<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1996
--------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITITES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 1-11897
-------
A. Full title of the Plan and the address of the Plan, if different from
that of the issuer named below:
BW/IP International, Inc.
Capital Accumulation Plan
B. Name of issuer of securities held pursuant to the Plan and the address
of its principal executive office:
BW/IP, Inc.
200 Oceangate Boulevard
Suite 900
Long Beach, California 90802
Page 1 of 17
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page(s)
-------
<S> <C> <C>
(1) Signatures 3
(2) Consent of Independent Accountants 4
(3) Financial Statements of the BW/IP International, Inc.
Capital Accumulation Plan
Report of Independent Accountants 6
Statements of Net Assets Available for Plan Benefits,
with Fund Information as of December 31, 1996 and 1995 7-8
Statements of Changes in Net Assets Available for
Plan Benefits, with Fund Information for the
Years Ended December 31, 1996 and 1995 9-10
Notes to Financial Statements 11-15
Supplemental Schedules:
Line 27a - Assets Held for Investment Purposes
as of December 31, 1996 16
Line 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1996 17
</TABLE>
Page 2 of 17
<PAGE> 3
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Committee administering the Plan has duly caused this annual report to
be signed on its behalf by the undersigned hereto duly authorized.
BW/IP International, Inc.
Capital Accumulation Plan
Date: June 27, 1997 /s/ D.G. Taylor
-----------------------------
D.G. Taylor
Chairman
Page 3 of 17
<PAGE> 4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-44806) of BW/IP, Inc. of our report dated June 25,
1997 appearing on page 6 of the Annual Report of the BW/IP International, Inc.
Capital Accumulation Plan on Form 11-K for the year ended December 31, 1996.
/s/ Price Waterhouse LLP
- ----------------------------------
Price Waterhouse LLP
Los Angeles, California
June 25, 1997
Page 4 of 17
<PAGE> 5
BW/IP INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
REPORT AND FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1996 AND 1995
Page 5 of 17
<PAGE> 6
REPORT OF INDEPENDENT ACCOUNTANTS
June 25, 1997
To the Participants and
Administrative Committee of the
BW/IP International, Inc.
Capital Accumulation Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the BW/IP International, Inc. Capital Accumulation Plan (the
Plan) at December 31, 1996 and 1995 and the changes in the net assets available
for plan benefits for the years then ended, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Plan's Administrative Committee; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by the Plan's
Administrative Committee, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules I and II is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is additional information
required by ERISA. The Fund Information in the statements of net assets
available for plan benefits and the statements of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for benefits and the changes in net
assets available for plan benefits of each fund. Schedules I and II and the Fund
Information have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Price Waterhouse LLP
- ----------------------------------
Price Waterhouse LLP
Los Angeles, California
June 25, 1997
Page 6 of 17
<PAGE> 7
BW/IP INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
------------------------------------------------------------------------------
FUND INFORMATION
-------------------------------------------------------------
COMPANY INCOME BALANCED AGGRESSIVE LOAN
STOCK FUND FUND FUND STOCK FUND FUND TOTAL
---------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 20,009 $ 501,037 $9,599,074 $ 20,000 $ 30,094 $10,170,214
Investments:
Common stock 9,032,826 9,032,826
Registered investment companies 9,342,843 32,670,829 42,013,672
Group Annuity Contracts with insurance
companies, at contract value 23,706,389 23,706,389
Participant loans 3,027,035 3,027,035
Receivables:
Participant contributions 66,557 79,394 55,384 161,183 362,518
Employer contributions 373,320 373,320
Interest and dividends 57,025 1,762 94 304 79 59,264
---------- ----------- ---------- ----------- ---------- -----------
Net assets available for plan benefits $9,549,737 $33,631,425 $9,654,552 $32,852,316 $3,057,208 $88,745,238
========== =========== ========== =========== ========== ===========
</TABLE>
The accompanying notes to financial statements are an integral
part of these statements.
Page 7 of 17
<PAGE> 8
BW/IP INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1995
------------------------------------------------------------------------------
FUND INFORMATION
-------------------------------------------------------------
COMPANY INCOME BALANCED AGGRESSIVE LOAN
STOCK FUND FUND FUND STOCK FUND FUND TOTAL
---------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 470,276 $ 2,563,211 $ 20,000 $ 20,000 $ 33,055 $ 3,106,542
Investments:
Common stock 6,217,167 6,217,167
Registered investment companies 8,833,689 32,275,878 41,109,567
Group Annuity Contracts with insurance
companies, at contract value 30,409,219 30,409,219
Participant loans 2,564,698 2,564,698
Receivables:
Participant contributions 69,378 85,526 51,179 169,267 375,350
Employer contributions 63,503 63,503
Interest and dividends 40,627 12,752 173 345 144 54,041
---------- ----------- ---------- ----------- ---------- -----------
Net assets available for plan benefits $6,860,951 $33,070,708 $8,905,041 $32,465,490 $2,597,897 $83,900,087
========== =========== ========== =========== ========== ===========
</TABLE>
The accompanying notes to financial statements are an integral
part of these statements.
Page 8 of 17
<PAGE> 9
BW/IP INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1996
-------------------------------------------------------------------------------
FUND INFORMATION
--------------------------------------------------------------
COMPANY INCOME BALANCED AGGRESSIVE LOAN
STOCK FUND FUND FUND STOCK FUND FUND TOTAL
---------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Additions (deductions) in net assets
available for plan benefits:
Interest and dividends $ 210,350 $ 2,047,285 $ 516,569 $ 443,417 $ 179,915 $ 3,397,536
Net appreciation (depreciation) in
fair value of investments (75,024) 313,259 3,084,682 3,322,917
Contributions by participants 537,132 2,836,440 474,721 1,374,292 5,222,585
Contributions by employer 1,155,948 1,155,948
Benefit payments to participants (713,030) (2,896,281) (1,207,034) (3,437,490) (8,253,835)
---------- ----------- ----------- ----------- ---------- -----------
Net increase prior to interfund transfers 1,115,376 1,987,444 97,515 1,464,901 179,915 4,845,151
Interfund transfers 1,573,410 (1,426,727) 651,996 (1,078,075) 279,396
---------- ----------- ----------- ----------- ---------- -----------
Net increase 2,688,786 560,717 749,511 386,826 459,311 4,845,151
Net assets available for plan benefits:
Beginning of year 6,860,951 33,070,708 8,905,041 32,465,490 2,597,897 83,900,087
---------- ----------- ----------- ----------- ---------- -----------
End of year $9,549,737 $33,631,425 $ 9,654,552 $32,852,316 $3,057,208 $88,745,238
========== =========== =========== =========== ========== ===========
</TABLE>
The accompanying notes to financial statements are an integral
part of these statements.
Page 9 of 17
<PAGE> 10
BW/IP INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PLAN YEAR ENDED DECEMBER 31, 1995
-------------------------------------------------------------------------------
FUND INFORMATION
--------------------------------------------------------------
COMPANY INCOME BALANCED AGGRESSIVE LOAN
STOCK FUND FUND FUND STOCK FUND FUND TOTAL
---------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Additions (deductions) in net assets
available for plan benefits:
Interest and dividends $ 151,172 $ 1,938,099 $ 466,407 $ 224,458 $ 141,812 $ 2,921,948
Net appreciation (depreciation) in
fair value of investments (270,204) 1,493,887 9,157,541 10,381,224
Contributions by participants 927,889 944,837 751,585 2,158,257 4,782,568
Contributions by employer 784,718 784,718
Benefit payments to participants (524,230) (4,525,646) (679,160) (4,095,402) (9,824,438)
---------- ----------- ----------- ----------- ---------- -----------
Net increase prior to interfund transfers 1,069,345 (1,642,710) 2,032,719 7,444,854 141,812 9,046,020
Interfund transfers 618,022 922,293 (229,042) (1,449,174) 137,901
---------- ----------- ----------- ----------- ---------- -----------
Net increase (decrease) 1,687,367 (720,417) 1,803,677 5,995,680 279,713 9,046,020
Net assets available for plan benefits:
Beginning of year 5,173,584 33,791,125 7,101,364 26,469,810 2,318,184 74,854,067
---------- ----------- ----------- ----------- ---------- -----------
End of year $6,860,951 $33,070,708 $ 8,905,041 $32,465,490 $2,597,897 $83,900,087
========== =========== =========== =========== ========== ===========
</TABLE>
The accompanying notes to financial statements are an integral
part of these statements.
Page 10 of 17
<PAGE> 11
BW/IP INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
GENERAL
The BW/IP International, Inc. Capital Accumulation Plan (the "Plan") is a
defined contribution plan covering all U.S. employees of BW/IP
International, Inc. (the "Company"). An employee is eligible to participate
in the Plan on the first day of the calendar quarter following the
completion of three calendar months of employment commencing on his date of
hire by the Company. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). Although it has not
expressed any intention to do so, the Company has the right, under the terms
of the Plan, to terminate the Plan subject to ERISA provisions. The Plan is
administered by an Administrative Committee consisting of at least three
persons appointed by the Board of Directors of the Company.
CONTRIBUTIONS
Participant contributions to the Plan are based upon a percentage of gross
pay as designated by each participant. Participants may contribute up to 16%
of their annual wages before bonuses on a pre-tax or after-tax basis.
Contributions are invested based on each participant's election in one or
more of the following funds: Company Stock Fund, Income Fund, Balanced Fund,
and Aggressive Stock Fund.
The Company makes matching contributions of 25% of the first 6% of a
participant's contributions. The Company may make an additional matching
contribution of up to 75% of the first 2% of a participant's contribution,
based upon the Company's performance during the year. The Company intends to
make all matching contributions in shares of common stock of BW/IP, Inc.,
the parent of BW/IP International, Inc.
PARTICIPANTS' ACCOUNTS
Each participant's account is credited with the participant's contributions,
Company matching contributions and Plan earnings. Allocations of earnings
are based on participants' account balances.
VESTING
All participant and Company contributions are fully vested at all times.
BENEFIT PAYMENTS AND PARTICIPANT LOANS
Participants or beneficiaries may elect to withdraw benefits upon
termination of employment, retirement, permanent disability, or death. Other
withdrawals and loans from the Plan can be made under certain circumstances.
Participants may generally borrow up to the lesser of 50% of their vested
balance or $50,000. The loans are collateralized by the participant's
interest in the Plan.
Page 11 of 17
<PAGE> 12
BW/IP INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
There were no amounts payable to employees who had withdrawn from the Plan
as of December 31, 1996. At December 31, 1995, amounts payable to employees
who had withdrawn from the Plan were $32,047 for the Company Stock Fund,
$199,031 for the Income Fund, $46,758 for the Aggressive Stock Fund, and
$130,704 for the Balanced Fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting
principles.
INVESTMENT INCOME
Dividend and interest income are recorded as earned. The net appreciation or
depreciation in the fair value of investments comprises realized gains or
losses and unrealized appreciation or depreciation of investments.
PAYMENT OF BENEFITS
Benefit payments to participants are recorded upon distribution.
CASH AND CASH EQUIVALENTS
For reporting purposes, the Plan's Administrative Committee considers all
short-term highly liquid investments with maturities of three months or less
at the date of acquisition to be cash equivalents.
USE OF ESTIMATES
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of net assets
available for plan benefits and of changes in net assets available for plan
benefits at the date of the financial statements and during the respective
reporting periods. Actual results could differ from those estimates.
VALUATION OF INVESTMENTS AND DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL
INSTRUMENTS
The carrying amounts of cash, cash equivalents and contributions and
investment income receivable approximate fair value because of the short
maturity of these instruments. Investments in common stock are stated at
fair value. Investments in registered investment companies are stated at net
asset value. The carrying amounts of investments in common stock and
registered investment companies approximate fair value based upon market
quotes at December 31, 1996. Group Annuity Contracts (GAC), with the
exception of the Executive Life GAC described in Note 7, are stated at
contract value. The carrying values of Group Annuity Contracts approximate
fair value based upon current rates offered to the Company for investments
of the same remaining maturity. Participant loans are stated at cost which
approximates fair value.
Page 12 of 17
<PAGE> 13
BW/IP INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
3. NET ASSETS BY INVESTMENT OPTION
Plan participants may choose among four investment options:
o Company Stock Fund - This fund is primarily comprised of shares of
------------------
BW/IP, Inc. common stock.
o Income Fund - The primary objective is to provide a fixed rate of
-----------
return while preserving principal. The fund invests in Group Annuity
Contracts (GACs) issued by insurance companies and Merrill Lynch
Investment.
o Balanced Fund (Vanguard's Wellesley Income Fund) - This fund emphasizes
------------------------------------------------
the idea of combining income and growth in a single fund in order to
reduce risk and volatility through diversification. It invests in stocks
and bonds, changing the portion invested in each as market conditions
change. Stock dividends and bond interest provide income, while the
securities offer the potential for capital appreciation when stock
markets rise or interest rates fall.
o Aggressive Stock Fund (Fidelity Magellan Fund) - The primary objective
----------------------------------------------
of this fund is to seek maximum capital appreciation by identifying and
purchasing attractive, undervalued securities. The fund invests in
companies with substantial promise of future earnings growth.
4. GROUP ANNUITY CONTRACTS WITH INSURANCE COMPANIES AND INVESTMENTS
The Plan's deposits with insurance companies and investments are held in
trust funds administered by The Northern Trust Company of Chicago, Illinois,
the Plan's Trustee ("the Trustee").
5. TAX STATUS
A determination letter has been received from the Internal Revenue Service
which qualifies the Plan for tax-exempt status under Section 401(a) of the
Internal Revenue Code ("IRC") and for exemption from federal income taxes
under the provisions of Section 501(a) of the IRC. The Plan sponsor believes
that the Plan, as presently amended, will continue to qualify under
applicable provisions of the IRC and will thereby be exempt from
federal income taxes.
Page 13 of 17
<PAGE> 14
BW/IP INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
6. ADMINISTRATIVE EXPENSES
Expenses incurred by the Plan for accounting and administration are borne by
the Company. Such expenses amounted to approximately $276,000 and $243,000
for the plan years ended December 31, 1996 and 1995, respectively.
7. EXECUTIVE LIFE GROUP ANNUITY CONTRACT
At December 31, 1990, the Plan held a Group Annuity Contract ("GAC") in the
amount of $8,009,755, issued by Executive Life Insurance Company ("Executive
Life"). The terms of the GAC included interest at an annual rate of 10.01%
with scheduled maturity on June 30, 1992.
On April 11, 1991, as a result of the State of California Insurance
Commissioner's application for Order of Conservation, the Superior Court of
California placed Executive Life of California into conservatorship. In
connection therewith, the payment of certain obligations, including the
Plan's GAC investment, was frozen. As a result of the above action, the
Plan's Administrative Committee formally segregated all assets of the Plan's
Income Fund which had been invested in the Executive Life GAC, into a new
fund, named the "Executive Life Fund" which is included in the Income Fund
for financial reporting purposes. As of that date, assets of the Executive
Life Fund were allocated to participants' accounts based on their respective
percentage interests in the Income Fund of the Plan, and were then frozen to
all activity, including transfer and withdrawal of funds, and interest
thereon was no longer accrued. The value of the GAC frozen at April 11, 1991
was $8,224,018 of which interest of $214,263 was not included in the
December 31, 1990 financial statements resulting in an adjusted carrying
value of $8,009,755. The carrying value of the GAC was further reduced in
the December 31, 1992 and 1993 financial statements by $196,938 and
$260,774, respectively, resulting in adjusted values of $7,812,817 and
$7,552,043, respectively.
On May 5, 1992, court approval was given to the buyout of Executive Life by
a French investment group. On March 22, 1993, the State of California Court
of Appeals overturned the State of California Insurance Commissioner's
Rehabilitation Plan citing certain deficiencies that had to be corrected. On
June 6, 1993, a Revised Rehabilitation Plan was presented to the Court of
Appeals and subsequently approved effective September 3, 1993.
In December 1993, Executive Life retroactively adjusted the original value
of the GAC from $8,224,018 to $8,317,228. The adjusted value is used for
calculating all settlement amounts.
The Revised Rehabilitation Plan provided for an election between two
scenarios: "Opting In" with recovery estimated at approximately 87% plus any
state guarantee funds but no payment until September 3, 1998, or "Opting
Out" with recovery forecasted by legal counsel at approximately 84% without
full assurance of state guarantee funds but a first quarter 1994 payment of
approximately 57% plus nominal interest, with the balance to be paid
periodically over approximately five years.
Page 14 of 17
<PAGE> 15
BW/IP INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The Plan's Administrative Committee elected the "Opting Out" scenario,
causing payments of $7,111,063 to be made by Executive Life from December
1993 to May 1996. These funds, along with $58,866 interest, were transferred
to the Income Fund with special provisions for participants to further elect
to transfer their respective allocated amounts to other funds or make
withdrawals in accordance with Plan provisions. The interest received was
treated as a reduction in the principal amount of the investment. Future
receipts of interest will be treated similarly.
Based on the "Opting Out" scenario and an analysis of the most likely
recovery from the state guarantee funds, management determined that the
carrying value of the GAC of $382,114 at December 31, 1996 reflected its
best estimate of the future payments to be received. However, based upon a
payment of $562,831 received in April 1997, the Plan has been able to
realize amounts in excess of the adjusted carrying value.
8. RECONCILIATION OF THE FINANCIAL STATEMENTS TO THE FORM 5500
The following is a reconciliation of net assets available for Plan benefits
per the financial statements to the Form 5500. Differences between the
financial statements and the Form 5500 primarily consist of adjustments made
to conform the financial statements to the accrual method of accounting as
required by generally accepted accounting principles.
<TABLE>
<CAPTION>
DECEMBER 31,
1996 1995
<S> <C> <C>
Net assets available for Plan benefits per
the financial statements $88,745,238 $83,900,087
Executive Life Insurance Company Valuation
Reserve (Note 7) 776,703 776,703
Accrued interest receivable (129,726) --
Other 19,000 24,850
----------- -----------
Net assets available for Plan benefits
per the Form 5500 $89,411,215 $84,701,640
=========== ===========
</TABLE>
9. SUBSEQUENT EVENTS
On January 2, 1997, the Plan's trustee and recordkeeper were changed from
the Northern Trust Company and William M. Mercer, Inc., respectively, to
Merrill Lynch Trust Company of California and Merrill Lynch, Pierce, Fenner
& Smith, Incorporated, respectively.
On May 6, 1997, the Company entered into an Agreement and Plan of Merger
with Durco International, Inc. The Company is not aware of any intention to
terminate the Plan in part or in whole at any time.
Page 15 of 17
<PAGE> 16
BW/IP INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
SCHEDULE I - LINE 27a SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE,
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL,
LESSOR, OR SIMILAR PARTY PAR OR MATURITY VALUE COST CURRENT VALUE
- ---------------------------- ----------------------------- ---- -------------
<S> <C> <C> <C>
Investment Companies
- --------------------
Fidelity Magellan Fund, Inc. 405,094 shares $27,357,514 $32,670,829
Merrill Lynch Retirement Preservation Trust 9,213,116 shares 9,342,843 9,342,843
----------- -----------
Total investment companies 36,700,357 42,013,672
----------- -----------
U.S. Corporation Common Stock
- -----------------------------
BW/IP, Inc.(2) 547,444 shares, common stock,
$0.01 par value 10,212,752 9,032,826
----------- -----------
Contracts with Insurance Companies
- ----------------------------------
Executive Life Insurance Company(1) Group Annuity Contract, 10.01%
annual rate, maturity 6/30/92 382,114
John Hancock Insurance Company Group Annuity Contract, 6.28%
annual rate, maturity 9/30/99 4,316,247 4,316,247
CNA Insurance Company Group Annuity Contract, 6.90%
annual rate, maturity 3/31/98 5,833,062 5,833,062
New York Life Insurance Company Group Annuity Contract, 6.30%
annual rate, maturity 9/30/99 4,317,262 4,317,262
Commonwealth Insurance Company Group Annuity Contract, 6.83%
annual rate, maturity 9/30/98 2,912,649 2,912,649
Principal Mutual Life Insurance Company Group Annuity Contract, 7.15%
annual rate, maturity 3/31/99 5,945,055 5,945,055
----------- -----------
Total contracts with insurance companies 23,324,275 23,706,389
----------- -----------
Participant loans
- -----------------
Participant loans Loans to Plan participants, interest
rates ranging from 6.76% to 10.45%
per annum, maturity dates ranging
from January 1997 to November 2010,
collateralized by vested interest
in individual Plan accounts -- 3,027,035
----------- -----------
Cash and Short-Term Investments
- -------------------------------
Northern Trust Company Collective
Short-Term Investment Fund 571,140 units, $1.00 unit value 571,140 571,140
Cash - BW/IP Balanced Fund 9,599,074 9,599,074
----------- -----------
Total Cash and Short-Term Investments 10,170,214 10,170,214
----------- -----------
Total Assets Held for Investment $80,407,598 $87,950,136
=========== ===========
</TABLE>
(1) Refer to Note 7 of accompanying financial statements
(2) Party-in-Interest
Page 16 of 17
<PAGE> 17
BW/IP INTERNATIONAL, INC.
CAPITAL ACCUMULATION PLAN
SCHEDULE II - LINE 27d SCHEDULE OF REPORTABLE TRANSACTIONS(2) FOR THE YEAR ENDED
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CURRENT
EXPENSE VALUE OF
INCCURED ASSET ON NET
IDENTITY OF PARTY DESCRIPTION OF ASSET PURCHASE SELLING LEASE WITH COST OF TRANSACTION REALIZED
INVOLVED PRICE PRICE RENTAL TRANSACTION ASSET DATE GAIN
- ----------------- -------------------- ----------- ---------- ------ ----------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
The Northern Trust Northern Trust $28,090,849 $28,090,849 $28,090,849
Company(1) Company Collective
Short-Term
Investment Funds
The Northern Trust Northern Trust $30,626,251 30,626,251 30,626,251
Company(1) Company Collective
Short-Term
Investment Fund
Fidelity Management Fidelity Magellan 8,994,253 8,994,253 8,994,253
and Research Company Fund, Inc.
Fidelity Management Fidelity Magellan 6,811,578 5,971,028 6,811,578 $ 840,550
and Research Company Fund, Inc.
Fidelity Management Vanguard/Wellesley 11,225,046 10,316,656 11,225,046 908,390
and Research Company Income Fund, Inc.
Merrill Lynch Merrill Lynch 9,500,000 9,500,000 9,500,000
Retirement
Preservation
Trust
Canada Life Assurance Group Annuity 5,315,890 5,315,890 5,315,890
Company Contract, 6.30%
Annual Rate,
Maturity 9/30/96
</TABLE>
(1) Party-in-Interest transaction
(2) Under ERISA, a reportable transaction is a transaction or series of
transactions during the period that involves more than 5% of the fair value
of plan assets at the beginning of the period.
Page 17 of 17
