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, 1998
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
CORDANT TECHNOLOGIES INC.
BARGAINING UNIT
RETIREMENT SAVINGS AND INVESTMENT PLAN
CORDANT TECHNOLOGIES INC.
15 West S. Temple, Suite 1600, Salt Lake City, Utah 84101-1532
<PAGE>
CORDANT TECHNOLOGIES INC. BARGAINING UNIT
RETIREMENT SAVINGS AND INVESTMENT PLAN
Audited Financial Statements
December 31, 1998 and 1997
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
Cordant Technologies Inc.
We have audited the accompanying statements of net assets available for
benefits of the Cordant Technologies Inc. Bargaining Unit Retirement
Savings and Investment Plan as of December 31, 1998 and 1997, 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 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 December 31, 1998 and 1997, 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
Salt Lake City, Utah
June 8, 1999
1
<PAGE>
CORDANT TECHNOLOGIES INC. BARGAINING UNIT
RETIREMENT SAVINGS AND INVESTMENT PLAN
<TABLE>
Statements of Net Assets Available for Benefits
<CAPTION>
December 31
1998 1997
------------------- ------------------
<S> <C> <C>
ASSETS
Investments, at fair value
Equity Index Fund $ 738,014 $ 540,815
Cordant Technologies Inc.
Stock Fund 336,089 336,325
Balanced Fund 84,427 86,629
Aggressive Equity Fund 81,396 82,666
International Equity Fund 55,402 52,614
Investments, at contract value
Fixed Income Fund 2,089,897 2,150,270
Government Securities Fund 1,579 5,474
-------------------- -------------------
TOTAL INVESTMENTS 3,386,804 3,254,793
Income and contributions receivable 12,861 4,762
-------------------- -------------------
TOTAL ASSETS 3,399,665 3,259,555
LIABILITIES
Other payables 1,392 2,970
-------------------- -------------------
NET ASSETS AVAILABLE
FOR BENEFITS $ 3,398,273 $ 3,256,585
==================== ===================
<FN>
See notes to Financial Statements.
</FN>
</TABLE>
2
<PAGE>
CORDANT TECHNOLOGIES INC. BARGAINING UNIT
RETIREMENT SAVINGS AND INVESTMENT PLAN
<TABLE>
Statements of Changes in Net Assets Available for Benefits
<CAPTION>
Year Ended December 31
1998 1997
------------------- ------------------
<S> <C> <C>
Contributions and investment income
Company contributions $ 50,634 $ 46,233
Participant contributions 153,733 130,537
Dividend income 6,887 5,596
Interest income 135,567 138,908
Net realized and unrealized appreciation
in fair value of investments 142,728 292,038
------------------- ------------------
TOTAL CONTRIBUTIONS AND
INVESTMENT INCOME 489,549 613,312
Participant payments (342,353) (603,946)
Administrative expenses (5,508) (4,945)
Plan transfers - (125,384)
-------------------- ------------------
NET INCREASE (DECREASE) 141,688 (120,963)
Net assets available for benefits at
beginning of year 3,256,585 3,377,548
-------------------- ------------------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $ 3,398,273 $ 3,256,585
==================== =================
<FN>
See notes to Financial Statements.
</FN>
</TABLE>
3
<PAGE>
CORDANT TECHNOLOGIES INC. BARGAINING UNIT
RETIREMENT SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
General:
On May 5, 1998, Thiokol Corporation changed its corporate name to Cordant
Technologies Inc. (the Company). During 1998, the plan name was changed to
the Cordant Technologies Inc. Bargaining Unit Retirement Savings and
Investment Plan (the Plan).
All investments of the Plan are held in the Cordant Technologies Inc.
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 the Company pursuant to instructions
provided to it by the investment managers. The investment managers are
appointed by the Compensation Committee of the Company's Board of
Directors.
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 (loss). 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
Net Asset Value (NAV) at an annual rate of fifteen one hundredths of one
percent. All other Plan administrative and general expenses are paid by the
Company.
Certain reclassifications have been made to the 1997 statements to conform
to the 1998 presentation.
Investments:
There are seven investment options under the Plan. Investment options are:
the Equity Index Fund, Cordant Technologies Inc. Stock Fund, Balanced Fund,
International Equity Fund, Aggressive Equity Fund, Fixed Income Fund, and
the Government Securities Fund.
Investments in the Company stock are recorded at fair market value as
determined by the closing price on the New York Stock Exchange.
4
<PAGE>
CORDANT TECHNOLOGIES INC. BARGAINING UNIT
RETIREMENT SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements (continued)
NOTE A - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The investment managers for the Equity Index, Balanced, International
Equity, and Aggressive Equity Funds provide the unit 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 Income 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.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes, such as the adjustment of the stated interest rate
for the Fixed Income and Government Securities Funds. Actual results could
differ from those estimates.
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 a
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.
5
<PAGE>
NOTE B - DESCRIPTION OF THE PLAN (CONTINUED)
All operations ceased at the Huntsville division in 1996 and the Longhorn
division in 1997. As a result, there are no longer any active employees
from Huntsville and Longhorn participating in the Plan. However, former
employees from these locations have balances in the Plan.
Participation in the Plan is voluntary. Kingston participants may make
contributions to the plan for any whole percentage up to a maximum of 8
percent of base pay subject to limitations imposed by Federal Tax
Regulations. Huck International, Inc. contributes an amount equal to 50
percent of each Kingston participant's base pay up to 4 percent, 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.
A more complete description of the plan including vesting and benefit
provisions is contained in the booklet entitled Your Employee Benefits and
is available from the Company's human resources department.
Although it has not expressed any intent to do so, 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.
NOTE C - INVESTMENTS
A description of the investment funds follows:
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.
6
<PAGE>
NOTE C - INVESTMENTS (CONTINUED)
Cordant Technologies Inc. Stock Fund:
This fund is invested primarily in Cordant Technologies Inc. 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.
On January 22, 1998, the Company's Board of Directors declared a
two-for-one stock split in the form of a stock dividend payable March 13,
1998, for each stockholder of record on February 27, 1998. The Company
Stock Fund is valued in units, rather than shares, and therefore the split
did not impact the number of units or the value allocated to the
participants accounts. The NAV is also unaffected by the stock split.
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
percent of total fund assets.
Aggressive Equity Fund:
This fund is managed by the investment management firms of Norwest
Investment Management, Inc., and Provident Investment Counsel. 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 percent 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.
7
<PAGE>
NOTE C - INVESTMENTS (CONTINUED)
International Equity Fund:
This fund was previously managed solely by the investment management firm
of T. Rowe Price Associates, Inc. Morgan Stanley Dean Witter Advisors Inc.
was added as an investment manager during the year. On May 1, 1998, T. Rowe
Price Associates transferred the value of 50 percent of the outstanding
shares of the T. Rowe Price Institutional International Foreign Equity Fund
to Morgan Stanley Dean Witter Advisors. Morgan Stanley Dean Witter Advisors
invested the cash proceeds into the Morgan Stanley Institutional
International Equity Portfolio.
The T. Rowe Price Institutional International Foreign Equity Fund is
broadly diversified in over 300 equity securities of established foreign
companies 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 Morgan Stanley Dean Witter Institutional International Equity Portfolio
seeks long-term appreciation by investing primarily in equity securities of
non-US markets. Morgan Stanley Dean Witter Advisors considers cash flow and
intrinsic value of company assets to select undervalued securities from a
group of approximately 1,900 companies.
The value of this fund fluctuates with world stock and currency market
conditions and the performance of the individual securities in the fund.
Fixed Income Fund:
This fund is managed by Connecticut General Life Insurance Company (CIGNA)
under a group annuity contract issued to the Trustee, which provides for a
fixed rate of return. The stated annual rate of return was 6.35 percent and
6.65 percent for the first and second halves of 1998, respectively, and
6.35 percent for 1997. The average yield for the fund was 6.50 percent and
6.35 percent for 1998 and 1997, respectively. The majority of fund assets
consists of intermediate-term investment grade corporate bonds. The
contract is included in the financial statements at contract value which
approximates fair value as reported to the Plan by CIGNA.
The fund is maintained in a separate account at the insurance company to
prevent the assets from being subject to the claims of the general
creditors of CIGNA.
8
<PAGE>
NOTE C - INVESTMENTS (CONTINUED)
Government Securities Fund:
This fund is managed by Metropolitan Life Insurance Company (MetLife) 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 5.85 percent and 6.15 percent for the first and second
halves of 1998, respectively, and 5.85 percent for 1997. The average yield
for the fund was 6.00 percent and 5.85 percent for 1998 and 1997,
respectively. The contract is included in the financial statements at
contract value, which approximates fair value, as reported to the Plan by
MetLife.
The fund is maintained in a separate account at the insurance company to
prevent the assets from being subject to the claims of the general
creditors of MetLife.
9
<PAGE>
<TABLE>
NOTE D - CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY INVESTMENT FUND
<CAPTION>
Year Ended December 31, 1998
-------------------------------------------------------------------
Equity Company Aggressive
Index Stock Balanced Equity
Fund Fund Fund Fund
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contributions and investment
income:
Company contributions $ 16,180 $ 10,518 $ 3,220 $ 4,324
Participant contributions 51,069 35,296 9,492 14,081
Dividend income - 2,250 3,327 354
Interest income - 233 - -
Net realized and unrealized
appreciation (depreciation) in
fair value of investments 157,928 (22,898) 3,155 (2,548)
----------------- --------------- ------------- --------------
TOTAL CONTRIBUTIONS AND
INVESTMENT INCOME 225,177 25,399 19,194 16,211
Participant payments (52,240) (57,032) (5,935) (9,970)
Administrative expenses (1,362) (336) (154) (421)
Participant transfers 28,266 32,792 (15,077) (6,764)
----------------- --------------- ------------- --------------
NET INCREASE (DECREASE) 199,841 823 (1,972) (944)
Net assets available for benefits
at beginning of year 540,504 336,309 91,271 82,582
----------------- --------------- ------------- --------------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $ 740,345 $ 337,132 $ 89,299 $ 81,638
================= =============== ============= ==============
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31, 1998
- -----------------------------------------------------------------------------------------------------------------------------
Int'l Fixed Gov't
Equity Income Sec.
Fund Fund Fund Total
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contributions and Investment
Income:
Company contributions $ 2,026 $ 14,239 $ 127 $ 50,634
Participant contributions 6,663 36,624 508 153,733
Dividend income 956 - - 6,887
Interest Income - 135,273 61 135,567
Net realized and unrealized
appreciation (depreciation) in
fair value of investments 7,091 - - 142,728
--------------------------------------------------------------------------
TOTAL CONTRIBUTIONS AND
INVESTMENT INCOME 16,736 186,136 696 489,549
Participant Payments (406) (211,611) (5,159) (342,353)
Administrative expenses (83) (3,150) (2) (5,508)
Participant transfers (13,637) (26,155) 575 -
----------------------------------------------------------------------------
NET INCREASE (DECREASE) 2,610 (54,780) (3,890) 141,688
Net assets available for benefits
at beginning of year 52,607 2,147,838 5,474 3,256,585
---------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS AT END OF
YEAR $ 55,217 $ 2,093,058 $ 1,584 $ 3,398,273
==========================================================================
</TABLE>
11
<PAGE>
CORDANT TECHNOLOGIES INC. BARGAINING UNIT
RETIREMENT SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements (continued)
<TABLE>
NOTE D - CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY INVESTMENT FUND (CONTINUED)
<CAPTION>
Year Ended December 31, 1997
-------------------------------------------------------------------
Equity Company Aggressive
Index Stock Balanced Equity
Fund Fund Fund Fund
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contributions and investment
income:
Company contributions $ 15,503 $ 7,111 $ 2,314 $ 3,299
Participant contributions 46,007 21,885 6,938 10,347
Dividend income 3 2,928 2,457 54
Interest income - 253 - -
Net realized and unrealized
appreciation in fair
value of investments 137,547 133,888 14,574 3,878
--------------------------------------------------------------------
TOTAL CONTRIBUTIONS AND
INVESTMENT INCOME 199,060 166,065 26,283 17,578
Participant payments (62,134) (54,909) (3,430) (3,608)
Administrative expenses (900) (397) (136) (68)
Plan transfers (80,656) 12,408 (27,317) (21,251)
Participant transfers 1,944 70,190 (23,116) 9,808
Net loan activity 444 94 - -
------------------------------------------------------------------
NET INCREASE (DECREASE) 57,758 193,451 (27,716) 2,459
Net assets available for benefits
at beginning of year 482,746 142,858 118,987 80,123
-------------------------------------------------------------------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $ 540,504 $ 336,309 $ 91,271 $ 82,582
===================================================================
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31, 1997
- -----------------------------------------------------------------------------------------------------------------------------
Int'l Fixed Gov't
Equity Income Sec. Loan
Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contributions and investment
Income:
Company contributions $ 2,107 $ 15,881 $ 18 $ - $ 46,233
Participant contributions 6,317 38,949 94 - 130,537
Dividend income 154 - - - 5,596
Interest Income - 138,323 316 16 138,908
Net realized and unrealized
appreciation (depreciation)
in fair value of investments 2,151 - - - 292,038
-------------------------------------------------------------------------------
TOTAL CONTRIBUTIONS AND
INVESTMENT INCOME 10,729 193,153 428 16 613,312
Participant payments (1,925) (447,271) (353) (30,316) (603,946)
Administrative expenses (107) (3,329) (8) - (4,945)
Plan transfers (22,852) 14,284 - - (125,384)
Participant transfers (20,883) (37,943) - - -
Net loan activity - - - (538) -
-------------------------------------------------------------------------------
NET INCREASE (DECREASE) (35,038) (281,106) 67 (30,838) (120,963)
Net assets available for benefits
At beginning of year 87,645 2,428,944 5,407 30,838 3,377,548
------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $ 52,607 $ 2,147,838 $ 5,474 $ - $ 3,256,585
==============================================================================
</TABLE>
13
<PAGE>
CORDANT TECHNOLOGIES INC. BARGAINING UNIT
RETIREMENT SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements (continued)
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(a) 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 NAV of each fund was established at $10.00 on January 1, 1995. A
participant's fund balance is computed by multiplying the NAV by the number
of units owned. The investment fund NAV at the end of each quarter for 1998
and 1997 was as follows:
<TABLE>
<CAPTION>
March 31 June 30 Sept 30 Dec 31
---------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Calendar Year 1998
Equity Index Fund $ 25.5693 $ 26.3948 $ 23.7722 $ 28.8359
Cordant Technologies Stock Fund 33.5301 32.0316 29.4211 26.1354
Balanced Fund 18.8838 18.9207 17.4168 18.8886
Aggressive Equity Fund 13.1325 12.4013 9.3473 11.3809
International Equity Fund 15.1573 15.2626 13.2197 15.4074
Fixed Income Fund 12.0034 12.1917 12.3908 12.5932
Government Securities Fund 11.8257 11.9958 12.1770 12.3612
Calendar Year 1997
Equity Index Fund $ 17.2947 $ 20.3152 $ 21.8366 $ 22.4551
Cordant Technologies Stock Fund 19.3789 24.3948 29.8851 28.2672
Balanced Fund 14.8108 16.4264 17.7097 17.7295
Aggressive Equity Fund 9.3690 10.9900 12.7147 11.5949
International Equity Fund 12.9622 14.5394 14.4370 13.3608
Fixed Income Fund 11.2903 11.4647 11.6437 11.8256
Government Securities Fund 11.1744 11.3336 11.4969 11.6625
</TABLE>
14
<PAGE>
NOTE G - YEAR 2000 (UNAUDITED)
The Plan is dependent on information systems controlled and maintained by
the Company and significant third party service providers. The Company
believes its systems are Year 2000 compliant. Third party service providers
have represented that their systems are Year 2000 compliant. In the event
the systems are not compliant, there may be delays in processing (ie.
checks, transfers, investments, etc.) The Company and the third party
service providers bear all costs associated with becoming Year 2000
compliant. No significant impact to the Plan is anticipated from Year 2000
issues.
15
<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 Cordant Technologies Inc. of our report dated June 8,
1999, with respect to the financial statements of the Cordant Technologies
Inc.Bargaining Unit Retirement Savings and Investment Plan included in this
Annual Report (Form 11-K) for the year ended December 31, 1998.
/s/ Ernst & Young LLP
Salt Lake City, Utah
June 28, 1999
16
<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.
CORDANT TECHNOLOGIES INC.
BARGAINING UNIT
RETIREMENT SAVINGS AND
INVESTMENT PLAN
/s/ Richard L. Corbin
Date: June 28, 1999 ---------------------------------------------
Richard L. Corbin, Executive Vice
President and Chief Financial
Officer for the Plan Administrative
Committee
