PROSPECTUS SUPPLEMENT
(To Prospectus dated April 17, 1996)
$150,000,000
[HII Logo]
6-7/8% Debentures due February 15, 2027
-------------------
Interest Payable February 15 and August 15
-------------------
The Debentures will mature on February 15, 2027. The
Debentures are not redeemable prior to maturity and are not subject to any
sinking fund. Each Holder of the Debentures has the right to require the
Company to repay such Holder's Debentures, in whole or in part on
February 15, 2007, at a repayment price equal to 100% of the aggregate
principal amount thereof plus accrued and unpaid interest. Interest on the
Debentures is payable semi-annually on February 15 and August 15 of each year,
commencing August 15, 1997. The Debentures will be issued in the form
of one or more Global Securities (the "Global Securities") registered in the
name of The Depository Trust Company as Depositary (the "Depositary").
Beneficial interests in the Global Securities will be shown on, and transfer
will be effected only through, records maintained by the Depositary and its
participants. Except as described herein, Debentures in definitive form will
not be issued. See "Description of the Debentures." The Debentures will
trade in the Depositary's Same-Day Funds Settlement System until
maturity, and secondary market trading activity for the Debentures will
therefore settle in immediately available funds. All payments of principal
and interest will be made in immediately available funds. See "Description
of the Debentures - Same-Day Settlement and Payment."
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAP-
PROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
=====================================================
Price to Underwriting Proceeds to
Public(1) Discount(2) Company(1)(3)
=====================================================
Per Debenture 99.925% 0.650% 99.275%
- -----------------------------------------------------
Total $149,887,500 $975,000 $148,912,500
======================================================
(1) Plus accrued interest, if any, from February 25, 1997 to date of
delivery.
(2) The Company has agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. See "Underwriting."
(3) Before deduction of expenses payable by the Company estimated
at $50,000.
-------------------
The Debentures offered by this Prospectus Supplement are offered
by the Underwriters subject to prior sale, withdrawal, cancellation or
modification of the offer without notice, to delivery to and acceptance by
the Underwriters and to certain further conditions. It is expected that
delivery of the Debentures will be made in book-entry form through the
facilities of the Depositary, against payment therefore in immediately
available funds, on or about February 25, 1997.
--------------------
Lehman Brothers Merrill Lynch & Co.
Chase Securities Inc.
First Chicago Capital Markets, Inc.
RBC Dominion Securities Corporation
February 20, 1997
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE
UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE DEBENTURES OFFERED HEREBY AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended
October 31, 1996 and the Company's Current Report on Form 8-K dated
February 19, 1997, each of which has been filed by the Company with the
Commission, are incorporated herein by reference.
All documents filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus Supplement and prior to the termination of the
offering of the Debentures shall be deemed to be incorporated by reference
in this Prospectus Supplement and to be a part hereof from the date of
filing of such documents. Any statement contained herein or in a
document incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus Supplement and the
accompanying Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus
Supplement or the accompanying Prospectus.
The Company will provide without charge to each person,
including any beneficial owner to whom this Prospectus Supplement is
delivered, upon written or oral request of such person, a copy of any
document incorporated by reference in this Prospectus Supplement or the
accompanying Prospectus, other than exhibits to any such document not
specifically described above. Requests for such documents should be
directed to Harnischfeger Industries, Inc., 3600 S. Lake Drive, St. Francis,
Wisconsin 53235, Attention: Corporate Secretary (Telephone Number
(414) 486-6400).
<PAGE>
THE COMPANY
Harnischfeger Industries, Inc. ("Harnischfeger" or the "Company")
is an international holding company with business segments involved in the
manufacture and distribution of equipment for surface mining (P&H
Mining Equipment); underground mining (Joy Mining Machinery) ("Joy"); pulp
and papermaking (Beloit Corporation); and material handling (P&H Material
Handling). Harnischfeger is the direct successor to a business begun over
100 years ago which, through its subsidiaries, manufactures and markets
products classified into three industry segments: Mining Equipment, Pulp
and Papermaking Machinery, and Material Handling. For more
detailed information regarding the Company, see "The Company" on page
3 in the Prospectus.
RECENT DEVELOPMENTS
In early fiscal 1996, the Company acquired Dobson Park Industries
plc ("Dobson"), an industrial engineering group with interests in
underground mining equipment, industrial electronic control systems, toys
and plastics. Dobson's principal subsidiary, Longwall International
("Longwall"), is engaged in the manufacture, sale and service of mining
equipment for the international underground coal mining industry and has
been added to the Company's Mining Equipment Segment. Longwall
enables Joy Mining Machinery to offer integrated underground longwall
mining systems to the worldwide mining industry. As part of the Dobson
acquisition, several non-mining businesses were designated as businesses
for sale. The original value of the businesses was set at $100.0 million. At
October 31, 1996, three businesses remained unsold with a total assigned
value of $26.2 million. It is expected that the remaining businesses will be
sold within the next year.
In March, 1996, the Company completed its acquisition of
Ingersoll-Rand Company's Pulp Machinery Division ("IMPCO"). IMPCO
produces process technology and equipment for pulp production and has
been added to the Company's Pulp and Papermaking Machinery Segment.
In the fourth quarter of fiscal 1996, the Company's Beloit
Corporation subsidiary recorded a restructuring charge of $43.0 million
($21.8 million after tax and minority interest, or $0.46 per share). The
focus of the restructuring is to improve financial returns and increase
customer satisfaction while significantly reducing costs and cycle times. It
is expected that the restructuring actions will be substantially completed by
the end of fiscal 1997.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the Company is defined
as income from continuing operations before provision (credit) for income
taxes and minority interest plus interest expense (including amortization of
debt issuance expense), the portion of rental expense which represents
interest (deemed to be one-third of rentals) and dividends received on
less-than-fifty-percent-owned companies, reduced (increased) by equity income
(loss) recorded on less-than-fifty-percent-owned companies, divided by
fixed charges. Fixed charges include interest expense (including
amortization of debt issuance expense), the portion of rental expense
which represents interest and the preferred dividend requirements, if any.
Fiscal Years Ended October 31,
-----------------------------------------
1996 1995 1994 1993 1992
----- ----- ----- ----- -----
Ratio of Earnings
to Fixed Charges: 3.33 3.60 1.87 --(1) 2.05
==== ==== ==== ==== ====
(1) Earnings did not cover fixed charges by $47.4 million in 1993.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of
the Debentures initially will be added to the general corporate funds of the
Company. It is expected that such funds will be used for general
corporate purposes which may include, among other things, working
capital and refinancing short term indebtedness having an average maturity
and interest rate of seventeen days and 5.5%, respectively.
<PAGE>
SELECTED FINANCIAL DATA
(dollars in thousands except per share amounts)
The following selected financial data has been derived from the
Company's consolidated financial statements audited by Price Waterhouse
LLP, independent accountants. This financial data should be read in
conjunction with, and is qualified in its entirety by, the related financial
statements and notes thereto which have been incorporated in this Prospectus by
reference.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
STATEMENT
OF INCOME Fiscal Year Ended October 31
DATA: --------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ ------
Revenues
Net Sales $2,863,931 $2,152,079 $1,551,728 $1,409,204 $1,594,192
Other Income 23,639 32,208 23,301 9,040 18,571
---------- -------------- -------------- ------------- -------------
2,887,570 2,184,287 1,575,029 1,418,244 1,612,763
Cost of Sales 2,166,775 1,671,932 1,195,851 1,083,846 1,179,904
Product Develop-
ment, Selling and
Administrative
Expenses 433,776 330,990 279,016 259,831 267,568
Restructuring Charge 43,000 - - 67,000 -
Nonrecurring Charge - - - 8,000 -
---------- ---------- --------- ---------- -------------
Operating Income
(Loss) 244,019 181,365 100,162 (433) 165,291
Interest Expense -
Net (62,258) (40,713) (47,366) (48,313) (53,216)
---------- ----------- ---------- --------- --------------
Pre-Tax Income
(Loss) before Joy
Merger Costs
and Gain on Sale
of Measurex
Investment 181,761 140,652 52,796 (48,746) 112,075
Joy Merger Costs - (17,459) - - -
Gain on Sale of
Measurex Investment - 29,657 - - -
(Provision) Credit for
Income Taxes (63,600) (53,500) (13,979) 16,497 (42,634)
Minority Interest (3,944) (7,230) (2,224) 4,799 (9,277)
----------- ---------- --------- -------- ------------
Income (Loss) from
Continuing Operations
(after deducting
$21,830 in 1996
related to the
restructuring charge
and $11,384 in 1995
related to Joy merger
costs, and adding
$18,657 in 1995
related to the gain
on sale of of
Measurex Investment) 114,217 92,120 36,593 (27,450) 60,164
Income (Loss) from and
(Net Loss) on Sale of
Discontinued Opera-
tions, net of applicable
income taxes - (31,235) (3,982) 7,760 9,465
Extraordinary Loss on
Retirement of Debt, net
of applicable income
taxes - (3,481) (4,827) - (22,816)
Cumulative Effect of
Accounting Change, net
of applicable income
taxes and minority
interest - - (81,696) - -
--------- ---------- ----------- -------- ----------
Net Income (Loss)
before Preferred Stock
Dividend Requirements 114,217 57,404 (53,912) (19,690) 46,813
Preferred Stock
Dividend Require-
ments(1) - - - - (10,866)
Net Income (Loss)
applicable to Com-
mon Shareholders $ 114,217 $ 57,404 $ (53,912) $ (19,690) $ 35,947
========= ======== ========= ========= ========
Earnings (Loss)
Per Share
Income (loss)
from continuing
operations (after
deducting $0.46
per share in 1996
for the restructuring
charge and $0.24
per share in 1995
related to Joy merger
costs, and adding
$0.40 per share in
1995 related to the
gain on sale of
Measurex investment) $ 2.42 $ 1.99 $ 0.84 $ (0.62) $ 1.17
Income (loss) from and
(net loss) on sale of
discontinued operations - (0.67) (0.09) 0.18 0.23
Extraordinary loss on
retirement of debt - (0.08) (0.11) - (0.54)
Cumulative effect of
accounting change - - (1.87) - -
Net Income (Loss)
Per Common Share $ 2.42 $ 1.24 $ (1.23) $ (0.44) $ 0.86
========= ========= ========= ========= ========
BALANCE SHEET DATA
(at period end):
Total Assets 2,690,029 2,040,767 1,981,953 1,908,250 2,109,605
Working Capital 333,123 490,087 431,325 375,236 572,751
Long-term
Obligations(2) 662,137 462,991 571,054 559,852 608,301
Shareholders' Equity 673,485 559,276 502,365 511,169 610,072
DEBT TO CAPITAL-
IZATION RATIO(3): 48.0% 42.6% 49.9% 51.1% 48.0%
CASH FLOW DATA:
Depreciation and
Amortization $ 89,270 $ 70,512 $ 73,243 $ 72,629 $ 63,555
EBITDA 333,289 264,075 173,405 72,196 228,846
Capital Expenditures 83,388 73,484 50,842 71,761 63,973
</TABLE>
Notes
- --------------------------
(1) Reflects declared and cumulative preferred stock dividends of the
senior and junior preferred stock of Joy.
(2) Includes amounts classified as current portion of long-term
obligations.
(3) The debt to capitalization ratio is defined as the sum of short-term
notes payable, long-term debt (including current portion) and
capitalized lease obligations divided by the sum of short-term notes
payable, long-term debt (including current portion) and capitalized
lease obligations, minority interest and shareholders' equity.
<PAGE>
DESCRIPTION OF THE DEBENTURES
The following description of the particular terms of the Debentures
offered hereby (referred to in the Prospectus as "Securities") supplements
and, to the extent inconsistent therewith, replaces the description of the
general terms and provisions of the Securities set forth in the
accompanying Prospectus, to which description reference is hereby made.
General
The Debentures will be limited to an aggregate principal amount of
$150,000,000, will mature on February 15, 2027, and will be issued under
an Indenture dated as of March 1, 1992, as supplemented by a
supplemental indenture dated as of June 12, 1992 (collectively, the
"Indenture"), between the Company and First Trust National Association,
(f/k/a First Trust of Illinois, National Association), as trustee (the
"Trustee"), which is described more fully in the accompanying Prospectus.
The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject to, and are qualified in their
entirety by reference to, all provisions of the Indenture,
including the definition therein of certain terms. Capitalized terms used
herein and not defined herein or on the cover page hereof shall have the
respective meanings set forth in the Indenture.
Each Debenture will bear interest at the rate of 6 % per annum
from February 25, 1997 or from the most recent interest payment date to
which interest has been paid, payable semi-annually on February 15 and
August 15 in each year (each such date being hereinafter referred to as an
"Interest Payment Date"), commencing August 15, 1997, to the person in
whose name such Debenture is registered at the close of business on the
February 1 or August 1, as the case may be, immediately preceding such
Interest Payment Dates. The Debentures will be sold in denominations of
$1,000 or any amount in excess thereof which is an integral multiple of
$1,000.
The Debentures will not be subject to redemption prior to maturity
at the option of the Company and will not be entitled to the benefit of any
sinking fund.
The Company is a holding company, conducting its operations
through its operating subsidiaries. Accordingly, the Company's ability to
pay interest and principal on the Debentures depends, in part, on its ability
to obtain dividends or loans from such operating subsidiaries. The
Debentures will be unsecured and will rank pari passu with all other
unsecured and unsubordinated indebtedness of the Company. However,
because the Company is a holding company which conducts substantially
all of its operations through subsidiaries, the right of the Company, and
hence the right of creditors of the Company (including the Holders of the
Debentures), to participate in any distribution of the assets of any
subsidiary upon its liquidation or reorganization or otherwise, is
necessarily subject to the prior claims of creditors of the subsidiary, except
to the extent that claims of the Company itself as a creditor of the
subsidiary may be recognized.
The covenants in the Indenture would not necessarily afford the
holders of the Debentures protection in the event of a decline in the
Company's credit quality resulting from highly leveraged or other
transactions involving the Company.
Repayment at Option of Holder on February 15, 2007
On February 15, 2007 (the "Optional Repayment Date"), each Holder of
Debentures will have the right (the "Repayment Right") to require the
Company to repay all or any part (equal to $1,000 or any integral
multiple thereof) of such Holder's Debentures at a repayment price equal
to 100% of the aggregate principal amount thereof plus accrued and
unpaid interest thereon to the Optional Repayment Date.
On or prior to December 15, 2006, the Company will mail a notice
to each Holder stating that (a) in order for a Holder to exercise the
Repayment Right, the Holder must surrender the Debentures in respect of
which the Repayment Right is being exercised, together with the form
entitled "Option of Holder to Elect Repayment on February 15, 2007" on
the reverse of the Debentures, duly completed, or transfer such Debentures,
duly completed, or transfer such Debentures by book-entry, to the Trustee
during the period from January 1, 2007 and prior to 5:00 p.m. (New York
City time) on January 31, 2007 (or if such date is not a business day,
then the next succeeding business day), (b) any election on the part
of a Holder to exercise the Repayment Right effected in accordance with
the foregoing shall be irrevocable on the part of the Holder and may not
be withdrawn, (c) Holders whose Debentures are being repaid only in part
will be issued new Debentures equal in principal amount to the unpaid
portion of the Debentures surrendered, which unpaid portion must be
equal to $1,000 in principal amount or an integral multiple thereof and
(d) unless the Company defaults in the payment of principal and accrued
interest on the Debentures to be repaid on the Optional Repayment Date,
interest on such Debentures will cease to accrue on the Optional Repayment
Date. The Company will comply with the requirements of Rule 14e-1 under
the Securities Exchange Act of 1934, as amended and any other
<PAGE>
securities laws and regulations thereunder to the extent such laws and
regulations are applicable to the repayment of the Debentures pursuant
to the Repayment Right.
On the Optional Repayment Date, the Company will, to the extent
lawful, deposit with the Trustee an amount sufficient to repay all
Debentures or portions thereof being repaid (together with accrued
and unpaid interest).
All questions regarding the validity, eligibility (including time of
receipt) and acceptance of any Debenture for repayment will be determined
by the Company, whose determination will be final and binding.
As long as the Debentures are represented by a Global Security,
the Depositary's nominee will be the holder of the Debentures and
therefore will be the only entity that can exercise a right to repayment.
Notice by the Depositary's participating organizations (the "Participants")
or indirect participants or by owners of beneficial interests in a Global
Security held through such Participants or indirect participants of the
exercise of the option to elect repayment of beneficial interests in
Debentures represented by a Global Security must be transmitted to the
Depositary in accordance with its procedures on a form required by the
Depositary and provided to Participants. In order to ensure that the
Depositary's nominee will timely exercise a right to repayment with respect
to a particular Debenture, the beneficial owner of such Debenture must
instruct the broker or other Participant or indirect participant through
which it holds an interest in such Debenture to notify the Depositary of its
desire to exercise a right to repayment. Different firms have different
cut-off times for accepting instructions from their customers and, accordingly,
each beneficial owner should consult the broker or other Participant or
indirect participant through which it holds an interest in a Debenture in
order to ascertain the cut-off time by which such an instruction must be
given in order for timely notice to be delivered to the Depositary. The
Company will not be liable for any delay in delivery to the Paying Agent of
notices of the exercise of the option to elect repayment.
Book-Entry Securities
Except as otherwise provided in this Prospectus Supplement or the
Indenture, the Debentures will be represented by one or more global
securities ("Global Securities") held in book-entry form. The Global
Security representing the Debentures will be deposited with, or on behalf
of, The Depository Trust Company ("DTC"), or other successor
depository appointed by the Company (DTC or such other depository is
herein referred to as the "Depository") and registered in the name of the
Depository or its nominee. Unless otherwise provided in this Prospectus
Supplement or the Indenture, Debentures will not be issued in definitive
form.
DTC has advised the Company that DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Participants which have
accounts directly with DTC ("Direct Participants") include securities
brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations. DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc. and the National Association of Securities Dealers,
Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The Rules applicable
to DTC and its Participants are on file with the Securities and Exchange
Commission.
Upon the issuance by the Company of the Debentures represented
by a Global Security, purchases of the Debentures under the DTC system
must be made by or through Direct Participants, which will receive a credit
for the Debentures on DTC's records. The ownership interest of each
actual purchaser of each Debenture ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from DTC of their purchase,
but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the Direct or Indirect Participant through which the
Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Debentures are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests
in the Debentures, except in the event that use of the book-entry system
for the Debentures is discontinued. The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to
transfer beneficial interests in the Global Security.
<PAGE>
So long as the Depository for the Global Security, or its nominee,
is the registered owner of the Global Security, the Depository or its
nominee, as the case may be, will be considered the sole owner or holder
of the Debentures represented by such Global Security for all purposes
under the Indenture. Except as provided below, owners of beneficial
interest in the Debentures represented by the Global Security will not be
entitled to have Debentures represented by such Global Security registered
in their names, will not receive or be entitled to receive physical delivery of
the Debentures in definitive form and will not be considered the owners or
holders thereof under the applicable Indenture.
To facilitate subsequent transfers, all Debentures deposited by
Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of the Debentures with DTC and their
registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the
Debentures. DTC's records reflect only the identity of the Direct
Participants to whose accounts such Debentures are credited, which may
or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their
customers. Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to
Debentures. The Company has been advised that under its usual
procedures, DTC mails an Omnibus Proxy to the issuer as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights, to the extent such may exist, to those Direct
Participants to whose accounts the Debentures are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Payments of principal and interest, if any, on the Debentures
represented by the Global Security registered in the name of DTC or its
nominee will be made by the Company though the Trustee under the
Indenture or a paying agent (the "Paying Agent"), which may also be the
Trustee under the Indenture, to DTC or its nominee, as the case may be,
as the registered owner of the Global Security. None of the Company, the
Trustee, any Paying Agent or the Underwriters will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Global Security
representing any Debentures or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company has been advised that DTC, upon receipt of any
payment of principal and interest in respect of a Global Security, will credit
Direct Participants' accounts on the payable date in accordance with their
respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payment on the payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as is the case with securities held for the
accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participants and not of DTC, the Paying
Agent, or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal
and interest to DTC is the responsibility of the Company or the Paying
Agent, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
If the Depository with respect to a Global Security is at any time
unwilling or unable to continue as Depository and a successor Depository
is not appointed by the Company within 90 days, the Company will issue
certificated notes in exchange for the Debentures represented by such
Global Security.
The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the
Company believes to be reliable, but the Company takes no responsibility
for the accuracy thereof.
Same-Day Settlement and Payment
Settlement for the Debentures will be made by the Underwriters in
immediately available funds. All payments of principal and interest will be
made by the Company in immediately available funds.
The Debentures will trade in the Depositary's Same-Day Funds
Settlement System until maturity, and secondary market trading activity in
the Debentures will therefore be required by the Depositary to settle in
immediately available funds. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading activity in the
Debentures.
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Distribution
Agreement and Terms Agreement, the Company has agreed to sell to each
of the Underwriters named below, and each of the Underwriters has
severally agreed to purchase from the Company, the principal amounts of
the Debentures set forth opposite its name below.
Principal
Amount
Underwriter of Debentures
----------- -------------
Lehman Brothers Inc. $ 67,500,000
Merrill Lynch, Pierce,
Fenner & Smith Incorporated 67,500,000
Chase Securities Inc. 5,000,000
First Chicago Capital Markets, Inc. 5,000,000
RBC Dominion Securities Corporation 5,000,000
-----------
Total $150,000,000
The Distribution Agreement and the Terms Agreement provide
that the obligations of the Underwriters are subject to certain conditions
precedent and that the Underwriters will be obligated to purchase all of the
Debentures if any are purchased.
The Underwriters have advised the Company that they propose
initially to offer the Debentures to the public at the public offering price set
forth on the cover page of this Prospectus Supplement, and to certain
dealers at such price less a concession not in excess of 0.40% of the
principal amount of the Debentures. The Underwriters may allow, and
such dealers may reallow, a discount not in excess of 0.25% of the principal
amount of the Debentures to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be
changed.
The Company does not intend to list the Debentures on any
securities exchange or on the NASDAQ National Market System. The
Company has been advised by Lehman Brothers Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated that they presently intend to make a
market in the Debentures; however, they are not obligated to do so, and
market making with respect to the Debentures may be discontinued at any
time without notice. There can be no assurance that an active public
market for the Debentures will develop.
The Company has agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribute to payments the Underwriters may be required
to make in respect of such liabilities.
The proceeds of the offering may be used to repay debts owed to
affiliates of the following underwriters: Chase Securities Inc., First
Chicago Capital Markets, Inc. and RBC Dominion Securities Corporation.
Each of Lehman Brothers Inc. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated have provided from time to time, and expect to
provide in the future, financial advisory and investment banking services to
the Company and its affiliates, for which such Underwriters have received
and will receive customary fees and commissions.
VALIDITY OF SECURITIES
The validity of the Debentures will be passed upon for the
Company by K. Thor Lundgren, General Counsel to the Company, and
Eric B. Fonstad, Associate General Counsel to the Company, and for the
Underwriters by Mayer, Brown & Platt, Chicago, Illinois, which may rely
on the opinion of K. Thor Lundgren or Eric B. Fonstad as to matters of
Wisconsin law.
<PAGE>
PROSPECTUS
$200,000,000
Harnischfeger Industries, Inc.
Debt Securities
Harnischfeger Industries, Inc. ("Harnischfeger Industries" or the
"Company") directly, through agents designated from time to time, or
through dealers or underwriters also to be designated, may sell from time
to time up to $200,000,000 aggregate principal amount of its debt
securities (the "Securities") in one or more series in amounts, at prices and
upon terms to be determined at the time of sale (or, if issued at an original
issue discount, such greater principal amount as shall result in an aggregate
initial offering price of up to $200,000,000). The specific designation,
aggregate principal amount, maturities, rate (or method of calculation) and
time of payment of interest, purchase price, any terms for redemption or
sinking fund provisions and the agents, dealers or underwriters, if any, in
connection with the sale of the Securities in respect of which this
Prospectus is being delivered and other terms of the Securities are set forth
in the accompanying Prospectus Supplement ("Prospectus Supplement").
The Company reserves the sole right to accept and, together with its
agents from time to time, to reject in whole or in part any proposed
purchase of Securities to be made directly or through agents.
If an agent of the Company or a dealer or underwriter is involved
in the sale of the Securities in respect of which this Prospectus is being
delivered, the agent's commission, dealer's purchase price, or underwriter's
discount will be set forth in, or may be calculated from, the Prospectus
Supplement and the net proceeds to the Company from such sale will be
the purchase price of such Securities less such commission in the case of
any agent, the purchase price of such Securities in the case of a dealer, or
the public offering price less such discount in the case of an underwriter
and less, in each case, the other attributable issuance expenses. The
aggregate proceeds to the Company from all the Securities will be the
purchase price of Securities sold less the aggregate of agents' commissions
and underwriters' discounts and other expenses of issuance and
distribution. See "Plan of Distribution" for possible indemnification
arrangements for the agents, dealers and underwriters.
--------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
--------------------------------------------------
The date of this Prospectus is April 17, 1996
<PAGE>
No person is authorized to give any information or to make any
representations other than those contained in this Prospectus, the
Prospectus Supplement or any Pricing Supplement and, if given or made
such information or representation must not be relied upon as having been
authorized. This Prospectus, the Prospectus Supplement and any Pricing
Supplement do not constitute an offer to sell or a solicitation of any offer
to buy any securities other than the securities offered by this Prospectus,
the Prospectus Supplement and any Pricing Supplement or an offer to sell
or a solicitation of an offer to buy such securities in any jurisdiction to any
person to whom it is unlawful to make such offer or solicitation in such
jurisdiction. Neither the delivery of this Prospectus, the Prospectus
Supplement or any Pricing Supplement nor any sale made thereunder shall,
under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date of this Prospectus, the
Prospectus Supplement or any Pricing Supplement, or that the information
herein or therein is correct as of any time since such date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information
filed by the Company with the Commission can be inspected, and copies
may be obtained, at the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C 20549, at prescribed rates, as well as
at the following Regional Offices of the Commission: 7 World Trade
Center, Suite 1300, New York, New York 10048; and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60611. Reports, proxy statements
and other information concerning the Company can also be inspected at
the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005, and the Pacific Stock Exchange, Inc., 233 South
Beaudry Street, Los Angeles, California 90012 and 301 Pine Street, San
Francisco, California 94014.
The Company has filed with the Commission a Registration
Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), covering the
Securities. This Prospectus and the accompanying Prospectus Supplement
do not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules
and regulations of the Commission. For further information, reference is
hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended
October 31, 1995, the Company's Current Reports on Form 8-K dated
December 4 (two reports) and December 8, 1995 and the Company's
Quarterly Report on Form 10-Q for the quarter ended January 31, 1996,
each of which has been filed by the Company with the Commission
pursuant to the Exchange Act (File No. 1-9299), are incorporated herein
by reference.
All documents filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus and prior to the termination of the offering of
the Securities shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference in this Prospectus
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
<PAGE>
The Company will provide without charge to each person, including
any beneficial owner to whom this Prospectus is delivered, upon written or
oral request of such person, a copy of any document incorporated by
reference in this Prospectus, other than exhibits to any such document not
specifically incorporated by reference into the text of such document.
Requests for such documents should be directed to Harnischfeger
Industries, Inc. at its principal executive offices, 13400 Bishops Lane,
Brookfield, Wisconsin 53005, Attention: Corporate Secretary (Telephone
Number (414) 671-4400).
THE COMPANY
Harnischfeger Industries is a holding company for subsidiaries
involved in the worldwide manufacture and distribution of papermaking
machinery (Beloit Corporation); surface mining equipment (P&H (R)
Mining Equipment); material handling equipment (P&H Material
Handling); and underground mining equipment (Joy Mining Machinery).
In early fiscal 1996, the Company completed the acquisition of Dobson
Park Industries plc ("Dobson"), an industrial engineering group with
interests in underground mining equipment, industrial electronic control
systems, toys and plastics. Dobson's principal subsidiary, Longwall
International, is engaged in the manufacture, sale and service of mining
equipment for the international underground coal mining industry and has
been added to the Company's Mining Equipment Segment. In March,
1996, the Company completed its acquisition of Ingersoll-Rand Company's
Pulp Machinery Division ("IMPCO"). IMPCO produces process
technology and equipment for pulp production and has been added to the
Company's Papermaking Machinery and Systems Segment.
Harnischfeger Industries is the direct successor to a business begun
over 100 years ago which, at October 31, 1995, through its subsidiaries,
manufactures and markets products classified into three industry segments:
Papermaking Machinery and Systems, Mining Equipment, and Material
Handling Equipment.
PAPERMAKING MACHINERY AND SYSTEMS
The Papermaking Machinery and Systems Group is comprised of
the Company's 80% interest in Beloit Corporation ("Beloit"). Mitsubishi
Heavy Industries, Ltd. ("Mitsubishi") is the owner of the other 20%
interest in Beloit. The Company and Mitsubishi have entered into certain
agreements that provide Mitsubishi with the right to designate one of
Beloit's five directors. These agreements also place certain restrictions on
the transfer of Beloit stock. In the event of a change in control of the
Company, Mitsubishi has the right to sell its 20% interest back to the
Company for the greater of $60 million or the book value of its equity
interest.
Beloit is a leader in the design and manufacture of papermaking
machinery and related products used in the pulp and paper industries.
Beloit operates on a global basis with major manufacturing facilities in
seven countries and sales and service offices located throughout the world.
In addition, licensing arrangements exist with several major foreign
companies.
Beloit's activities are divided into the following categories:
complete installations involving the design, manufacture and installation of
integrated papermaking equipment and systems; major rebuilds and
servicing of existing systems; and the sale of ancillary equipment and
replacement parts. This machinery is custom designed to meet the specific
needs of each customer. In 1995, Beloit expanded its service business
through the acquisition of the roll-covering business of Rollin, S.A., a roll
service and repair company located in France.
Beloit is known for the quality and dependability of its products
and is a leader in product innovation and development. Beloit has made a
continuous commitment to research and development activities, and has
been granted numerous patents on its designs. Beloit systems and
equipment are used by a substantial number of paper producers, both
domestic and international.
<PAGE>
A major factor in Beloit's success in the paper machinery industry
has been its international manufacturing operations. Beloit's overseas
facilities have been used to support both domestic and international sales
and have provided Beloit with the flexibility to shift its manufacturing to
more favorable locations as appropriate. Beloit's manufacturing facilities
are supported by a domestic and international marketing network staffed
by experienced sales engineers.
Formerly, the Papermaking Machinery and Systems Group also
included the Company's 20% interest in Measurex Corporation
("Measurex"). On December 29, 1994, Measurex repurchased 2,026,900
shares of its stock which had been held by the Company. On June 23,
1995, Measurex Corporation repurchased the Company's remaining
1,613,100 shares of Measurex stock. These transactions resulted in a gain
of $29.7 million. Measurex continues to have cooperative agreements
with Beloit.
In March, 1996, Ingersoll-Rand Company's Pulp Machinery
Division ("IMPCO") was acquired and added to the Company's
Papermaking Machinery and Systems Group. IMPCO produces process
technology and equipment for pulp production.
MINING EQUIPMENT
P&H Mining Equipment is the world's largest producer of electric
mining shovels and is a significant producer of electric and diesel-electric
crawler and walking draglines, hydraulic mining excavators, blasthole
drills, and electric shovel, dredge and dragline bucket products. Electric
mining shovels range in capacity from 18 to 80 cubic yards, crawler
draglines from 10 to 20 cubic yards, and hydraulic mining excavators from
12 to 27 cubic yards. Capacities for walking draglines range from 20 to
150 cubic yards. Blasthole drills have drilling diameters ranging from 9 to
22 inches and bit load capacities from 70,000 to 150,000 pounds.
The products of P&H Mining Equipment are used in mines,
quarries and earth-moving operations in the digging and loading of such
minerals and other ores as coal, copper, gold, iron ore, lead, zinc, bauxite,
uranium, phosphate, stone and clay.
P&H Mining Equipment has a relationship in the mining shovel
business with Kobe Steel, Ltd. ("Kobe") pursuant to which P&H Mining
Equipment licenses Kobe to manufacture certain electric mining shovels
and related replacement parts in Japan. Harnischfeger Corporation, a
subsidiary of the Company, has the exclusive right to market
Kobe-manufactured mining shovels and parts outside Japan (except in the
case of certain government sales). In addition, Harnischfeger Corporation
is party to an agreement, through 1996, with a corporate unit of the
People's Republic of China, licensing the manufacture and sale of two
models of electric mining shovels and related components. This
relationship provides P&H Mining Equipment with an opportunity to sell
component parts for shovels built in China.
In November 1994, pursuant to an exchange of common stock,
the Company acquired Joy Technologies Inc. ("JOY" or "Joy Mining
Machinery"), a world leader in underground mining equipment. JOY
manufactures and services mining equipment for the underground
extraction of coal and other bedded deposits and has facilities in Australia,
South Africa, the United Kingdom and the United States, as well as sales
offices in Poland and the People's Republic of China. Joy Mining
Machinery designs, manufactures and distributes continuous miners, entry
drivers and sump shearers; long-wall shearers; shuttle cars; and continuous
haulage systems for use in underground mining. JOY products are not
sold into the general construction industry, and demand for them is not
tied to cycles in that industry. JOY also maintains an extensive network of
service and parts distribution centers strategically located in major
underground mining regions to rebuild and service equipment and sell
parts in support of its installed base. The financial position and results of
operations of Harnischfeger Industries and JOY were combined
retroactively in fiscal 1995.
<PAGE>
In early fiscal 1996, the Company completed the acquisition of
Dobson Park Industries plc for a purchase price of approximately $330
million including acquisition costs. Dobson, headquartered in the
United Kingdom, is an industrial engineering group with interests in
underground mining equipment, industrial electronic control systems,
toys and plastics. Longwall International ("Longwall"), one of the
main subsidiaries of Dobson, is engaged in the manufacture, sale and
service of underground mining equipment for the international coal
mining industry. Its products include electronically controlled roof
support systems, armored face conveyors, pumps and belt
conveyor components and systems. Longwall will enable JOY to offer
integrated underground longwall mining systems to the worldwide mining
industry. The industrial electronic and toys/plastics businesses are held for
sale and are separately classified as such on the Consolidated Balance
Sheet incorporated herein by reference to the Company's Quarterly Report
on Form 10-Q for the quarter ended January 31, 1996. These businesses
have been valued at $100 million and are expected to be sold within one
year. This estimate is based on recent valuations and expected operating
results during the disposal period.
Financial information with respect to the acquisition of Dobson is
presented in Note 17 to the Consolidated Financial Statements contained
in the Company's Current Report on Form 8-K dated December 8, 1995,
and in the Company's Current Reports on Form 8-K dated December 4,
1995 (two reports). See "Incorporation of Certain Documents by
Reference."
MATERIAL HANDLING
Material Handling produces lines of through-the-air material
handling equipment designed for a variety of users, as well as container
handling cranes for use in ports, and is comprised of five business groups:
P&H Equipment, P&H Aftermarket, P&H Distribution and Service,
Morris - Engineered Products Division and Morris - Standard Products
Division.
P&H Equipment
P&H Equipment is comprised of the overhead crane and hoist
product lines in the United States. It was formed from the core of what
made up the Material Handling Equipment Division in prior years.
The new crane portion of the group is comprised of several
product lines: engineered cranes, standard cranes, portal cranes and crane
components. Cranes manufactured by P&H Equipment are designed for
installation in a wide range of industrial settings and engineered to the
customer's specifications, using standard components wherever possible.
Engineered cranes are marketed for moderate to severe duty cycle
applications in capacities from 3 to 800 tons.
Standard overhead cranes are available in capacities from 5 to 100
tons. Stacker cranes, ranging in capacities from 2 to 50 tons, are
particularly suitable for factory automation projects. Portal cranes range
in lifting capacities from 5 to 100 tons and are used outdoors in woodyard,
scrap, and container handling applications.
The component products portion of this group consists of electric
wire rope and chain hoists, manual chain hoists, ratchet lever hoists, and
electrical products. Hoists range in capacities from 1/8 ton to 60 tons and
use state-of-the-art materials and manufacturing techniques and feature a
wide variety of controls.
P&H Aftermarket
The P&H Aftermarket Group consists of: Product Support, which
markets repair parts, and PHoenix(TM), which handles pre-owned and
remanufactured cranes and parts.
<PAGE>
The Product Support portion of the Aftermarket Group markets
replacement products and parts through Material Handling Centers,
both independent and company owned, in domestic markets and through
licensees or agents in international markets.
The PHoenix portion of the P&H Aftermarket Group markets pre-owned
cranes which have been remanufactured and modernized to meet
customer requirements. It also markets pre-owned parts. PHoenix also
provides engineering services for the revitalization of crane and runway
systems. It's products are marketed directly and through independent and
company owned Material Handling Centers.
P&H Distribution and Service
This group provides installation, erection and repair and
maintenance services under the ProCare(R) trademark through a network
of company owned Material Handling Centers.
Morris - Engineered Products Division
The Morris - Engineered Products Division is the larger portion of
the Morris Mechanical Handling business based in the United Kingdom. It
manufactures special purpose heavy lifting equipment, principally
container handling cranes. In addition, its operations in South Africa are
involved in the manufacture and service of cranes and other lifting
equipment. Its United Kingdom Crane Service Division distributes and
services overhead lifting equipment throughout the United Kingdom.
Morris - Standard Products Division
The Morris - Standard Products Division manufactures hoists,
cranes, linear motors, and controls. The Hoist Division manufactures
electric wire rope hoists and both electric and hand chain hoists. The
Industrial Cranes Division manufactures electric overhead cranes to
standardized designs. Linear Motors manufactures crane and general
industrial controls and linear motors for special and general applications.
A recently acquired operation in Singapore provides a base for distribution
of standard products in that region.
DISCONTINUED SEGMENTS
The Company completed the sale of Joy Environmental
Technologies ("JET") in the first quarter of fiscal 1996. JET has been
presented as a discontinued operation in the Company's Consolidated
Financial Statements. JET supplies flue gas desulfurization systems for
reducing smokestack emissions and designs, fabricates, and installs
systems for the collection and removal of ash from coal burning boilers.
USE OF PROCEEDS
Except as may be set forth in the Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities
for general corporate purposes, including, without limitation, the
repayment of indebtedness, the financing of its operations, the financing of
capital expenditures, the acquisition of equity securities of the Company
and possible business investments and acquisitions. Pending such
applications, the net proceeds will be temporarily invested in marketable
securities.
SELECTED FINANCIAL DATA
(dollars in thousands except per share amounts)
The following selected financial data at and for the fiscal years
ended October 31, 1995, 1994, 1993, 1992 and 1991 has been derived
from the Company's consolidated financial statements audited by Price
Waterhouse LLP, independent accountants. The following selected
financial data at and for the three months ended January 31, 1996 and
January 31, 1995 is unaudited. The following selected financial data
should be read in conjunction with, and is qualified in its entirety by, the
<PAGE>
related financial statements and notes thereto which
have been incorporated in this Prospectus by reference.
<TABLE>
<CAPTION>
Three Months Ended
(Unaudited) Fiscal Year Ended October 31
--------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C>
STATEMENT OF
INCOME DATA: 1/31/96 1/31/95 1995 1994 1993
------- ------- ---- ---- ----
Revenues
Net Sales $ 632,684 $ 449,369 $2,152,079 $1,551,728 $1,409,204
Other income 10,882 9,256 61,865 23,301 9,040
----------- ---------- ---------- ---------- ----------
643,566 458,625 2,213,944 1,575,029 1,418,244
Cost of Sales 491,532 351,623 1,671,932 1,195,851 1,083,846
Product
Development,
Selling and
Administrative
Expenses 98,856 72,862 330,990 279,016 259,831
Restructuring
Charges - - - - 67,000
Nonnrecurring Charge - - - - 8,000
----------- --------- ---------- ---------- ----------
Operating Income
(Loss) 53,178 34,140 211,022 100,162 (433)
Interest Expense
- Net (13,237) (11,492) (40,713) (47,366) (48,313)
---------- ---------- ----------- ----------- ---------
Income (Loss)
before JOY
Merger Costs,
Provision
(Credit) for
Income Taxes
and Minority
Interest 39,941 22,648 170,309 52,796 (48,746)
JOY Merger Costs - (17,459) (17,459) - -
Provision (Credit)
for Income
Taxes (including
credit for
$6,075 relating
to JOY
merger costs) 14,375 1,850 53,500 13,979 (16,497)
Minority Interest (2,375) (146) (7,230) (2,224) 4,799
---------- ---------- ---------- ---------- ---------
Income (Loss) From
Continuing Operations
(after deducting
$11,384, net of
applicable income
taxes, related to
JOY merger costs) 23,191 3,193 92,120 36,593 27,450)
Income (Loss) from
and (Net Loss)
on Sale of
Discontinued
Operations,
net of
applicable
income taxes - (22,634) (31,235) (3,982) 7,760
Extraordinary
Loss on
Retirement of
Debt, net of
applicable income
taxes - (3,481) (3,481) (4,827) -
Cumulative Effect of
Accounting
Change, net of
applicable income
taxes and minority
interest - - - (81,696) -
--------- ---------- ---------- -------- ------
Net Income (Loss)
before Preferred
Stock Dividend
Requirements 23,191 (22,922) 57,404 (53,912) (19,690)
Preferred Stock
Dividend
Requirements - - - - -
---------- ---------- ---------- --------- -------
Net Income (Loss)
applicable
to Common
Shareholders $ 23,191 $ (22,922) $ 57,404 $ (53,912) $ (19,690)
----------- ---------- ---------- --------- ----------
----------- ---------- ---------- --------- ----------
Earnings (Loss)
per Share
Income (loss)
from continuing
operations
(After deducting
$0.24 per share
related to JOY
Merger Costs) $ 0.50 $ 0.07 $ 1.99 $ 0.84 $ (0.62)
Income (loss)
from and (net loss)
on sale of
discontinued
operations - (0.49) (0.67) (0.09) 0.18
Extraordinary
loss on
retirement of
debt - (0.08) (0.08) (0.11) -
Cumulative effect
of accounting
change - - - (1.87) -
----------- ---------- ----------- ---------- ---------
Net Income (Loss)
Per Common
Share $ 0.50 $ (0.50) $ 1.24 $ (1.23) $ (0.44)
------------ ----------- ------------ ----------- ---------
------------ ----------- ------------ ----------- ---------
BALANCE SHEET DATA
Total assets 2,532,324 1,894,782 2,040,767 1,981,953 1,908,250
Working capital 377,841 397,090 490,087 431,325 375,236
Long-term
obligations (1) 621,128 467,291 462,991 571,054 559,852
Shareholders'
equity 582,687 480,679 559,276 502,365 511,169
Debt to
capitalization
ratio (2) 49.6% 43.1% 38.3% 44.9% 48.9%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Fiscal Year Ended October 31
----------------------------------------------
<S> <C> <C>
STATEMENT OF
INCOME DATA: 1992 1991
-------------- -------------
Revenues
Net Sales $1,594,192 $1,863,703
Other income 18,571 20,468
---------- ------------
1,612,763 1,884,171
Cost of Sales 1,179,904 1,420,176
Product Development,
Selling and
Administrative
Expenses 267,568 269,313
Restructuring Charges - -
Nonrecurring Charge - -
---------- ------------
Operating Income
(Loss) 165,291 194,682
Interest Expense
- - Net (53,216) (42,190)
----------- -------------
Income (Loss)
before JOY
Merger Costs,
Provision
(Credit) for
Income Taxes
and Minority
Interest 112,075 152,492
JOY Merger Costs - -
Provision (Credit)
for Income
Taxes (including
credit for
$6,075 relating
to JOY
merger costs) 42,634 52,781
Minority Interest (9,277) (15,509)
----------- ------------
Income (Loss) From
Continuing Operations
(after deducting
$11,384, net of
applicable income
taxes, related to
JOY merger costs) 60,164 84,202
Income (Loss) from
and (Net Loss)
on Sale of
Discontinued
Operations,
net of applicable
income taxes 9,465 7,568
Extraordinary Loss
on Retirement of
Debt, net of
applicable income
taxes (22,816) -
Cumulative Effect
of Accounting
Change, net of
applicable income
taxes and minority
interest - -
--------- ---------
Net Income (Loss)
before Preferred
Stock Dividend
Requirements 46,813 91,770
Preferred Stock
Dividend
Requirements (1) (10,866) (11,804)
----------- ----------
Net Income (Loss)
applicable
to Common
Shareholders $ 35,947 $ 79,966
------------ -----------
------------ -----------
Earnings (Loss)
per Share
Income (loss)
from continuing
operations (After
deducting
$0.24 per share
related to JOY
Merger Costs) $ 1.17 $ 1.72
Income (loss)
from and (net loss)
on sale of
discontinued
operations 0.23 0.18
Extraordinary loss
on retirement of
debt (0.54) -
Cumulative effect
of accounting
change - -
------------ ------------
Net Income (Loss)
Per Common
Share $ 0.86 $ 1.90
------------ ------------
------------ ------------
BALANCE SHEET DATA
Total assets 2,109,605 2,135,627
Working capital 572,751 536,301
Long-term
obligations (1) 608,301 540,741
Shareholders' equity 610,072 492,924
Debt to capitalization
ratio (2) 48.0% 51.9%
</TABLE>
(refer to notes on following page)
<PAGE>
(1) Includes amounts classified as current liabilities.
(2) The debt to capitalization ratio is defined as the sum of short-term
notes payable, long-term debt (including current portion) and
capitalized lease obligations divided by the sum of short-term notes
payable, long-term debt (including current portion) and capitalized
lease obligations, after tax liability for postretirement benefits,
minority interest and shareholders' equity, excluding the Stock
Employee Compensation Trust ("SECT").
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the Company is defined as
income from continuing operations before provision (credit) for income
taxes and minority interest plus interest expense (including amortization of
debt issuance expense), the portion of rental expense which represents
interest (deemed to be one-third of rentals) and dividends received on
less-than-fifty-percent-owned companies, reduced (increased) by equity income
(loss) recorded on less-than-fifty-percent-owned companies, divided by
fixed charges. Fixed charges include interest expense (including
amortization of debt issuance expense),the portion of rental expense which
represents interest and the preferred dividend requirements, if any.
Three Months Ended Fiscal Years Ended October 31,
------------------- ---------------------------------
1/31/96 1/31/95 1995 1994 1993 1992 1991
Ratio of Earnings
to Fixed Charges: 3.26 1.33 3.60 1.87 - (1) 2.05 2.40
(1) Earnings did not cover fixed charges by $47,437 in 1993.
DESCRIPTION OF SECURITIES
The following descriptions set forth certain general terms and
provisions of the Securities to which any Prospectus Supplement may
relate. The particular terms and provisions of the series of Securities
offered by a Prospectus Supplement, and the extent to which such general
terms and provisions described below may apply thereto, will be described
in the Prospectus Supplement relating to such series of Securities.
The Securities are to be issued in one or more series under an
Indenture dated as of March 1, 1992, as supplemented by a First
Supplemental Indenture dated as of June 12, 1992 (collectively, the
"Indenture'), between the Company and First Trust of Illinois, National
Association (successor to Continental Bank, National Association), as
Trustee (the "Trustee"). The following summaries of certain provisions of
the Securities and the Indenture do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all provisions
of the Indenture, including the definition therein of certain terms.
Particular sections of the Indenture which are relevant to the discussion are
cited parenthetically. Wherever particular sections or defined terms of the
Indenture are referred to, it is intended that such sections or defined terms
shall be incorporated herein by reference.
General
The Indenture does not limit the amount of Securities which can be
issued thereunder or the amount or type of debt securities which may
otherwise be issued by the Company and additional debt securities may,
without the consent of the holders of outstanding Securities, be issued
under the Indenture up to the aggregate principal amount which may be
authorized from time to time by, or pursuant to a resolution of, the
Company's Board of Directors or by a supplemental indenture. At January
31, 1996, the aggregate principal amount of Securities
<PAGE>
outstanding under the Indenture was $300,000,000. Reference is made
to the Prospectus Supplement for the following terms, if applicable,
of the particular series of Securities being offered thereby: (1)
the title of the Securities of the series; (2) any limit upon the
aggregate principal amount of the Securities of the series; (3)
whether the Securities of the series will be issuable in registered
or bearer form or both, any restrictions applicable to the offer,
sale or delivery of Securities in bearer form ("bearer Securities")
and whether and the terms upon which bearer Securities will
be exchangeable for Securities in registered form ("registered Securities")
and vice versa; (4) the date as of which any bearer Securities of the series
and any temporary global Security shall be dated if other than the date of
issuance of the first Security of the series; (5) the method of paying interest
with respect to any portion of a temporary bearer Security in the form of a
global note; (6) the date or dates on which the principal of the Securities of
the series will be payable; (7) the rate or rates (or manner of calculation
thereof), if any, at which the Securities of the series will bear interest, the
date or dates from which any such interest will accrue and on which such
interest will be payable, and, with respect to Securities of the series in
registered form, the record date for the interest payable on any interest
payment date, whether and under what circumstances the Company will
pay additional amounts on the Securities of the series held by a person who
is not a U.S. person in respect of taxes or similar charges withheld or
deducted and, if so, whether the Company will have the option to redeem
such Securities rather than pay such additional amounts; (8) the place or
places where the principal of and interest or additional amounts, if any, on
the Securities of the series will be payable; (9) the period or periods within
which, the price or prices at which and the terms and conditions upon
which the Securities of the series may be redeemed at the option of the
Company; (10) any redemption or sinking fund provisions; (11) the
denominations in which Securities of the series shall be issuable; (12) if
other than the principal amount thereof, the portion of the principal amount
of Securities of the series which will be payable upon declaration of
acceleration of the maturity thereof; (13) the currencies in which payments
of interest, premium or principal are payable with respect to such
Securities; and (14) any additional provisions or other terms not
inconsistent with the provisions of the Indenture, including any terms which
may be required by or advisable under United States laws or regulations or
advisable in connection with the marketing of Securities of such series.
(Sections 3.1 and 3.2.) To the extent not described herein, principal and
interest, if any, will be payable, and the Securities of a particular series
will be transferable, in the manner described in the Prospectus Supplement
relating to such series. "Principal' when used herein includes, when
appropriate, the premium, if any, on the Securities.
Securities of any series may be issued as registered Securities or
bearer Securities or both as specified in the terms of the series.
Additionally, Securities of any series may be represented by one or more
global notes registered in the name of a depositary's nominee and, if so
represented, beneficial interests in such global note will be shown on, and
transfers thereof will be effected only through, records maintained by a
designated depositary and its participants. Unless otherwise indicated in
the Prospectus Supplement, registered Securities will be issued in the
denomination of $1,000 and integral multiples thereof and bearer Securities
will be issued in the denomination of $5,000 and integral multiples thereof.
If appropriate, federal income tax consequences applicable to a
series of Securities will be described in the Prospectus Supplement relating
thereto.
Exchange of Securities
Registered Securities may be exchanged for an equal aggregate
principal amount of registered Securities of the same series and date of
maturity in such authorized denominations as may be requested upon
surrender of the registered Securities at an agency of the Company
maintained for such purpose and upon fulfillment of all other requirements
of such agent. (Section 3.5.)
To the extent permitted by the terms of a series of Securities
authorized to be issued in registered form
<PAGE>
and bearer form, bearer Securities may be exchanged for an equal
aggregate principal amount of registered or bearer Securities of
the same series and date of maturity in such authorized
denominations as may be requested upon surrender of the bearer Securities
with all unpaid coupons relating thereto at an agency of the Company
maintained for such purpose and upon fulfillment of all other requirements
of such agent. (Section 3.5.)
Limitation Upon Liens
The Indenture provides that the Company will not, and will not
permit any Restricted Subsidiary (as defined below) to create, incur, issue,
assume or guarantee any indebtedness for borrowed money
("indebtedness") secured by a mortgage, security interest, pledge or lien
(each a "Lien") of or upon any Principal Manufacturing Property (as
defined below), or any shares of capital stock or indebtedness of any
Restricted Subsidiary (as defined below), whether owned at the date of the
Indenture or thereafter acquired, without effectively providing that the
Notes and any other Securities issued under the Indenture shall be secured
by such Lien equally and ratably with (or, at the option of the Company,
prior to) such indebtedness, so long as such indebtedness shall be so
secured. The foregoing restrictions, however, shall not apply to (i) taxes,
assessments or governmental charges which are not yet delinquent, or are
being diligently contested in good faith and by appropriate proceedings; (ii)
governmental Liens or Liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and vendors' liens for sums not
yet due or which are being diligently contested in good faith and by
appropriate proceedings; (iii) existing Liens; (iv) any Lien on any property
acquired, constructed or substantially improved by (or of or upon any
shares of capital stock or indebtedness acquired by) the Company or any
Restricted Subsidiary after the date of the Indenture and created
contemporaneously with or within twelve (12) months of such acquisition,
construction or improvement to secure or provide for all or a portion of the
purchase price of such property or for such construction or improvement;
(v) Liens in connection with industrial revenue bonds, pollution control
bonds or similar secured financings; (vi) performance of bids, tenders,
contracts (other than for the repayment of or in connection with borrowed
money), or for purposes of like general nature in the ordinary course of the
Company's business; (vii) Liens in favor of any customer to the extent
necessary to secure partial, progress, advance or other payments for goods
produced or services rendered to such customer in the ordinary course of
business; (viii) attachment, judgment and other similar Liens arising in
connection with court proceedings, provided the execution or other
enforcement of such Liens is effectively stayed within thirty (30) days after
the Company or a Restricted Subsidiary receives notice thereof and the
claims secured thereby are being actively contested in good faith by
appropriate proceedings and against which an adequate reserve has been
established; (ix) any Lien existing on the property, shares of stock or
indebtedness of a Person at the time such Person becomes a Restricted
Subsidiary of the Company or is merged into or consolidated with the
Company or a Restricted Subsidiary or at the time of a sale, lease or other
disposition of the properties of any Person as an entirety or substantially as
an entirety to the Company or a Restricted Subsidiary (whether or not such
Lien is assumed by the Company or a Restricted Subsidiary); (x) Liens on
the property of a Restricted Subsidiary to secure indebtedness for
borrowed money owed to the Company or another Subsidiary, (xi) in the
case of leased properties, the terms and conditions of leases or subleases
creating the leasehold estate and, in the case of all real properties, title
exceptions affecting the underlying fee simple estate; or (xii) Liens created
in connection with the extension or renewal of any secured indebtedness or
other obligations permitted under the terms of the Indenture.
Notwithstanding the restrictions outlined above, the Company or
any Restricted Subsidiary may, without equally and ratably securing the
Securities, issue, assume or guarantee indebtedness secured by a Lien not
excepted under clauses (i) through (xii) above, if the aggregate amount of
such indebtedness, together with all other indebtedness secured by Liens
not so excepted, does not at the time exceed 10% of Consolidated Net
Tangible Assets (as defined below).
<PAGE>
The term "Consolidated Net Tangible Assets" means, as of any
particular time, the total amount of assets (less applicable reserves)
after deducting therefrom (i) all current liabilities (excluding any
thereof which are by their terms extendible or renewable at the option
of the obligor thereon to a time more than twelve (12) months after
the time as of which the amount thereof is being computed and excluding
current maturities of long-term indebtedness), and (ii) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense
and other like intangible assets, all as shown in the audited
consolidated balance sheet of the Company and its Subsidiaries
contained in the Company's then most recent annual report to stockholders.
The term "Principal Manufacturing Property" means any
manufacturing plant (including fixtures and improvements but excluding
equipment, leases and other contract rights which might otherwise be
deemed real property) owned by the Company, or any Restricted
Subsidiary, whether owned on the date of the Indenture or thereafter,
provided each such plant has a gross book value (without deduction for
any depreciation reserves) at the date as of which the determination is
being made of in excess of two percent (2%) of Consolidated Net Tangible
Assets, other than any such plant or portion thereof which, in the opinion
of the Board of Directors (evidenced by a Board Resolution), is not of
material importance to the business conducted by the Company and its
Subsidiaries taken as a whole.
The term "Restricted Subsidiary" means each Subsidiary (i)
substantially all the property of which is located, or substantially all the
business of which is conducted, within the United States excluding its
territories and possessions, and (ii) which owns or leases a Principal
Manufacturing Property.
Additional Restrictive Covenants
Reference is made to the Prospectus Supplement relating to a
particular series of Securities for any additional restrictive covenants which
may relate to such series.
Amendment and Waiver
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented by the Company and the Trustee with the
written consent of the Holders of not less than 66-2/3% in principal amount
of the outstanding Securities of each series affected by the amendment or
supplement (with each series voting as a class) or compliance with any
provision may be waived with the consent of the Holders of a majority in
principal amount of the outstanding Securities of each series affected by
such waiver (with each series voting as a class). However, without the
consent of each Holder affected, an amendment or waiver may not, among
other things, (i) reduce the principal of or change the Stated Maturity of
any Security; (ii) reduce the rate of or change the time for payment of
interest on any Security; (iii) reduce any premium payable upon redemption
of any Security; (iv) change the place of payment where any Security or
any interest thereon is payable; (v) waive a default in the payment of the
principal of or interest on any Security (Section 5.13); (vi) make any
Security payable in money other than that stated in the Security; (vii)
impair the right to institute suit on or after the Stated Maturity Date of any
Security for the enforcement of any payment on or with respect to such
Security; or (viii) reduce the percentage in principal amount of Securities
whose Holders must consent to a supplemental indenture, amendment or
any waiver of compliance with certain provisions of the Indenture or
certain defaults thereunder and their consequence. (Section 9.2.) The
Indenture may be amended or supplemented without the consent of any
Holder, among other things, (i) to provide for the assumption of all the
obligations of the Company under the Securities and any coupons
appertaining thereto and under the Indenture by any corporation in
connection with a merger, consolidation, or transfer or lease of the
Company's property and assets substantially as an entirety, as provided for
in the Indenture; (ii) to add to the covenants of the Company, for the
benefits of the Holders of all or any series of Securities; (iii) to provide for
bearer Securities that are registrable as to principal or to change
<PAGE>
or eliminate in certain circumstances any restrictions on the payment
of principal (and interest in the case of bearer Securities)
on the Securities; (iv) to provide for uncertificated Securities in addition to
or in place of certificated Securities; (v) to make any change that does not
adversely affect the rights of any Holder of Securities; (vi) to provide for
the issuance of and establish the form and terms and conditions of a series
of Securities or to establish the form of any certifications required to be
furnished pursuant to the terms of the Indenture or any series of Securities;
(vii) to cure any ambiguity, defect or inconsistency in the Indenture or in
the Securities of any series; (viii) to evidence the appointment of a
successor Trustee; or (ix) to secure the Securities. (Section 9.1.)
Successor Entity
The Company may consolidate with, or merge into, or be merged
into, or transfer or lease its property and assets substantially as an entirety
to, any other corporation, if (i) the Company is the continuing corporation,
or the successor is a U.S. corporation which assumes all the obligations of
the Company under the Securities and any coupons appertaining thereto
and under the Indenture, and (ii) after giving effect thereto, no default
under the Indenture shall have occurred and be continuing. Thereafter,
except in the case of a lease, all such obligations of the Company shall
terminate. (Section 8.1 and Section 8.2.)
Defeasance, Satisfaction and Discharge of the Securities Prior to Maturity
Defeasance. Unless provided for otherwise in the applicable
Prospectus Supplement, if the Company shall deposit with the Trustee, in
trust, at or before maturity, lawful money or direct obligations of the
United States of America or obligations the principal of and interest on
which are guaranteed by the United States of America in such amounts and
maturing at such times that the proceeds of such obligations to be received
upon the respective maturities and interest payment dates of such
obligations will provide funds sufficient, in the opinion of a
nationally-recognized firm of independent public accountants chosen
by the Company, to pay when due the principal of and interest on the Securities
to maturity (such money or direct obligations of, or obligations guaranteed by,
the United States of America initially deposited or equivalent cash or
securities subsequently exchanged therefor, to be held as security for
the payment of such principal and interest), then the Company may omit
to comply with certain of the terms of the Indenture as they relate to the
Securities, including the restrictive covenants described herein under the
caption "Description of Securities-Limitation Upon Liens" and the Event of
Default described in clause (iv) under the caption "Description of
Securities-Events of Default." Defeasance of the Securities would be
subject to the satisfaction of certain conditions, including, among others,
(i) the absence of an Event of Default at the date of the deposit, (ii)
the perfection of the Holders' interest in such deposit and (iii) the
condition that such deposit would not result in a breach of a material
instrument by which the Company is bound. (Section 4.2.)
Satisfaction and Discharge. Upon the deposit of money or
securities contemplated above and the satisfaction of certain conditions, the
Company may omit to comply with its obligations duly and punctually to
pay the principal of and interest on the Securities, or with any Events of
Default with respect thereto, and thereafter the Holders of Securities shall
be entitled only to payment out of the money or securities deposited with
the Trustee. Such conditions may include, among others, (i) except in
certain limited circumstances involving a deposit made within one year of
maturity, (A) the absence of an Event of Default at the date of deposit or
on the 91st day thereafter, and (B) the delivery to the Trustee by the
Company of an opinion of nationally-recognized tax counsel to the effect
that Holders of Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and discharge and
will be subject to federal income tax on the same amounts and in the same
manner and at the same times as would have been the case if such deposit
and discharge had not occurred, and (ii) the receipt by the Company of an
opinion of counsel to the effect that such satisfaction
<PAGE>
and discharge will not result in a violation of the rules of any
nationally-recognized exchange on which the Securities are listed.
(Section 4.1.)
Events of Default
The following events are defined in the Indenture as "Events of
Default" with respect to a series of Securities: (i) default in the payment of
interest on any Security of such series which continues for 30 days; (ii)
failure by the Company for two business days after notice to it to pay the
principal of any Security of such series when due; (iii) failure by the
Company for two business days after notice to it to pay any sinking fund
installment required to be made by the Company with respect to any series
of Securities; (iv) failure by the Company for 60 days after notice to it to
comply with any of its other agreements with respect to the Securities of
such series in the Indenture or in any supplemental indenture under which
the Securities of that series may have been issued; (v) certain events of
bankruptcy or insolvency and (vi) acceleration of any indebtedness for
money borrowed by the Company or any Restricted Subsidiary in excess of
$10,000,000 in aggregate principal amount, if such acceleration is not
rescinded or annulled within 10 days after written notice has been provided
to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of outstanding
Securities. (Section 5.1.) If an Event of Default occurs with respect to the
Securities of any series and is continuing, the Trustee or the Holders of at
least 25% in principal amount of all of the outstanding Securities of that
series may declare the principal (or, if the Securities of that series are
original issue discount Securities, such portion of the principal amount as
may be specified in the terms of that series) of, and any accrued interest on,
all the Securities of that series to be due and payable. Upon such
declaration, such principal (or, in the case of original issue discount
Securities, such specified amount) and all accrued interest thereon shall be
due and payable immediately. (Section 5.2.)
Holders of Securities may not enforce the Indenture or the
Securities, except as provided in the Indenture. (Section 5.7.) The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or
the Securities. (Section 6.3(e).) Subject to certain limitations, Holders of
a majority in principal amount of the Securities of each series affected (with
each series voting as a class) may direct the Trustee in its exercise of any
trust power. (Section 5.12.) The Trustee may withhold from Holders
notice of any continuing default (except a default in payment of principal or
interest) if it determines in good faith that withholding notice is in their
interests. (Section 6.2.) The Company is not required under the Indenture
to furnish any periodic evidence as to the absence of default or as to
compliance with the terms of the Indenture.
BOOK-ENTRY ONLY SYSTEM
Securities of any series may be issued initially in the form of one or
more global securities under a book-entry only system operated by a
securities depository. Unless otherwise specified in the Prospectus
Supplement, The Depository Trust Company ("DTC") will act as securities
depository for Securities, which would be registered in the name of CEDE
& Co., as registered securityholder and nominee for DTC. Individual
purchases of Book-Entry Interests (as herein defined) in any such
Securities will be made in book-entry form. Purchasers of Book-Entry
Interests in such Securities will not receive certificates representing their
interests in such Securities. So long as CEDE & Co., as nominee of DTC,
is the security holder, references herein to holders of Securities or
registered owners will mean CEDE & Co., rather than the owners of
Book-Entry Interests in Securities.
DTC is a limited purpose trust company organized under the
banking laws of the State of New York and a "banking organization"
within the meaning of that law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered
<PAGE>
pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities deposited by its participants (the "DTC Participants")
and facilitates the settlement of securities transactions among DTC
Participants in such securities through electronic computerized
book-entry changes in accounts of the DTC Participants, thereby
eliminating the need for physical movement of securities certificates.
Direct DTC Participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations,
some of whom (including, possibly, the underwriters with respect to the
Securities), together with the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc., own DTC. Access to the DTC system is also available to
others such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a DTC Participant,
either directly or indirectly (the "Indirect Participants").
DTC Participants purchasing Book-Entry Interests (as defined
below) in any Securities will not receive certificates. Each DTC Participant
will receive a credit balance in the records of DTC in the amount of such
DTC Participant's interest in such Securities, which will be confirmed in
accordance with DTC's standard procedures. The ownership interest of
each actual purchaser of a Book-Entry Interest in a Security (the "Book-Entry
Interests") will be recorded through the records of the DTC
Participant or through the records of the Indirect Participant. Owners of
Book-Entry Interests should receive from the DTC Participant or Indirect
Participant a written confirmation of their purchase providing details of the
Book-Entry Interests acquired. Transfers of Book-Entry Interests will be
accomplished by book entries made by the DTC Participants or Indirect
Participants who act on behalf of the owners of Book-Entry Interests.
Owners of Book-Entry Interests will not receive certificates representing
their ownership of Book-Entry Interests with respect to any Securities
except as described below upon the resignation of DTC.
Under the Indenture, payments made by the Trustee to DTC or its
nominee will satisfy the Company's obligations under the Indenture, to the
extent of the payments so made. Owners of Book-Entry Interests will not
be or be considered by the Company or the Trustee to be, and will not have
any rights as, holders of Securities under the Indenture.
NEITHER THE COMPANY NOR THE TRUSTEE UNDER THE
INDENTURE WILL HAVE ANY RESPONSIBILITY OR
OBLIGATION TO ANY DTC PARTICIPANT, INDIRECT
PARTICIPANT OR ANY OWNER OF A BOOK-ENTRY INTEREST
OR ANY OTHER PERSON NOT SHOWN ON THE REGISTRATION
BOOKS OF THE TRUSTEE AS BEING A HOLDER OF SECURITIES
WITH RESPECT TO: (1) ANY SECURITIES; (2) THE ACCURACY
OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC
PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT
BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT
OF ANY AMOUNT DUE TO ANY OWNER OF A BOOK-ENTRY
INTEREST IN RESPECT OF THE PRINCIPAL OR REDEMPTION
PRICE OF OR INTEREST ON SUCH SECURITIES; (4) THE
DELIVERY BY DTC OR ANY DTC PARTICIPANT OR INDIRECT
PARTICIPANT OF ANY NOTICE TO ANY OWNER OF A BOOK-ENTRY
INTEREST WHICH IS REQUIRED OR PERMITTED UNDER
THE TERMS OF THE INDENTURE TO BE GIVEN TO HOLDERS OF
SECURITIES; (5) THE SELECTION OF THE OWNERS OF A
BOOK-ENTRY INTEREST TO RECEIVE PAYMENT IN THE EVENT OF
ANY PARTIAL REDEMPTION OF ANY SECURITIES; OR (6) ANY
CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC OR ITS
NOMINEE AS HOLDER OF SECURITIES.
Principal and redemption price of, and interest payments on,
Securities registered in the name of DTC or its nominee will be made to
DTC or such nominee, as registered owner of such Securities. DTC is
responsible for disbursing such payments to the appropriate DTC
Participants and such DTC Participants, and any Indirect Participants, are
in turn responsible for disbursing the same to the owners of Book-Entry
Interests. Unless it has
<PAGE>
reason to believe it will not receive payment, DTC's current practice
is to credit the accounts of the DTC Participants on
a payment date in accordance with their respective holdings shown on the
records of DTC. Payments by DTC Participants and Indirect Participants
to owners of Book-Entry Interests will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name",
and will be the responsibility of such DTC Participant or Indirect
Participant and not of DTC, the Company or the Trustee, subject to any
statutory and regulatory requirements as may be in effect from time to
time.
DTC Participants and Indirect Participants carry the "position" of
the ultimate Book-Entry Interest owner on their records, and will be
responsible for providing information to the ultimate Book-Entry Interest
owner as to the Securities in which the Book-Entry Interest is held, debt
service payments received, and other information. Each person for whom a
DTC Participant or Indirect Participant acquires an interest in Securities, as
nominee, may desire to make arrangements with such DTC Participant or
Indirect Participant to receive a credit balance in the records of such DTC
Participant or Indirect Participant, to have all notices of redemption or
other communications to or by DTC which may affect such persons
forwarded in writing by such DTC Participant or Indirect Participant, and
to have notification made of all debt service payments.
Purchases, transfers and sales of Book-Entry Interests by the
ultimate Book-Entry Interest owners may be made through book entries
made by DTC Participants or Indirect Participants or others who act for
the ultimate Book-Entry Interest owner. The Trustee, the Company and
the agents, dealers and underwriters, as such, have no role in those
purchases, transfers or sales.
Owners of Book-Entry Interests may be charged a sum sufficient to
cover any tax, fee, or other governmental charge that may be imposed in
relation to any transfer or exchange of a Book-Entry Interest.
The Trustee will recognize and treat DTC (or any successor
securities depository) or its nominee as the holder of Securities registered
in its name or the name of its nominee for all purposes, including payment
of debt service, notices, enforcement of remedies and voting. Under DTC's
current practice, a proxy will be given to the DTC Participants holding
Book-Entry Interests in Securities in connection with any matter on which
holders of such Securities are asked to vote or give their consent.
Crediting of debt service payments and transmittal of notices and other
communications by DTC to DTC Participants, by DTC Participants to
Indirect Participants and by DTC Participants and Indirect Participants to
the ultimate Book-Entry Interest owners are the responsibility of those
persons and will be handled by arrangements among them and are not the
responsibility of the Trustee, the Company or any agent, dealer or
underwriter, as such.
The Trustee, so long as a book-entry system is used for any series
of Securities, will send any notice of redemption and any other notices
required by the Indenture to be sent to holders of such Securities, only to
DTC (or such successor securities depository) or its nominee. Any failure
of DTC to advise any DTC Participant, or of any DTC Participant or
Indirect Participant to notify the Book-Entry Interest owner, of any such
notice and its content or effect will not affect the validity of the redemption
of the Securities called for redemption, or any other action premised on
that notice. In the event of a call for redemption, the Trustee's notification
to DTC will initiate DTC's standard call process, and, in the event of a
partial call, its lottery process by which the call will be randomly allocated
to DTC Participants holding positions in the Securities to be redeemed.
When DTC and DTC Participants allocate the call for redemption, the
owners of the Book-Entry Interests that have been called should be notified
by the broker or other person responsible for maintaining the records of
those interests and subsequently credited by that person with the proceeds
once such Securities are redeemed.
<PAGE>
The Company, the Trustee and any dealer, underwriter or agent
cannot and do not give any assurances that DTC, DTC Participants or
others will distribute payments of debt service on Securities made to DTC
or its nominee as the registered owner, or any redemption or other notices,
to the Book-Entry Interest owners, or that they will do so on a timely
basis, or that DTC will serve and act in the manner described in this
Prospectus.
The Company understands that the current "Rules" applicable to
DTC are on file with the Commission, and that the current "Procedures" of
DTC to be followed in dealing with DTC Participants are on file with DTC.
If DTC is at any time unwilling or unable to continue as depository, and
a successor depository is not appointed by the Company within 90 days,
the Company will issue individual certificates to owners of Book-Entry
Interests in exchange for the Securities held by DTC or its nominee. In
such instance, an owner of a Book-Entry Interest will be entitled to
physical delivery of certificates equal in principal amount to such Book-Entry
Interest and to have such certificates registered in its name.
Individual certificates so issued will be issued in denominations of $1,000
or any multiple thereof.
Neither the Company, the Trustee nor any dealer, agent or underwriter
makes any representation as to the accuracy of the above description of
DTC's business, organization and procedures, which is based upon
information furnished by DTC.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby: (i)
directly to purchasers, (ii) through agents, (iii) through underwriters, (iv)
through dealers or (v) through a combination of any such methods of sale.
The distribution of the Securities may be effected from time to time
in one or more transactions either: (i) at a fixed price or prices, which may
be changed, or (ii) at market prices prevailing at the time of sale, or (iii) at
prices related to such prevailing market prices, or (iv) at negotiated prices.
Offers to purchase Securities may be solicited directly by the
Company or by agents designated by the Company from time to time. Any
such agent, which may be deemed to be an underwriter as that term is
defined in the Securities Act, involved in the offer or sale of the Securities
in respect of which this Prospectus is delivered will be named, and any
commissions payable by the Company to such agent will be set forth, in the
Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a reasonable best efforts basis
for the period of its appointment.
If an underwriter or underwriters are used in the sale, the Company
will execute an underwriting agreement with such underwriters at the time
of sale to them and the names of the underwriters and the terms of the
transaction will be set forth in the Prospectus Supplement, which will be
used by the underwriters to make resales of the Securities in respect of
which this Prospectus is delivered to the public.
If a dealer is used in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to the
dealer as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale.
In the event the Securities are not listed on a national securities
exchange, certain broker-dealers may make a market in the Securities, but
will not be obligated to do so and may discontinue any market making at any
<PAGE>
time without notice. No assurance can be given that any broker-dealer
will make a market in the Securities or as to the liquidity of the trading
market for the Securities, whether or not the Securities are listed on a
national securities exchange. The Prospectus Supplement with respect to
the Securities will state, if known, whether or not any broker-dealer
intends to make a market in the Securities. If no such determination
has been made, the Prospectus Supplement will so state.
If so indicated in the Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers by certain
specified institutions to purchase Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in
the future. Such contracts will be subject only to those conditions set forth
in the Prospectus Supplement and the Prospectus Supplement will set forth
the commission payable for the solicitation of such contracts.
Underwriters, dealers, agents and other persons may be entitled,
under agreements which may be entered into with the Company, to
indemnification against certain civil liabilities, including liabilities
under the Securities Act. Agents, underwriters and dealers may be
customers of, engage in transactions with, or perform services for the
Company in the ordinary course of business.
The place and time of delivery for the Securities in respect of which
this Prospectus is delivered will be set forth in the accompanying
Prospectus Supplement.
LEGAL MATTERS
Unless otherwise indicated in the Prospectus Supplement, certain
legal matters in connection with the Securities offered hereby will be
passed upon for the Company by the General Counsel or Senior Corporate
Counsel to the Company. The General Counsel and Senior Corporate
Counsel are employees of the Company and owned as of January 31, 1996,
directly and beneficially, in the aggregate less that 0.3% of the Company's
common stock outstanding as of such date.
EXPERTS
The financial statements incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the year
ended October 31, 1995 and the Company's Current Report on Form 8-K
dated December 8, 1995 except as they relate to Joy Technologies Inc. for
the years ended February 25, 1994 and February 26, 1993, have been
audited by Price Waterhouse LLP, independent accountants, and, insofar as
they relate to Joy Technologies Inc. for the years ended February 24, 1994
and February 26, 1993, by Arthur Andersen LLP, independent accountants,
whose reports thereon are incorporated by reference herein. Such financial
statements of the Company, except for the financial statements of Joy
Technologies Inc. for each of the two years in the period ended February
25, 1994, have been so incorporated in reliance on the report of Price
Waterhouse LLP given on the authority of such firm as experts in auditing
and accounting.
The financial statements and schedules of Joy Technologies Inc. for
each of the two years in the period ended February 25, 1994 incorporated
by reference in this Prospectus and elsewhere in the Registration Statement
have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated herein in reliance upon the authority of that firm as experts in
accounting and auditing in giving said reports.
The financial statements of Dobson Park Industries plc
incorporated in this Prospectus by reference to
<PAGE>
the Company's Current Report on Form 8-K dated December 4, 1995, have
been so incorporated in reliance on the report of Price Waterhouse,
independent accountants given on the authority of said firm as experts
in auditing and accounting.
<PAGE>
No dealer, salesperson or other person has been authorized to give
any information or to make any representations not contained in this
Prospectus Supplement or the accompanying Prospectus, and, if given or
made, such information or representations must not be relied upon as
having been authorized by the Company or any of the Underwriters. This
Prospectus Supplement and the accompanying Prospectus do not
constitute an offer of any securities other than those described in this
Prospectus Supplement or an offer to sell, or a solicitation of an offer to
buy, to any person in any jurisdiction where such an offer or solicitation
would be unlawful. Neither the delivery of this Prospectus Supplement or
the Prospectus nor any sale made hereunder or thereunder shall, under any
circumstances, create any implication that the information contained herein
or therein is correct as of any time subsequent to the date of such
information.
------------------------
TABLE OF CONTENTS
Prospectus Supplement
Page
-------
Incorporation of Certain Documents
by Reference S-2
The Company S-3
Recent Developments S-3
Consolidated Ratios of Earnings
to Fixed Charges S-3
Use of Proceeds S-3
Selected Financial Data S-4
Description of the Debentures S-5
Underwriting S-8
Validity of Securities S-8
Prospectus
Available Information 2
Incorporation of Certain Documents by
Reference 2
The Company 2
Use of Proceeds 6
Selected Financial Data 6
Consolidated Ratios of Earnings to
Fixed Charges 8
Description of Securities 8
Plan of Distribution 16
Legal Matters 17
Experts 17
$150,000,000
[HII Logo]
6 % Debentures
due February 15, 2027
---------------------------
PROSPECTUS SUPPLEMENT
February 20, 1997
---------------------------
Lehman Brothers
Merrill Lynch & Co.
Chase Securities Inc.
First Chicago Capital
Markets, Inc.
RBC Dominion
Securities Corporation
