UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from ____________
to ____________
Commission file number: 1-6179
THIOKOL CORPORATION
BARGAINING UNIT
RETIREMENT SAVINGS AND INVESTMENT PLAN
THIOKOL CORPORATION
2475 Washington Blvd., Ogden, Utah 84401-2398
<PAGE>
THIOKOL CORPORATION BARGAINING UNIT
RETIREMENT SAVINGS AND INVESTMENT PLAN
Audited Financial Statements
December 31, 1996 and 1995
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
<PAGE>
Report of Independent Auditors
------------------------------
Compensation Committee
of the board of Directors
Thiokol Corporation
We have audited the accompanying statements of net assets available for
benefits of the Thiokol Corporation Bargaining Unit Retirement Savings and
Investment Plan as of December 31, 1996 and 1995, 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 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 of 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
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 December 31, 1996 and 1995, and the changes in its net assets available
for benefits for the years then ended, in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
April 11, 1997
<PAGE>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31
1996 1995
------------------- -------------------
<S> <C> <C>
ASSETS
Investments, at fair value - Note C
Fixed Return Fund $2,424,100 $3,814,212
Government Securities Fund 5,407 7,212
Balanced Fund 120,669 110,036
Equity Index Fund 482,944 388,149
International Equity Fund 85,924 70,191
Aggressive Equity Fund 80,036 84,639
Thiokol Corporation Stock Fund 143,304 164,724
---------- ----------
TOTAL INVESTMENTS 3,342,384 4,639,163
Loans to participants 30,838 133,223
Accrued income receivable 4,757 5,778
---------- ----------
TOTAL ASSETS 3,377,979 4,778,164
LIABILITIES
Withdrawals payable 431 6,405
---------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $3,377,548 $4,771,759
========== ==========
</TABLE>
See notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Year Ended December 31
1996 1995
------------------- -------------------
<S> <C> <C>
Contributions and investment income
Company contributions $ 78,611 $ 160,124
Participant contributions 240,437 466,432
Rollover contributions 59,936 -
Dividend income 15,420 17,230
Interest income 186,779 229,945
---------- ----------
TOTAL CONTRIBUTIONS AND
INVESTMENT INCOME 581,183 873,731
Net gain on sale of plan assets - Note D 73,002 25,149
Net unrealized appreciation in fair
value of investments - Note C 63,225 103,097
Participant payments (2,099,139) (1,171,637)
Administrative expenses (6,090) (6,890)
Plan transfers (6,392) 216,168
---------- ----------
NET (DECREASE) INCREASE (1,394,211) 39,618
Net assets available for benefits at
beginning of year 4,771,759 4,732,141
---------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $3,377,548 $4,771,759
========== ==========
</TABLE>
See notes to Financial Statements.
<PAGE>
THIOKOL CORPORATION BARGAINING UNIT
RETIREMENT SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
General:
- --------
All investments of the Thiokol Corporation Bargaining Unit Retirement
Savings and Investment Plan (the Plan) are held in the Thiokol Corporation
Master Savings Trust (the Trust) by The Northern Trust Company (the
Trustee). The Trustee invests the assets of three employee retirement
savings and investment plans of Thiokol Corporation (the Company) pursuant
to instructions provided it by the investment managers The investment
managers are appointed by the Compensation Committee of the Thiokol Board
of Directors.
On January 1, 1995, the Company enhanced the Plan by converting to a daily
valuation system. Under the daily valuation system, a Net Asset Value (NAV)
is computed daily for each fund based on the current fair value of the
fund's assets. The NAV of each fund was established at $10.00. A
participant's fund balance is computed by multiplying the NAV by the number
of units owned.
The Company's and participants' contributions, loans made to participants,
repayments received from participants, and benefit payments or withdrawals
are specifically identified for each plan. Income (loss) is allocated to
the various plans based upon each plan's proportionate share of the fair
value of the Trust's assets related to that income. Asset values in the
Plan reflect the deduction of brokerage commissions, related transaction
costs and other fees assessed by the various investment managers. Costs
incurred by the Plan to administer the daily valuation system are allocated
daily to each investment fund as a reduction of the NAV at an annual rate
of fifteen one hundredths of one percent. All other Plan administrative and
general expenses are paid by the Company.
Investments:
- ------------
There are seven investment options and one employee loan option under the
Plan. Investment options are: the Fixed Return Fund, the Government
Securities Fund, the Balanced Fund, the Equity Index Fund, the
International Equity Fund, the Aggressive Equity Fund, and the Thiokol
Corporation Stock Fund.
Investments in the stock of the Company are recorded at fair market value
as determined by the closing price on the New York Stock Exchange.
<PAGE>
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
The investment managers for the Equity Index, Balanced, International
Equity, and Aggressive Equity Funds provide the composite value of their
respective funds on a daily basis to the Trustee based upon each
investment's closing price from the appropriate exchange or closing bid
prices from investment brokerage firms.
The Fixed Return and Government Securities Funds are valued at contract
value, which represents periodic deposit amounts net of funds used to pay
participants' withdrawals, plus credited interest at the contract rate. The
interest rate for each contract is reviewed and may be adjusted
semi-annually to reflect current interest rates. The stated interest rate
has been adjusted for estimated contract transaction and plan
administration costs.
Funds may be invested on a temporary basis in common trust funds.
Participation units in common trust funds, comprised exclusively of
short-term investments, are valued at par value, which is equal to
redemption value.
Gain or loss on the sale of Plan assets is determined by utilizing an
historical average unit cost of investments. Unrealized appreciation or
depreciation is determined by the change in fair value for the twelve-month
period.
NOTE B - DESCRIPTION OF THE PLAN
The Plan is a defined-contribution 401(k) plan established to provide
eligible employees with an incentive to make systematic savings for
retirement from current income through payroll deductions and to provide an
opportunity to acquire an equity interest in the Company or to invest in
one of the other six investment choices. All bargaining unit employees of
the Kingston Division of Huck International, Inc. (Kingston) are eligible
to participate in the Plan. During 1995 bargaining unit employees of the
Longhorn Division of the Company (Longhorn), who previously participated in
the Retirement Savings and Investment Plan for Certain Bargaining Employees
of Thiokol Corporation, ratified new contracts which shifted participation
to the Plan. All assets from those participants' previous plan were
transferred to the Plan during 1995.
In October 1996, all operations ceased at the Huntsville Division. As a
result, there are no longer any active employees from Huntsville
participating in the Plan. However, several former Huntsville employees
have balances in the Plan.
<PAGE>
NOTE B - DESCRIPTION OF THE PLAN
Participation in the Plan is voluntary. Longhorn participants may make
contributions to the Plan for any whole percentage up to a maximum of 17%
of base pay subject to limitations imposed by Federal Tax Regulations. For
Longhorn participants the Company contributes an amount equal to 50% of the
participants' base pay up to 6%, adjusted for any current forfeitures and
reinstatement of prior forfeitures. Kingston participants may make
contributions to the plan for any whole percentage up to a maximum of 8% of
base pay. Huck International, Inc. contributes an amount equal to 50% of
each Kingston participant's base pay up to 4%, adjusted for any current
forfeitures and reinstatement of prior forfeitures.
Company contributions are allocated among the investment funds in
accordance with the participants' elections. Participants may transfer
amounts from one investment fund to another subject to certain
restrictions.
Information about the Plan's vesting and benefit provisions is contained in
the booklet entitled Your Employee Benefits and is available from the
Company's human resources department.
Longhorn participants may obtain loans from the Plan. The maximum loan
amount is subject to certain restrictions and each loan is secured by the
participant's account balance. The interest charged on loans is based upon
rates as determined by the Plan Administration Committee subject to
Department of Labor regulations.
The Company has the right to terminate, amend, modify, or suspend the Plan
at any time. In the event the Plan is terminated, the entire value of the
investment funds shall be applied for the exclusive benefit of
participants, and no part of the funds will revert to the Company. Upon
termination of the Plan, the Company will have no obligation to continue
making contributions to the Plan.
<PAGE>
NOTE C - INVESTMENTS
A description of the investment funds follows:
Fixed Return Fund:
- ------------------
This fund is managed by Connecticut General Life Insurance Company (CGLC)
under a group annuity contract issued to the Trustee, which provides for a
fixed rate of return. The stated annual rate of return was 5.50% and 5.75%
for the first and second halves of 1996 respectively, and 5.10% and 5.50%
for the first and second halves of 1995 respectively. The average yield for
the fund was 5.63% and 5.30% for 1996 and 1995 respectively. The majority
of Fund assets consist of intermediate-term investment grade corporate
bonds.
The fund is maintained in a separate account to prevent the assets from
being subject to the claims of the general creditors of CGLC.
Government Securities Fund:
- ---------------------------
This fund is managed by Metropolitan Life Insurance Company (Met) under a
group annuity contract. The fund invests in intermediate-term United States
Government and Government National Mortgage Association Fixed Income
Securities backed by the full faith and credit of the United States
Treasury and in other highly rated short-term securities. The stated annual
rate of return was 5.00% and 5.25% for the first and second halves of 1996
respectively, and 4.60% and 5.00% for the first and second halves of 1995
respectively. The average yield for the fund was 5.13% and 4.80% for 1996
and 1995 respectively.
The fund is maintained in a separate account to prevent the assets from
being subject to the claims of the general creditors of Met.
Balanced Fund:
- --------------
This fund is managed by the investment management firm of Dodge and Cox.
The fund is invested in both common stocks and bonds. The value of
investments can fluctuate due to general stock and bond market conditions
as well as the performance of the individual securities in which the fund
is invested. Investments in any single stock or bond issue, with the
exception of United States government securities, are seldom in excess of
2% of total fund assets.
<PAGE>
NOTE C - INVESTMENTS
Equity Index Fund:
- ------------------
This fund is managed by the Bankers Trust Company. The fund is invested
primarily in common stocks and securities convertible into common stocks
and in other similar types of equity investments which closely mirror the
Standard and Poor's 500 Composite Stock Price Index. The value of
investments can fluctuate due to general stock market conditions and the
performance of the individual securities which comprise the Standard and
Poor's 500 Composite Stock Price Index.
International Equity Fund:
- --------------------------
This fund is managed by the investment management firm of Rowe Price
- -Fleming International. This fund is broadly diversified by investing in
the equity securities of established foreign companies. Generally this fund
is invested in over 300 stocks in more than 25 countries. This fund may
invest in corporate and government debt securities, futures, options and
enter into forward foreign currency exchange contracts. The fund is managed
on a team basis by several portfolio mangers that are each responsible for
a geographic region. The portfolio managers are supported by more than 100
financial analysts. The value of this fund fluctuates with world stock and
currency market conditions and the performance of the individual securities
in the fund.
<PAGE>
NOTE C - INVESTMENTS
Aggressive Equity Fund:
- -----------------------
This fund is managed by the investment management firms of Peregrine
Capital Management and Provident Investment Counsel. They began management
of the fund on November 1, 1996, replacing Target Investors, Inc. (Target).
The Company terminated its relationship with Target due to less than
expected investment returns. During November 1996, the funds in Target were
liquidated and transferred to the two new managers. As a result of the
transfer, the fund under Target realized a net loss of $2,500, and the fund
under the new managers recognized a realized gain of $1,623 resulting in a
net realized loss of $877 for 1996 (See Note D).
This fund is invested in the common stocks of small, rapidly growing
companies. A small growth company is one which is still in the early stage
of its life cycle, yet has demonstrated, or is expected to achieve,
long-term earnings growth. Investments in any single stock rarely exceed 4%
of total fund assets. The value of investments can fluctuate due to general
stock market conditions and the performance of the individual securities in
the fund.
Thiokol Corporation Stock Fund:
- -------------------------------
This fund is invested primarily in Thiokol Corporation common stock. Its
performance depends primarily upon the performance of the Company's stock.
As with other stocks, the market value of this stock can fluctuate, and
participants' investments in this fund can increase or decrease in value.
Prior to the Plan being on a daily valuation system, the unit value used to
determine a participant's account balance was shares of Company stock. With
the conversion to a daily valuation system, the NAV is the unit used to
determine a participant's account balance.
<PAGE>
NOTE C - INVESTMENTS
During 1996 and 1995, the unrealized appreciation (depreciation) of the
Plan's investments was as follows:
<TABLE>
<CAPTION>
Appreciation
(Depreciation)
in Fair Value
During the Period Fair Value Cost
----------------------- ------------------ ------------------
<S> <C> <C> <C>
December 31, 1996:
Fair value as determined by
redemption or contract value:
Fixed Return Fund $2,424,100 $2,424,100
Government Securities Fund 5,407 5,407
Fair value as determined by
quoted market prices:
Balanced Fund $ 7,577 120,669 107,705
Equity Index Fund 42,454 482,944 357,208
International Equity Fund 6,001 85,924 77,854
Aggressive Equity Fund (825) 80,036 82,258
Thiokol Corporation Stock Fund 8,018 143,304 94,049
-------- ---------- ----------
$ 63,225 $3,342,384 $3,148,581
======== ========== ==========
December 31, 1995:
Fair value as determined by
redemption or contract value:
Fixed Return Fund $3,814,212 $3,814,212
Government Securities Fund 7,212 7,212
Fair value as determined by
quoted market prices:
Balanced Fund $ 7,267 110,036 102,769
Equity Index Fund 81,612 388,149 309,760
International Equity Fund 4,320 70,191 65,871
Aggressive Equity Fund (5,427) 84,639 90,066
Thiokol Corporation Stock Fund 15,325 164,724 97,504
-------- ---------- ----------
$103,097 $4,639,163 $4,487,394
======== ========== ==========
</TABLE>
<PAGE>
NOTE D - CHANGE IN NET ASSETS AVAILABLE FOR BENEFITS BY
INVESTMENT FUND
<TABLE>
<CAPTION>
Year Ended December 31, 1996
--------------------------------------------------------
Fixed Gov't
Return Sec. Balanced
Fund Fund Fund
------------------ ------------- ----------------
<S> <C> <C> <C>
Contributions and investment
income:
Company contributions $ 48,564 $ 201 $ 570
Participant contributions 150,593 1,075 6,595
Rollover contributions 27,794 - 13,334
Dividend income 3,968
Interest income 184,546 368 1
---------- ------ --------
TOTAL CONTRIBUTIONS AND
INVESTMENT INCOME 411,497 1,644 24,468
Net gain (loss) on sale of plan assets 3,956
Net unrealized appreciation
(depreciation) in fair value of
investments 7,577
Participant payments (1,813,025) (831) (79,277)
Administrative expenses (4,858) (9) (178)
Plan transfers (24,620) (3) (51)
Participant transfers (17,005) (2,707) 51,530
---------- ------ --------
NET (DECREASE) INCREASE (1,448,011) (1,906) 8,025
Net assets available for benefits
at beginning of year 3,903,698 7,373 110,965
---------- ------ --------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $2,455,687 $5,467 $118,990
========== ====== ========
</TABLE>
<PAGE>
NOTE D - CHANGE IN NET ASSETS AVAILABLE FOR BENEFITS BY
INVESTMENT FUND
<TABLE>
<CAPTION>
Year Ended December 31, 1996
------------------------------------------------------------------------------
Equity Int'l Aggressive Company
Index Equity Equity Stock
Fund Fund Fund Fund Total
-------------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Contributions and investment
income:
Company contributions $ 14,901 $ 2,282 $ 3,887 $ 8,206 $ 78,611
Participant contributions 41,771 8,315 11,680 20,408 240,437
Rollover contributions 14,690 4,118 - - 59,936
Dividend income 7,249 1,129 187 2,887 15,420
Interest income 488 61 20 1,295 186,779
-------- ------- ------- -------- ----------
TOTAL CONTRIBUTIONS AND
INVESTMENT INCOME 79,099 15,905 15,774 32,796 581,183
Net gain (loss) on sale of plan assets 29,331 5,955 (877) 34,637 73,002
Net unrealized appreciation
(depreciation) in fair value of
investments 42,454 6,001 (825) 8,018 63,225
Participant payments (127,718) (13,283) (24,822) (40,183) (2,099,139)
Administrative expenses (596) (149) (44) (256) (6,090)
Plan transers 17,012 (36) 9,321 (8,015) (6,392)
Participant transfers 35,908 (3,895) (7,123) (56,708) -
-------- ------- ------- -------- ----------
NET (DECREASE) INCREASE 75,490 10,498 (8,596) (29,711) (1,394,211)
Net assets available for benefits
at beginning of year 408,699 77,211 88,928 174,885 4,771,759
-------- ------- ------- -------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $484,189 $87,709 $80,332 $145,174 $3,377,548
======== ======= ======= ======== ==========
</TABLE>
<PAGE>
NOTE D - CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY
INVESTMENT FUND
<TABLE>
<CAPTION>
Year Ended December 31, 1995
--------------------------------------------------------
Fixed Gov't
Return Sec. Balanced
Fund Fund Fund
------------------ ------------- ----------------
<S> <C> <C> <C>
Contributions and investment
income:
Company contributions $ 116,076 $1,031 $ 1,172
Participant contributions 350,072 3,502 4,718
Dividend income 3,772
Interest income 226,647 398 69
---------- ------ --------
TOTAL CONTRIBUTIONS AND
INVESTMENT INCOME 692,795 4,931 9,731
Net gain on sale of plan assets 5,473
Net unrealized appreciation
(depreciation) in fair value of
investments 7,267
Participant payments (1,021,718) (5,495) (18,231)
Administrative expenses (6,009) (12) (110)
Plan transfers 216,168 - -
Participant transfers (271,250) (258) 106,835
---------- ------ --------
NET (DECREASE) INCREASE (390,014) (834) 110,965
Net assets available for benefits
at beginning of year 4,293,712 8,207 -
---------- ------ --------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $3,903,698 $7,373 $110,965
========== ====== ========
</TABLE>
<PAGE>
NOTE D - CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY
INVESTMENT FUND
<TABLE>
<CAPTION>
Year Ended December 31, 1995
-------------------------------------------------------------------------------------
Equity Int'l Aggressive Company
Index Equity Equity Stock
Fund Fund Fund Fund Total
------------- ------------ -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Contributions and investment
income:
Company contributions $ 22,342 $ 1,711 $ 3,011 $ 14,781 $ 160,124
Participant contributions 57,864 5,083 8,028 37,165 466,432
Dividend income 8,730 1,556 - 3,172 17,230
Interest income 745 41 74 1,971 229,945
-------- ------- ------- -------- ----------
TOTAL CONTRIBUTIONS AND
INVESTMENT INCOME 89,681 8,391 11,113 57,089 873,731
Net gain on sale of plan assets 1,436 1,209 5,579 11,452 25,149
Net unrealized appreciation
(depreciation) in fair value of
investments 81,612 4,320 (5,427) 15,325 103,097
Participant payments (80,062) (578) (9,738) (35,815) (1,171,637)
Administrative expenses (436) (72) (33) (218) (6,890)
Plan transfers - - - - 216,168
Participant transfers 37,731 63,941 87,434 (24,433) -
-------- ------- ------- -------- ----------
NET (DECREASE) INCREASE 129,962 77,211 88,928 23,400 39,618
Net assets available for benefits
at beginning of year 278,737 - - 151,485 4,732,141
-------- ------- ------- -------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $408,699 $77,211 $88,928 $174,885 $4,771,759
======== ======= ======= ======== ==========
</TABLE>
<PAGE>
NOTE E - INCOME TAX STATUS
The Company has received a favorable letter of determination from the
Internal Revenue Service stating that the Plan qualifies under section 401
and the Trust is exempt from tax under section 501(a) of the Internal
Revenue Code (IRC). The Plan is required to operate in conformity with the
IRC to maintain its qualification. The Company is not aware of any course
of action or series of events that have occurred that would adversely
affect the Plan's qualified status. Participants are not subject to income
tax on Company contributions or income credited to their accounts until
such time as these amounts are distributed.
NOTE F - QUARTERLY NET ASSET VALUE INFORMATION
The investment fund NAV at the end of each quarter for 1996 and 1995 was as
follows:
<TABLE>
<CAPTION>
March 31 June 30 Sept 30 Dec 31
-------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Calendar Year 1996
Fixed Return Fund 10.6708 10.8135 10.9622 11.1209
Government Securities Fund 10.6097 10.7396 10.8787 11.0196
Balanced Fund 13.1734 13.4550 13.7435 14.6521
Equity Index Fund 14.4606 15.0990 15.5518 16.8403
International Equity Fund 11.8484 12.3096 12.3838 12.9706
Aggressive Equity Fund 10.4971 10.8888 10.4508 10.5032
Thiokol Corporation Stock Fund 15.5724 14.0127 16.5682 15.7884
Calendar Year 1995
Fixed Return Fund 10.1762 10.3031 10.4429 10.5299
Government Securities Fund 10.1619 10.2773 10.4047 10.4827
Balanced Fund 10.7836 11.6447 12.2787 12.7871
Equity Index Fund 11.1327 12.1974 13.1570 13.7356
International Equity Fund 9.9686 10.4582 10.9479 11.2173
Aggressive Equity Fund 10.5847 11.6723 13.0732 11.1457
</TABLE>
<PAGE>
Exhibit
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-10316) pertaining to certain Retirement Savings and
Investment Plans of Thiokol Corporation of our report dated April 11, 1997,
with respect to the financial statements of the Thiokol Corporation
Bargaining Unit Retirement Savings and Investment Plan included in this
Annual Report (Form 11-K) for the year ended December 31, 1996.
/s/ Ernst & Young LLP
Salt Lake City, Utah
June 20, 1997
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the
undersigned thereunto duly authorized.
THIOKOL CORPORATION BARGAINING UNIT
RETIREMENT SAVINGS AND INVESTMENT PLAN
Date: June 20, 1997 /s/ Richard L. Corbin
-----------------------------------
Richard L. Corbin, Senior Vice
President and Chief Financial
Officer for the Plan Administrative
Committee
