<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------- -------
Commission file number: 1-8247
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
Johns Manville Corporation
717 17th Street
Denver, Colorado 80202
<PAGE> 2
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
_____________________
REPORT ON AUDIT OF FINANCIAL STATEMENTS
as of December 31, 1996 and 1995 and for
the Year ended December 31, 1996
<PAGE> 3
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
---------------------
<TABLE>
<CAPTION>
Pages
-----
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Benefits with
Fund Information at December 31, 1996 and 1995 3 - 6
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year ended
December 31, 1996 7 - 8
Notes to Financial Statements 9 - 18
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes
(Item 27a Form 5500) 19
Schedule of Reportable Transactions
(Item 27d Form 5500) 20
</TABLE>
-1-
<PAGE> 4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Compensation Committee
of the Board of Directors of Johns Manville Corporation
We have audited the accompanying statements of net assets available for benefits
of the Schuller International Employees Thrift Plan ("Plan") as of December 31,
1996 and 1995 and the statement of changes in net assets available for benefits
for the year ended December 31, 1996. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Schuller
International Employees Thrift Plan at December 31, 1996 and 1995, and the
changes in net assets available for benefits for the year ended December 31,
1996, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements but are supplementary information required by
the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The Fund
Information in the statements of net assets available for benefits and the
statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for plan benefits of each
fund. The Supplemental Schedules and 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/ COOPERS & LYBRAND L.L.P.
- ----------------------------
COOPERS & LYBRAND L.L.P.
Denver, Colorado
June 20, 1997
-2-
<PAGE> 5
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1996 and 1995
<TABLE>
<CAPTION>
Retirement
Government
Money Market Income Asset Disciplined
1996 Portfolio Fund Manager Equity Fund
- ---- --------- ---- ------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Schuller Corporation
at market value (cost $976,165)
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $9,429,706) $ 9,429,706
Asset Manager (cost $31,447,918) $34,650,950
Disciplined Equity (cost $26,510,270) $30,253,151
Value Fund (cost $22,142,535)
Magellan Fund (cost $40,558,383)
OTC Portfolio (cost $14,078,032)
International Growth and
Income Fund (cost $8,434,009)
Short-Term Bond Fund (cost $16,595,052) $19,085,157
Investment contracts, at contract value 39,324,462
Loans to Plan members, at cost
(approximates market)
Cash and equivalents (Note 3) 2,754,161
Due from associated funds 7,730 42,709 42,635 31,491
Contributions receivable:
Plan members 13,693 58,916 61,990 50,731
Company 132,046 523,495 594,154 477,790
Accrued income receivable (Note 2)
----------- ----------- ----------- -----------
Total assets 9,583,175 61,788,900 35,349,729 30,813,163
LIABILITIES
Payable to associated funds
----------- ----------- ----------- -----------
Net assets available for benefits $ 9,583,175 $61,788,900 $35,349,729 $30,813,163
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
International
Value Magellan OTC Growth and
1996 Fund Fund Portfolio Income Fund
- ---- ---- ---- --------- -----------
<S> <C> <C> <C> od<C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Schuller Corporation
at market value (cost $976,165)
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $9,429,706)
Asset Manager (cost $31,447,918)
Disciplined Equity (cost $26,510,270)
Value Fund (cost $22,142,535) $24,003,971
Magellan Fund (cost $40,558,383) $44,842,426
OTC Portfolio (cost $14,078,032) $16,003,360
International Growth and
Income Fund (cost $8,434,009) $ 9,236,749
Short-Term Bond Fund (cost $16,595,052)
Investment contracts, at contract value
Loans to Plan members, at cost
(approximates market)
Cash and equivalents (Note 3)
Due from associated funds 28,797 65,406 20,771 15,996
Contributions receivable:
Plan members 50,405 96,878 39,037 25,231
Company 444,866 978,179 343,266 251,483
Accrued income receivable (Note 2)
----------- ----------- ----------- -----------
Total assets 24,528,039 45,982,889 16,406,434 9,529,459
LIABILITIES
Payable to associated funds
----------- ----------- ----------- -----------
Net assets available for benefits $24,528,039 $45,982,889 $16,406,434 $ 9,529,459
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 6
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1996 and 1995
<TABLE>
<CAPTION>
Schuller
Common
Stock Loan Mutual Combined
1996 (Continued) Pool Account Benefit Life Total
---- -------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Schuller Corporation
at market value (cost $976,165) $128,910 $ 128,910
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $9,429,706) 9,429,706
Asset Manager (cost $31,447,918) 34,650,950
Disciplined Equity (cost $26,510,270) 30,253,151
Value Fund (cost $22,142,535) 24,003,971
Magellan Fund (cost $40,558,383) 44,842,426
OTC Portfolio (cost $14,078,032) 16,003,360
International Growth and
Income Fund (cost $8,434,009) 9,236,749
Short-Term Bond Fund (cost $16,595,052) 19,085,157
Investment contracts, at contract value $14,651,511 53,975,973
Loans to Plan members, at cost
(approximates market) $7,865,239 7,865,239
Cash and equivalents (Note 3) 2,754,161
Due from associated funds 255,535
Contributions receivable:
Plan members 396,881
Company 3,745,279
Accrued income receivable (Note 2) 55,919 55,919
-------- ---------- ----------- ------------
Total assets 128,910 7,921,158 14,651,511 256,683,367
LIABILITIES
Payable to associated funds 255,535 255,535
-------- ---------- ----------- ------------
Net assets available for benefits $128,910 $7,665,623 $14,651,511 $256,427,832
======== ========== =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 7
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1996 and 1995
<TABLE>
<CAPTION>
Retirement
Government
Money Market Income Asset Disciplined
1995 Portfolio Fund Manager Equity Fund
---- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Schuller Corporation
at market value (cost $1,066,822)
Common stock pool of Riverwood
International at market value
(cost $741,900)
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $6,535,040) $ 6,535,040
Asset Manager (cost $28,179,246) $30,692,009
Disciplined Equity (cost $23,527,426) $25,983,839
Value Fund (cost $12,612,053)
Magellan Fund (cost $36,078,039)
OTC Portfolio (cost $7,776,839)
International Growth and
Income Fund (cost $7,334,637)
Investment contracts, at contract value $52,118,355
Loans to Plan members, at cost
(approximates market)
Cash and equivalents (Note 3) 13,562,186
Due from associated funds 7,188 44,451 37,881 25,805
Contributions receivable:
Plan members 9,868 68,618 64,182 47,397
Company 100,557 609,989 624,553 457,198
Accrued income receivable (Note 2)
----------- ----------- ----------- -----------
Total assets 6,652,653 66,403,599 31,418,625 26,514,239
LIABILITIES
Payable to associated funds
----------- ----------- ----------- -----------
Net assets available for benefits $ 6,652,653 $66,403,599 $31,418,625 $26,514,239
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
International
Value Magellan OTC Growth and
1995 Fund Fund Portfolio Income Fund
---- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Schuller Corporation
at market value (cost $1,066,822)
Common stock pool of Riverwood
International at market value
(cost $741,900)
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $6,535,040)
Asset Manager (cost $28,179,246)
Disciplined Equity (cost $23,527,426)
Value Fund (cost $12,612,053) $14,496,921
Magellan Fund (cost $36,078,039) $43,284,628
OTC Portfolio (cost $7,776,839) $9,131,710
International Growth and
Income Fund (cost $7,334,637) $7,501,926
Investment contracts, at contract value
Loans to Plan members, at cost
(approximates market)
Cash and equivalents (Note 3)
Due from associated funds 20,437 63,379 12,399 11,937
Contributions receivable:
Plan members 37,079 103,943 26,042 21,448
Company 364,184 1,070,629 247,576 259,797
Accrued income receivable (Note 2)
----------- ----------- ---------- ----------
Total assets 14,918,621 44,522,579 9,417,727 7,795,108
LIABILITIES
Payable to associated funds
----------- ----------- ---------- ----------
Net assets available for benefits $14,918,621 $44,522,579 $9,417,727 $7,795,108
=========== =========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE> 8
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1996 and 1995
<TABLE>
<CAPTION>
Schuller
RVW Common
Stock Stock Loan Mutual Combined
1995 (Continued) Pool Pool Account Benefit Life Total
---- ---------- -------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Schuller Corporation
at market value (cost $1,066,822) $105,457 $ 105,457
Common stock pool of Riverwood
International at market value
(cost $741,900) $1,013,760 1,013,760
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $6,535,040) 6,535,040
Asset Manager (cost $28,179,246) 30,692,009
Disciplined Equity (cost $23,527,426) 25,983,839
Value Fund (cost $12,612,053) 14,496,921
Magellan Fund (cost $36,078,039) 43,284,628
OTC Portfolio (cost $7,776,839) 9,131,710
International Growth and
Income Fund (cost $7,334,637) 7,501,926
Investment contracts, at contract value $14,482,275 66,600,630
Loans to Plan members, at cost
(approximates market) $6,959,901 6,959,901
Cash and equivalents (Note 3) 13,562,186
Due from associated funds 223,477
Contributions receivable:
Plan members 378,577
Company 3,734,483
Accrued income receivable (Note 2) 48,214 48,214
---------- -------- ---------- ----------- ------------
Total assets 1,013,760 105,457 7,008,115 14,482,275 230,252,758
LIABILITIES
Payable to associated funds 223,477 223,477
---------- -------- ---------- ----------- ------------
Net assets available for benefits $1,013,760 $105,457 $6,784,638 $14,482,275 $230,029,281
========== ======== ========== =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE> 9
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Retirement
Government
Money Market Income Asset Disciplined
1996 Portfolio Fund Manager Equity Fund
---- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Investment Income:
Interest income $ 598,612
Dividend income $ 388,143 $ 2,710,968 $ 2,194,299
Net appreciation (depreciation)
in fair value
of investments (Note 2) 2,698,643 1,216,820 1,774,978
----------- ----------- ----------- -----------
Total investment income 388,143 3,297,255 3,927,788 3,969,277
----------- ----------- ----------- -----------
Contributions (Note 7):
By Plan members 302,954 1,603,587 1,781,125 1,444,844
By the Company 116,308 1,026,567 1,153,409 908,696
----------- ----------- ----------- -----------
419,262 2,630,154 2,934,534 2,353,540
----------- ----------- ----------- -----------
Transfers into fund from
associated funds 7,003,324 67,329,581 3,304,725 3,186,887
----------- ----------- ----------- -----------
Transfers out of fund to
associated funds (4,106,411) (72,140,999) (4,273,449) (3,365,086)
----------- ----------- ----------- -----------
Withdrawals and forfeitures (Note 8) (768,683) (5,721,116) (1,952,125) (1,841,872)
----------- ----------- ----------- -----------
Administrative expenses (5,113) (9,574) (10,369) (3,822)
----------- ------------- ----------- -----------
Net increase (decrease) 2,930,522 (4,614,699) 3,931,104 4,298,924
Net assets available for benefits:
Beginning of year 6,652,653 66,403,599 31,418,625 26,514,239
----------- ----------- ----------- -----------
End of year $ 9,583,175 $61,788,900 $35,349,729 $30,813,163
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
International
Value Magellan OTC Growth and
1996 Fund Fund Portfolio Income Fund
---- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Investment Income:
Interest income
Dividend income $ 2,692,441 $ 7,155,043 $ 1,905,307 $ 302,301
Net appreciation (depreciation)
in fair value
of investments (Note 2) 352,217 (2,361,951) 825,283 728,499
----------- ----------- ----------- ----------
Total investment income 3,044,658 4,793,092 2,730,590 1,030,800
----------- ----------- ----------- ----------
Contributions (Note 7):
By Plan members 1,293,016 2,876,526 867,154 675,837
By the Company 838,616 1,979,234 616,910 486,019
----------- ----------- ----------- ----------
2,131,632 4,855,760 1,484,064 1,161,856
----------- ----------- ----------- ----------
Transfers into fund from
associated funds 8,972,766 5,614,200 7,303,179 1,787,167
----------- ----------- ----------- ----------
Transfers out of fund to
associated funds (3,509,237) (11,341,618) (3,801,521) (1,388,524)
----------- ----------- ----------- ----------
Withdrawals and forfeitures (Note 8) (1,028,423) (2,458,373) (727,421) (856,890)
----------- ----------- ----------- ----------
Administrative expenses (1,978) (2,751) (184) (58)
----------- ----------- ----------- ----------
Net increase (decrease) 9,609,418 1,460,310 6,988,707 1,734,351
Net assets available for benefits:
Beginning of year 14,918,621 44,522,579 9,417,727 7,795,108
----------- ----------- ----------- ----------
End of year $24,528,039 $45,982,889 $16,406,434 $9,529,459
=========== =========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-7-
<PAGE> 10
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Schuller
RVW Common
Stock Stock Loan Mutual Combined
1996 (Continued) Pool Pool Account Benefit Life Total
---- ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest income $ 629,606 $ 880,789 $ 2,109,007
Dividend income 17,348,502
Net appreciation (depreciation) in fair value
of investments (Note 2) $ 59,830 $ 34,389 5,328,708
----------- ----------- ----------- ----------- ------------
Total investment income 59,830 34,389 629,606 880,789 24,786,217
----------- ----------- ----------- ----------- ------------
Contributions (Note 7):
By Plan members 10,845,043
By the Company 7,125,759
----------- ----------- ----------- ----------- ------------
17,970,802
----------- ----------- ----------- ----------- ------------
Transfers into fund from
associated funds 4,185,608 108,687,437
----------- ----------- ----------- ----------- ------------
Transfers out of fund to
associated funds (1,048,818) (55) (3,603,327) (108,392) (108,687,437)
----------- ----------- ----------- ----------- ------------
Withdrawals and forfeitures (Note 8) (24,772) (10,881) (330,902) (603,161) (16,324,619)
----------- ----------- ----------- ----------- ------------
Administrative expenses (33,849)
----------- ----------- ----------- ----------- ------------
Net increase (decrease) (1,013,760) 23,453 880,985 169,236 26,398,551
Net assets available for benefits:
Beginning of year 1,013,760 105,457 6,784,638 14,482,275 230,029,281
----------- ----------- ----------- ----------- ------------
End of year $ 0 $ 128,910 $ 7,665,623 $14,651,511 $256,427,832
=========== =========== =========== =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE> 11
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
-------------------
1. Plan Description:
-----------------
The Schuller International Employees Thrift Plan (the "Plan") is
sponsored by Johns Manville Corporation, formerly Schuller Corporation,
and offered through Johns Manville International Inc. (the "Company"), a
wholly owned subsidiary of Johns Manville Corporation. The Plan provides
eligible employees a convenient means for regular and systematic savings
with several investment options. Plan participants have the option of
directing the investment of their contributions and related Company
contributions into any one or a combination of separate funds. Fidelity
Institutional Retirement Services Company ("Fidelity"), the trustee of
the Plan's assets, administers, manages and reports the Plan's investment
transactions. The Plan offers the following Fidelity funds as investment
options: the Retirement Government Money Market Portfolio, Asset Manager,
Disciplined Equity Fund, Value Fund, Magellan Fund, OTC Portfolio, and
the International Growth and Income Fund. In addition, the Income Fund
holds the Fidelity Short-Term Bond Fund and contracts with various
insurance and investment companies. The Income Fund also contains
contracts with Mutual Benefit Life Insurance Company ("Mutual Benefit
Life") and Confederation Life Insurance Company ("Confederation Life")
(see Notes 4 and 5). Summarized information regarding eligibility,
vesting, contributions and benefits is provided in the Summary Plan
Document.
In addition to the funds described above, at December 31, 1996, some
participants had investments in the Schuller Common Stock Pool, which
holds common stock of Schuller Corporation. Although the Schuller
Common Stock Pool is not currently offered as an investment option, the
Plan allows additional shares to be purchased with dividends paid on the
common stock. Similarly, at December 31, 1995, some participants had
investments in the RVW Stock Pool, which contained shares of stock of
Riverwood International Corporation ("Riverwood"). Riverwood was an
affiliate of the Company until a private group of investors acquired all
of its remaining common stock during March, 1996. At that time, the
Plan's investments in the RVW Stock Pool were either liquidated or
transferred to the Retirement Government Money Market Portfolio.
The loan account holds loans made to eligible participants out of their
vested account balances in the aforementioned funds except for the RVW
Stock Pool, Schuller Common Stock Pool, and investment contracts with
Mutual Benefit Life and Confederation Life. Principal and interest
payments are reinvested in the participants investment funds in
accordance with the participant's investment election in effect at the
time the payments are made.
At December 31, 1996, there were a total of 5,219 participants in the
Plan. They participated in one or more of the funds as follows: 736 in
the Retirement Government Money Market Portfolio, 1,974 in the Asset
Manager, 2,018 in the Disciplined Equity
-9-
<PAGE> 12
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
-------------------
1. Plan Description, continued:
-----------------
Fund, 1,579 in the Value Fund, 2,584 in the Magellan Fund, 1,201 in the
OTC Portfolio, 1,202 in the International Growth and Income Fund, 4,648
in the Income Fund, 216 in the Schuller Common Stock Pool, and 986 in the
Mutual Benefit Life contract. Additionally, 1,574 participants had loans
outstanding through the loan account at December 31, 1996.
2. Summary of Significant Accounting Policies:
-------------------------------------------
Investments in the funds are stated at current values based upon the
following:
<TABLE>
<S> <C>
Retirement Government original cost plus accrued interest.
Money Market Fund
Asset Manager Fund quotations obtained directly from mutual fund company.
Disciplined Equity Fund quotations obtained directly from mutual fund company.
Value Fund quotations obtained directly from mutual fund company.
Magellan Fund quotations obtained directly from mutual fund company.
OTC Portfolio quotations obtained directly from mutual fund company.
International Growth quotations obtained directly from mutual fund company.
and Income Fund
Income Fund contract value (original cost plus accrued interest and contributions less
withdrawals) and quotations obtained directly from mutual fund company.
RVW Stock Pool stock quotations obtained from New York Stock Exchange.
Schuller Common stock quotations obtained from New York Stock
Stock Pool Exchange.
Mutual Benefit Life contract value (original cost plus accrued interest and
contributions less withdrawals)
</TABLE>
-10-
<PAGE> 13
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies, continued:
-------------------------------------------
Transactions in the various funds are accounted for using the trade date.
Realized gains or losses from such transactions are determined on the
basis of average cost. Accrued income receivable on investments consists
of dividends receivable based on the ex-dividend date and interest income
receivable at December 31, 1996 and 1995.
Within the Income Fund, the Plan has entered into investment contracts
with various insurance and investment companies. The contracts are
credited with earnings on the underlying investments and charged for Plan
withdrawals and administrative expenses charged by these companies. The
contracts are included in the financial statements at contract value, as
reported by the insurance and investment companies. Contract value
represents contributions under the contracts, plus earnings, less Plan
withdrawals and administrative expenses. The average yields presented on
the contracts approximate the contract rate. No valuation reserves were
required to adjust contract amounts, as the contract value of the
reported investment contracts approximates fair value. Investment
contracts held in the Income Fund contain provisions that could reduce
the earnings on the investment below the guaranteed rate if there is an
early discontinuance of the contract.
The Plan is exposed to credit risk in the event of nonperformance by the
counterparties to financial instruments but has no off-balance-sheet
credit risk of accounting loss. The Plan anticipates, however, that
counterparties will be able to fully satisfy their obligations to the
Plan. The Plan does not require collateral or other security to support
investments with credit risk.
The Plan presents in the statement of changes in net assets available for
benefits with fund information the net appreciation (depreciation) in the
fair value of its investments which consists of the realized gains
(losses) and the unrealized appreciation (depreciation) on those
investments, including derivative financial instruments (see Note 6).
The preparation of the Plan's consolidated financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
reported in these financial statements, including disclosures of
contingent liabilities. The Plan has reclassified the presentation of
certain prior year information to conform with the current presentation
format.
-11-
<PAGE> 14
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
-------------------
3. Investments:
------------
The number of shares and carrying value per share at December 31, were as
follows:
<TABLE>
<CAPTION>
1996 1995
------------ ----------
<S> <C> <C>
Retirement Government Money Market
----------------------------------
Shares 9,429,706 6,535,040
Market value per share $1.00 $1.00
Asset Manager*
-------------
Shares 2,103,883 1,936,404
Market value per share $16.47 $15.85
Disciplined Equity Fund*
-----------------------
Shares 1,372,647 1,258,907
Market value per share $22.04 $20.65
Value Fund*
----------
Shares 465,735 292,041
Market value per share $51.54 $49.64
Magellan Fund*
-------------
Shares 556,013 503,427
Market value per share $80.65 $85.98
OTC Portfolio*
-------------
Shares 489,250 301,078
Market value per share $32.71 $30.33
International Growth and Income Fund
------------------------------------
Shares 472,468 417,935
Market value per share $19.55 $17.95
Income Fund
-----------
Short-Term Bond Fund*
Shares 2,188,665
Market Value per share $8.72
Security Life of Denver Contract*
Shares 18,971,620 18,350,306
Contract value per share $1.00 $1.00
Average yield 3.00% 4.78%
</TABLE>
-12-
<PAGE> 15
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
-------------------
3. Investments, continued:
------------
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Morgan Guaranty ABS
Shares 7,890,809 8,777,330
Contract value per share $1.00 $1.00
Average yield 7.09% 7.07%
Confederation Life Insurance Contract
Shares 3,626,142 3,681,527
Contract value per share $1.00 $1.00
Average yield (Note 4) 0.00% 0.00%
Peoples Security Life ABS
Shares 2,991,598 2,973,949
Contract value per share $1.00 $1.00
Average yield 7.73% 7.72%
Sun Life Insurance of America Contract
Units 2,923,252 2,706,213
Contract value per share $1.00 $1.00
Average yield 8.02% 8.02%
Protective Life Insurance Contract
Units 2,921,041 2,705,184
Contract value per share $1.00 $1.00
Average yield 7.98% 7.98%
J.P. Morgan Securities Insurance Contract
Shares 8,241,212
Contract value per share $1.00
Average yield 8.90%
Life of Virginia Contract
Shares 2,357,664
Contract value per share $1.00
Average yield 8.52%
Bankers Trust Investment Contracts
Shares 2,324,969
Contract value per share $1.00
Average yield 9.13%
</TABLE>
-13-
<PAGE> 16
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
3. Investments, continued:
------------
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Schuller Common Stock Pool
--------------------------
Shares 5,801 6,336
Market value per share $22.22 $16.65
RVW Stock Pool
--------------
Shares 73,546
Market value per share $13.79
Loan Account
------------
Remaining principal balance, at cost $7,865,239 $6,959,901
(approximates market)
Mutual Benefit Life Insurance Contract*
--------------------------------------
Shares $14,651,511 $14,482,275
Contract value per share $1.00 $1.00
Average yield (Note 5) 6.25% 3.55%
</TABLE>
* Represents at least 5% of net assets available for benefits at December
31, 1996.
The cash and equivalents portion of the Income Fund was invested
primarily in short-term U.S. Government Securities until it was
transferred to the Fidelity Short-Term Bond Fund, a new investment
option, on March 1, 1996. Existing contracts at December 31, 1996 will
remain as such until maturity, at which time the cash will be invested in
this bond fund, as the Plan does not intend to offer such contracts as an
investment option in the future.
4. Confederation Life Insurance Company:
-------------------------------------
At December 31, 1996, the Income Fund held a $3.6 million investment
contract with Confederation Life, representing 5.9% of the net assets of
the Income Fund. Since 1994, assets of this contract were segregated by
the Plan as Canadian and U.S. regulators assumed control of Confederation
Life and a court subsequently placed them into rehabilitation. During
the rehabilitation period, certain hardship withdrawals were permitted
and participants had access to the remainder of the Income Fund.
Adjustment to reduce the carrying value of the contract to net realizable
value would have no material effect on the financial statements. During
April and May 1997, Plan participants received a total of $3.9 million
from Confederation Life, effectively terminating the contract.
-14-
<PAGE> 17
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
-------------------
5. Mutual Benefit Life Insurance Company:
--------------------------------------
During 1991, Mutual Benefit Life was placed under rehabilitory
conservatorship with the state of New Jersey by court order, and during
1993, a plan of rehabilitation (the "Rehabilitation") was approved.
Mutual Benefit Life became insolvent during 1994 and its assets and
liabilities were assumed by a successor company, MBL Life Assurance
Corporation ("MBLLAC"). Pursuant to the Rehabilitation, participants had
the option of opting out of the existing contract or accepting
participation in a new, restructured contract to be issued by MBLLAC.
Participants electing to opt out of the contract received 55% of their
account balances with interest credited at 3.5% annually through payout.
Participants who elected to opt out of the contract received $864,000,
while those who elected to accept participation in the restructured
contract were credited with balances totaling approximately $15.2
million, with interest credited at the contract rate (11.05%) through
December 31, 1991, at 4.0% for 1992, at 3.5% for 1993, at 3.5% for 1994,
at 3.55% for 1995, and at 5.25% through September 30, 1996, and at 9.25%
for the remainder of 1996. Interest to be paid thereafter has not been
determined, but will be no less than zero. The contract value of Mutual
Benefit reflects interest credited at these rates. Payment of principal
and interest has been guaranteed by a consortium of major insurance
companies.
During the rehabilitation period, which is expected to extend through
December 31, 1999, withdrawals will remain limited. However, payments
will continue to be made in cases of death and hardship, and out-of-fund
payments will be made to retirees aged 59 1/2 or more who have elected to
leave the Plan. A cashout resulting in a penalty is also available. The
penalty percentage is determined on a quarterly basis and was 18% at
December 31, 1996 The Rehabilitation anticipates that balances in the
restructured contracts will be paid out in five annual installments
beginning in the year 2000. However, should there be insufficient
liquidity or assets, scheduled installment payments may be deferred for
up to seven years.
6. Derivative Financial Instruments:
---------------------------------
The Plan has only limited involvement with derivative financial
instruments and does not use them for trading purposes.
The fair value of derivatives utilized by the funds is determined as the
amounts the Plan would receive or pay to terminate the contracts at the
reporting date, taking into account the current unrealized gains or
losses on open contracts. Market or dealer quotes are available for many
derivatives; otherwise, pricing or valuation models are applied to
current market information to estimate fair value.
Investments in the Asset Manager Fund, the Magellan Fund and the
International Growth and Income Fund occasionally include derivative
financial instruments such as futures, forward, swap or option contracts.
-15-
<PAGE> 18
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
-------------------
6. Derivative Financial Instruments, continued:
---------------------------------
The primary objectives of investing in domestic equity futures are to
remain fully invested and maintain liquidity ("long positions"), and to
hedge against equity price declines ("short positions"). Futures
contracts are settled on a daily basis using funds set aside in separate
accounts. Foreign exchange forward contracts are entered into to manage
foreign currency exchange exposures and to hedge the funds' investments
against currency fluctuations. During 1996 and 1995 these derivative
investments comprised an immaterial portion of the total net assets
available for benefits.
7. Contributions, Eligibility and Vesting:
---------------------------------------
Pre-tax Contributions - Eligible employees may contribute to the Plan
through a reduction in salary on a pre-tax basis (a "401(k)" Plan ) from
1% to 9% of salary (defined as regular fixed compensation plus
commissions, bonuses, overtime pay and profit sharing distributions) or,
for highly compensated employees, from 1% to 8% of salary on a pre-tax
basis.
After-tax Contributions - Employees may elect to contribute 1% to 7% of
salary on an after-tax basis regardless of the percentage of pre-tax
contributions.
Company Contributions - The Company contribution is based on a 50% fixed
match plus up to 50% variable match based on the operating performance of
the Company, on the first six percent of pre-tax employee contributions.
Company contributions of $3,609,919 related to the 50% variable match
were accrued for at December 31, 1996. After-tax contributions and
rollover contributions are not matched by the Company. The Company's
annual contribution made on behalf of any one employee is subject to
certain maximums as specified in the Plan and regulated by the Internal
Revenue Service.
Eligibility - Full-time permanent salaried employees and non-union hourly
employees at participating locations are eligible to become Plan
participants on the first day of employment or re-employment. If the
employee is a part- time or temporary, such employee becomes eligible to
participate after completing at least one year and 1,000 hours of
service. The Plan also allows non-union hourly employees at
participating locations to contribute to the Plan.
Vesting - Employee contributions and earnings thereon vest to the
participant immediately. Company contributions and the earnings thereon
vest to the participant with the earlier of five years of service or
three years participation in the Plan.
-16-
<PAGE> 19
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
-------------------
8. Withdrawals and Forfeitures and Loans:
--------------------------------------
Rollover contributions which have been in the Plan at least 24 months and
all vested amounts (except those relating to participant pre-tax
contributions and earnings thereon) may be withdrawn by the participant
at any time. Employee pre-tax contributions and earnings thereon may not
be withdrawn until the participant attains age 59 1/2, or leaves the
Company, or furnishes satisfactory proof of financial hardship.
If a participant's employment is terminated for reasons other than death,
disability or retirement, the participant forfeits any unvested Company
contributions and applicable earnings. Participants with vested balances
of at least $3,500, can elect to defer the distribution of funds to
December 31 of the year they attain age 65.
Forfeitures serve to reduce future contributions of the Company. During
1996, forfeitures totaled $133,749. A participant who is terminated and
subsequently rehired by the Company within five years has the option of
repaying to the Plan, within two years of the re-employment date, cash in
one lump sum equal to the full amount received from the Plan at
termination. If such repayment is made, the Company will restore to the
participant's account the amounts previously forfeited.
A participant who retires or becomes disabled, and has a balance of at
least $3,500, can elect to defer the distribution of funds credited to
the participant in the Plan until April of the year following the year in
which the participant attains age 70 1/2 or, in the event of death, the
beneficiary can elect to defer distribution for a period of 60 months
from date of death.
Withdrawal of Company contributions is subject to suspension of Company
contributions for the greater of three months or the time period during
which the employee does not make contributions. Hardship withdrawals are
subject to one year suspension of employee contributions. Suspension
does not occur if the withdrawal is limited to after-tax contributions
and the related earnings thereon.
The Plan's loan provisions allow a participant to borrow up to 50% of the
value of their vested account balances; however, in no event within the
previous 12 month period can the participant's aggregate loan balance
exceed $50,000. All loans are collateralized by the participant's
account balances and bear interest at one percent over the prime rate on
the last day of the prior month.
9. Tax Status:
-----------
The Plan is designed to constitute a qualified trust under Section 401(a)
of the Internal Revenue Code and is therefore considered to be exempt
from federal income tax under provisions of Section 501(a). An
application was filed with the Internal Revenue Service on March 22, 1993
for a determination as to whether the Plan meets the qualification
-17-
<PAGE> 20
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
-------------------
9. Tax Status, continued:
-----------
requirements of Section 401(a) of the Internal Revenue Code of 1986. On
August 24, 1993, the Company received a favorable tax qualification
determination letter, retroactive to January 1, 1989, from the Internal
Revenue Service. The Plan has been amended since that date; however, the
Company believes that the Plan remains in accordance with the applicable
requirements under the Internal Revenue Code of 1986. Participants in the
Plan will not be taxed on pre-tax contributions, rollover contributions,
earnings on contributions from the Company's retirement plans, Company
contributions to the Plan on their behalf or on earnings credited to their
accounts until such contributions and earnings are distributed or
otherwise made available to them.
10. Termination of the Plan:
------------------------
It is the intent of the Company to continue the Plan; however, in the
event that the Plan is terminated by the Company, accounts would
automatically be fully vested. The assets of the Plan would be
distributed to the participants based on their account balances. In
addition, any previously forfeited amounts which had not been applied to
reduce Company contributions would be credited ratably to the accounts of
the participants remaining in the Plan at the time of such termination.
11. Administrative Expenses Paid by Company:
----------------------------------------
The Company paid approximately $58,000 in 1996 of administrative expenses
to the Plan's trustee on behalf of the Plan, which are not included in
the financial statements.
-18-
<PAGE> 21
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par or Maturity Date Share Balance Cost Current Value
- --------------------------- ----------------------------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Retirement Government
Money Market Money market fund 9,429,706 $ 9,429,706 $ 9,429,706
Income Fund Income mutual fund commingled with a
blend of guaranteed investment
contracts (GICS) and investment
contracts with insurance and
investment companies, and cash and
equivalents (1) 41,513,126 58,673,675 61,163,780
Asset Manager Mutual fund of domestic and foreign stocks,
bonds, and short-term instruments 2,103,883 31,447,918 34,650,950
Disciplined Equity Fund Domestic common stocks mutual fund 1,372,647 26,510,270 30,253,151
Value Fund Common stock mutual fund of companies
considered undervalued or having growth
potential 465,735 22,142,535 24,003,971
Magellan Fund Common stock and convertible securities
mutual fund 556,013 40,558,383 44,842,426
OTC Portfolio Mutual fund of securities of companies
mainly traded in the over-the-counter market 489,250 14,078,032 16,003,360
International Growth Foreign equity and debt securities
and Income Fund mutual fund 472,478 8,434,009 9,236,749
Schuller Common Stock Pool* Common stock 5,801 976,165 128,910
Loans to Plan members Participant loans (2) 7,865,239 7,865,239
Mutual Benefit Life Insurance contract 14,651,511 14,651,511 14,651,511
------------ ------------
$234,767,443 $252,229,753
============ ============
</TABLE>
(1) The Income Fund bears interest ranging from 0.00% to 9.13%, maturing
January, 1997 through June, 1997.
(2) Loans to Plan members bear interest ranging from 7% to 12% and mature on
January, 1997 through December, 2021.
* Party in interest
-19-
<PAGE> 22
SCHULLER INTERNATIONAL EMPLOYEES THRIFT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
December 31, 1996
<TABLE>
<CAPTION>
Current Value
at Transaction
Identity of Fund Description of Asset Total Purchases Total Sales Cost of Asset Date Net Gain
- ------------------ ----------------------- --------------- ------------ ------------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Retirement Government
Money Market Money market fund $ 7,908,621 $ 5,013,954 $ 5,013,954 $ 5,013,954
Income Fund Income mutual fund
commingled with a
blend of guaranteed
investment contracts
(GICS) and investment
contracts with insurance
and investment companies $70,672,396 $77,887,799 $77,679,261 $77,887,799 $208,538
Asset Manager Asset allocation mutual
fund $ 8,978,065 $ 6,235,944 $ 5,709,393 $ 6,235,944 $526,551
Disciplined Equity Fund Domestic common stocks
mutual fund $ 7,705,114 $ 5,210,781 $ 4,722,270 $ 5,210,781 $488,511
Value Fund Long-term capital
growth mutual fund $13,694,472 $ 4,539,638 $ 4,163,990 $ 4,539,638 $375,648
Magellan Fund Growth common stock
fund $17,722,490 $13,802,741 $13,242,145 $13,802,741 $560,596
OTC Portfolio Mutual fund of securities
of companies mainly traded
in the over-the-counter
market $10,575,494 $ 4,529,127 $ 4,274,301 $ 4,529,127 $254,826
</TABLE>
-20-
<PAGE> 23
Pursuant to the requirements of the Securities and Exchange Act of
1934, the trustees (or other persons who administer the Plan) have duly caused
this annual report to be signed by the undersigned hereunto duly authorized.
June 25, 1997 SCHULLER INTERNATIONAL EMPLOYEES
THRIFT PLAN
By: /s/ Ann J. Henley
----------------------------------
Ann J. Henley
Director, Benefits
-21-
