<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:
PROFIT SHARING RETIREMENT AND SAVINGS PLAN
FOR SALARIED EMPLOYEES OF
GENCORP INC. AND
CERTAIN SUBSIDIARY COMPANIES
("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
Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
Audited Financial Statements
Years ended October 31, 1999 and 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
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.............................................................................................13
Consent of Independent Auditors (Exhibit 23)..........................................................14
</TABLE>
<PAGE> 3
Report of Independent Auditors
To GenCorp Inc. as Administrator and
GenCorp Inc. and OMNOVA Solutions Inc. as Sponsors
of the Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
We have audited the accompanying statements of net assets available for benefits
of the Profit Sharing Retirement and Savings Plan for Salaried Employees of
GenCorp Inc. and Certain Subsidiary Companies 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
Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
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; 416,655 and .................. $ 4,887 $11,530
507,208 shares, respectively
OMNOVA Solutions Inc.--common stock fund;
404,584 shares .............................................. 2,917 --
Investments in securities of unaffiliated issuers
at fair value:
Participation in Master Trust commingled
funds (Note E) .............................................. 51,671 49,661
-------------------------
Net assets available for benefits .................................... $59,475 $61,191
=========================
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
2
<PAGE> 5
Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
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) $ 13,263 $ 8,272
GenCorp Inc. common stock dividends 223 317
Interest 13 17
Net realized and unrealized depreciation (4,001) (1,460)
----------------------------
Net investment income 9,498 7,146
Benefits paid to participants (11,198) (8,253)
Trustee and manager fees (16) (16)
----------------------------
Decrease in net assets (1,716) (1,123)
Net assets available for benefits at beginning of year 61,191 62,314
----------------------------
Net assets available for benefits at end of year $ 59,475 $ 61,191
============================
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
3
<PAGE> 6
Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
Notes to Financial Statements
Years ended October 31, 1999 and 1998
NOTE A--DESCRIPTION OF PLAN
The following description of the Profit Sharing Retirement and Savings Plan for
Salaried Employees of GenCorp Inc. and Certain Subsidiary Companies (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 which, prior to September 1, 1989, was
available to salaried and certain non-union hourly employees of GenCorp Inc. and
certain participating companies (GenCorp or the Company). The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Effective December 1, 1989, the Savings and Profit Sharing Plan of RKO General,
Inc., and Certain Subsidiary Companies was merged into the Plan.
Effective October 1, 1999, GenCorp Inc. 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. GenCorp continues
to be both administrator and sponsor of the Plan.
VESTING
Effective August 31, 1989, all participant and Company contributions to the Plan
were discontinued in conjunction with the establishment of the GenCorp/OMNOVA
Joint Retirement Savings Plan, and the Plan interests of all participants became
fully vested and nonforfeitable.
4
<PAGE> 7
Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
Notes to Financial Statements (continued)
NOTE A--DESCRIPTION OF PLAN (CONTINUED)
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's allocations of
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.
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.
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.
5
<PAGE> 8
Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
Notes to Financial Statements (continued)
NOTE A--DESCRIPTION OF PLAN (CONTINUED)
PLAN EXPENSES
Fees and expenses are paid by GenCorp and OMNOVA, except that terminated
participants pay fees at a flat annual rate of 1/10 of one percent of their Plan
assets. These fees are deducted quarterly from such participants' accounts.
Expenses incurred in connection with the purchase or sale of securities and
expenses incurred in the preservation of the Trust Fund are paid from trust
assets. All other administrative costs of the Plan are paid ratably by GenCorp
and OMNOVA.
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 fair
value 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.
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.
6
<PAGE> 9
Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
Notes to Financial Statements (continued)
NOTE B--SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
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.
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 is as follows:
<TABLE>
<CAPTION>
OCTOBER 31,
1999 1998
-----------------------------
(Dollars in thousands)
<S> <C> <C>
Net assets:
GenCorp Inc. common stock fund $ 4,887 $ 11,530
OMNOVA Solutions Inc. common stock fund 2,917 -
-----------------------------
Total $ 7,804 $ 11,530
=============================
</TABLE>
7
<PAGE> 10
Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
Notes to Financial Statements (continued)
NOTE C--NONPARTICIPANT-DIRECTED INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
1999 1998
-----------------------------
(Dollars in thousands)
<S> <C> <C>
Changes in net assets:
Interest and dividends $ 236 $ 334
Net realized and unrealized depreciation in
fair value (1,621) (1,460)
Distributions to participants (1,593) (1,882)
Transfers to participant-directed investments (744) (392)
Trustee and manger fees (4) (3)
-----------------------------
Decrease in net assets (3,726) (3,403)
Net assets available for benefits at beginning of year 11,530 14,933
-----------------------------
Net assets available for benefits at end of year $ 7,804 $ 11,530
=============================
</TABLE>
8
<PAGE> 11
Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
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
(Amounts in thousands, STOCK STOCK INCOME EQUITY
except Plan share values
FUND FUND FUND FUND
-----------------------------------------------------------
<S> <C> <C> <C> <C>
As of October 31, 1999:
Fair value of net assets $ 4,887 $ 2,917 $ 12,025 $ 39,646
===========================================================
Plan shares 84 7,676 3,224 188
===========================================================
Plan share values at year end $ 58.47 $ .38 $ 3.73 $ 211.15
===========================================================
As of October 31, 1998:
Fair value of net assets $ 11,530 - $ 12,611 $ 37,050
===========================================================
Plan shares 105 - 3,583 221
===========================================================
Plan share values at year end $ 109.81 - $ 3.52 $ 167.64
===========================================================
</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.
9
<PAGE> 12
Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
Notes to Financial Statements (continued)
NOTE E--INVESTMENTS IN MASTER TRUST (CONTINUED)
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 Plan does not participate in
the Master Trust's International Equity Fund, Balanced Fund, Diversified Bond
Fund or Short-Term Investment Fund.
The Interest Income Fund and the Diversified Equity Fund of the Plan have
undivided interests in the commingled total assets of the Interest Income Fund
and the Diversified Equity Fund of the Master Trust. Ownership is represented by
units of participation. Participation by the Plan's funds in the corresponding
Interest Income and Diversified Equity Funds of the Master Trust 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
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>
10
<PAGE> 13
Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
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. $ (24,344) $ (18,972)
Stock Funds
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>
11
<PAGE> 14
Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies
Notes to Financial Statements (continued)
NOTE E--INVESTMENTS IN MASTER TRUST (CONTINUED)
The aggregate of the Plan's interest in the funds equaled 13% of the total value
of the Master Trust at October 31, 1999 and 1998, respectively.
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 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 applicable requirements of the Code and, therefore, believes that the Plan
is qualified and the related trust is tax exempt.
12
<PAGE> 15
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.
PROFIT SHARING RETIREMENT AND
SAVINGS PLAN FOR SALARIED
EMPLOYEES OF GENCORP INC. AND
CERTAIN SUBSIDIARY COMPANIES
By /s/ M. F. Martin
-------------------------------
Michael F. Martin
Vice President and Controller
Date: April 28, 2000
13
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Prospectuses constituting
part of GenCorp Inc.'s Post-Effective Amendment No. 1 to Registration Statement
No. 2-80440 on Form S-8 and Post-Effective Amendment No. 4 to Registration
Statement No. 2-66840 on Form S-8 pertaining to the Profit Sharing Retirement
and Savings Plan for Salaried Employees of GenCorp Inc. and Certain Subsidiary
Companies of our report dated April 18, 2000, with respect to the financial
statements of the Profit Sharing Retirement and Savings Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies included in this
Annual Report on Form 11-K for the year ended October 31, 1999.
Ernst & Young LLP
Sacramento, California
April 28, 2000
14
