ADDITIONS (DEDUCTIONS) 171 (385) 3,747 (39) 1,316
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 7,249 3,003 3,900
End of year $ 7,420 $ 2,618 $ 3,747 $ 3,861 $ 1,316
The accompanying notes are an integral part of this financial statement.
-4-
/TABLE
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION - Continued
ELJER TAX REDUCTION INVESTMENT PLAN
Year Ended December 31, 1996
(Thousands)
<CAPTION>
Eljer
Household Industries
International Common
Stock Fund Stock Fund Other Total
<S> <C> <C> <C> <C>
ADDITIONS
Investment income:
Dividends and interest $ 42 $ 7 $ 1,259
Net appreciation in
value of investments 940 6,132 7,726
982 6,139 8,985
Contributions:
Participants' 265 $ (3) 2,300
Employers' 407 498 2,803
TOTAL ADDITIONS 982 6,811 495 14,088
BENEFITS PAID TO PARTICIPANTS (179) (442) (30) (1,757)
TRANSFERS (107) (61) 52 -
NET ADDITIONS 696 6,308 517 12,331
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 1,885 5,009 1,411 22,457
End of year $ 2,581 $11,317 $ 1,928 $34,788
The accompanying notes are an integral part of this financial statement.
-5-
/TABLE
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
ELJER TAX REDUCTION INVESTMENT PLAN
Year Ended December 31, 1995
(Thousands)
<CAPTION>
Fixed Managed United Household
Income Balanced States International
Fund Fund Stock Fund Stock Fund
<S> <C> <C> <C> <C>
ADDITIONS
Investment income:
Dividends and interest $ 472 $ 223 $ 180 $ 44
Net appreciation in
value of investments 306 684 737
472 529 864 781
Contributions:
Participants' 786 371 589
Employers' 158 102 138
TOTAL ADDITIONS 1,416 1,002 1,591 781
BENEFITS PAID TO PARTICIPANTS (881) (190) (245) (206)
TRANSFERS (37) (46) (58) (63)
NET ADDITIONS 498 766 1,288 512
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 6,751 2,237 2,612 1,373
End of year $ 7,249 $ 3,003 $ 3,900 $ 1,885
The accompanying notes are an integral part of this financial statement.
-6-
/TABLE
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION - Continued
ELJER TAX REDUCTION INVESTMENT PLAN
Year Ended December 31, 1995
(Thousands)
<CAPTION>
Eljer
Industries
Common
Stock Fund Other Total
<S> <C> <C> <C>
ADDITIONS
Investment income:
Dividends and interest $ 8 $ 927
Net appreciation in
value of investments 2,341 4,068
2,349 4,995
Contributions:
Participants' 162 $ 6 1,914
Employers' 376 5 779
TOTAL ADDITIONS 2,887 11 7,688
BENEFITS PAID TO PARTICIPANTS (233) (104) (1,859)
TRANSFERS (4) 208 -
NET ADDITIONS 2,650 115 5,829
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 2,359 1,296 16,628
End of year $ 5,009 $ 1,411 $22,457
The accompanying notes are an integral part of this financial statement.
-7-
/TABLE
<PAGE>
ELJER TAX REDUCTION INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 and 1995
1. GENERAL DESCRIPTION OF THE PLAN
The Eljer Tax Reduction Investment Plan (the "Plan"), which became effective
April 1, 1989, is a defined contribution retirement plan for eligible
employees of Eljer Industries, Inc. (the "Company") and its participating
subsidiaries. Subject to certain eligibility requirements, participants may
contribute on a pretax basis ("Tax Reduction Contributions") or after-tax
basis ("Investment Plan Contributions") up to 15% of their compensation to the
Plan through employee payroll deductions. The participants are fully vested
in their contributions immediately.
Each participant's contributions may, at the Company's discretion, be matched
in whole or in part by Company contributions ("Employer Matching
Contributions") at a rate determined by the Company. The amount of a
participant's contribution eligible for matching may not exceed 6% of the
participant's annual compensation. In addition, beginning January 1, 1996,
the Company contributes amounts equal to 2% of each eligible participant's
compensation ("Level One TRIP+") and 0% to 7% of compensation based on the
participant's years of credited service ("Level Two TRIP+"). Employer
Matching Contributions and Level Two TRIP+ contributions vest over four years
of plan participation. Level One TRIP+ contributions become vested after five
years of service. All company contributions become 100% vested upon
eligibility for normal retirement, death, or full and permanent disability.
Participants may obtain loans from the Plan up to the lesser of one-half of
their individual vested balance or regulatory maximum. With certain
exceptions, a participant's Investment Plan Contributions may be withdrawn at
any time while Tax Reduction Contributions may not be withdrawn except for an
immediate financial hardship, as defined in the Plan, termination of
employment, or attainment of age 59-1/2. Employer contributions may be
withdrawn after five years of plan participation. Withdrawals may be subject
to federal income tax.
Prior to April 14, 1989, the Company's subsidiaries were wholly-owned
subsidiaries of Household International, Inc. On that date, Household
distributed to its shareholders all of the outstanding shares of common stock
of the Company. On April 1, 1989 in preparation for the distribution, the
equity of the Plan for the participating employees of the Company, including
investments in Household common stock, was transferred from the Household
Manufacturing, Inc. Tax Reduction Investment Plan to the Plan adopted by the
Company. The Plan's Household International Stock Fund is frozen and no
contributions are permitted to be made to the fund.
Participants should refer to the plan agreement for a more complete
description of the Plan's provisions.
-8-<PAGE>
ELJER TAX REDUCTION INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 and 1995
2. SIGNIFICANT ACCOUNTING POLICIES
The accounts of the Plan are maintained on the accrual basis of accounting.
Investments in common stock and mutual funds of registered investment
companies are carried at fair market value determined on the basis of quoted
market prices. Money market funds are carried at cost which approximates
market. The average cost method is used in determining gains or losses on
securities sold or distributed.
Eljer Manufacturing, Inc., the Plan sponsor and a wholly-owned subsidiary of
the Company, pays all administrative expenses of the Plan and is not
reimbursed by the Plan.
The format and classification of amounts in the 1995 financial statements have
been changed to conform to the current presentation with no effect on the
amount of total net assets available for benefits.
3. WITHDRAWALS AND FORFEITURES
Benefits payable to withdrawing participants not included in the financial
statements at December 31, 1996 and 1995 amounted to approximately $439,000
and $222,000, respectively. Forfeited contributions reduced the amount of
employer contributions by approximately $26,000 and $8,000 in 1996 and 1995,
respectively.
4. TAX STATUS OF THE PLAN
The Plan operates as a qualified plan under Sections 401(a) and 401(k) of the
Internal Revenue Code (the "Code"). Qualification of the Plan means that a
participant will not be subject to federal income taxes on Tax Reduction
Contributions and employer contributions, or on earnings or appreciation on
investments held in the Plan, until such amounts either are withdrawn by or
distributed to the participant, or are distributed to the participant's
beneficiary in the event of the participant's death. The Plan has received a
favorable determination letter, dated September 30, 1995, from the Internal
Revenue Service that indicates that the Plan, and the related trust, meet the
requirements of the Code for exemption from taxation under Sections 401(a) and
501(a), respectively, of the Code.
-9-<PAGE>
ELJER TAX REDUCTION INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 and 1995
5. PLAN TERMINATION
According to the plan document, the Plan shall terminate upon the dissolution,
merger, consolidation, or reorganization of the Employer, or the sale by the
Employer of all or substantially all of its assets, unless the successor or
purchaser continues the Plan. Although it has not expressed any intent to do
so, the Company has the right under the Plan to discontinue its contributions
at any time and to terminate the Plan subject to the provisions of the
Employee Retirement Income Security Act of 1974. In the event of Plan
termination, participants will become 100% vested in their accounts.
6. SIGNIFICANT INVESTMENTS
The following investments represent 5% or more of the net assets available for
benefits at December 31, 1996 and 1995:
1996 1995
(Thousands)
Common stocks:
Eljer Industries, Inc., $11,315 $ 5,007
Household International, Inc. 2,581 1,874
Mutual funds of registered investment companies:
Davis New York Venture Fund 2,037 1,664
Putnam Voyager Fund 1,931 1,174
Pooled separate account:
LaSalle Income Plus Fund 7,420 7,247
7. CONTINGENCIES
United States Brass Corporation, an indirect wholly-owned subsidiary of the
Company and an employer participating in the Plan, filed in 1974 a voluntary
petition for reorganization under Chapter 11 of the United States Bankruptcy
Code for the purpose of systematically resolving issues resulting from sales
of polybutylene plumbing systems and related litigation. US Brass and certain
of its affiliates have proposed a reorganization plan which they believe
provides for payment, satisfaction, and discharge of all claims involving the
polybutylene systems. Currently, US Brass operates as a debtor-in-possession
under Section 108 of the Bankruptcy Code subject to the supervision and orders
of the bankruptcy court which has approved the continuing funding of the Plan
by US Brass. In the event the bankruptcy or litigation has a material adverse
effect of any employer participating in the Plan, neither the assets of the
Plan nor any participant's rights to such assets will be affected as the Plan
is an entity separate and distinct from the employers.
-10-<PAGE>
ELJER TAX REDUCTION INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 and 1995
8. SUBSEQUENT EVENTS
On January 22, 1997, all the Company's common stock, including shares held by
the Plan, was purchased by a subsidiary of Zurn Industries, Inc. in connection
with transactions in which the Company became a wholly-owned subsidiary of
Zurn with provisions for the continuation of the Plan. Subsequently, the
Pension Committee of Zurn succeeded the Eljer TRIP Administrative and
Investment Committee as Plan administrator.
-11-<PAGE>
SCHEDULE I Page 1 of 2
ELJER TAX REDUCTION INVESTMENT PLAN
ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1996
EIN: 36-3114796
PLAN NUMBER: 101
(a) (b) (c) (d) (e)
Identity of Description of Current
Party Involved Investment Cost Value
(Thousands)
* Eljer Industries, Inc. Common Stock, par $ 4,355 $11,315
value $1
478,935 shares
Household Common Stock, par 353 2,581
International, Inc. value $1
27,858 shares
LaSalle National LaSalle Income 7,420 7,420
Trust, N.A. Plus Fund
7,420,571 shares
Miller, Anderson & MAS Funds Fixed Income 844 852
Sherrerd Portfolio Mutual Fund
76,429 shares
The Vanguard Group Vanguard Fixed Income 1,304 1,304
of Investment Fund, 121,783 shares
Companies
Davis Selected Davis New York 1,837 2,037
Advisors, L.P. Venture Fund
120,676 shares
GAM Funds, Inc. GAM International Fund 1,036 1,187
51,280 shares
T. Rowe Price T. Rowe Price 699 748
International International
Funds, Inc. Stock Fund
54,168 shares
The Vanguard Group Vanguard Windsor II 291 329
of Investment Fund, 13,822 shares
Companies
* - A party known to be a party-in-interest.
-12-<PAGE>
SCHEDULE I Page 2 of 2
ELJER TAX REDUCTION INVESTMENT PLAN
ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1996
EIN: 36-3114796
PLAN NUMBER: 101
(a) (b) (c) (d) (e)
Identity of Description of Current
Party Involved Investment Cost Value
(Thousands)
First of America Parkstone Small
Investment Capitalization Fund 1,430 1,351
Corporation 46,417 shares
Pimco Advisors Blairlogie Emerging 254 243
Institutional Markets Fund
Advisors 20,326 shares
Putnam Voyager Fund Putnam Voyager Fund 1,761 1,931
119,839 shares
PIC Investment Trust Pinnacle Growth Fund 1,513 1,562
106,997 shares
* Loans to Loans to Participants - 1,121
Participants Interest rates
9.5% to 10%
$23,097 $33,981
* - A party known to be a party-in-interest.
-13-<PAGE>
<TABLE>
SCHEDULE II Page 1 of 3
ELJER TAX REDUCTION INVESTMENT PLAN
ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
EIN: 36-3114796
PLAN NUMBER: 101
<CAPTION>
(a) (b) (c) (d) (g) (j)
Net
Identity of Description of Purchase Selling Cost of Gain
Party Involved Asset Price Price Asset (Loss)
(Thousands)
<S> <C> <C> <C> <C> <C>
INDIVIDUAL TRANSACTIONS:
Davis Selected Davis New York Venture
Advisors, LLP Fund $1,161 $ 1,028 $133
Nationsbank Trust Nations Prime Fund
1 Purchase $ 1,161 1,161
1 Sale 1,160 1,158 2
SERIES OF TRANSACTIONS:
Davis Selected Davis New York Venture
Advisors, LLP Fund
43 Purchases 1,691 1,691
9 Sales 1,552 1,387 165
Eljer Industries, Common Stock
Inc. 30 Purchases 842 842
46 Sales 449 378 71
Categories (e) Lease Rental and (f) Transaction Expense do not apply to any of these
transactions. Category (h) Current Value is the same as Purchase Price or Selling Price.
This supplemental schedule lists individual and series of transactions in excess
of 5% of the fair market value of the Plan assets at the beginning of the year.
-14-
/TABLE
<PAGE>
<TABLE>
SCHEDULE II Page 2 of 3
ELJER TAX REDUCTION INVESTMENT PLAN
ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
EIN: 36-3114796
PLAN NUMBER: 101
<CAPTION>
(a) (b) (c) (d) (g) (j)
Net
Identity of Description of Purchase Selling Cost of Gain
Party Involved Asset Price Price Asset (Loss)
(Thousands)
<S> <C> <C> <C> <C> <C>
SERIES OF TRANSACTIONS:
Nationsbank Trust Nations Prime Fund
307 Purchases $10,003 $10,003
193 Sales $9,522 9,522
PIC Investment Pinnacle Growth Fund
Trust 40 Purchases 1,329 1,329
16 Sales 927 777 $150
Parkstone Small Capitalization
Fund
22 Purchases 1,472 1,472
1 Sale 290 271 19
Putnam Voyager Putnam Voyager Fund
Fund, Inc. 39 Purchases 1,218 1,218
3 Sales 573 453 120
Categories (e) Lease Rental and (f) Transaction Expense do not apply to any of these
transactions. Category (h) Current Value is the same as Purchase Price or Selling Price.
This supplemental schedule lists individual and series of transactions in excess
of 5% of the fair market value of the Plan assets at the beginning of the year.
-15-
/TABLE
<PAGE>
<TABLE>
SCHEDULE II Page 3 of 3
ELJER TAX REDUCTION INVESTMENT PLAN
ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
EIN: 36-3114796
PLAN NUMBER: 101
<CAPTION>
(a) (b) (c) (d) (g) (j)
Net
Identity of Description of Purchase Selling Cost of Gain
Party Involved Asset Price Price Asset (Loss)
(Thousands)
<S> <C> <C> <C> <C> <C>
SERIES OF TRANSACTIONS:
T. Rowe Price International Stock
International Fund
Funds, Inc. 38 Purchases $ 593 $ 593
17 Sales $ 970 871 $ 99
Vanguard Group Fixed Income Fund
of Investments 33 Purchases 1,619 1,619
Companies 19 Sales 1,312 1,324 (12)
LaSalle National LaSalle Income
Trust, N.A. Plus Fund
33 Purchases 1,907 1,907
34 Sales 1,712 1,712
Categories (e) Lease Rental and (f) Transaction Expense do not apply to any of these
transactions. Category (h) Current Value is the same as Purchase Price or Selling Price.
This supplemental schedule lists individual and series of transactions in excess
of 5% of the fair market value of the Plan assets at the beginning of the year.
-16-
/TABLE
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Pension Committee of Zurn Industries, Inc. has duly caused this
annual report to be signed on its behalf by the undersigned thereunto duly
authorized
ELJER TAX REDUCTION INVESTMENT PLAN
September 29, 1997 /s/ James A. Zurn
James A. Zurn, Chairman
Pension Committee of
Zurn Industries, Inc.
-17-
