Annual Report (Form 10-K), fiscal year 1993

ITEM 1. BUSINESS.
MascoTech, Inc. (formerly Masco Industries, Inc.) is a diversified manufacturer of original equipment and aftermarket parts for the transportation industry; commercial, institutional and residential building products for the construction industry; and other diversified products principally for the defense industry. Sophisticated technology plays a significant role in the Company's businesses and in the design, engineering and manufacturing of many of its products. Transportation-Related Products are manufactured utilizing a variety of metalworking and other process technologies. Although published industry statistics are not available, the Company believes that it is a leading independent producer of many of the industrial component parts that it produces using cold, warm or hot forming processes. In addition to its manufacturing activities, the Company provides design and engineering services primarily for the automotive, heavy truck and aerospace industries.
MascoTech was incorporated under the laws of Delaware in 1984 as a wholly-owned subsidiary of Masco Corporation, which in May, 1984 transferred to MascoTech its industrial businesses. The Company became a separate public company in July, 1984 when Masco Corporation distributed shares of Company Common Stock as a special dividend to its stockholders. Masco Corporation currently owns approximately 42 percent of the Company's outstanding Common Stock. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Corporate Development," included in Item 7 of this Report.
Except as the context otherwise indicates, the terms "MascoTech" and the "Company" refer to MascoTech, Inc. and its consolidated subsidiaries.
RECENT DEVELOPMENTS
The Company has undertaken the planned disposition of its energy-related business segment, which consisted of seven business units, as part of its long-term strategic plan to de-leverage its balance sheet and increase the focus on its core operating capabilities. As a result, the Company's financial statements have been reclassified to present such businesses as discontinued operations. These businesses manufactured specialized tools, equipment and other products for energy-related industries. Two of the businesses were sold in late 1993, including one business to the Company's affiliate, TriMas Corporation, and the Company expects to divest the remaining businesses in 1994. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Discontinued Operations," included in Item 7 of this Report. Except as the context otherwise indicates, all information contained herein has been reclassified for these discontinued operations.
In July, 1993, the Company issued $216 million (liquidation value) of Dividend Enhanced Convertible StockSM. In late 1993, the Company redeemed for cash its outstanding $100 million of 10% Exchangeable Preferred Stock and, following a call for redemption, the outstanding $187 million of the Company's 6% Convertible Subordinated Debentures due 2011 were converted into 10.4 million shares of Company Common Stock (including approximately 7 million shares issued to Masco Corporation). In early 1994, the Company issued, in a public offering, $345 million of 4 1/2% Convertible Subordinated Debentures due 2003 which are convertible into Company Common Stock at $31.00 per share. The net proceeds from this offering were used to redeem, on February 1, 1994, the outstanding $250 million of the Company's 10 1/4% Senior Subordinated Notes due 1997 and reduce outstanding bank debt.
INDUSTRY SEGMENTS
The following table sets forth for the three years ended December 31, 1993, the contribution of the Company's continuing industry segments to net sales and operating profit:
- ------------------------- (1) Results in 1992 and 1991 have been reclassified to conform with the presentation adopted in 1993 (including amounts for discontinued operations -- see the Note to the Company's Consolidated Financial Statements captioned "Discontinued Operations" included in Item 8 of this Report).
(2) Amounts are before general corporate expense.
Additional financial information concerning the Company's operations by industry segments as of and for the three years ended December 31, 1993, is set forth in Item 8 of this Report in the Note to the Company's Consolidated Financial Statements captioned "Segment Information."
TRANSPORTATION-RELATED PRODUCTS
The Company manufactures a broad range of semi-finished components, subassemblies and assemblies for the transportation industry. Transportation-Related Products represented 76 percent of 1993 sales from continuing operations and primarily consist of original equipment products for the automotive and truck industries. The Company's products include a number of high-performance products for which reliability, quality and certainty of supply are major factors in customers' selection of suppliers. Over half of the products are used for engine and drivetrain applications (such as semi-finished transmission shafts, drive gears, engine connecting rods, wheel spindles and front wheel drive and exhaust system components) and for chassis and suspension functions (including electromechanical solenoids and relays and suspension components). Products manufactured for exterior body trim applications include automotive trim, luggage racks and accessories, and metal stampings. Aftermarket products include fuel and emission systems components, windshield wiper blades, constant-velocity joints, brake hardware repair kits, and luggage racks and accessories. In addition to its manufacturing activities, the Company provides engineering services primarily for the automotive and heavy-duty truck industries, and is engaged in specialty vehicle development and conversion programs.
Products are manufactured using various metalworking technologies, including cold, warm and hot forming, powdered metal forming and stamping. Approximately one-quarter of the Company's sales of Transportation-Related Products resulted from using cold, warm or hot metal forming technologies. The Company believes that its metalworking technologies provide cost-competitive,
high-performance, quality components that are required in order to meet the increasing demands of the automotive and truck markets it serves.
Approximately 85 percent of the Company's Transportation-Related Products sales in 1993 were original equipment automotive products and services. Sales to original equipment manufacturers are made through factory sales personnel and independent sales representatives. During 1993, sales to various divisions and subsidiaries of Ford Motor Company, General Motors Corporation and Chrysler Corporation accounted for approximately 20 percent, 14 percent and 12 percent, respectively, of the Company's net sales. Sales to the automotive aftermarket are made primarily to distributors utilizing factory sales and service personnel.
SPECIALTY PRODUCTS
Architectural Products
The Company manufactures a variety of Architectural Products for commercial, institutional and residential markets. Products include steel doors and frames; stainable and low maintenance steel doors; wood windows and aluminum-clad wood windows; leaded, etched and beveled glass for decorative windows and entryways; residential entry systems; garage doors; sectional and rolling doors; security grilles; and modular metal partitions. The Company's commercial and institutional markets include office buildings, factories, hotels, schools, hospitals, retail stores and malls, warehouses and mini-warehouses. Residential markets include single family new construction as well as repair and remodeling. Architectural Products are sold principally to wholesale distributors who sell the products to builders, developers, dealers, retailers (such as do-it-yourself home centers) and residential, commercial, industrial and institutional end users. Security grilles are sold directly to builders, developers and end users.
Other Specialty Products
The Company's Other Specialty Products consist primarily of Defense Products, including large diameter cold formed cartridge cases, projectiles and casings for rocket motors and missiles for the United States government and its suppliers. Changes in government procurement practices and requirements have adversely affected orders, sales and profits of such products in recent years and are expected to continue to do so in the future. As a result, the Company is pursuing other commercial applications for the resources related to the manufacturing of Defense Products, including its metal forging capability and waste-water treatment capability. Since obtaining the necessary permits in 1990, the Company has marketed waste-water treatment services to other industrial companies principally in southern California.
The Company's government contracts contain standard clauses providing for termination at the convenience of the government which, in such cases, would provide the Company with compensation for work performed and costs of termination. Defense Products are sold both directly to the federal government and to other prime contractors to the federal government.
GENERAL INFORMATION CONCERNING INDUSTRY SEGMENTS
No material portion of the Company's business is seasonal or has special working capital requirements. The Company does not consider backlog orders to be a material factor in its industry segments, and, except as noted above, no material portion of its business in its other industry segments is dependent upon any one customer or subject to renegotiation of profits or termination of contracts at the election of the federal government. Compliance with federal, state and local regulations relating to the discharge of materials into the environment, or otherwise relating to the protection of the environment, is not expected to result in material capital expenditures by the Company or to have a material effect on the Company's earnings or competitive position. See, however, "Legal Proceedings," included as Item 3 of this Report, for a discussion of certain pending proceedings concerning environmental matters. In general, raw materials required by the Company are obtainable from various sources and in the quantities desired.
INTERNATIONAL OPERATIONS
The Company, through its subsidiaries, has businesses located in Canada, Germany, Italy and the United Kingdom. Products manufactured by the Company outside of the United States include forged automotive component parts, constant-velocity joints and extruded urethane lineals. In addition, the Company provides engineering services outside of the United States, primarily serving automotive manufacturers in the United Kingdom and Germany. For 1991 through 1993, the Company's annual net export sales from the United States to other countries, as a percentage of annual consolidated net sales from continuing operations, approximated five percent.
The Company's foreign operations are subject to political, monetary, economic and other risks attendant generally to international businesses. These risks generally vary from country to country.
EQUITY INVESTMENTS
TriMas Corporation
The Company owns approximately 43 percent of the outstanding common stock of TriMas Corporation ("TriMas"). The Company's common equity interest in TriMas increased from 28 percent as a result of the late 1993 conversion of TriMas convertible preferred stock held by the Company into 7.8 million shares of TriMas common stock. TriMas manufactures a number of industrial products, including a variety of steel, stainless steel, aluminum and other non-ferrous fasteners for the building construction, farm implement, medium and heavy-duty truck, appliance, aerospace, electronics and other industries. TriMas also provides metal treating services for manufacturers of fasteners and comparable products. TriMas manufactures towing systems products, including vehicle hitches, jacks, winches, couplers and related accessories for the passenger car, light truck, recreational vehicle, marine, agricultural and industrial markets. TriMas also manufactures specialty container products, including industrial container closures, sealing caps and dispensing spigots primarily for the chemical, agricultural, food, petroleum and health care industries, as well as high-pressure seamless compressed gas cylinders used for shipping, storing and dispensing oxygen, nitrogen, argon and helium, specialty industrial gaskets for refining, petrochemical and other industrial applications, and a complete line of low-pressure welded cylinders used to contain and dispense acetylene gas for the welding and cutting industries. In addition, TriMas manufactures flame-retardant facings and jacketings used in conjunction with fiberglass insulation, principally for commercial and industrial construction applications, pressure-sensitive specialty tape products and a variety of specialty precision tools such as center drills, cutters, end mills, reamers, master gears, gages and punches.
Emco Limited
The Company owns approximately 43 percent of the outstanding common stock and convertible debentures of Emco Limited ("Emco"), as a result of the transactions described under "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Corporate Development," included in Item 7 of this Report. Emco is a major, publicly traded, Canadian-based manufacturer and distributor of building and home improvement products, including roofing materials, wood fiber products, vinyl siding, stainless steel sinks and vinyl windows, and a distributor of plumbing and related products. In addition, Emco manufactures and distributes worldwide fluid handling equipment for the petroleum and petrochemical and other industries, and produces custom components, brass and aluminum forgings, plastic components, tools, dies and molds. Emco also provides other services on a contract basis for original equipment manufacturers and others.
Titan Wheel International, Inc.
The Company owns approximately 21 percent of the outstanding common stock of Titan Wheel International, Inc. ("Titan"), as a result of the transactions described in the Note to the Company's Consolidated Financial Statements captioned "Equity and Other Investments in Affiliates," included in Item 8 of this Report. Titan is a manufacturer of wheels and other products for agricultural, construction and other off-highway equipment.
Other Equity Investments
The Company has equity investments in several other companies which are engaged in activities related to the Company's businesses, including the manufacture of plastic component parts utilizing the reaction injection molding process, primarily for the automotive and truck industries, and the manufacture of electrical and electronic components, primarily for the automotive and truck industries.
PATENTS AND TRADEMARKS
The Company holds a number of patents, patent applications, licenses, trademarks and trade names. The Company considers its patents, patent applications, licenses, trademarks and trade names to be valuable, but does not believe that there is any reasonable likelihood of a loss of such rights which would have a material adverse effect on the Company's industry segments or its present business as a whole.
COMPETITION
The major domestic and foreign markets for the Company's products in its industry segments are highly competitive. Competition is based primarily on price, performance, quality and service, with the relative importance of such factors varying among products. Government procurement practices are an additional factor in the case of Defense Products. In the case of Transportation-Related Products, the Company's competitors include a large number of other well-established independent manufacturers as well as certain customers who have their own metalworking and engineering capabilities. Although a number of companies of varying size compete with the Company in its industry segments, no single competitor is in substantial competition with the Company with respect to more than a few of its product lines and services.
EMPLOYEES
At December 31, 1993, the Company employed approximately 12,200 people. Satisfactory relations have generally prevailed between the Company and its employees.
ITEM 2.



ITEM 2. PROPERTIES.
The following list includes the Company's principal manufacturing facilities by location and the industry segments utilizing such facilities:
Arizona..............Chandler (2)
California...........Santa Fe Springs (4), Vernon (3) and Yuba City (1)
Florida..............Auburndale (2), Deerfield Beach (1) and Orlando (2)
Georgia..............Adel (1), Lawrenceville (1) and Valdosta (1)
Indiana..............Kendallville (1)
Iowa.................Dubuque (2)
Kentucky.............Nicholasville (1)
Michigan.............Auburn Hills (1)(1), Brighton (1), Burton (1), Coopersville (1), Detroit (1)(1)(1), Farmington Hills (1), Fraser (1), Green Oak Township (1 and 3), Hamburg (1 and 3), Holland (1), Livonia (1), Mesick (1), Mt. Clemens (1), Oxford (1) (1) (1), Port Huron (1), Redford (1), Roseville (1), Royal Oak (1), Shelby Township (1), St. Clair (1), St. Clair Shores (1), Sterling Heights (1), Traverse City (1) (1) (1) (1) (1), Troy (1)(1), Warren (1) (1), West Branch (2) and Ypsilanti (1)
Mississippi..........Nesbit (2)
New York.............Brooklyn (2) and Maspeth (2)
Ohio.................Blue Ash (2), Bluffton (1), Canal Fulton (1), Columbus (2), Lima (1), Minerva (1), Perrysburg (2), Port Clinton (1) and Upper Sandusky (1)
Oklahoma.............Tulsa (4)
Pennsylvania.........Ridgway (1)
Texas................Bryan (4), Dallas (4), Greenville (4) and Houston (4) (4) (4)
Virginia.............Duffield (1)
Germany..............Riedstadt (2) and Zell am Harmersbach (1 and 3)
Italy................Poggio Rusco (1)
United Kingdom.......Wednesfield, England (1)
Note: Multiple footnotes within the same parenthesis indicate the facility is engaged in significant activities relating to more than one segment. Multiple footnotes to the same municipality denote separate facilities in that location. Industry segments in the preceding table are identified as follows: (1) Transportation-Related Products; (2) Specialty Products -- Architectural; (3) Specialty Products -- Other; and (4) Discontinued Operations.
The Company's largest manufacturing facility is located in Vernon, California and is a multi-plant facility of approximately 920,000 square feet. The Company owns the largest plant, comprising approximately 540,000 square feet and operates the remaining portions of this facility under leases, the earliest of which expires at the end of 1994. Except for the foregoing facility and an additional manufacturing facility covering approximately 605,000 square feet, the Company's manufacturing facilities range in size from approximately 25,000 square feet to 325,000 square feet, are owned by the Company or leased, and are not subject to significant encumbrances. The Company's executive offices
are located in Taylor, Michigan, and are provided by Masco Corporation to the Company under a corporate services agreement.
The Company's buildings, machinery and equipment have been generally well maintained, are in good operating condition, and are adequate for current production requirements.
The following list identifies the manufacturing facilities of TriMas by location and the industry segments utilizing such facilities:
California.................... Commerce(a) Illinois...................... Wood Dale(a) Indiana....................... Auburn(c), Elkhart(b), Frankfort(a) and Mongo(b) Louisiana..................... Baton Rouge(c) Massachusetts................. Plymouth(d) Michigan...................... Canton(b), Detroit(a) and Warren(d)(d)(d)(d) New Jersey.................... Edison(d), Netcong(d) and North Bergen(d) Ohio.......................... Lakewood(a) Texas......................... Houston(c) and Longview(c) Wisconsin..................... Mosinee(b) Australia..................... Dandenong South, Victoria(b) Canada........................ Brampton, Ontario(c), Fort Erie, Ontario(c) and Oakville, Ontario(b) Mexico........................ Mexico City(c)
Note: Multiple footnotes to the same municipality denote separate facilities in that location. Industry segments in the preceding table are identified as follows: (a) Specialty Fasteners; (b) Towing Systems; (c) Specialty Container Products; and (d) Corporate Companies.
TriMas' buildings, machinery and equipment have been generally well maintained, are in good operating condition, and are adequate for current production requirements.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS.
A civil suit was filed in the United States District Court for the Central District of California in April, 1983 by the United States of America and the State of California against 30 defendants, including the Company's NI Industries, Inc. subsidiary ("NI"), for alleged release into the environment of hazardous waste disposed of at the Stringfellow Disposal Site in California. The plaintiffs have requested, among other things, that the defendants clean up the contamination at that site. A consent decree has been entered into by the plaintiffs and the defendants, including NI, providing that the consenting parties perform partial remediation at the site. Another civil suit was filed in the United States District Court for the Central District of California in December, 1988 by the United States of America and the State of California against more than 180 defendants, including NI, for alleged release into the environment of hazardous waste disposed of at the Operating Industries, Inc. site in California. This site served for many years as a depository for municipal and industrial waste. The plaintiffs have requested, among other things, that the defendants clean up the contamination at that site. Two partial consent decrees have been entered into by the plaintiffs and a group of the defendants, including NI, providing that the consenting parties perform certain interim remedial work at the site and reimburse the plaintiffs for certain past costs incurred by the plaintiffs at the site. Based upon its present knowledge, and subject to future legal and factual developments, the Company does not believe that any of this litigation will have a material adverse effect on its consolidated financial position.
In November, 1993 the California Environmental Protection Agency issued a proposed enforcement order and a tentative civil penalty in the amount of $180,000 against the Company's subsidiary, NI Industries, Inc., principally on account of alleged past violations of certain California environmental laws and regulations relating to the subsidiary's handling of waste material and relating to its permit
allowing it to treat industrial waste. The proposed enforcement order is under negotiation and is not yet final.
During the fourth quarter of 1991, a division of the Company was assessed a civil penalty in excess of $100,000 by a municipal sewer authority for alleged past violations of limitations of waste-water discharges into the authority's sanitary sewer system. This assessment was appealed by the division, and the appeal is pending. The division is now in compliance with all applicable waste-water discharge requirements and the Company believes that the costs of penalties, if paid, would be immaterial to the Company.
The Company is subject to other claims and litigation in the ordinary course of its business, but does not believe that any such claim or litigation will have a material adverse effect on its consolidated financial position.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
SUPPLEMENTARY ITEM. EXECUTIVE OFFICERS OF REGISTRANT (PURSUANT TO INSTRUCTION 3 TO ITEM 401(B) OF REGULATION S-K).
Each of the executive officers is elected to a term of one year or less and serves at the discretion of the Board of Directors. Mr. Manoogian is and has been for over five years a Director, Chairman of the Board and the Chief Executive Officer of Masco Corporation, an affiliate of the Company that is a manufacturer of building and home improvement and home furnishings products for the home and family. Mr. Manoogian also is a Director and Chairman of the Board of TriMas Corporation. Mr. Gardner was appointed President and Chief Operating Officer of the Company in October, 1992. Prior to his appointment, Mr. Gardner was President -- Automotive. He joined the Company in 1987, and in 1990 assumed responsibility for all of the Company's businesses serving the transportation industry.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock commenced trading on the New York Stock Exchange ("NYSE") on June 23, 1993 under the symbol "MSX." The Company's Common Stock was previously traded over-the-counter and quoted on the National Association of Securities Dealers Automated Quotation System -- National Market System ("NASDAQ-NMS") under the symbol "MASX." The following table sets forth for the periods indicated the high and low sales prices of the Company's Common Stock as reported on the NASDAQ-NMS for the periods prior to June 23, 1993 and as reported on the NYSE Composite Tape commencing June 23, 1993:
On March 15, 1994 there were approximately 5,600 holders of record of the Company's Common Stock.
The Company commenced paying cash dividends on its Common Stock in August, 1993 and to date has declared four and paid three quarterly dividends, each in the amount of $.02 per share. Future declarations of dividends on the Common Stock are discretionary with the Board of Directors and will depend upon the Company's earnings, capital requirements, financial condition and other factors. Dividends may not be paid on Company Common Stock if there are any dividend arrearages on the Company's outstanding Preferred Stock. In addition, certain of the Company's long-term debt instruments contain provisions that restrict the dividends that it may pay on its capital stock. See the Note to the Company's Consolidated Financial Statements captioned "Long-Term Debt," included in Item 8 of this Report.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA.
The following table sets forth summary consolidated financial information of the Company, for the years and dates indicated (information related to the statements of income and, in 1993, the balance sheet, have been reclassified for discontinued operations):
Results for 1993 and 1992 include pre-tax income of approximately $9 million and $25 million, respectively, as a result of gains associated with the sale of common stock through public offerings by equity affiliates and, in 1992, a prepayment premium related to the redemption of debentures held by the Company. This income was largely offset by costs and expenses related to cost-reduction initiatives, the restructuring of certain operations and product lines, adjustments to the carrying value of certain long-term assets, and other costs and expenses.
Results for 1993 were reduced by a charge of approximately $.03 per common share reflecting the increased 1993 federal corporate income tax rate related to adjusting deferred tax balances as of December 31, 1992 for the higher income tax rate.
Results for 1993 are before the effect of a $5.8 million pre-tax extraordinary charge ($3.7 million after-tax or $.06 per common share) related to the early extinguishment of subordinated debt (see the Note to the Company's Consolidated Financial Statements captioned "Long-Term Debt," included in Item 8 of this Report). 1993 results are also before an after-tax charge of approximately $22 million ($.39 per common share) related to the disposition of a segment of the Company's business (see the Note to the Company's Consolidated Financial Statements captioned "Discontinued Operations," included in Item 8 of this Report). Net income for 1993 before preferred stock dividends was $47.6 million or $.57 per common share.
Income from continuing operations per common share in 1993 is presented on a fully diluted basis. Primary earnings from continuing operations per common share were $.97 in 1993. For years 1989 through 1992, the assumed conversion of dilutive securities is anti-dilutive.
Income from continuing operations before extraordinary loss attributable to common stock was $56.0 million and $29.7 million after preferred stock dividends in 1993 and 1992, respectively.
Results for 1991 include the effect of charges for restructurings and other costs, aggregating approximately $41 million pre-tax, which reduced operating profit by $27 million, income from continuing operations before extraordinary income by $27 million and earnings per common share by $.45.
Loss from continuing operations attributable to common stock in 1991 was $20.0 million after preferred stock dividends.
Results for 1990 include the effect of charges for restructurings and other costs, aggregating approximately $40 million pre-tax, which reduced operating profit by $38 million, income from continuing operations before extraordinary income by $26 million and earnings per common share by $.35.
Net loss in 1990 was $18.6 million or $.25 per common share after inclusion of extraordinary income of $8.2 million or $.11 per common share related to the early extinguishment of debt.
Results for 1989 include the effect of charges for restructurings and other costs, aggregating approximately $54 million pre-tax, which reduced operating profit by $39 million, income from continuing operations before extraordinary income by $36 million and earnings per common share by $.45.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
MASCOTECH
Masco Corporation undertook a major corporate restructuring during 1984, transferring its Products for Industry businesses to the Company at their historical net book value. MascoTech became a separate public company in mid-1984, when Masco Corporation distributed common shares of MascoTech as a special dividend to its shareholders. At December 31, 1993, Masco Corporation owned approximately 42 percent of MascoTech Common Stock.
In 1993 the Company changed its name to MascoTech, Inc. from Masco Industries, Inc. to reflect the significance of technology in the design, engineering and manufacturing of many of the Company's products.
CORPORATE DEVELOPMENT
Since mid-1984, the Company has acquired a number of businesses for approximately $650 million in cash and Company Common Stock. These acquisitions have contributed significantly to the more than tripling of the sales volume of the Company during this time. The Company has invested more than $1.2 billion in capital expenditures and acquisitions combined to build up the Company's technological positions in its industrial markets.
Since late 1988 the Company has divested several operations as part of its long-term strategic plan to de-leverage its balance sheet and focus on its core operating capabilities. The Company's divestiture activity included several businesses transferred to its equity affiliate, TriMas Corporation ("TriMas"), and in late 1993 the announcement of the Company's plan to dispose of its energy-related business segment. In addition to its continuing common equity ownership interest in TriMas (43 percent at December 31, 1993), the Company has realized cash proceeds of approximately $400 million through December 31, 1993 from its divestiture activity which has been applied to reduce the Company's indebtedness.
In early 1993, the Company acquired from Masco Corporation 10 million shares of Company Common Stock, $77.5 million of the Company's 12% Exchangeable Preferred Stock held by Masco Corporation, and Masco Corporation's holdings of Emco Limited ("Emco") common stock and convertible debentures. In exchange, Masco Corporation received from the Company $87.5 million in cash, $100 million of the Company's 10% Exchangeable Preferred Stock (subsequently redeemed in 1993) and seven-year warrants to purchase 10 million shares of Company Common Stock at $13 per share. As part of this transaction, as modified in late 1993, Masco Corporation agreed to purchase from the Company, at the Company's option through March, 1997, up to $200 million of subordinated debentures. As a result of these transactions, the Company owns approximately 43 percent of the outstanding common stock and convertible debentures of Emco, a major, publicly traded, Canadian-based manufacturer and distributor principally of building and other industrial products with annual sales of approximately $800 million in 1993.
DISCONTINUED OPERATIONS
In late November, 1993, the Company adopted a formal plan to divest its energy-related business segment which consisted of seven business units. Accordingly, the applicable financial statements and related notes have been reclassified to present such energy-related segment as discontinued operations and include a 1993 fourth quarter charge of approximately $22 million after-tax to reflect the estimated loss from the disposition of this segment. During 1993, two energy-related business units were sold for approximately $93 million, including the sale of one business unit to the Company's equity affiliate, TriMas, for $60 million. The remaining five energy-related business units had net assets at December 31, 1993 of approximately $68 million (adjusted to reflect the anticipated loss upon disposition, net of tax benefit) and are expected to be disposed of during 1994.
Net sales attributable to the discontinued operations during 1993 (through the decision to discontinue), 1992 and 1991 were $192 million, $202 million and $201 million, respectively. The discontinued operations had operating profit of approximately $6 million, $3 million and $1 million in 1993, 1992 and 1991, respectively.
PROFIT MARGINS -- CONTINUING OPERATIONS
Operating profit margin from continuing operations was nine percent in 1993, eight percent in 1992 and three percent in 1991. The increase in the operating profit margin from continuing operations in 1993 compared with the previous two years is primarily attributable to increased sales volumes in the Transportation-Related Products segment, and from the benefits of internal cost reductions and restructuring initiatives undertaken in recent years. Margins in 1993 related to the Company's Specialty Products segment continue to be hampered by the depressed industry conditions affecting the construction and defense markets that the Company serves. Operating profit from continuing operations was reduced by significant charges aggregating approximately $27 million in 1991. These charges reflect expenses related to the discontinuance of product lines, costs related to the restructuring of several businesses and other expenses. Of these charges, approximately $15 million in 1991 relate to the Company's automotive vehicle conversion business, which has been restructured and returned to profitability. In addition, margins from continuing operations were negatively impacted in 1991 as a result of reduced sales volumes in certain of the Company's Transportation-Related Products operations, due to production cutbacks by automotive customers, and in virtually all of the Company's other product groups due to recessionary market conditions.
CASH FLOWS AND CAPITAL EXPENDITURES
Net cash flow from operating activities, including discontinued operations, increased to $100 million in 1993 from $58 million in 1992 principally as a result of improved operating performance. In 1993, the Company received approximately $210 million from the issuance of equity (6% Dividend Enhanced Convertible StockSM -- the "DECS") and $93 million from the sale of two energy-related businesses. These proceeds were applied to reduce the Company's indebtedness. The Company redeemed $100 million of non-convertible preferred stock for cash and, in early 1993, the Company invested $87.5 million as described in Corporate Development.
During 1991 and 1992, the Company received approximately $260 million in cash from the disposition of its investment in Masco Capital (during 1991 the Company had advanced Masco Capital approximately $44 million to fund debt repayment obligations and working capital requirements) and from the early redemption by TriMas, including a prepayment premium, of TriMas' subordinated debentures held by the Company. These proceeds were applied to reduce the Company's indebtedness in late 1991 and 1992.
From January 1, 1991 to December 31, 1993, the Company repaid or repurchased over $380 million, net, of its outstanding debt, and an additional $187 million of convertible debt was converted to Company Common Stock.
The Company has substantial new business opportunities over the next few years in its Transportation-Related Products segment which are anticipated to require an increase from the recent level of capital expenditures and increased working capital needs.
INVENTORIES
The Company's investment in inventories decreased to $140 million at December 31, 1993. This decrease was the result of the sale during 1993 of a portion of the Company's energy-related segment and the reclassification of the remaining inventories in the energy-related segment at December 31, 1993 into net assets of discontinued operations. The Company's continued emphasis on inventory management, utilizing Just-In-Time (JIT) and other inventory management techniques has contributed to higher inventory turnover rates in recent years.
FINANCIAL POSITION AND LIQUIDITY
During 1993, the Company's financial position was substantially improved as the Company's equity increased by approximately $314 million while its total indebtedness decreased by approximately $339 million. This improvement in financial position resulted from the Company's positive operating performance, the issuance of the DECS, the conversion of the Company's previously outstanding convertible debt into Company Common Stock and from the collection of $93 million of proceeds related to the sale of two of the Company's energy-related businesses. The Company also redeemed its $100 million of 10% Exchangeable Preferred Stock with significantly lower cost bank borrowings, and invested $87.5 million as part of the transactions whereby it acquired the Emco holdings.
The Company's financial flexibility and liquidity were also substantially improved during 1993. In September, 1993, the Company entered into a new $675 million revolving credit agreement, replacing a prior bank agreement which required principal payments commencing September 30, 1993. Amounts outstanding under this new agreement are due in January, 1997; however, under certain circumstances the due date may be extended until July, 1998. In addition, the Company in early 1994 sold $345 million of 4 1/2% Convertible Subordinated Debentures due 2003. The proceeds from this offering were used to redeem $250 million of 10 1/4% Subordinated Notes (called in late 1993 for redemption on February 1, 1994) and to retire other indebtedness. The Company at December 31, 1993 had cash and cash investments of $83 million.
As a result of the above mentioned transactions, the Company's debt as a percent of debt plus equity was reduced to 54 percent at December 31, 1993 from 76 percent at December 31, 1992. In addition, the Company's annual financing costs have been reduced by approximately $20 million after-tax. As of December 31, 1993, adjusted on a pro forma basis for the issuance in early 1994 of the 4 1/2% Convertible Debentures, the Company had floating rate debt of approximately $213 million (at a current interest rate of approximately 4%) and $578 million of fixed rate debt (at a weighted average interest rate of under 7%).
At December 31, 1993 current assets, which aggregated approximately $556 million, were approximately three times current liabilities. In addition, the Company has significant financial assets, including 20 percent or more ownership positions in the securities of three publicly traded companies with an aggregate carrying value of approximately $137 million. This compares with an aggregate quoted market value at December 31, 1993 (which may differ from the amounts that would have been realized upon disposition) of approximately $524 million.
The Company's cash, additional borrowings available under the Company's new revolving credit agreement and anticipated internal cash flow are expected to provide sufficient liquidity to fund its near-term working capital and other investment needs. The Company believes that its longer-term working capital and other general corporate requirements, including the retirement of Senior Subordinated Notes maturing in 1995, will be satisfied through its internal cash flow, proceeds from the early 1994 issuance of the 4 1/2% Convertible Debentures, divestiture of the remaining businesses in the energy-related segment, other nonstrategic operating assets and certain additional financial assets and, to the extent necessary, future financings in the financial markets.
GENERAL FINANCIAL ANALYSIS
1993 versus 1992 -- Continuing Operations
In 1993, net sales from continuing operations increased nine percent to $1.58 billion from $1.46 billion in 1992. Income from continuing operations in 1993, after preferred stock dividends, was $56.0 million or $.91 per common share, assuming full dilution, compared with income from continuing operations, after preferred stock dividends, of $29.7 million or $.49 per common share in 1992.
Including the results of discontinued operations and the loss upon disposition of those businesses, and an extraordinary loss ($3.7 million after-tax) related to the early extinguishment of debt, earnings
for 1993 after preferred stock dividends were $.57 per common share, compared with earnings, after preferred stock dividends, of $.48 per common share in 1992.
Sales of Transportation-Related Products increased 13 percent, principally due to increased levels of automotive production. Sales also benefitted from new product introductions which were partially offset by the phase-out of existing programs, including the mid-1993 completion of the Company's conversion program for the Ford Mustang convertible. Operating profit in 1993 for Transportation- Related Products increased to $160 million from $124 million in 1992. Operating margins, in 1993, continued to be favorably impacted by higher sales volumes for most of the Company's Transportation-Related Products. Margins in both 1993 and 1992 have benefitted from the internal cost reductions and restructuring initiatives that the Company has undertaken in recent years.
Sales of Specialty Products in 1993 decreased approximately two percent from 1992 levels reflecting the continued unfavorable market conditions for the Company's Architectural and Defense Products. Operating profit declined to $1 million in 1993 from $5 million in 1992 as the result of the $4 million operating loss for Architectural Products in 1993. This loss was principally the result of costs and expenses related to the consolidation of certain operating activities, start-up costs associated with a new manufacturing process and the unfavorable conditions existing in the markets served by these products.
Other expense, net decreased to $25 million in 1993 from $44 million in 1992. Other expense, net in 1993 benefitted from reduced interest expense resulting from a reduction in debt and lower interest rates; and from increased equity and interest income from affiliates related primarily to the Company's Emco holdings. Additionally, 1993 and 1992 results benefitted from gains from sales of marketable securities of approximately $11.5 million and $4.0 million, respectively.
Other expense, net for 1993 and 1992 include gains aggregating approximately $13 million and $25 million pre-tax, respectively. These gains resulted from the sale of stock through public offerings by equity affiliates (including in 1993, affiliate shares held by the Company) and, in 1992, a prepayment premium related to the redemption of debentures held by the Company. The Company's equity affiliates may, from time to time, issue additional common equity depending upon their financing requirements. This income was largely offset by costs and expenses related to cost reduction initiatives, the restructuring of certain operations and product lines, adjustments to the carrying values of certain long-term assets and other costs and expenses.
Earnings in 1993 were reduced by an extraordinary charge of $3.7 million after-tax related to the early extinguishment of debt. Although the federal statutory corporate tax rate increased in 1993, the Company's effective tax rate on income from continuing operations declined slightly in 1993 as compared with 1992. This decrease was the result of the relationship of substantially higher pre-tax income in 1993 to certain book expenses that are not deductible for tax purposes and to the Company's foreign and state tax expenses. In addition, the application of the increased tax rate to deferred tax balances at December 31, 1992 resulted in a 1993 third quarter one-time charge of approximately $.03 per common share.
1992 versus 1991 -- Continuing Operations
In 1992, net sales from continuing operations increased 15 percent to $1.46 billion from $1.27 billion in 1991. Income from continuing operations in 1992, after preferred stock dividends, was $29.7 million or $.49 per common share, compared with a loss from continuing operations, after preferred stock dividends, of $20.0 million or $.33 per common share in 1991.
Sales of Transportation-Related Products increased 21 percent due to a modest improvement in levels of automotive production, increased market penetration and the inclusion of a full year of Creative Industries Group sales. Excluding the acquisition of Creative Industries Group, 1992 Transportation-Related Products sales would have increased 16 percent. Operating profit in 1992 for Transportation-Related Products increased 68 percent to $124 million from $74 million in 1991.
Operating margins, in 1992, were favorably impacted by higher sales volumes for most of the Company's Transportation-Related Products. In addition, 1992 margins have benefitted from the internal cost reductions and restructuring initiatives that the Company has undertaken in recent years.
Sales of Specialty Products were generally unchanged from 1991, as a seven percent increase in sales of Architectural Products was substantially offset by reduced sales of Other Specialty Products. Operating profit for Specialty Products in 1992 was $5 million compared with an operating loss of $15 million in 1991. This improvement resulted principally from improved operating performance of the Architectural Products group which had operating profit of $2 million in 1992 compared with a loss of $16 million in 1991. The 1991 Architectural Products group results were impacted by $8 million of charges related to discontinuance of product lines, restructuring costs and other expenses.
Other expense, net decreased to $44 million in 1992 from $56 million in 1991. Other expense, net in 1992 benefitted from reduced interest expense resulting from a reduction in debt and lower interest rates. This was partially offset by reduced interest income as a result of the redemptions of TriMas subordinated debentures previously held by the Company and lower income from sales of marketable securities.
Other expense, net for 1992 benefitted from the inclusion of income aggregating approximately $25 million pre-tax in the second quarter resulting from a prepayment premium related to the redemption by TriMas of the subordinated debentures held by the Company, and from the change in the Company's common equity ownership interest in TriMas. This income was substantially offset by costs and expenses aggregating approximately $21 million pre-tax in the second quarter (of which $15 million is included in other expense) related to the restructuring of certain operations, and for adjustments to the carrying values of certain long-term assets. Other expense, net in 1991 benefitted from the inclusion of an approximate $22 million gain related to the disposition of certain operations and reduced interest expense, principally as a result of lower interest rates. Additionally, net gains from sales of marketable securities, including the effect of valuation allowances, aggregated approximately $12 million in 1991.
The Company's effective tax rate exceeds the statutory rate primarily as a result of the impact of state taxes and nondeductible amortization.
ITEM 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of MascoTech, Inc.:
We have audited the accompanying consolidated balance sheet of MascoTech, Inc. and subsidiaries (formerly Masco Industries, Inc.) as of December 31, 1993 and 1992, and the related consolidated statements of income and cash flows for each of the three years in the period ended December 31, 1993, and the financial statement schedules as listed in Item 14(a)(2)(i) of this Form 10-K. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedules 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 consolidated financial position of MascoTech, Inc. and subsidiaries as of December 31, 1993 and 1992, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles. In addition, in our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information required to be included therein.
COOPERS & LYBRAND
Detroit, Michigan February 24, 1994
MASCOTECH, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1993 AND 1992
The accompanying notes are an integral part of the consolidated financial statements.
MASCOTECH, INC.
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
- ------------------------- * Anti-dilutive
The accompanying notes are an integral part of the consolidated financial statements.
MASCOTECH, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
The accompanying notes are an integral part of the consolidated financial statements.
MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING POLICIES:
Principles of Consolidation. The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. All significant intercompany transactions have been eliminated. Corporations that are 20 to 50 percent owned are accounted for by the equity method of accounting. Capital transactions by equity affiliates at amounts differing from the Company's carrying amount are reflected in other income or expense and the investment in affiliates account.
Certain amounts for the years ended December 31, 1992 and 1991 have been reclassified to conform to the presentation adopted in 1993. The statements of income and cash flows for 1993, 1992 and 1991 and related notes have been reclassified to present the Energy-related segment as discontinued operations. In addition, the balance sheet as of December 31, 1993 reflects the Energy-related segment as discontinued operations (see "Discontinued Operations" note). The balance sheet as of December 31, 1992 has not been reclassified for discontinued operations. Effective June 23, 1993 the Company changed its name to MascoTech, Inc. from Masco Industries, Inc.
The Company has a corporate services agreement with Masco Corporation, which at December 31, 1993 owned approximately 42 percent of the Company's Common Stock. Under the terms of the agreement, the Company pays fees to Masco Corporation for various corporate staff support and administrative services, research and development and facilities. Such fees, which are determined principally as a percentage of net sales, including net sales related to discontinued operations, aggregated approximately $11 million in each of 1993, 1992 and 1991.
Cash and Cash Investments. The Company considers all highly liquid debt instruments with an initial maturity of three months or less to be cash and cash investments. The carrying amount reported in the balance sheet for cash and cash investments approximates fair value. At December 31, 1993, the Company has $33 million on deposit with a German bank that is subject to currency exchange rate fluctuations.
Receivables. Receivables are presented net of allowances for doubtful accounts of $5.1 million and $7.2 million at December 31, 1993 and 1992, respectively.
Inventories. Inventories are stated at the lower of cost or net realizable value, with cost determined principally by use of the first-in, first-out method.
Property and Equipment, Net. Property and equipment additions, including significant betterments, are recorded at cost. Upon retirement or disposal of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in income. Repair and maintenance costs are charged to expense as incurred.
Depreciation and Amortization. Depreciation is computed principally using the straight-line method over the estimated useful lives of the assets. Annual depreciation rates are as follows: buildings and land improvements, 2 1/2 to 10 percent, and machinery and equipment, 6 2/3 to 33 1/3 percent. Deferred financing costs are amortized over the lives of the related debt securities. The excess of cost over net assets of acquired companies is amortized using the straight-line method over the period estimated to be benefitted, not exceeding 40 years. At each balance sheet date management assesses whether there has been a permanent impairment of the excess of cost over net assets of acquired companies by comparing anticipated undiscounted future cash flows from operating activities with the carrying amount of the excess of cost over net assets of acquired companies. The factors considered by management in performing this assessment include current operating results, business prospects, market trends, potential product obsolescence, competitive activities and other economic factors. Based on this assessment there was no permanent impairment related to excess of cost over net assets of acquired companies at December 31, 1993.
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
At December 31, 1993 and 1992, accumulated amortization of the excess of cost over net assets of acquired companies and patents was $98.4 million and $105.1 million, respectively. Amortization expense was $22.2 million, $22.8 million and $21.2 million in 1993, 1992 and 1991, respectively, including amortization expense of approximately $1.6 million in each year related to discontinued operations.
Income Taxes. In January, 1993, the Company adopted Statement of Financial Accounting Standards No. 109 ("SFAS No. 109"), "Accounting for Income Taxes." SFAS No. 109 is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. In estimating future tax consequences, SFAS No. 109 generally allows consideration of all expected future events other than enactments of changes in the tax law or tax rates. Previously, the Company used the SFAS No. 96 asset and liability approach that gave no recognition to future events other than the recovery of assets and settlement of liabilities at their carrying amounts. There was no income statement impact from the adoption of SFAS No. 109 and the required balance sheet reclassification was immaterial. Provision is made for U.S. income taxes on the undistributed earnings of foreign subsidiaries unless such earnings are considered permanently reinvested.
Earnings (Loss) Per Common Share. Primary earnings (loss) per common share are based on the weighted average number of shares of common stock and common stock equivalents outstanding (including the dilutive effect of options and warrants, utilizing the treasury stock method) of 57.4 million, 60.9 million and 59.7 million in 1993, 1992 and 1991, respectively, and earnings (loss) after deducting preferred stock dividends of $14.9 million, $9.3 million and $9.6 million in 1993, 1992 and 1991, respectively.
Fully diluted earnings (loss) per common share are only presented when the assumed conversion of convertible debentures is dilutive. Fully diluted earnings per share in 1993 were calculated based on 68.8 million weighted average common shares outstanding. Convertible securities did not have a dilutive effect on earnings (loss) in 1992 or 1991. The shares of Dividend Enhanced Convertible Stock DECSSM (the "DECS") issued in 1993 (see "Shareholders' Equity" note) are common stock equivalents, but are not included in the calculation of primary or fully diluted shares outstanding as such inclusion would be anti-dilutive.
In late 1993, approximately 10.4 million shares were issued as a result of the conversion of the 6% Convertible Subordinated Debentures (see "Shareholders' Equity" note). If such conversion had taken place at the beginning of 1993, the primary earnings per common and common equivalent share amounts would have approximated the amounts presented for earnings per common and common equivalent share, assuming full dilution, for the year ended December 31, 1993.
Adoption of Statements of Financial Accounting Standards. The Company expects that the adoption of Statements of Financial Accounting Standards ("SFAS") No. 112 "Employers' Accounting for Postemployment Benefits", SFAS No. 114 "Accounting by Creditors for Impairment of a Loan" and SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities" will not have a material impact on the financial position or the results of operations of the Company when adopted in 1994 and 1995.
SUPPLEMENTARY CASH FLOWS INFORMATION:
Significant transactions not affecting cash were: in 1993: in addition to the payment by the Company of $87.5 million, the non-cash portion of the issuance of Company Preferred Stock and warrants in exchange for Company Common Stock, Company Preferred Stock and Masco Corporation's holdings of Emco Limited common stock and convertible debentures (see "Shareholders' Equity" note); conversion of $187 million of convertible debentures into Company Common Stock
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(see "Shareholders' Equity" note); and conversion of the Company's TriMas Corporation ("TriMas") convertible preferred stock holdings into TriMas common stock (see "Equity and Other Investments in Affiliates" note); and in 1991: an exchange of certain operating assets (see "Dispositions of Other Operations" note); and the assumption of liabilities of $18 million in partial exchange for the acquisition of Creative Industries Group (see "Equity and Other Investments in Affiliates" note).
Income taxes paid were $32 million in 1993 and $23 million in 1992. Income tax refunds of $8 million were received in 1991. Interest paid was $82 million, $91 million and $115 million in 1993, 1992 and 1991, respectively.
DISCONTINUED OPERATIONS:
In late November, 1993, the Company adopted a formal plan to divest its Energy-related business segment, which consisted of seven business units. Accordingly, the consolidated statements of income and cash flows and related notes have been reclassified to present such Energy-related segment as discontinued operations. During 1993, two such business units were sold for approximately $93 million, including the sale of one business unit to the Company's equity affiliate, TriMas for $60 million cash. The expected loss from the planned disposition of the Company's Energy-related segment resulted in a fourth quarter 1993 pre-tax charge of approximately $41 million (approximately $22 million after-tax), including a provision for the businesses not yet sold and the deferral of a portion of the gain (approximately $6 million after-tax) related to the sale of the business to TriMas. The Company expects to sell the remaining business units in privately negotiated transactions in 1994.
Selected financial information for discontinued operations is as follows as at December 31, 1993 and for the period up to the decision to discontinue in 1993 and for the years ended December 31, 1992 and 1991:
The unusual relationship of income taxes to pre-tax income in 1992 results principally from foreign losses for which no tax benefit was recorded. Operating and pre-tax income include charges of $6 million in 1991, principally related to the discontinuance of product lines and the cost of restructuring several businesses.
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DISPOSITIONS OF OTHER OPERATIONS:
In separate transactions from late 1989 to early 1991, the Company divested itself of three subsidiaries and received consideration of approximately $160 million, of which $108 million was received in 1990. The remaining $52 million was received in 1991. In addition, in 1991 the Company disposed of certain equity affiliates, and exchanged operating assets aggregating approximately $27 million.
These transactions, including the disposition of Masco Capital Corporation (see "Equity and Other Investments in Affiliates" note), resulted in an approximate $22 million pre-tax gain in 1991.
INVENTORIES:
EQUITY AND OTHER INVESTMENTS IN AFFILIATES:
Equity and other investments in affiliates consist primarily of the following common stock interests in publicly traded affiliates:
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The carrying amount of investments in affiliates at December 31, 1993 and 1992 and quoted market values at December 31, 1993 for publicly traded affiliates (which may differ from the amounts that could have been realized upon disposition) are as follows:
In 1988, the Company transferred several businesses to TriMas, a publicly traded, diversified manufacturer of commercial, industrial and consumer products. In exchange, the Company received $128 million principal amount of 14% Subordinated Debentures (which were subsequently redeemed resulting in prepayment premium income to the Company of $9 million in 1992 and $4 million in 1991), $70 million (liquidation value) of 10% Convertible Participating Preferred Stock and 9.3 million shares of TriMas common stock.
During the second quarter of 1992, TriMas sold 9.2 million shares of newly issued common stock at $9.75 per share in a public offering, which reduced the Company's common equity ownership interest in TriMas to 28 percent from 41 percent. As a result, the Company recognized a pre-tax gain of $16.7 million from the change in the Company's common equity ownership interest in TriMas. In late 1993, the TriMas 10% Convertible Participating Preferred Stock held by the Company was converted at a conversion price of $9 per share into 7.8 million shares of TriMas common stock, increasing the Company's common equity ownership interest in TriMas to 43 percent.
In 1993, the Company sold a business unit to TriMas for $60 million cash (see "Discontinued Operations" note).
Included in notes receivable are approximately $10.7 million of notes which resulted from the sale by the Company of one million shares of its TriMas common stock holdings to members of the Company's executive management group in mid-1989. The notes have an effective interest rate of nine percent, payable at maturity in mid-1994. Ownership and resale of certain of such shares is restricted and subject to the continuing employment of these executives.
TriMas' Board of Directors declared a 100 percent stock distribution (one additional share for every share held) to its shareholders effective July 19, 1993. TriMas share amounts and per share prices have been restated to reflect this distribution.
The Company's holdings in Emco Limited ("Emco") were acquired from Masco Corporation in 1993 (see "Shareholders' Equity" note). Emco is a major, publicly traded, Canadian-based
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
manufacturer and distributor of building and other industrial products with annual sales of approximately $800 million.
At December 31, 1992, the Company had an approximate 47 percent common equity ownership interest in Titan Wheel International, Inc. ("Titan"), a manufacturer of wheels and other products for agricultural, construction and other off-highway equipment markets. In May, 1993, Titan completed an initial public offering of three million shares of common stock at $15 per share (including 292,000 shares held by the Company), reducing the Company's common equity ownership interest in Titan to 24 percent. The Company's ownership interest was further reduced in late 1993 to 21 percent as a result of the issuance of additional common shares by Titan in connection with an acquisition by Titan. These transactions resulted in 1993 gains aggregating approximately $12.8 million pre-tax (principally in the second quarter) as a result of the sale of shares held by the Company and from the change in the Company's common equity ownership interest in Titan.
During the second quarter of 1991, the Company acquired the remaining 50 percent equity ownership interest of Creative Industries Group, which had sales in 1990 of approximately $150 million.
In 1991, Masco Capital Corporation ("Masco Capital") sold its principal asset and used the proceeds to repay its outstanding bank borrowings and to make loan repayments and distributions to its shareholders, whereby the Company received approximately $65 million (including repayment of $44 million advanced during 1991). In addition, the Company subsequently sold its 50 percent equity ownership interest in Masco Capital to the other shareholder, Masco Corporation, for approximately $50 million (which resulted in a pre-tax gain of approximately $5 million) and contingent amounts based on the future value of certain assets held by Masco Capital.
In addition to its equity and other investments in publicly traded affiliates, the Company retains interests in privately held manufacturers of automotive components, including the Company's 50 percent common equity ownership interests in Autostyle, Inc., a manufacturer of reaction injection molded automotive components, and Elbi-Hi Ram, Inc., a manufacturer of electrical and electronic automotive components.
Approximate combined condensed financial data of the Company's equity affiliates (including Emco after date of investment, Creative Industries Group through date of acquisition (second quarter 1991) and Masco Capital through date of disposition) are as follows:
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Equity and interest income from affiliates consists of the following:
PROPERTY AND EQUIPMENT, NET:
Depreciation expense totalled $48 million, $46 million and $47 million in 1993, 1992 and 1991, respectively. These amounts include depreciation expense of approximately $8 million in each year related to discontinued operations.
ACCRUED LIABILITIES:
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
LONG-TERM DEBT:
In 1993, the Company entered into a new $675 million revolving credit agreement with a group of banks, replacing its prior bank credit agreement (which had consisted of a revolving credit facility and a bank term loan at December 31, 1992). Amounts outstanding under the revolving credit agreement are due in January, 1997; however, under certain circumstances, the due date may be extended to July, 1998. The interest rates applicable to the revolving credit agreement are principally at alternative floating rates provided for in the agreement (approximately four percent at December 31, 1993).
The revolving credit agreement requires the maintenance of a specified level of shareholders' equity, with limitations on the ratio of senior debt to earnings, long-term debt (at December 31, 1993 additional borrowing capacity of approximately $380 million was available under this agreement), intangible assets and the acquisition of Company Capital Stock. Under the most restrictive of these provisions, $120 million of retained earnings was available at December 31, 1993 for the payment of cash dividends and the acquisition of Company Capital Stock.
The 6% Convertible Subordinated Debentures were converted into Company Common Stock in late 1993 (see "Shareholders' Equity" note).
The senior subordinated notes contain limitations on the payment of cash dividends and the acquisition of Company Capital Stock. In late 1993, the Company called for redemption, on February 1, 1994, the $250 million of 10 1/4% Senior Subordinated Notes. During 1992, the Company repurchased, in open-market transactions, approximately $67 million of its 10% Senior Subordinated Notes at prices approximating face value.
In early 1994, the Company issued, in a public offering, $345 million of 4 1/2% Convertible Subordinated Debentures due December 15, 2003. These debentures are convertible into Company Common Stock at $31 per share. The net proceeds were used to redeem the $250 million of 10 1/4% Subordinated Notes (called in late 1993 for redemption on February 1, 1994) and to reduce other indebtedness. In the fourth quarter of 1993, the Company recognized a $5.8 million pre-tax extraordinary charge ($3.7 million after-tax) related to the call premium (1.25%) and unamortized prepaid debenture expense associated with the call for early extinguishment of the $250 million of 10 1/4% Subordinated Notes. The 10 1/4% Subordinated Notes are classified as non-current as the Company had the intent and the ability to maintain these borrowings on a long-term basis (due to the issuance of the 4 1/2% Convertible Subordinated Debentures). The maturities of long-term debt during the next five years are as follows (in millions): 1994 -- $3; 1995 -- $234; 1996 -- $1; 1997 -- $303; and 1998 -- $0.
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SHAREHOLDERS' EQUITY:
On March 31, 1993, the Company acquired from Masco Corporation 10 million shares of Company Common Stock, recorded at $100 million, $77.5 million of the Company's previously outstanding 12% Exchangeable Preferred Stock, and Masco Corporation's holdings of Emco Limited common stock and convertible debentures, recorded at $80.8 million. In exchange, Masco Corporation received $100 million (liquidation value) of the Company's 10% Exchangeable Preferred Stock, seven-year warrants to purchase 10 million shares of Company Common Stock at $13 per share, recorded at $70.8 million, and $87.5 million in cash. The transferable warrants are not exercisable by Masco Corporation if an exercise would increase Masco Corporation's common equity ownership interest in the Company above 35 percent. The cash portion of this transaction is included in the accompanying statement of cash flows as cash used for investing activities of $87.5 million. As part of this transaction, as modified in late 1993, Masco Corporation agreed to purchase from the Company, at the Company's option through March, 1997, up to $200 million of subordinated debentures. In late 1993, the Company redeemed the 10% Exchangeable Preferred Stock for its $100 million liquidation value.
In July, 1993, the Company issued 10.8 million shares of 6% Dividend Enhanced Convertible Stock (DECS) at $20 per share ($216 million aggregate liquidation amount) in a public offering (classified as
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Convertible Preferred Stock). The net proceeds from this issuance were used to reduce the Company's indebtedness. On July 1, 1997, each of the then outstanding shares of the DECS will convert into one share of Company Common Stock, if not previously redeemed by the Company or converted at the option of the holder, in both cases for Company Common Stock.
Each share of the DECS is convertible at the option of the holder anytime prior to July 1, 1997 into .806 of a share of Company Common Stock, equivalent to a conversion price of $24.81 per share of Company Common Stock. Dividends are cumulative and each share of the DECS has 4/5 of a vote, voting together as one class with holders of Company Common Stock.
Beginning July 1, 1996, the Company, at its option, may redeem the DECS at a call price payable in shares of Company Common Stock principally determined by a formula based on the then current market price of Company Common Stock. Redemption by the Company, as a practical matter, will generally not result in a call price that exceeds one share of Company Common Stock or is less than .806 of a share of Company Common Stock (resulting from the holder's conversion option).
The Company's 6% Convertible Subordinated Debentures were called for redemption in late 1993. Substantially all holders, including Masco Corporation, exercised their right to convert these debentures into Company Common Stock (at a conversion price of $18 per share), resulting in the issuance of approximately 10.4 million shares of Company Common Stock.
The Company's consideration for a 1987 acquisition included two million shares of Company Common Stock which were subject to a stock value guarantee agreement. During the second quarter of 1993, the Company's stock value guarantee obligation was settled, resulting in no material financial impact to the Company.
The Company commenced paying cash dividends on its Common Stock in August, 1993 and declared three and paid two quarterly dividends in 1993, each in the amount of $.02 per common share.
STOCK OPTIONS AND AWARDS:
For the three years ended December 31, 1993, stock option data pertaining to stock option plans for key employees of the Company and affiliated companies are as follows:
As of December 31, 1993, options have been granted and are outstanding with exercise prices ranging from $4 1/2 to $26 per share, the fair market value at the dates of grant.
Pursuant to restricted stock incentive plans, the Company granted long-term incentive awards, net, for 202,000, 251,000 and 675,000 shares of Company Common Stock during 1993, 1992 and 1991, respectively, to key employees of the Company and affiliated companies. The unamortized costs of
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
incentive awards, aggregating approximately $20 million at December 31, 1993, are being amortized over the ten-year vesting periods.
At December 31, 1993 and 1992, a combined total of 5,631,000 and 5,759,000 shares, respectively, of Company Common Stock were available for the granting of options and incentive awards under the above plans.
EMPLOYEE BENEFIT PLANS:
Pension and Profit-Sharing Benefits. The Company sponsors defined-benefit pension plans for most of its employees. In addition, substantially all salaried employees participate in noncontributory profit-sharing plans, to which payments are approved annually by the Directors. Aggregate charges to income under these plans were $10.9 million in 1993, $10.3 million in 1992 and $8.3 million in 1991, including approximately $.9 million in each year related to discontinued operations.
Net periodic pension cost for the Company's defined-benefit pension plans includes the following components for the three years ended December 31, 1993:
Major assumptions used in accounting for the Company's defined-benefit pension plans are as follows:
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The funded status of the Company's defined-benefit pension plans at December 31, 1993 and 1992 is as follows:
Postretirement Benefits. The Company provides postretirement medical and life insurance benefits for certain of its active and retired employees.
Effective January 1, 1993, the Company adopted Statement of Financial Accounting Standards No. 106 "Employers' Accounting for Postretirement Benefits Other Than Pensions" ("SFAS 106") for its postretirement benefit plans. This statement requires the accrual method of accounting for postretirement health care and life insurance based on actuarially determined costs to be recognized over the period from the date of hire to the full eligibility date of employees who are expected to qualify for such benefits. In conjunction with the adoption of SFAS 106, the Company elected to recognize the transition obligation on a prospective basis and accordingly, the net transition obligation is being amortized over 20 years. Net periodic postretirement benefit cost includes the following components for the year ended December 31, 1993:
The incremental cost in 1993 of accounting for postretirement health care and life insurance benefits under SFAS 106 amounted to approximately $1.7 million.
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Postretirement benefit obligations, none of which are funded, are summarized as follows for the year ended December 31, 1993:
The discount rate used in determining the accumulated postretirement benefit obligation was seven percent. The assumed health care cost trend rate in 1993 was 12 percent, decreasing to an ultimate rate in the year 2000 of seven percent. If the assumed medical cost trend rates were increased by one percent, the accumulated postretirement benefit obligation would increase by $2.6 million and the aggregate of the service and interest cost components of net periodic postretirement benefit cost would increase by $.2 million.
SEGMENT INFORMATION:
The Company's business segments involve the production and sale of the following:
Transportation-Related Products:
Precision products, generally produced using advanced metalworking technologies with significant proprietary content, and aftermarket products for the transportation industry.
Specialty Products:
Architectural -- Doors, windows, security grilles and office panels and partitions for commercial and residential markets.
Other -- Products manufactured principally for the defense industry.
Amounts related to the Company's Energy-related segment have been presented as discontinued operations.
Corporate assets consist primarily of cash and cash investments, equity and other investments in affiliates and notes receivable.
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
- --------------- (A) Included within this segment are sales to one customer of $324 million, $268 million and $217 million in 1993, 1992 and 1991, respectively; sales to another customer of $222 million, $216 million and $201 million in 1993, 1992 and 1991, respectively; and sales to a third customer of $186 million, $184 million and $126 million in 1993, 1992 and 1991, respectively.
(B) Included in 1991 operating profit (principally Transportation-Related Products and Architectural Products) are charges of $27 million to reflect the expenses related to the discontinuance of product lines, and the costs of restructuring several businesses. Other expense, net in 1992 and 1991, includes approximately $15 million and $14 million, respectively, to reflect disposition costs related to idle facilities and other long-term assets.
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
OTHER INCOME (EXPENSE), NET:
Gains realized from sales of marketable securities are determined on a specific identification basis at the time of sale.
INCOME TAXES:
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The components of the net deferred taxes as at December 31, 1993 were as follows:
The following is a reconciliation of tax computed at the U.S. federal statutory rate to the provision for income taxes (credit) allocated to income (loss) from continuing operations before income taxes (credit) and extraordinary loss:
Provisions for deferred income taxes by temporary difference components for the years ended December 31, 1992 and 1991 were as follows:
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS:
In accordance with Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments," the following methods were used to estimate the fair value of each class of financial instruments:
Notes Receivable and Other Assets. Fair values of financial instruments included in notes receivable and other assets were estimated using various methods including quoted market prices and discounted future cash flows based on the incremental borrowing rates for similar types of investments. In addition, for variable-rate notes receivable that fluctuate with the prime rate, the carrying amounts approximate fair value.
Long-Term Debt. The carrying amount of bank debt and certain other long-term debt instruments approximate fair value as the floating rates inherent in this debt reflect changes in overall market interest rates. The fair values of the Company's subordinated debt instruments are based on quoted market prices. The fair values of certain other debt instruments are estimated by discounting future cash flows based on the Company's incremental borrowing rate for similar types of debt instruments.
The carrying amounts and fair values of the Company's financial instruments as at December 31, 1993 and 1992 are as follows:
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
INTERIM AND OTHER SUPPLEMENTAL FINANCIAL DATA (UNAUDITED):
MASCOTECH, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Certain amounts presented above have been reclassified to present a segment of the Company's business as discontinued operations (see "Discontinued Operations" note).
Results for the second quarters of 1993 and 1992 include pre-tax income of approximately $9 million and $25 million, respectively, as a result of gains associated with the sale of common stock through public offerings by equity affiliates and, in 1992, a prepayment premium related to the redemption of debentures held by the Company. This income was largely offset by costs and expenses related to cost reduction initiatives, the restructuring of certain operations and product lines, adjustments to the carrying value of certain long-term assets, and other costs and expenses.
Results for the third quarter of 1993 were reduced by a charge of approximately $.04 per common share reflecting the recently increased 1993 federal corporate income tax rate.
The fourth quarter of 1993 net loss includes the effect of a $5.8 million pre-tax extraordinary charge ($3.7 million after-tax or $.06 per common share) related to the early extinguishment of subordinated debt (see "Long-Term Debt" note). The fourth quarter of 1993 net loss also includes an after-tax charge of approximately $22 million ($.38 per common share) related to the disposition of a segment of the Company's business (see "Discontinued Operations" note).
The 1993 results include the benefit of approximately $11.5 million pre-tax income ($6.7 million after-tax or $.12 per common share), primarily in the third and fourth quarters, resulting from net gains from sales of marketable securities.
The 1992 results include the benefit of approximately $4 million pre-tax income ($2 million after-tax or $.04 per common share), primarily in the fourth quarter, resulting from net gains from sales of marketable securities.
The 1993 income (loss) per common share amounts for the quarters do not total to the full year amounts due to the changes in the number of common shares outstanding during the year and the dilutive effect of first, second and third quarter 1993 results.
The calculation of earnings per common and common equivalent share for the fourth quarter of 1993 results in dilution for income from continuing operations, assuming full dilution. Therefore, the fully diluted earnings per share computation is used for all computations, even though the result is anti-dilutive for one of the per share amounts.
MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONCLUDED)
The following supplemental unaudited financial data combine the Company with Masco Capital Corporation (through date of disposition) and TriMas and have been presented for analytical purposes. The Company had a common equity ownership interest in TriMas of approximately 43 percent at December 31, 1993 and 28 percent at December 31, 1992. The interests of the other common shareholders are reflected below as "Equity of other shareholders of TriMas." All significant intercompany transactions have been eliminated.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding executive officers required by this Item is set forth as a Supplementary Item at the end of Part I hereof (pursuant to Instruction 3 to Item 401(b) of Regulation S-K). Other information required by this Item will be contained in the Company's definitive Proxy Statement for its 1994 Annual Meeting of Stockholders, to be filed on or before April 30, 1994, and such information is incorporated herein by reference.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION.
Information required by this Item will be contained in the Company's definitive Proxy Statement for its 1994 Annual Meeting of Stockholders, to be filed on or before April 30, 1994, and such information is incorporated herein by reference.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information required by this Item will be contained in the Company's definitive Proxy Statement for its 1994 Annual Meeting of Stockholders, to be filed on or before April 30, 1994, and such information is incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required by this Item will be contained in the Company's definitive Proxy Statement for its 1994 Annual Meeting of Stockholders, to be filed on or before April 30, 1994, and such information is incorporated herein by reference.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(A) LISTING OF DOCUMENTS.
(1) Financial Statements. The Company's Consolidated Financial Statements included in Item 8 hereof, as required at December 31, 1993 and 1992, and for the years ended December 31, 1993, 1992 and 1991, consist of the following:
Consolidated Balance Sheet Consolidated Statement of Income Consolidated Statement of Cash Flows Notes to Consolidated Financial Statements
(2) Financial Statement Schedules.
(i) Financial Statement Schedules of the Company appended hereto, as required for the years ended December 31, 1993, 1992 and 1991, consist of the following:
II. Amounts Receivable from Related Parties and Underwriters, Promoters, and Employees Other than Related Parties V. Property, Plant and Equipment VI. Accumulated Depreciation, Depletion and Amortization of Property, Plant and Equipment VIII. Valuation and Qualifying Accounts X. Supplementary Income Statement Information
(ii) (A) TriMas Corporation and Subsidiaries Consolidated Financial Statements appended hereto, as required at December 31, 1993 and 1992, and for the years ended December 31, 1993, 1992 and 1991, consist of the following:
Consolidated Statements of Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
(ii) (B) TriMas Corporation and Subsidiaries Financial Statement Schedules appended hereto, as required for the years ended December 31, 1993, 1992 and 1991, consist of the following:
V. Property, Plant and Equipment VI. Accumulated Depreciation, Depletion and Amortization of Property, Plant and Equipment VIII. Valuation and Qualifying Accounts X. Supplementary Income Statement Information (3) Exhibits. 3.i Restated Certificate of Incorporation of MascoTech, Inc. and amendments thereto. 3.ii Bylaws of MascoTech, Inc., as amended.(3) 4.a Indenture dated as of November 1, 1986 between Masco Industries, Inc. (now known as MascoTech, Inc.) and Morgan Guaranty Trust Company of New York, as Trustee, and Directors' resolutions establishing the Company's 4 1/2% Convertible Subordinated Debentures Due 2003.
- ------------------------- (1) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Current Report on Form 8-K dated November 22, 1993.
(2) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 1993.
(3) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Current Report on Form 8-K dated June 22, 1993.
(4) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Registration Statement on Form S-3 dated March 9, 1993.
(5) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Current Report on Form 8-K dated February 1, 1993.
(6) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1992.
(7) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991.
(8) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1990.
(9) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1989.
(B) REPORTS ON FORM 8-K.
The following Current Reports on Form 8-K were filed by MascoTech, Inc. in the calendar quarters ended December 31, 1993 and March 31, 1994:
1. Report on Form 8-K dated November 22, 1993 reporting under Item 2 "Acquisition or Disposition of Assets" the Company's plan to dispose of its energy-related businesses and to treat such businesses as discontinued operations for financial reporting purposes. The following financial statements and financial information were filed with such report:
(i) MascoTech, Inc. and Subsidiaries unaudited pro forma consolidated condensed balance sheet as of September 30, 1993, and unaudited pro forma consolidated condensed statements of income for the year ended December 31, 1992 and the nine-month period ended September 30, 1993.
2. Report on Form 8-K dated January 11, 1994 reporting under Item 5 "Other Events" the reclassification of certain of the Company's financial statements and financial information to reflect the treatment of the Company's energy-related businesses as discontinued operations in connection with the Company's previously reported plan to dispose of such businesses. The following financial statements and financial information were filed with such report:
(i) Selected Financial Data;
(ii) MascoTech, Inc. and Subsidiaries Audited Consolidated Financial Statements as of December 31, 1992 and 1991 and for the three years in the period ended December 31, 1992 and notes thereto; and
(iii) MascoTech, Inc. and Subsidiaries Unaudited Consolidated Condensed Financial Statements as of September 30, 1993 and December 31, 1992 and for the three month and nine month periods ended September 30, 1993 and 1992 and notes thereto.
3. Report on Form 8-K dated March 2, 1994 reporting under Item 5 "Other Events" certain financial information related to 1993. The following financial statements were filed with such report:
(i) MascoTech, Inc. and Subsidiaries Audited Consolidated Financial Statements as of December 31, 1993 and 1992 and for the three years in the period ended December 31, 1993 and notes thereto.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
MASCOTECH, INC.
By /s/ TIMOTHY WADHAMS -------------------------------------- TIMOTHY WADHAMS Vice President -- Controller and Treasurer
March 22, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
MASCOTECH, INC.
FINANCIAL STATEMENT SCHEDULES
PURSUANT TO ITEM 14(A)(2) OF FORM 10-K
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
FOR THE YEAR ENDED DECEMBER 31, 1993
MASCOTECH, INC.
FINANCIAL STATEMENT SCHEDULES
Schedules, as required for the years ended December 31, 1993, 1992 and 1991:
MASCOTECH, INC. SCHEDULE II. AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
All amounts receivable are related to an incentive program of the Company that has been disclosed in previous proxy statements of the Company and that will be described in the Company's definitive Proxy Statement for its 1994 Annual Meeting of Stockholders to be filed on or before April 30, 1994.
NOTES:
(A) Represents accrual of interest.
(B) Amounts receivable (including interest of $3,400,000) from employees are due June 30, 1994. The stated rate of interest is 7%.
(C) Represents the discount pertaining to the difference between the stated rate of interest of 7% and the effective rate of interest of approximately 9%.
Activity in 1992 includes discount amortization of $550,000, interest of $710,000 and the cancellation of the receivable balance of $1,350,000 for an ex-employee.
Activity in 1991 includes discount amortization of $340,000 and interest of $1,040,000.
MASCOTECH, INC.
SCHEDULE V. PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
NOTES: (A) Includes property, plant and equipment additions of $20 million in 1991 obtained through the acquisition of companies.
(B) Includes property, plant and equipment from the disposition of certain operations in 1991.
(C) Adjustments and reclassifications to present the Energy-related segment as discontinued operations in 1993, and the effect of foreign currency translation.
MASCOTECH, INC.
SCHEDULE VI. ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
Notes:
(A) Includes accumulated depreciation of property, plant and equipment from the disposition of operations in 1991.
(B) Adjustments and reclassifications to present the Energy-related segment as discontinued operations in 1993, and the effect of foreign currency translation.
MASCOTECH, INC.
SCHEDULE VIII. VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
Notes:
(A) Allowance of companies reclassified for discontinuance of Energy-related segment in 1993, and other adjustments, net in 1991.
(B) Deductions, representing uncollectible accounts written off, less recoveries of accounts written off in prior years.
MASCOTECH, INC.
SCHEDULE X. SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
Notes:
Other captions provided for under this schedule are excluded, as the amounts related to such captions are not material.
Amounts reflect the reclassification of the Company's Energy-related segment as discontinued operations.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of TriMas Corporation:
We have audited the consolidated financial statements and the financial statement schedules of TriMas Corporation and subsidiaries listed in Item 14(a)(2)(ii) of this Form 10-K. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedules 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 consolidated financial position of TriMas Corporation and subsidiaries as of December 31, 1993 and 1992, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1993 in conformity with generally accepted accounting principles. In addition, in our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information required to be included therein.
COOPERS & LYBRAND
Detroit, Michigan February 8, 1994
TRIMAS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
The accompanying notes are an integral part of the consolidated financial statements.
TRIMAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
The accompanying notes are an integral part of the consolidated financial statements.
TRIMAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of the consolidated financial statements.
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of TriMas Corporation and its majority owned subsidiaries (the "Company"). All significant intercompany transactions have been eliminated.
AFFILIATES
As of December 31, 1993 MascoTech, Inc.'s common stock ownership in the Company approximated 43 percent, and Masco Corporation's common stock ownership approximated 5 percent. The Company has a corporate services agreement with Masco Corporation. Under the terms of the agreement, the Company pays a fee to Masco Corporation for various corporate support staff, administrative services, and research and development services. Such fee equals .8 percent of the Company's net sales, subject to certain adjustments.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.
INVENTORIES
Inventories are stated at the lower of cost or net realizable value, with cost determined principally by use of the first-in, first-out method.
PROPERTY AND EQUIPMENT
Property and equipment additions, including significant betterments, are recorded at cost. Upon retirement or disposal of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in income. Maintenance and repair costs are charged to expense as incurred.
DEPRECIATION AND AMORTIZATION
Depreciation is computed principally using the straight-line method over the estimated useful lives of the assets. Annual depreciation rates are as follows: buildings and land improvements, 2 1/2 to 5 percent, and machinery and equipment, 6 2/3 to 33 1/3 percent. The excess of cost over net assets of acquired companies is being amortized using the straight-line method over the periods estimated to be benefitted, not exceeding 40 years. At December 31, 1993 and 1992 accumulated amortization of the excess of cost over net assets of acquired companies and other intangible assets was $21.5 million and $17.0 million, respectively. Amortization expense was $4.5 million, $4.2 million, and $3.4 million in 1993, 1992 and 1991, respectively.
As of each balance sheet date management assesses whether there has been an impairment in the value of excess of cost over net assets of acquired companies by comparing anticipated undiscounted future cash flows from the related operating activities with the carrying value. The factors considered by management in performing this assessment include current operating results, trends and prospects, as well as the effects of obsolescence, demand, competition and other economic factors. Based on this assessment there was no impairment at December 31, 1993.
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1. ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
The Company uses the liability method of accounting for income taxes. Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and the basis as reported in the consolidated financial statements. The Company has not provided for taxes on $9.4 million of undistributed earnings of foreign subsidiaries at December 31, 1993, because such earnings are considered permanently reinvested.
FOREIGN CURRENCY TRANSLATION
Net assets of the Company's operations outside of the United States are translated into U.S. dollars using current exchange rates with the effects of translation adjustments deferred and included as a separate component of shareholders' equity. Revenues and expenses are translated at the average rates of exchange during the period.
EARNINGS PER COMMON SHARE
On June 7, 1993 the Company's Board of Directors adopted a resolution for a stock split, effected in the form of a 100 percent stock distribution, with issuance to shareholders on July 6, 1993. Accordingly, information in the consolidated financial statements and related notes, including the number of common shares and per common share amounts, has been adjusted to reflect this distribution.
Primary earnings per common share in 1993, 1992 and 1991 were calculated on the basis of 31.1 million, 26.0 million and 19.8 million weighted average common and common equivalent shares outstanding. Fully diluted earnings per common share in 1993, 1992 and 1991 were calculated on the basis of 39.1 million, 33.9 million and 27.6 million weighted average common and common equivalent shares outstanding.
On December 15, 1993 MascoTech, Inc. converted all of the $100 Convertible Participating Preferred Stock into 7.8 million shares of Company common stock. On a pro forma basis, as if the conversion had occurred on January 1, 1993, primary and fully diluted earnings per common share for 1993 would have been $1.03 and $1.01, respectively.
NOTE 2. ACQUISITIONS
In 1993 the Company acquired all of the capital stock of Lamons Metal Gasket Co. ("Lamons") from MascoTech, Inc. for $60.3 million cash and the assumption of certain liabilities. The acquisition was accounted for as a purchase. The excess of cost over net assets acquired of approximately $45.4 million is being amortized on a straight-line basis over 40 years. The results of operations of Lamons have been included in the consolidated financial statements from the effective date of the transaction. Additional purchase price amounts, contingent upon the achievement of specified levels of future profitability by Lamons, may be payable to MascoTech, Inc. beginning in 1997. These payments, if required, will be recorded as additional excess of cost over net assets of acquired businesses.
Lamons is engaged in the manufacture of specialty metallic and non-metallic gaskets used in the refinery, chemical and petrochemical industries. The acquisition was financed through partial use of the Company's bank credit facility.
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 2. ACQUISITIONS (CONTINUED)
On a pro forma, unaudited basis, as if the Lamons acquisition had occurred as of January 1, 1992, net sales, net income, earnings available for common stock, primary earnings per common share and fully diluted earnings per common share for 1993 would have been $475.6 million, $40.6 million, $35.4 million, $1.14 and $1.08, respectively, and net sales, income before extraordinary charge, net income, earnings available for common stock, primary earnings per common share before extraordinary charge, fully diluted earnings per common share before extraordinary charge, primary earnings per common share and fully diluted earnings per common share for 1992 would have been $437.8 million, $33.7 million, $27.9 million, $20.9 million, $1.02, $.99, $.80 and $.80, respectively.
During 1991 the Company acquired all of the capital stock of Monogram Aerospace Fasteners, Inc. for $50.2 million cash and the assumption of certain operating liabilities. The acquisition was accounted for as a purchase. The excess of cost over net assets acquired of $13.4 million is being amortized on a straight-line basis over 40 years. The results of operations of Monogram Aerospace Fasteners, Inc. have been included in the consolidated financial statements from the date of acquisition.
NOTE 3. SUPPLEMENTAL CASH FLOWS INFORMATION
NOTE 4. RECEIVABLES
Accounts receivable are presented net of an allowance for doubtful accounts of $1.8 million and $1.4 million at December 31, 1993 and 1992, respectively. Accounts receivable at December 31, 1993 include approximately $3.2 million due from MascoTech, Inc. relating to the acquisition of Lamons Metal Gasket Co.
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 5. INVENTORIES
NOTE 6. PROPERTY AND EQUIPMENT
Depreciation expense was $13.9 million, $12.7 million and $10.6 million in 1993, 1992 and 1991, respectively.
NOTE 7. NOTES RECEIVABLE
Notes receivable are net of an allowance for doubtful accounts of $.7 million at both December 31, 1993 and 1992, and consist principally of the long-term portion of notes receivable arising from the sale of certain products in the normal course of business. These notes bear various fixed interest rates and mature through 2000. At December 31, 1993 the carrying value of these notes receivable approximated their estimated fair value as calculated using the interest rates in effect on that date.
NOTE 8. ACCRUED LIABILITIES
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 9. LONG-TERM DEBT
In August, 1993 the Company issued $115.0 million of 5% Convertible Subordinated Debentures Due 2003. The Debentures are convertible into Company common stock at $22 5/8 per share, subject to adjustment in certain events. The Debentures are redeemable, at a premium, at the Company's option after August 1, 1996.
The Company has a $350.0 million revolving credit facility maturing in 1998 with a group of domestic and international banks. The facility permits the Company to borrow under several different interest rate options. The facility contains certain restrictive covenants, the most restrictive of which, at December 31, 1993, requires $186.4 million of shareholders' equity.
Borrowings from banks at December 31, 1993 and 1992 include $122.0 million and $147.0 million, respectively, owing under the Company's revolving credit facilities. At December 31, 1993 the blended interest rate on borrowings equalled 3.5 percent. The Company had available credit of $228.0 million under the credit facility at December 31, 1993.
At December 31, 1992 the Company had borrowed $30.0 million from several banks under short term, uncommitted credit facilities. As the Company had the ability and the intent to maintain these borrowings on a long-term basis, borrowings under these short term facilities were classified as long-term debt.
NOTE 10. SUBORDINATED DEBT HELD BY AFFILIATE
On December 31, 1991 the Company utilized available cash to retire $40.0 million of the $128.0 million 14 percent Subordinated Debentures due 2008, held by MascoTech, Inc., and recognized a $3.9 million pre-tax extraordinary charge ($2.5 million after tax, or $.13 per common share) relative to the payment of the redemption premium associated with the early extinguishment.
Effective January 1, 1992 the Company exchanged the remaining $88.0 million of 14 percent Subordinated Debentures for a new issue of $88.0 million 12 percent Subordinated Debentures due 1999.
In April, 1992 the Company retired the $88.0 million 12 percent Subordinated Debentures and recognized a $9.0 million pre-tax extraordinary charge ($5.7 million after tax, or $.22 per common share) relative to the payment of the redemption premium associated with the early extinguishment.
At December 31, 1993 there were no outstanding Subordinated Debentures held by MascoTech, Inc.
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 11. SHAREHOLDERS' EQUITY
During 1993, dividends on the $100 Convertible Participating Preferred Stock, held by MascoTech, Inc., converted from an annual to a quarterly payment schedule. Therefore, the Company paid $12.3 million in preferred stock dividends in 1993 representing dividends accrued through the first three quarters of 1993 and the full year 1992. On December 15, 1993 MascoTech, Inc. converted all of the preferred stock into 7.8 million shares of Company common stock.
On the basis of amounts paid (declared), cash dividends per common share were $.11 ($.11 1/2) in 1993 and $.02 1/2 ($.05) in 1992.
NOTE 12. STOCK OPTIONS AND AWARDS
The Company has a Stock Option Plan and a Restricted Stock Incentive Plan which permit the grant of up to a combined total of 2,000,000 shares of Company common stock for stock options or awards to key employees of the Company and its affiliates. Shares available for grant through these two plans were 419,944 and 549,156 at December 31, 1993 and December 31, 1992, respectively.
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 12. STOCK OPTIONS AND AWARDS (CONTINUED)
Stock option data are as follows (option prices are the fair market value at the dates of grant):
Restricted long-term incentive stock awards of a net total of 974,056 shares have been granted as of December 31, 1993, with the related costs being expensed over the ten year vesting period. At December 31, 1993 non-vested incentive stock awards had an aggregate carrying value of $7.8 million.
NOTE 13. RETIREMENT PLANS
The Company has noncontributory retirement benefit plans, both defined benefit plans and profit-sharing and other defined contribution plans, for most of its employees. At December 31, 1993 the combined assets of the Company's defined benefit plans exceeded the combined accumulated benefit obligation by $5.7 million.
The annual expense for all plans was:
Contributions to profit-sharing and other defined contribution plans are generally determined as a percentage of the covered employee's annual salary.
Defined benefit plans provide retirement benefits for salaried employees based primarily on years of service and average earnings for the five highest consecutive years of compensation. Defined benefit plans covering hourly employees generally provide benefits of stated amounts for each year of service. These plans are funded based on an actuarial evaluation and review of the assets, liabilities and requirements of each plan. Plan assets are held by a trustee and invested principally in cash equivalents and marketable equity and fixed income instruments.
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 13. RETIREMENT PLANS (CONTINUED)
Net periodic pension cost of defined benefit plans includes the following components:
Net amortization and deferral consists of amortization of the net asset or overfunded position at the date of adoption and deferral and amortization of subsequent net gains and losses caused by the actual plan and investment experience differing from that assumed.
Weighted average rate assumptions used were as follows:
The following table sets forth the funded status of the defined benefit plans:
Several of the Company's subsidiaries and divisions provide certain postretirement health care and life insurance benefits for eligible retired employees under unfunded plans. Some of the plans have cost-sharing provisions. Prior to 1993, the expense recognized for postretirement health care and life insurance benefits was based on actual expenditures. Effective January 1, 1993 the estimated costs
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 13. RETIREMENT PLANS (CONTINUED)
of these postretirement benefits are being accrued in accordance with the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions. The new accounting method has no effect on the Company's cash flows related to these retiree benefits.
The Company has decided to amortize the unrecognized accumulated postretirement benefit obligation existing at January 1, 1993 over 20 years as permitted by the new Standard.
Net periodic postretirement benefit cost for 1993 includes the following components:
Rate assumptions used were as follows:
The following sets forth the plans' status reconciled with the amount recognized in the Company's balance sheet as of December 31, 1993:
Accumulated postretirement benefit obligation:
A one percentage point increase each year in the assumed rate of increase in health care costs would have increased the aggregate of the service and interest cost components of net periodic postretirement benefit cost by approximately $.1 million during 1993, and would have increased the accumulated postretirement benefit obligation at December 31, 1993 by approximately $.8 million.
NOTE 14. OTHER INCOME (EXPENSE), NET
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 15. BUSINESS SEGMENT INFORMATION
The Company's operations in its business segments consist principally of the manufacture and sale of the following:
Specialty Fasteners: Cold formed fasteners and related metallurgical processing.
Towing Systems: Vehicle hitches, jacks, winches, couplers and related towing accessories.
Specialty Container Products: Industrial container closures, pressurized gas cylinders and metallic and non-metallic gaskets.
Corporate Companies: Specialty drills, cutters and specialized metal finishing services, and flame-retardant facings and jacketings and pressure-sensitive tapes.
Corporate assets consist primarily of cash and cash equivalents and notes receivable.
Operations are located principally in the United States.
(A) Includes $8.2 million from business acquired.
(B) Includes $19.0 million from business acquired.
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 16. INCOME TAXES
The following is a reconciliation of the U.S. federal statutory tax rate to the effective tax rate applicable to income before income taxes and extraordinary charge:
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 16. INCOME TAXES (CONTINUED) Items that gave rise to deferred taxes:
At December 31, 1993 capital loss carryforwards, for tax purposes only, equalled $3.2 million and expire in 1995.
NOTE 17. INTERIM FINANCIAL INFORMATION (UNAUDITED)
TRIMAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONCLUDED)
NOTE 17. INTERIM FINANCIAL INFORMATION (UNAUDITED) (CONTINUED)
Quarterly earnings per common share amounts for 1993 do not total to the full year amount due to the change in the number of common shares outstanding occurring during the year.
Earnings per common share in the fourth quarter of 1993 and 1992 were improved by $.04 and $.03, net, respectively, resulting from various year-end adjustments to accrual estimates recorded earlier in each year.
QUARTERLY COMMON STOCK PRICE AND DIVIDEND INFORMATION:
TRIMAS CORPORATION AND SUBSIDIARIES
SCHEDULE V. PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
Notes:
(A) Including fixed asset additions of $8,210,000 in 1993 and $18,990,000 in 1991 obtained through the acquisition of companies.
(B) Adjustments and reclassifications between accounts.
TRIMAS CORPORATION AND SUBSIDIARIES
SCHEDULE VI. ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
Note:
(A) Adjustments and reclassifications between accounts.
TRIMAS CORPORATION AND SUBSIDIARIES
SCHEDULE VIII. VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
Notes:
(A) Allowance of companies acquired, and other adjustments, net.
(B) Doubtful accounts charged off, less recoveries.
TRIMAS CORPORATION AND SUBSIDIARIES
SCHEDULE X. SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
Other captions provided under this schedule are excluded as the amounts related to such captions are not material, or they are disclosed in the notes to the financial statements.
EXHIBIT INDEX
- ------------------------- (1) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Current Report on Form 8-K dated November 22, 1993.
(2) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 1993.
(3) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Current Report on Form 8-K dated June 22, 1993.
(4) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Registration Statement on Form S-3 dated March 9, 1993.
(5) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Current Report on Form 8-K dated February 1, 1993.
(6) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1992.
(7) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991.
(8) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1990.
(9) Incorporated by reference to the Exhibits filed with MascoTech, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1989.