<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Year Ended October 31, 1999
Commission File Numbers 1-1520 and 1-15147
A. Full title of the plan:
GENCORP/OMNOVA SOLUTIONS JOINT RETIREMENT SAVINGS PLAN
(formerly the GenCorp Retirement Savings Plan)
("Plan")
B. Names of issuers of the securities held pursuant to
the plan and the addresses of their principal
executive offices:
GenCorp Inc.
P.O. Box 537012
Sacramento, CA 95853-7012
and
OMNOVA Solutions Inc.
175 Ghent Road
Fairlawn, OH 44333-3300
<PAGE> 2
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Audited Financial Statements
Years ended October 31, 1999 and 1998
TABLE OF CONTENTS
Report of Independent Auditors.............................................1
Statements of Net Assets Available for Benefits............................2
Statements of Changes in Net Assets Available for Benefits.................3
Notes to Financial Statements..............................................4
Signature.................................................................14
Consent of Independent Auditors (Exhibit 23)..............................15
<PAGE> 3
Report of Independent Auditors
To GenCorp Inc. as Administrator and
GenCorp Inc. and OMNOVA Solutions Inc. as Sponsors
of the GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the GenCorp/OMNOVA Solutions Joint Retirement Savings Plan as of October 31,
1999 and 1998, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
October 31, 1999 and 1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
ERNST & YOUNG LLP
Sacramento, California
April 18, 2000
1
<PAGE> 4
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
OCTOBER 31,
1999 1998
----------------------------------
(Dollars in thousands)
<S> <C> <C>
Investments in Master Trust:
Investments in securities of participating employers at fair value:
GenCorp Inc.--common stock fund; 5,310,148
and 5,338,934 shares, respectively $ 62,317 $ 122,429
OMNOVA Solutions Inc.--common stock fund; 5,142,787 shares
36,976 -
Investments in securities of unaffiliated issuers at fair value:
Participation in Master Trust commingled
funds (Note E) 292,242 267,630
Participant notes receivable 9,046 9,684
Short-term investments at fair value 4,084 3,079
----------------------------------
Net assets available for benefits $ 404,665 $ 402,822
==================================
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
2
<PAGE> 5
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
1999 1998
----------------------------------
(Dollars in thousands)
<S> <C> <C>
Net investment income:
Net increase in value of Plan's interest in Master Trust commingled
funds (Note E) $ 20,962 $ 33,362
GenCorp Inc. common stock dividends 2,537 3,106
Interest 853 1,051
Net realized and unrealized depreciation (4,659) (17,512)
----------------------------------
Net investment income 19,693 20,007
Contributions and deposits:
Participants 22,514 22,123
Employer 11,363 11,281
----------------------------------
33,877 33,404
Benefits paid to participants (54,907) (34,787)
Trustee and manager fees (563) (347)
Rollovers from other plans 3,743 1,806
----------------------------------
Increase in net assets 1,843 20,083
Net assets available for benefits at beginning of year 402,822 382,739
----------------------------------
Net assets available for benefits at end of year $ 404,665 $ 402,822
==================================
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
3
<PAGE> 6
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Notes to Financial Statements
Years ended October 31, 1999 and 1998
NOTE A--DESCRIPTION OF PLAN
The GenCorp/OMNOVA Solutions Joint Retirement Savings Plan (the Plan) was
initially adopted effective July 1, 1989. Participants first began actively
contributing to the Plan effective September 1, 1989. Effective December 1,
1989, the Aerojet-General Corporation Savings Plan was merged into the Plan.
Effective August 1, 1994, the name of the Plan was changed from the GenCorp
Savings Plan to the GenCorp Retirement Savings Plan. Effective October 31, 1996,
the GenCorp Non-Bargaining Employees' Savings Plan was merged into the Plan.
Also as of October 31, 1996, accounts of participants in the Aerojet-General
Corporation Savings Plan for Bargaining Unit Employees (Aerojet Plan) who were
represented by (i) International Association of Machinist & Aerospace Workers
("IAM") Local 946, (ii) IAM Local 812 and (iii) International Union of Operating
Engineers, Stationary Engineers Local 39 were transferred to the Plan and became
accounts in the Plan. As of October 31, 1997, the Aerojet Plan was merged into
the Plan and the remaining participants' accounts in the Aerojet Plan became
accounts in the Plan.
Effective October 1, 1999, GenCorp Inc. (GenCorp or the Company) spun off its
Performance Chemicals and Decorative & Building Products businesses into a
separate, independent public company, OMNOVA Solutions Inc. (OMNOVA). As a
result, the Plan was amended to become a multiple employer plan whereby OMNOVA
is a participating sponsor of the Plan and the employees of OMNOVA will
participate in the Plan. At that time, the name of the Plan was changed to the
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan. GenCorp continues to be
both administrator and sponsor of the Plan.
The following description of the Plan provides only general information.
Participants should refer to the Summary Plan Description and the Plan
Prospectus for a more complete description of the Plan's provisions. If there is
any discrepancy between the provisions described herein or in the Prospectus or
Summary Plan Description, the terms of the Plan as set forth in the Plan
document shall be controlling. Copies of the Summary Plan Description and the
Prospectus for the Plan are available from the Plan administrator.
GENERAL
The Plan is a defined contribution plan available to salaried and certain union
and non-union hourly employees of GenCorp and OMNOVA and participating
subsidiaries. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
4
<PAGE> 7
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Notes to Financial Statements (continued)
NOTE A--DESCRIPTION OF PLAN (CONTINUED)
CONTRIBUTIONS
Participants may elect to contribute from 1 percent to 16 percent of their
pretax annual compensation to the Plan. The Plan provides that the Company and
OMNOVA will contribute $1.00 for each $1.00 their respective participants'
contributions up to the first 3 percent of a participant's compensation
contributed to the Plan during the Plan year, and $.50 for each $1.00 of a
participant's contributions on the next 3 percent of a participant's
compensation contributed to the Plan during the Plan year. Participants may also
contribute amounts representing distributions from other qualified defined
contribution plans.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of (a) the Company's or OMNOVA's contributions and, as the case may
be, (b) Plan earnings, and is charged with an allocation of certain
administrative expenses (see "Plan Expenses" below). Allocations are based on
participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's account.
VESTING
A participant's interests in his or her rollover contributions, if any, and
employee contributions that a participant has made or the Company or OMNOVA has
made for a participant pursuant to a Salary Reduction Agreement are at all times
vested and not subject to forfeiture. A participant's interest in the matching
contributions made for his or her benefit is at all times vested and not subject
to forfeiture, except such forfeitures as may be required or permitted in order
to meet the non-discrimination provisions of the Internal Revenue Code (Code) or
other applicable provisions of law. A participant may not, however, elect a
voluntary withdrawal of any plan shares attributable to matching contributions
until such matching contributions have remained in the Plan for at least two
full Plan years.
5
<PAGE> 8
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Notes to Financial Statements (continued)
NOTE A--DESCRIPTION OF PLAN (CONTINUED)
INVESTMENT OPTIONS
Participants may invest their contributions in various investment options. All
Company and OMNOVA matching contributions are held solely in the GenCorp Stock
Fund or OMNOVA Solutions Inc. Stock Fund, respectively.
The GenCorp Stock Fund--The fund is invested in common stock of the
Company.
The OMNOVA Solutions Inc. Stock Fund--The fund is invested in common stock
of OMNOVA.
Interest Income Fund--The fund currently is invested primarily in
investment contracts of insurance carriers and/or banks (GICs) as well as
marketable debt securities.
Diversified Equity Fund--The fund is designed to emulate the performance
of the Standard & Poor's 500 Stock Index and is invested primarily in
common stocks and other equity securities of companies included in the
Standard & Poor's 500 Stock Index and/or one or more funds designed to
emulate the performance of the Standard & Poor's 500 Stock Index.
Balanced Fund--The fund is invested in a fund, the assets of which were
initially allocated 60 percent to a Standard & Poor's 500 Index fund and
40 percent to a Lehman Brothers Aggregate Bond Index fund. The allocation
is rebalanced to 60 percent/40 percent whenever it moves by 2 percent from
that target.
International Equity Fund--The fund is invested in an index fund intended
to closely match the investment results of the Morgan Stanley Capital
International Europe, Australia and Far East Index (The EAFE Index).
Diversified Bond Fund--The fund is designed to emulate the performance of
the Lehman Brothers Aggregate Bond Index and is invested in a portfolio of
diversified bonds and/or one or more funds designed to emulate the
performance of the Lehman Brothers Aggregate Bond Index.
Short-Term Investment Fund--The fund is invested in a money market fund.
6
<PAGE> 9
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Notes to Financial Statements (continued)
NOTE A--DESCRIPTION OF PLAN (CONTINUED)
PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their fund accounts up to 50 percent of their
account balance but not more than $50,000. Company and OMNOVA matching
contributions are not available for loans, but are included in computing the
amount available for loan. Loan terms range from 1 - 5 years or up to 10 years
for the purchase of a primary residence. The loans are secured by the balance in
the participants' accounts and bear interest at one percent above the prime rate
as published in The Wall Street Journal on the last day of the month preceding
the loan request. Loans outstanding currently reflect interest rates ranging
from 8.7 percent to 10.0 percent. The borrowing interest rate at October 31,
1999 was 9.25 percent. Principal and interest is paid ratably through payroll
deductions.
PAYMENT OF BENEFITS
Distribution of the value of Plan shares to a participant who terminates or
elects a voluntary withdrawal is made in accordance with the terms of the Plan.
PLAN EXPENSES
A proportionate share of fees and expenses of the Trustee, investment managers,
and other service providers (including the Company and OMNOVA, if applicable) is
charged to each plan participants' account. All fees are deducted quarterly from
participants' accounts. Expenses incurred in connection with the purchase or
sale of securities are paid from trust assets. All other administrative costs of
the Plan are paid ratably by the Company and OMNOVA.
7
<PAGE> 10
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Notes to Financial Statements (continued)
NOTE B--SUMMARY OF ACCOUNTING POLICIES
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in GenCorp and OMNOVA common stock are valued at the closing price
of the respective common stock on the last trading day of the Plan's fiscal
year. Investments in marketable equity and debt securities are valued at market
as determined on the last business day of the Plan's fiscal year by the Trustee
or investment manager. Investment contracts, which are considered fully-benefit
responsive, are valued at contract value, which approximates fair value.
Participant notes receivable are valued at their outstanding balances, which
approximates fair value.
USE OF ESTIMATES
The preparation of these financial statements in conformity with accounting
principles generally accepted in the United States requires the Plan's
investment managers and Trustee, who are fiduciaries of the Plan, to make
estimates, assumptions and valuations that affect the amounts reported in the
financial statements and accompanying footnotes. Actual results could differ
from those estimates.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In September 1999, the AICPA issued Statement of Position (SOP) 99-3, Accounting
for and Reporting of Certain Defined Contribution Benefit Plan Investments and
Other Disclosure Matters. The SOP is effective for financial statements for plan
years ending after December 15, 1999, and eliminates the previous requirements
for a defined contribution plan to present investments by general type for
participant-directed investments in the statement of net assets available for
benefits, to disclose participant-directed investment programs, to disclose the
total number of units and the net asset value per unit during the period and at
the end of the period, and to disclose benefit-responsive investment contracts
by investment fund option. The Plan sponsors have elected to early adopt the
provisions of the SOP effective for the 1999 Plan year and have reclassified
certain 1998 amounts to conform to the 1999 presentation requirements.
Additionally, the Plan sponsors believe the effect of adopting the SOP will have
no future impact on the assets available for benefits or changes in assets
available for benefits of the Plan.
8
<PAGE> 11
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Notes to Financial Statements (continued)
NOTE C--NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant-directed investments (sponsor
contributions) is as follows:
<TABLE>
<CAPTION>
OCTOBER 31,
1999 1998
----------------------------------
(Dollars in thousands)
<S> <C> <C>
Net assets:
GenCorp Inc. common stock fund $ 62,317 $ 122,429
OMNOVA Solutions Inc. common stock fund 36,976 -
----------------------------------
Total $ 99,293 $ 122,429
==================================
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
1999 1998
----------------------------------
(Dollars in thousands)
<S> <C> <C>
Changes in net assets:
Contributions $ 15,071 $ 14,911
Interest and dividends 3,390 3,343
Net realized and unrealized depreciation
in fair value (4,659) (17,512)
Distributions to participants (11,468) (11,081)
Transfers (from) to participant-directed investments
(25,268) 1,842
Trustee and manager fees (202) (307)
----------------------------------
Decrease in net assets (23,136) (8,804)
Net assets available for benefits at beginning of year 122,429 131,233
----------------------------------
Net assets available for benefits at end of year $ 99,293 $ 122,429
==================================
</TABLE>
9
<PAGE> 12
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Notes to Financial Statements (continued)
NOTE D--PLAN SHARE VALUE CALCULATION
Plan share values are calculated in accordance with the Plan document. Plan
share values as of October 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
OMNOVA
GENCORP SOLUTIONS INTEREST DIVERSIFIED INTERNATIONAL DIVERSIFIED SHORT-TERM
(Amounts in STOCK STOCK INCOME EQUITY BALANCED EQUITY BOND INVESTMENT
thousands, except
Plan share values)
FUND FUND FUND FUND FUND FUND FUND FUND
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
As of October 31,
1999:
Fair value of net $ 62,317 $ 36,976 $102,962 $148,774 $ 25,008 $ 12,668 $ 2,830 $ 4,084
assets
====================================================================================================
Plan shares 81,996 99,935 49,264 30,995 10,464 7,967 2,051 3,190
====================================================================================================
Plan share values
at $ .76 $ .37 $ 2.09 $ 4.80 $ 2.39 $ 1.59 $ 1.38 $ 1.28
year end
====================================================================================================
As of October 31,
1998:
Fair value of net $122,429 $ - $108,292 $125,171 $ 21,537 $ 10,003 $ 2,627 $ 3,079
assets
====================================================================================================
Plan shares 86,218 - 54,971 32,767 10,354 7,754 1,918 2,524
====================================================================================================
Plan share values
at $ 1.42 $ - $ 1.97 $ 3.82 $ 2.08 $ 1.29 $ 1.37 $ 1.22
year end
====================================================================================================
</TABLE>
NOTE E--INVESTMENTS IN MASTER TRUST
The Master Trust is an investment trust formed for the investment of the assets
of the defined contribution plans sponsored by GenCorp and OMNOVA. At October
31, 1999 and 1998, the Master Trust consisted of all assets of such plans and
included ten investment funds, two of which were separate GenCorp Stock Funds,
one each for the GenCorp/OMNOVA Solutions Joint Retirement Savings Plan and the
Profit Sharing Retirement and Savings Plan for Salaried Employees of GenCorp
Inc. and Certain Subsidiary Companies, and another two of which were separate
OMNOVA Solutions Inc. Stock Funds, one each for the respective plans.
The assets of the Plan's Interest Income Fund and Diversified Equity Fund are
commingled in the Master Trust with the assets of the other defined contribution
plans' Interest Income Funds and Diversified Equity Funds to create the two
corresponding master investment funds, the Interest Income Fund and the
Diversified Equity Fund of the Master Trust. The assets of the Plan's Balanced
Fund, International Equity Fund, Diversified Bond Fund and Short-Term Investment
Fund are the only assets of the corresponding master investment funds of the
Master Trust.
10
<PAGE> 13
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Notes to Financial Statements (continued)
NOTE E--INVESTMENTS IN MASTER TRUST (CONTINUED)
These six Plan funds have an undivided interest in the commingled total assets
of the corresponding Master Trust funds. Ownership is represented by units of
participation. Participation by the Plan's funds in the corresponding Master
Trust funds is increased or decreased by the purchase or redemption of units of
participation at the unit value established at the end of the day on which the
purchase or redemption of units occurred. Income and gains and losses are
allocated among the Plans based on their proportionate dollar interest in the
Master Trust.
Financial information for the Master Trust funds is as follows:
<TABLE>
<CAPTION>
OCTOBER 31,
1999 1998
---------------------------------
(Dollars in thousands)
<S> <C> <C>
STATEMENTS OF ASSETS Investments, at fair value:
Cash $ 22,369 $ 6,392
Money market funds 4,065 12,960
U.S. Government securities 14,707 13,107
Corporate debt securities 3,743 7,058
Stock index fund investments 230,867 197,845
Investment contracts (GICs) 77,672 89,289
Accrued interest receivable 935 1,691
Employer related investments 103,974 129,346
---------------------------------
458,332 457,688
Payables (120) (55)
---------------------------------
Total net assets, at fair value $ 458,212 $ 457,633
=================================
</TABLE>
11
<PAGE> 14
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Notes to Financial Statements (continued)
NOTE E--INVESTMENTS IN MASTER TRUST (CONTINUED)
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
1999 1998
---------------------------------
(Dollars in thousands)
<S> <C> <C>
STATEMENTS OF CHANGES IN ASSETS Additions (deductions):
Interest income $ 7,635 $ 7,598
Dividends 2,759 3,423
Net realized and unrealized appreciation 21,900 15,703
Net transfers and administrative expenses (31,715) (9,981)
---------------------------------
Net increase in value of assets during the year 579 16,743
Fair value of assets--beginning of year 457,633 440,890
---------------------------------
Fair value of assets--end of year $ 458,212 $ 457,633
=================================
</TABLE>
Net realized and unrealized appreciation (depreciation) of assets for the Master
Trust funds is as follows:
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
1999 1998
------------------------------------
(Dollars in thousands)
<S> <C> <C>
Master Trust Funds:
GenCorp and OMNOVA Solutions Inc.
Stock Funds $ (24,344) $ (18,972)
Interest Income Fund (500) 442
Diversified Equity Fund 41,088 30,268
Balanced Fund 3,302 2,944
International Equity Fund 2,343 764
Diversified Bond Fund 11 139
Short-Term Investment Fund - 118
------------------------------------
Net realized and unrealized appreciation of assets
$ 21,900 $ 15,703
====================================
</TABLE>
The aggregate of the Plan's interest in the funds equaled 88% of the total value
of the Master Trust at October 31, 1999 and 1998, respectively.
12
<PAGE> 15
GenCorp/OMNOVA Solutions Joint Retirement Savings Plan
Notes to Financial Statements (continued)
NOTE F--PLAN TERMINATION
Although currently neither sponsor has expressed any intention to do so, the
Company and OMNOVA each have the right under the Plan to discontinue its
contributions at any time and to terminate the Plan as to their employees
subject to the provisions of ERISA. In the event of Plan termination,
participants would continue to be 100 percent vested in their accounts.
NOTE G--INCOME TAX STATUS
The Internal Revenue Service ruled on January 7, 1997 that the Plan qualifies
under Section 401(a) and 401(k) of the Internal Revenue Code ( the Code) and,
therefore, the related trust is exempt from taxation. Once qualified, the Plan
is required to operate in conformity with the Code to maintain its
qualification. The Company believes the Plan is being operated in compliance
with the applicable requirements of the Code and, therefore, believes that the
Plan is qualified and the related trust is tax exempt.
13
<PAGE> 16
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, GenCorp
Inc., as Plan Administrator, has duly caused this annual report to be signed on
its behalf by the undersigned thereunto duly authorized.
GENCORP/OMNOVA SOLUTIONS
JOINT RETIREMENT SAVINGS PLAN
By /s/ M.F. Martin
-------------------------------
Michael F. Martin
Vice President and Controller
Date: April 28, 2000
14
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Prospectuses constituting
part of GenCorp Inc.'s Registration Statements No. 33-28056, 2-98730 and
333-91783 on Forms S-8 and OMNOVA Solutions Inc.'s Registration Statement No.
333-34938 on Form S-8, pertaining to the GenCorp/OMNOVA Solutions Joint
Retirement Savings Plan of our report dated April 18, 2000, with respect to the
financial statements of the GenCorp/OMNOVA Solutions Joint Retirement Savings
Plan included in this Annual Report on Form 11-K for the year ended October 31,
1999.
Ernst & Young LLP
Sacramento, California
April 28, 2000
15
