<PAGE>
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, 1997
OR
[_] TRANSITON REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____to______
Commision 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:
JOHNS MANVILLE EMPLOYEES 401(k) 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>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
---------------------
REPORT ON AUDIT OF FINANCIAL STATEMENTS
as of December 31, 1997 and 1996 and for
the year ended December 31, 1997
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
---------------------
Pages
-----
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Benefits with
Fund Information at December 31, 1997 and 1996 3 - 6
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the year ended
December 31, 1997 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
-1-
<PAGE>
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
with fund information of the Johns Manville Employees 401(k) Plan ("Plan") as of
December 31, 1997 and 1996 and the statement of changes in net assets available
for benefits with fund information for the year ended December 31, 1997. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1997 and 1996, and the changes in net assets available for benefits
for the year ended December 31, 1997, 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. These supplemental
schedules are the responsibility of the Plan's management. 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 17, 1998
-2-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1997 and 1996
<TABLE>
<CAPTION>
Retirement
Government International
Money Market Short-Term Asset Disciplined Value Magellan OTC Growth and
1997 Portfolio Bond Fund Manager Equity Fund Fund Fund Portfolio Income Fund
---- ------------ ----------- ----------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3,
4, 5 and 6):
Common stock of Johns
Manville Corporation, at
market value
(cost $1,471,988)
Commingled funds, at
market value:
Retirement Government
Money Market Portfolio
(cost $13,467,220) $ 13,467,220
Asset Manager (cost
$35,877,845) $42,302,412
Disciplined Equity Fund
(cost $34,967,418) $42,699,460
Value Fund (cost
$29,826,963) $31,960,853
Magellan Fund (cost
$46,139,201) $57,005,851
OTC Portfolio (cost
$17,027,717) $18,554,441
International Growth and
Income Fund (cost
$10,221,157) $10,871,106
Short-Term Bond Fund (cost
$55,495,144) $55,494,023
Investment contracts, at
contract value
Loans to Plan members, at
cost (approximates market)
Cash and equivalents (Note
3)
Due from associated funds 10,043 44,033 41,328 37,979 31,404 76,295 21,215 16,522
Contributions receivable:
Plan members 17,360 56,157 68,005 59,865 60,909 105,565 41,411 27,388
Company 120,856 396,301 470,843 429,495 392,207 806,761 284,751 211,058
Accrued income receivable
(Note 2)
Total assets 13,615,479 55,990,514 42,882,588 43,226,799 32,445,373 57,994,472 18,901,818 11,126,074
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES
Payable to associated funds
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net assets available for
benefits $13,615,479 $55,990,514 $42,882,588 $43,226,799 $32,445,373 $57,994,472 $18,901,818 $11,126,074
=========== =========== =========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1997 and 1996
<TABLE>
<CAPTION>
JM
Stock Loan Mutual Combined
1997 (Continued) Fund Account Benefit Life Total
---- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3, 4, 5 and 6):
Common stock of Johns Manville
Corporation at market value (cost $1,471,988) $ 658,504 $ 658,504
Commingled funds, at market value:
Retirement Government Money
Market Portfolio (cost $13,467,220) 13,467,220
Asset Manager (cost $35,877,845) 42,302,412
Disciplined Equity Fund (cost $34,967,418) 42,699,460
Value Fund (cost $29,826,963) 31,960,853
Magellan Fund (cost $46,139,201) 57,005,851
OTC Portfolio (cost $17,027,717) 18,554,441
International Growth and
Income Fund (cost $10,221,157) 10,871,106
Short-Term Bond Fund (cost $55,495,144) 55,494,023
Investment contracts, at contract value $14,581,613 14,581,613
Loans to Plan members, at cost
(approximates market) $ 8,756,552 8,756,552
Cash and equivalents (Note 3)
Due from associated funds 957 279,776
Contributions receivable:
Plan members 1,525 438,185
Company 13,036 3,125,308
Accrued income receivable (Note 2) 64,721 64,721
----------- ----------- ------------ ------------
Total assets 674,022 8,821,273 14,581,613 300,260,025
LIABILITIES
Payable to associated funds 279,776 279,776
----------- ----------- ------------ ------------
Net assets available for benefits $ 674,022 $ 8,541,497 $14,581,613 $299,980,249
=========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1997 and 1996
<TABLE>
<CAPTION>
Retirement
Government International
Money Market Income Asset Disciplined Value Magellan OTC Growth and
1996 Portfolio Fund Manager Equity Fund Fund Fund Portfolio Income Fund
---- ----------- ----------- ------------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments (Notes 2, 3,
4, 5 and 6):
Common stock of Johns
Manville
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 Fund
(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 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 28,797 65,406 20,771 15,996
Contributions receivable:
Plan members 13,693 58,916 61,990 50,731 50,405 96,878 39,037 25,231
Company 132,046 523,495 594,154 477,790 444,866 978,179 343,266 251,483
Accrued income receivable
(Note 2)
Total assets 9,583,175 61,788,900 35,349,729 30,813,163 24,528,039 45,982,889 16,406,434 9,529,459
---------- ----------- ------------- ----------- ----------- ----------- ----------- ----------
LIABILITIES
Payable to associated funds
---------- ----------- ------------- ----------- ----------- ----------- ----------- ----------
Net assets available for
benefits $9,583,175 $61,788,900 $35,349,729 $30,813,163 $24,528,039 $45,982,889 $16,406,434 $9,529,459
========== =========== ============= =========== =========== =========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1997 and 1996
<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 Johns Manville
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 Fund (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.
-6-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Retirement
Government International
Money Market Short-Term Asset Disciplined Value Magellan OTC Growth and
1997 Portfolio Bond Fund Manager Equity Fund Fund Fund Portfolio Income Fund
---- ------------ ------------ ----------- ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest income
Dividend income $ 585,879 $ 1,151,621 $3,710,144 $ 5,088,457 $ 4,277,544 $ 3,649,286 $ 1,304,639 $ 657,260
Net appreciation
(depreciation)
in fair value
of investments
(Note 2) (1,754) 4,235,836 5,406,997 1,040,274 8,219,117 111,744 65,744
------------ ------------ ----------- ----------- ----------- ------------ ----------- -------------
Total investment
income 585,879 1,149,867 7,945,980 10,495,454 5,317,818 11,868,403 1,416,383 723,004
------------ ------------ ----------- ----------- ----------- ------------ ----------- -------------
Contributions
(Note 7):
By Plan members 456,627 480,530 1,771,938 1,653,743 1,668,278 2,936,270 1,170,392 815,418
By the Company 123,303 539,425 1,024,319 905,092 857,487 1,745,568 630,512 473,227
------------ ------------ ----------- ----------- ----------- ------------ ----------- -------------
579,930 1,019,955 2,796,257 2,558,835 2,525,765 4,681,838 1,800,904 1,288,645
------------ ------------ ----------- ----------- ----------- ------------ ----------- -------------
Transfers into
fund from
associated funds 16,696,454 59,542,627 4,638,618 9,253,821 8,359,152 7,097,030 7,615,952 2,180,742
------------ ------------ ----------- ----------- ----------- ------------ ----------- -------------
Transfers out of
fund to
associated funds (12,744,766) (4,551,899) (5,928,944) (7,857,477) (6,543,214) (8,763,382) (7,373,601) (2,018,197)
------------ ------------ ----------- ----------- ----------- ------------ ----------- -------------
Withdrawals,
forfeitures and
loans (Note 8) (1,078,820) (1,169,686) (1,907,124) (2,031,971) (1,740,045) (2,869,662) (964,069) (577,460)
------------ ------------ ----------- ----------- ----------- ------------ ----------- -------------
Administrative
expenses (6,373) (350) (11,928) (5,026) (2,142) (2,644) (185) (119)
------------ ------------ ----------- ----------- ----------- ------------ ----------- -------------
Net increase
(decrease) 4,032,304 55,990,514 7,532,859 12,413,636 7,917,334 12,011,583 2,495,384 1,596,615
Net assets
available for
benefits:
Beginning of
year 9,583,175 35,349,729 30,813,163 24,528,039 45,982,889 16,406,434 9,529,459
------------ ------------ ----------- ----------- ----------- ------------ ----------- -------------
End of year $ 13,615,479 $55,990,514 $42,882,588 $43,226,799 $32,445,373 $57,994,472 $18,901,818 $11,126,074
============ ============ =========== =========== =========== ============ =========== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-7-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the Year Ended December 31, 1997
<TABLE>
<CAPTION>
JM
Income Stock Loan Mutual Combined
1997 (Continued) Fund Fund Account Benefit Life Total
---- ---------- ---------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest income $ 331,784 $ 702,813 $ 1,136,945 $ 2,171,542
Dividend income 20,424,830
Net appreciation
(depreciation) in fair
value of investments
(Note 2) 2,441,951 $ (97,432) 21,422,477
---------- --------- ----------- ------------- ------------
Total investment income 2,773,735 (97,432) 702,813 1,136,945 44,018,849
---------- --------- ----------- ------------- ------------
Contributions (Note 7):
By Plan members 1,010,968 18,177 11,982,341
By the Company 329,333 17,564 6,645,830
---------- --------- ----------- ------------- ------------
1,340,301 35,741 18,628,171
---------- --------- ----------- ------------- ------------
Transfers into fund from
associated funds 10,355,571 669,358 4,319,594 130,728,919
---------- --------- ----------- ------------- ------------
Transfers out of fund to
associated funds (70,501,060) (40,431) (3,856,797) (549,151) (130,728,919)
---------- --------- ----------- ------------- ------------
Withdrawals, forfeitures
and loans (Note 8) (5,747,605) (22,124) (289,736) (657,692) (19,055,994)
---------- --------- ----------- ------------- ------------
Administrative expenses (9,842) (38,609)
---------- --------- ----------- ------------- ------------
Net increase (decrease) (61,788,900) 545,112 875,874 (69,898) 43,552,417
Net assets available
for benefits:
Beginning of year 61,788,900 128,910 7,665,623 14,651,511 256,427,832
---------- --------- ----------- ------------- ------------
End of year $ 0 $ 674,022 $ 8,541,497 $14,581,613 $299,980,249
========== ========= =========== ============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
_____________________
1. Plan Description:
----------------
The Johns Manville Employees 401(k) Plan (the "Plan"), formerly the Schuller
International Employees 401(k) Plan, is sponsored by Johns Manville
Corporation and offered through its wholly owned subsidiary, Johns Manville
International Inc. (the "Company"). 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: Retirement Government Money Market
Portfolio, Short-Term Bond Fund, Asset Manager, Disciplined Equity Fund,
Value Fund, Magellan Fund, OTC Portfolio, International Growth and Income
Fund, and the JM Stock Fund. Summarized information regarding eligibility,
vesting, contributions and benefits is provided in the Summary Plan Document.
Effective July 15, 1997 the JM Stock Fund, which holds common stock of Johns
Manville Corporation, became a new investment option. Participants may
invest up to 25% of the total value of their account in this fund. Prior to
July 1997, some participants had investments in the Schuller Common Stock
Pool, which also held common stock of Johns Manville Corporation but had been
unavailable as an investment option since 1982, although the Plan allowed
additional shares to be purchased with dividends paid on the common stock. In
1997, investments in the Schuller Common Stock Pool were transferred into the
JM Stock Fund.
The loan account holds loans made to eligible participants out of their
vested account balances in the aforementioned funds. 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, 1997, there were a total of 5,622 participants in the Plan.
They participated in one or more of the funds as follows: 791 in the
Retirement Government Money Market Portfolio, 2,611 in the Short-Term Bond
Fund, 2,021 in the Asset Manager, 2,194 in the Disciplined Equity Fund, 1,826
in the Value Fund, 2,787 in the Magellan Fund, 1,385 in the OTC Portfolio,
1,287 in the International Growth and Income Fund, 297 in the JM Stock Fund,
and 985 in the Mutual Benefit Life contract (see Notes 3 and 5).
Additionally, 1,567 participants had loans outstanding through the loan
account at December 31, 1997.
-9-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
_____________________
2. Summary of Significant Accounting Policies:
-------------------------------------------
Investments in the funds are stated at current values based upon the
following:
Retirement Government original cost plus accrued dividends.
Money Market Fund
Short-Term Bond Fund quotations obtained directly from mutual fund company.
Asset Manager Fund quotations obtained directly from mutual fund company.
Disciplined Equity quotations obtained directly from mutual fund company.
Fund
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.
Schuller Common unit value (stock quotations obtained from New York
Stock Pool Stock Exchange adjusted by a factor for cash reserve).
JM Stock Fund stock quotations obtained from New York Stock
Exchange.
Mutual Benefit Life contract value (original cost plus accrued interest
and contributions less withdrawals).
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, 1997 and 1996.
-10-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
-------------------
2. Summary of Significant Accounting Policies, continued:
-------------------------------------------
Beginning in 1996, investments in the Income Fund were transferred into the
Short-Term Bond Fund as contracts in the Income Fund matured or were
liquidated. All funds were transferred or liquidated by December 31, 1997.
Previously, the Plan entered into investment contracts with various insurance
and investment companies within the Income Fund. The contracts were credited
with earnings on the underlying investments and charged for Plan withdrawals
and administrative expenses charged by these companies. The contracts were
included in the financial statements at contract value, as reported by the
insurance and investment companies. Contract value represented contributions
under the contracts, plus earnings, less Plan withdrawals and administrative
expenses. The average yields presented on the contracts approximated the
contract rate. No valuation reserves were required to adjust contract
amounts, as the contract value of the reported investment contracts
approximated fair value. Investment contracts held in the Income Fund
contained provisions that could reduce the earnings on the investment below
the guaranteed rate if there was 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.
-11-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
------------------
3. Investments:
------------
The number of shares and carrying value per share at December 31, were as
follows:
1997 1996
---------- ----------
Retirement Government Money Market
----------------------------------
Shares 13,467,220 9,429,706
Market value per share $1.00 $1.00
Short-Term Bond Fund
--------------------
Shares 6,378,623* 2,188,665*
Market value per share $8.70 $8.72
Asset Manager
-------------
Shares 2,305,309* 2,103,883*
Market value per share $18.35 $16.47
Disciplined Equity Fund
-----------------------
Shares 1,651,178* 1,372,647*
Market value per share $25.86 $22.04
Value Fund
----------
Shares 591,430* 465,735*
Market value per share $54.04 $51.54
Magellan Fund
-------------
Shares 598,361* 556,013*
Market value per share $95.27 $80.65
OTC Portfolio
-------------
Shares 554,692* 489,250*
Market value per share $33.45 $32.71
International Growth and Income Fund
------------------------------------
Shares 551,833 472,468
Market value per share $19.70 $19.55
Income Fund
-----------
Security Life of Denver Contract
Shares 18,971,620*
Contract value per share $1.00
Average yield 3.00%
-12-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
-------------------
3. Investments, continued: 1997 1996
----------- ------------ ------------
Morgan Guaranty ABS
Shares 7,890,809
Contract value per share $1.00
Average yield 7.09%
Confederation Life Insurance Contract
Shares 3,626,142
Contract value per share $1.00
Average yield (Note 4) 0.00%
Peoples Security Life ABS
Shares 2,991,598
Contract value per share $1.00
Average yield 7.73%
Sun Life Insurance of America Contract
Units 2,923,252
Contract value per share $1.00
Average yield 8.02%
Protective Life Insurance Contract
Units 2,921,041
Contract value per share $1.00
Average yield 7.98%
JM Stock Fund
-------------
Shares 64,896
Market value per share $10.15
Schuller Common Stock Pool
--------------------------
Shares 5,801
Market value per share $22.22
Loan Account
------------
Remaining principal balance, at cost $8,756,552 $7,865,239
(approximates market)
-13-
<PAGE>
JOHNS MANVILLE EMPLOYEES 410(K) PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------
3. Investments, continued:
-----------
Mutual Benefit Life Insurance Contract
--------------------------------------
Shares 14,581,613 14,651,511*
Contract value per share $1.00 $1.00
Average yield (Note 5) 8.05% 6.25%
* Represents at least 5% of net assets available for benefits at December 31
of the corresponding year.
The cash and cash 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, on March 1, 1996. Investments in
existing contracts at December 31, 1996 remained until maturity, at which
time the cash was invested in this bond fund. Currently, 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. During April and May 1997, Plan
participants received a total of $3.9 million from Confederation Life,
effectively terminating the contract.
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 a total of $864,000, representing 55% of their account balances with
interest credited at 3.5% annually through payout. Participants 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, at 5.25% through September 30,
1996, at 9.25% through December 31, 1996, at 6.35% through June 30, 1997, and
at 9.75% through the remainder
-14-
<PAGE>
JOHNS MANVILLE EMPLOYEES 410(K) PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------
5. Mutual Benefit Life Insurance Company, continued:
-------------------------------------
of 1998. Interest to be paid thereafter has not been determined. 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 will extend through December 1999,
withdrawals will be available. The cashout penalty percentage is determined
on a quarterly basis and was 4% at December 31, 1997. Effective January 1,
1998 the penalty percentage is 0%. In February 1997, the Superior Court of
New Jersey gave final approval to a Settlement Agreement that eliminated
pending appeals and further litigation regarding the Rehabilitation Plan. As
part of the agreement, the installment payout provision at the end of
Rehabilitation was eliminated. Contract account values are now scheduled to
be paid in full at the end of the Rehabilitation Period, December 1999.
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. 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. At December 31, 1997 and 1996 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.
-15-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------
7. Contributions, Eligibility and Vesting, continued:
--------------------------------------
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 prior to July 15, 1997 was
---------------------
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. Effective July 15, 1997, the amount of the variable
match was amended to be based on the Company's sole discretion. Company
contributions of $2,976,905 related to the variable match were accrued for at
December 31, 1997. 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 part-time
or temporary, such employee becomes eligible to participate after completing
at least one year and 1,000 hours of service.
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.
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 1997,
forfeitures totaled $120,644. 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
-16-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------
8. Withdrawals and Forfeitures and Loans, continued:
-------------------------------------
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 participants 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 for a determination as to whether the
Plan meets the qualification requirements of Section 401(a) of the Internal
Revenue Code of 1986. On April 7, 1998, the Company received a favorable tax
qualification determination letter, retroactive to December 31, 1996, from
the Internal Revenue Service. 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
-17-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------
10. Termination of the Plan, continued:
-----------------------
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 $134,000 in 1997 of administrative expenses
to the Plan's trustee and outside consultants on behalf of the Plan, which
are not included in the financial statements.
-18-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1997
<TABLE>
<CAPTION>
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest, Collateral
Lessor, or Similar Party Par or Maturity Value, if applicable Share Balance Cost Current Value
- ---------------------------- -------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Retirement Government
Money Market Money market fund 13,467,220 $ 13,467,220 $ 13,467,220
Short-Term Bond Fund Income mutual fund 6,378,623 55,495,144 55,494,023
Asset Manager Mutual fund of domestic and foreign stocks,
bonds, and short-term instruments 2,305,309 35,877,845 42,302,412
Disciplined Equity Fund Domestic common stocks mutual fund 1,651,178 34,967,418 42,699,460
Value Fund Common stock mutual fund of companies
considered undervalued or having growth
potential 591,430 29,826,963 31,960,853
Magellan Fund Common stock and convertible securities
mutual fund 598,361 46,139,201 57,005,851
OTC Portfolio Mutual fund of securities of companies
mainly traded in the over-the-counter
market 554,692 17,027,717 18,554,441
International Growth Foreign equity and debt securities
and Income Fund mutual fund 551,833 10,221,157 10,871,106
JM Stock Fund* Common stock 64,896 1,471,988 658,504
Loans to Plan members Participant loans (1) 8,756,552
Mutual Benefit Life Insurance contract 14,581,613 14,581,613 14,581,613
------------ ------------
$259,076,266 $296,352,035
============ ============
</TABLE>
(1) Loans to Plan members bear interest ranging from 7% to 12% and mature on
January, 1998 through August, 2027.
* Party in interest
-19-
<PAGE>
JOHNS MANVILLE EMPLOYEES 401(K) PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 31, 1997
<TABLE>
<CAPTION>
Current
Value at
Identity Number of Number Transaction Net Gain
of Fund Description of Asset Total Purchases Purchases Total Sales of Sales Cost of Asset Date (Loss)
- ------------ --------------------- --------------- --------- ----------- -------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retirement
Government
Money Market Money market fund $17,996,835 226 $13,959,321 213 $13,959,321 $13,959,321
Short-Term
Bond Fund Income mutual fund $61,217,712 82 $ 5,721,935 81 $ 5,722,567 $ 5,721,935 $ (632)
Income Fund Income mutual fund
commingled with a
blend of guaranteed
investment contracts
(GICS) and investment
contracts with
insurance and
investment companies $12,652,776 171 $76,258,507 175 $71,326,451 $76,258,507 $4,932,056
Asset Manager Mutual fund of
domestic and foreign
stocks, bonds, and
short-term
instruments $11,263,621 248 $ 7,847,996 238 $ 6,833,695 $ 7,847,996 $1,014,301
Disciplined
Equity Fund Domestic common
stocks mutual fund $16,933,786 250 $ 9,894,474 240 $ 8,476,638 $ 9,894,474 $1,417,836
Value Fund Common stock mutual
fund of companies
considered
undervalued or having
growth potential $15,202,008 248 $ 8,285,401 231 $ 7,517,580 $ 8,285,401 $ 767,821
Magellan Fund Common stock and
convertible
securities mutual
fund $15,579,995 252 $11,635,688 249 $ 9,999,178 $11,635,688 $1,636,510
OTC Portfolio Mutual fund of
securities of
companies
mainly traded in
the over-the-counter
market $10,777,192 248 $ 8,337,854 233 $ 7,827,507 $ 8,337,854 $ 510,347
</TABLE>
-20-
<PAGE>
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 17, 1998 JOHNS MANVILLE EMPLOYEES
401(k) PLAN
By: /s/ Ann J. Henley
------------------------------------
Ann J. Henley
Director, Benefits
21
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Johns Manville Corporation of Form S-8 (File No. 333-31007) of our report dated
June 17, 1998, on our audits of the financial statements of the Johns Manville
Employees 401(k) Plan as of December 31, 1997 and 1996, and for the year ended
December 31, 1997, which report is incorporated by reference in this Annual
Report of Form 11-K.
COOPERS & LYBRAND L.L.P
Denver, Colorado
June 22, 1998
