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

ITEM 1 Business - ---------------
Ferro Corporation ("Ferro"), which was incorporated under the laws of Ohio in 1919, is a worldwide producer of specialty materials by organic and inorganic chemistry for industry. It operates (either directly or through wholly owned subsidiaries or partially owned affiliates) in 22 countries worldwide. Ferro produces a variety of specialty coatings, specialty colors, specialty chemicals, specialty ceramics, specialty plastics and related products and services. Ferro's most important product is frit produced for use in porcelain enamels and ceramic glazes.
Most of the products produced by Ferro are classified as specialty materials, rather than commodities, because they are formulated or designed to perform a specific and important function in the manufacturing processes of Ferro customers or in their end products. These specialty materials are not sold in the high volume normally associated with commodity businesses.
- 2 -
Ferro specialty materials require a high degree of technical service on an individual customer basis. The value of these specialty materials stems not just from their raw materials composition, but from the result and performance they achieve in actual use.
A further description of Ferro's business, its principal products, their markets and applications is contained under all headings on pages 4 through 13 of Ferro's 1993 Annual Report to Shareholders which is attached hereto as Exhibit 13 (the "Annual Report"). The information contained under the aforementioned headings on pages 4 through 13 of the Annual Report (excluding those pages on which only pictures appear and the pictures and text describing such pictures on pages 7, 9, 11, and 13) is incorporated herein by reference. Information concerning Ferro's business during 1993, 1992, and 1991 and certain transactions consummated during those years is included under the heading "Management's Discussion and Analysis" on pages 15 through 20 of the Annual Report and in Note 6 to Ferro's Consolidated Financial Statements, which are included in the Annual Report. Note 6 appears at page 29 of the Annual Report. Such information is incorporated herein by reference. Additional information about Ferro's industry segments, including financial information relating thereto, is set forth in Note 11 to Ferro's Consolidated Financial Statements, which appears on pages 33 through 35 of the Annual Report and is incorporated herein by reference.
Raw Materials -------------
For the most part the raw materials essential to Ferro's operations both in the United States and overseas are obtainable from multiple sources worldwide. Ferro did not encounter significant raw material shortages in 1993 and does not anticipate such shortages in 1994.
Patents and Licenses --------------------
Ferro owns a substantial number of patents relating to its various products and their uses. While these patents are of importance to Ferro, it does not consider that the invalidity or expiration of any single patent or group of patents would have a material adverse effect on its business. Ferro patents expire at various dates through the year 2010.
Ferro does not hold any licenses, franchises or concessions which it considers to be material.
Customers ---------
Ferro does not consider that a material part of its business is dependent on any single customer or group of customers.
Backlog of Orders -----------------
In general there is no significant lead time between order and delivery in any of Ferro's business segments. As a result, Ferro does not consider that the dollar amount of
- 3 -
backlog of orders believed to be firm as of any particular date is material for an understanding of its business. Ferro does not regard any material part of its business to be seasonal.
Competition -----------
With respect to most of its products, Ferro competes with a substantial number of companies, none of which is dominant. An exception is frit, as to which Ferro believes that it is the largest worldwide supplier. The details of foreign competition necessarily vary with respect to each foreign market.
Because of the specialty nature of Ferro's products, product performance characteristics and customer service are the most important components of the competition which Ferro encounters in the sale of nearly all of its products. However, in some of the markets served by Ferro, strong price competition is encountered from time to time.
Research and Development ------------------------
A substantial number of Ferro's employees are involved in technical activities concerned with products required by the ever-changing markets of its customers. Laboratories are located at each of Ferro's major subsidiaries around the globe, where technical efforts are applied to the customer and market needs of that geographical area. In the United States, laboratories are maintained in each of its divisions. Backing up these divisional customer services laboratories is Corporate research activity involving approximately 52 scientists and support personnel in the Cleveland area.
Expenditures for research and development activities relating to the development or significant improvement of new and/or existing products, services and techniques were approximately $19,334,000, $15,440,000, and $17,643,000 in 1993, 1992 and 1991, respectively. Expenditures for individual customer requested research and development were not material.
Environmental Matters ---------------------
Ferro's manufacturing facilities, like those of industry generally, are subject to numerous laws and regulations designed to protect the environment, particularly in regard to plant wastes and emissions. In general, Ferro believes that it is in substantial compliance with the environmental regulations to which its operations are subject and that, to the extent Ferro may not be in compliance with such regulations, such non-compliance has not had a material adverse effect on Ferro. Moreover, while Ferro has not generally experienced substantial difficulty in complying with environmental requirements, compliance has required a continuous management effort and significant expenditures.
Ferro and its international subsidiaries authorized approximately $8,970,000, $9,622,000 and $3,287,000 in capital expenditures for environmental control during 1993, 1992
- 4 -
and 1991, respectively. Three major projects accounted for the high level of environmental control capital expenditures in 1992. They were:
Three major projects accounted for the high level of environmental control capital expenditures in 1993. They were:
During 1993, the Company became involved in two separate environmental claims regarding Keil Chemical, a production facility owned and operated by Ferro in Hammond, Indiana. The Company has been named as one of several defendants, including three local municipalities, one local government agency (a sewer district) and four other area industrial concerns in a suit filed by the United States Environmental Protection Agency alleging violation of the Clean Water Act and the River and Harbors Act. The suit was filed in the Federal District Court for the Northern District of Indiana on August 2, 1993. The suit alleges violation of pre-treatment requirements for removal of pollutants prior to discharge of wastewater into the Grand Calumet and Little Calumet Rivers. Relief sought includes orders to comply with environmental regulations, civil penalties of up to $25,000 per day for each violation, and contribution to the cost of removing contaminated sediments from the west branch of the Grand Calumet River. The Company believes it is in substantial compliance with applicable law and intends to vigorously defend this litigation. However, the Company will also explore settlement
- 5 -
possibilities, and if it is more economical to settle than to defend, the Company will pursue that course of action.
In a separate matter, in late July 1993, the United States Environmental Protection Agency, the Indiana Department of Environmental Management and the Hammond Department of Environmental Management alleged violation of air emission regulations by the Keil Chemical facility. The allegations relate to materials used in the manufacture of flame retardants. The notices from the governmental authorities threaten the possibility of proceedings to suspend operations in the manufacture of flame retardants and threaten civil penalties of up to $25,000 per day of violation. The Company has voluntarily commenced a capital program, estimated to cost $3.0 million, to reduce air emissions related to its flame retardant process at Keil Chemical and in consultation with the agencies, has taken interim measures to reduce air emissions pending completion of the capital program. The Company has been working with the appropriate environmental agencies and is exploring whether the agencies' claims can be settled on reasonable terms. If reasonable settlement cannot be reached, the Company intends to vigorously defend against the agencies' claims.
Employees ---------
At December 31, 1993, Ferro employed approximately 6,627 full-time employees, including 4,325 employees in its foreign subsidiaries and affiliates and 2,302 in the United States.
Set forth below is a table of union contracts showing name of union, expiration date of union agreement, number of employees covered by the union agreement, and percentage of United States work force covered by the union agreement.
- 6 -
As indicated by the foregoing table, only 2.6% of Ferro's domestic work force is affected by union agreements which expire in 1994.
- 7 -
Foreign Operations ------------------
Financial information about Ferro's domestic and foreign operations is set forth under the heading "Geographic Operating Data" on page 35 of the Annual Report and is incorporated herein by reference.
Ferro's products are produced and distributed in foreign as well as domestic markets. Ferro commenced its international operations in 1927.
Wholly-owned subsidiaries operate manufacturing facilities in Argentina, Australia, Brazil, Canada, England, France, Germany, Holland, Italy, Mexico, New Zealand, Spain and Taiwan. Partially-owned affiliates manufacture in Ecuador, Indonesia, Italy, Japan, Portugal, Taiwan, Thailand, Turkey and Venezuela.
Foreign operations (excluding Canada) accounted for 50% of the consolidated net sales and 57% of Ferro's consolidated operating income for the fiscal year 1993; comparable amounts for the fiscal year 1992 were 55% and 74% and for fiscal year 1991 were 55% and 159%. The split of operating income between foreign and domestic operations in 1991 was skewed heavily against domestic results due to the one time restructuring charge.
Except for the sales of Ferro Enamel Espanola S.A. (Spain), Ferro France, S.a R.L. (France), Ferro Chemicals S.A. (France), Ferro (Holland) B.V., Ferro Mexicana S.A. de C.V. (Mexico), Ferro (Great Britain) Ltd., Ferro Industrial Products Limited (Taiwan), Ferro Toyo Co., Ltd. (Taiwan) and Metal Portuguesa S.A. (Portugal), the sales of each of Ferro's subsidiaries are principally for delivery in the country in which the subsidiary is located. Ferro's European Community subsidiaries continue to reduce and eliminate, to the extent practical, duplication of product lines with the intended result being that only one subsidiary will be the primary provider of each line of Ferro specialty products to the entire European Community market.
Ferro receives technical service fees and/or royalties from many of its foreign subsidiaries. Under historical practice, as a matter of general corporate policy, the foreign subsidiaries were normally expected to remit a portion of their annual earnings to the parent by way of dividends. Under current practice, earnings of the Company's European subsidiaries are being reinvested in European operations. Several of the countries where Ferro has subsidiaries control the transfer of currency out of the country, but in recent years Ferro has been able to receive such remittances without material hindrance from foreign government restrictions. To the extent earnings of foreign subsidiaries are not remitted to Ferro, such earnings are intended to be indefinitely invested in those subsidiaries.
- 8 -
ITEM 2



ITEM 2 Properties - -------------------
Ferro's research and development center is located in leased space in Cleveland, Ohio. The corporate headquarters office is located at 1000 Lakeside Avenue, Cleveland, Ohio, and such property is owned by the Company. The business segments in which Ferro's plants are used and the locations of the principal manufacturing plants it owns in the United States are as follows: Coatings, Colors and Ceramics -- Cleveland, Ohio, Lake Park, Florida, Nashville, Tennessee, Pittsburgh, Pennsylvania, Toccoa, Georgia, Orrville, Ohio, Penn Yan, New York, East Liverpool, Ohio, Crooksville, Ohio, and East Rochester, New York; Plastics -- Plymouth, Indiana, Evansville, Indiana, Stryker, Ohio, Edison, New Jersey and South Plainfield, New Jersey; Chemicals - -- Bedford, Ohio, Hammond, Indiana and Baton Rouge, Louisiana. In addition, Ferro leases manufacturing facilities in Santa Barbara, California (Coatings); Schaumburg, Illinois (Plastics) and Lake Park, Florida (Coatings).
Outside the United States, Ferro or its subsidiaries own manufacturing plants in Argentina, Australia, Brazil, Canada, France, Germany, Indonesia, Italy, Japan, Mexico, the Netherlands, Portugal, Spain, Taiwan, Thailand and the United Kingdom. Ferro or its subsidiaries lease manufacturing plants in Italy, the Netherlands and New Zealand. In many instances, the manufacturing facilities outside of the United States are used in multiple business segments of Ferro.
Ferro believes that all of the foregoing facilities are generally well maintained and adequate for their present use. During the past year, several of Ferro's plants have been operating near capacity.
ITEM 3

ITEM 3 Legal Proceedings - --------------------------
The information set forth in Note 7 to Ferro's Consolidated Financial Statements on page 29 of the Annual Report is incorporated herein by reference.
Information regarding certain legal proceedings with respect to environmental matters is contained under Part I of this Annual Report on Form 10-K.
The law firm of Squire, Sanders & Dempsey, of which Paul B. Campbell is a partner, provided legal services to Ferro in 1993 and Ferro plans to continue the use of such firm in 1994. Mr. Campbell is the Secretary and a Director of Ferro.
ITEM 4

ITEM 4 Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------
No matters were submitted to a vote of Ferro's security holders during the fourth quarter of the fiscal year covered by this report.
- 9 -
Executive Officers of the Registrant ------------------------------------
There is set forth below the name, age, positions and offices held by each of Ferro's executive officers as of March 15, 1994 as well as their business experience during the past five years. Years indicate the year the individual was named to the indicated position. There is no family relationship between any of Ferro's executive officers.
Albert C. Bersticker - 59 President and Chief Executive Officer, 1991 President and Chief Operating Officer, 1988
Werner F. Bush - 54 Executive Vice President and Chief Operating Officer, 1993 Senior Vice President, Coatings, Colors and Ceramics, 1991 Group Vice President, Coatings, Colors and Electronic Materials, 1988
David G. Campopiano - 45 Vice President, Corporate Development, 1989 Senior Vice President, Prescott, Ball & Turben, Inc., 1987
Frank A. Carragher - 62 Senior Vice President, Chemicals and Polymers, 1991 Group Vice President, Chemicals, 1979
R. Jay Finch - 52 Vice President, Specialty Plastics, 1991 Vice President and General Manager, Plastics & Rubber Division, Mobay Corporation, 1984
James F. Fisher - 56 Senior Vice President, Coatings, Colors and Ceramics, 1993 Group Vice President, International, 1991 Vice President, International, 1988
D. Thomas George - 46 Treasurer, 1991 Director, Treasury Operations, 1989 Area Controller, Latin America and Far East, 1988
Marino Lopez-Vega - 52 Vice President, Frit, 1992 Managing Director of Ferro Spain, 1984
- 10 -
Hector R. Ortino - 51 Executive Vice President and Chief Financial-Administrative Officer, 1993 Senior Vice President and Chief Financial Officer, 1991 Vice President, Finance and Chief Financial Officer, 1987
Richard C. Oudersluys - 55 Vice President, Pigments and Glass/Ceramics Colorants, 1992 General Manager, Color Division, 1987
Robert E. Price - 55 Vice President, International, 1993 Managing Director, Asia-Pacific, 1989 President, Ferro Far East Ltd., 1987
Thomas O. Purcell, Jr. - 50 Vice President, Research and Development, 1991 Associate Director Research, Plastics, 1990 Manager, Technology Assessment Operation, General Electric Plastics, 1988
Gary H. Ritondaro - 47 Vice President, Finance, 1993 Vice President, Controller, 1991 Controller, 1986
PART II -------
ITEM 5

ITEM 5 Market for Registrant's Common Equity and Related Stockholder Matters - ----------------------------------------------------------
Information regarding the recent price and dividend history of Ferro's Common Stock, the principal market for its Common Stock and the number of holders thereof is set forth under the heading "Quarterly Data" on page 38 of the Annual Report. Said information is incorporated herein by reference. Information concerning dividend restrictions is contained in Note 3 to Ferro's Consolidated Financial Statements on pages 26 and 27 of the Annual Report and said information is incorporated herein by reference.
ITEM 6

ITEM 6 Selected Financial Data - --------------------------------
The summary of selected financial data for each of the last five years set forth under the heading "Selected Financial Data" on pages 36 and 37 of the Annual Report is incorporated herein by reference.
- 11 -
ITEM 7

ITEM 7 Management's Discussion and Analysis of Financial Conditions and Results of Operation - ----------------------------------------------------------
The information contained under the heading "Management's Discussion and Analysis" on pages 15 through 20 of the Annual Report is incorporated herein by reference.
ITEM 8


ITEM 8 Financial Statements and Supplementary Data - ----------------------------------------------------
The Consolidated Financial Statements of Ferro and its subsidiaries contained on pages 21 through 35, inclusive, of the Annual Report, including the Notes to Consolidated Financial Statements, are incorporated herein by reference.
ITEM 9

ITEM 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure - ------------------------------------------------------------------------
There are no such changes or disagreements.
PART III --------
ITEM 10



ITEM 10 Directors and Executive Officers of the Registrant - -----------------------------------------------------------
The information regarding directors of Ferro contained under the headings "Election of Directors" and "Certain Matters Pertaining to the Board of Directors" on pages 1 through 9, inclusive, of Ferro's Proxy Statement dated March 14, 1994 is incorporated herein by reference. Information regarding executive officers of Ferro is contained under Part I of this Annual Report on Form 10-K.
ITEM 11

ITEM 11 Executive Compensation - -------------------------------
The information required by this Item 11 is set forth under the heading "Information Concerning Executive Officers" on pages 15 through 20, inclusive, of Ferro's Proxy Statement dated March 14, 1994 and is incorporated herein by reference.
ITEM 12

ITEM 12 Security Ownership of Certain Beneficial Owners and Management - -----------------------------------------------------------------------
The information required by this Item 12 is set forth under the headings "Election of Directors" and "Security Ownership of Directors, Officers and Certain Beneficial Owners" on pages 1 through 8 of Ferro's Proxy Statement dated March 14, 1994 and is incorporated herein by reference.
- 12 -
ITEM 13

ITEM 13 Certain Relationships and Related Transactions - -------------------------------------------------------
There are no relationships or transactions that are required to be reported.
PART IV -------
ITEM 14

ITEM 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K - ------------------------------------------------------------
1. Documents filed as part of this Annual Report on Form 10-K
(a) The following Consolidated Financial Statements of Ferro Corporation and its subsidiaries, contained on pages 21 through 35, inclusive, of the Annual Report are incorporated herein by reference:
Consolidated Statements of Income for the Years ended December 31, 1993, 1992 and 1991
Consolidated Balance Sheets at December 31, 1993 and 1992
Consolidated Statements of Shareholders' Equity for the years ended December 31, 1993, 1992 and 1991
Consolidated Statements of Cash Flows for the Years ended December 31, 1993, 1992 and 1991
Notes to Consolidated Financial Statements
(b) Financial Statement Schedules V, VI, VIII, IX and X, together with the independent Auditor's Report thereon, are contained on pages through of this Annual Report on Form 10-K.
(c) Exhibits
(3) Articles of Incorporation and by-laws
(a) Eleventh Amended Articles of Incorporation. (Reference is made to Exhibit 3 to Ferro Corporation's Quarterly Report on Form 10-Q for the three months ended September 30, 1989, which Exhibit is incorporated herein by reference.)
- 13 -
(b) Amended Code of Regulations. (Reference is made to Exhibit (3)(b) to Ferro Corporation's Quarterly Report on Form 10-Q for the three months ended June 30, 1987, which Exhibit is incorporated herein by reference.)
(4) Instruments defining rights of security holders, including indentures
(a) Revolving Credit Agreement by and between Ferro and four commercial banks dated August 22, 1990. (Reference is made to Exhibit 10 to Ferro Corporation's Quarterly Report on Form 10-Q for the three months ended September 30, 1990, which Exhibit is incorporated herein by reference.)
(b) Amendment Number 1 dated May 31, 1991, to the Revolving Credit Agreement by and between Ferro and four commercial banks. (Reference is made to Exhibit 4(b)(1) to Ferro Corporation's Quarterly Report on Form 10-Q for the three months ended June 30, 1991, which Exhibit is incorporated herein by reference.)
(c) Amendment Number 2 dated July 30, 1991, to the Revolving Credit Agreement by and between Ferro and four commercial banks. (Reference is made to Exhibit 4(b)(2) to Ferro Corporation's Quarterly Report on Form 10-Q for the three months ended June 30, 1991, which Exhibit is incorporated herein by reference.)
(d) Amendment Number 3 dated December 31, 1991, to the Revolving Credit Agreement by and between Ferro and four commercial banks. (Reference is hereby made to Exhibit 4 to Ferro Corporation's Form 10-K for the year ended December 31, 1991, which Exhibit is incorporated herein by reference.)
(e) Amendment Number 4 dated July 21, 1992, to the Revolving Credit Agreement by and between Ferro and four commercial banks. (Reference is hereby made to Exhibit 4 to Ferro Corporation's Form 10-Q for the three months ended June 30, 1992, which Exhibit is incorporated herein by reference.)
(f) Amendment Number 5 dated April 20, 1993, to the Revolving Credit Agreement by and between Ferro and four commercial banks. (Reference is hereby made to Exhibit 4(b)(4) to Ferro Corporation's Form 10-Q for the three months ended June 30, 1993, which Exhibit is incorporated herein by reference.)
- 14 -
(g) The rights of the holders of Ferro's 11-3/4% Debentures due October 15, 2000 are described in the form of Indenture filed as Exhibit 4(b) to Amendment No. 1 to the Registration Statement on Form S- 3 filed with the Commission on October 8, 1985 (Registration No. 33-529). Said Exhibit is incorporated herein by reference.
(h) Rights Agreement between Ferro Corporation and National City Bank, Cleveland, Ohio, as Rights Agent, dated as of March 21, 1986. (Reference is made to Exhibit 1.2 to the Registration Statement on Form 8-A dated March 26, 1986, which Exhibit is incorporated herein by reference.)
(i) Amendment No. 1 to Rights Agreement between Ferro Corporation and National City Bank, Cleveland, Ohio, as Rights Agent, dated as of March 31, 1989. (Reference is made to Exhibit 1 to Form 8-K filed with the Commission on March 31, 1989, which Exhibit is incorporated herein by reference.)
(j) The rights of the holders of Ferro's Debt Securities to be issued pursuant to an Indenture between Ferro and Society National Bank, as Trustee, are described in the form of Indenture dated May 1, 1993 filed as Exhibit 4(j) to Ferro Corporation's Form 10-Q for the three months ended June 30, 1993. Said Exhibit is incorporated herein by reference.
(10) Material Contracts
(a) Key elements of Ferro's Incentive Compensation Plan are set forth under the heading "Report of the Compensation and Organization Committee" on pages 11 through 13 of the Proxy Statement dated March 14, 1994. Said description is incorporated herein by reference.
(b) Key elements of Ferro's Performance Share Plan are set forth under the heading "Performance Share Plan Awards" on pages 15, note 1, 17 and 18 of Ferro Corporation's Proxy Statement dated March 15, 1993. Said description is incorporated herein by reference.
(c) Ferro Corporation Savings and Stock Ownership Plan. (Reference is made to Exhibit 4.3 to Ferro Corporation's Quarterly Report on Form 10-Q for the three months ended March 31, 1989, which Exhibit is incorporated herein by reference.)
- 15 -
(d) Ferro's 1985 Employee Stock Option Plan for Key Personnel (Amended and Restated). (Reference is hereby made to Exhibit A to Ferro Corporation's Proxy Statement dated March 11, 1991, which Exhibit is hereby incorporated by reference.)
(e) Form of Indemnification Agreement (adopted January 25, 1991 for use from and after that date). (Reference is hereby made to Exhibit 10 to Ferro Corporation's Form 10-K for the year ended December 31, 1990, which Exhibit is incorporated herein by reference.)
(f) Form of Executive Employment Agreement (adopted October 1, 1991 for use from and after that date). (Reference hereby is made to Exhibit 10 to Ferro Corporation's Form 10-K for the year ended December 31, 1991, which Exhibit is incorporated herein by reference.)
(g) Schedule I listing the officers with whom Ferro has entered into currently effective executive employment agreements. A copy of such Schedule I is attached hereto as Exhibit 10.
(h) Agreement between Ferro Corporation and Frank A. Carragher dated October 18, 1993 is attached hereto as Exhibit 10.1.
(11) Statement Regarding Computation of Earnings Per Share.
(12) Ratio of Earnings to Fixed Charges.
(13) Annual Report to Shareholders for the year ended December 31, 1993.
(21) List of Subsidiaries.
(23) Consent of KPMG Peat Marwick to the incorporation by reference of their audit report on the Consolidated Financial Statements contained in the Annual Report into Ferro's Registration Statements on Form S-8 Registration Nos. 2-61407, 33-28520 and 33-45582 and Ferro's Registration Statement on Form S-3 Registration No. 33-51284.
2. No reports on Form 8-K were filed for the three months ended December 31, 1993.
- 16 -
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
FERRO CORPORATION
By /s/Albert C. Bersticker ----------------------------------- Albert C. Bersticker, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in their indicated capacities and as of this 28th day of March, 1994.
- 17 -
- 18 -
FERRO CORPORATION AND SUBSIDIARIES
Supporting Schedules to Consolidated Financial Statements and Schedules
Submitted in Response to Part IV -- Form 10-K
December 31, 1993, 1992 and 1991
KPMG PEAT MARWICK
CERTIFIED PUBLIC ACCOUNTANTS
1500 National City Center 1800 East Ninth Street Cleveland, OH 44114-3495
INDEPENDENT AUDITORS' REPORT ----------------------------
The Shareholders and Board of Directors Ferro Corporation:
Under date of January 27, 1994, we reported on the consolidated balance sheets of Ferro Corporation and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the years in the three- year period ended December 31, 1993, as contained in the 1993 annual report to shareholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year 1993. In connection with our audits of the aforementioned consolidated financial statements, we also have audited the related financial statement schedules listed in the accompanying table of contents. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
/s/ KPMG PEAT MARWICK
Cleveland, Ohio January 27, 1994
FERRO CORPORATION AND SUBSIDIARIES
-----------------
Financial Statements -------------------- Audited
Consolidated Balance Sheets - December 31, 1992 and 1991
Consolidated Statements of Income - Years ended December 31, 1993, 1992, and 1991
Consolidated Statements of Shareholders' Equity - Years ended December 31, 1993, 1992, and 1991
Consolidated Statements of Cash Flows - Years ended December 31, 1993, 1992, and 1991
Notes to Consolidated Financial Statements - December 31, 1993, 1992, and 1991
Schedules --------- Plant and Equipment - Years ended December 31, 1993, 1992, and 1991 Schedule V
Accumulated Depreciation of Plant and Equipment - Years ended December 31, 1993, 1992, and 1991 Schedule VI
Valuation and Qualifying Accounts and Reserves - Years ended December 31, 1993, 1992, and 1991 Schedule VIII
Short-Term Borrowings - Years ended December 31, 1993, 1992, and 1991 Schedule IX
Supplementary Income Statement Information - Years ended December 31, 1993, 1992, and 1991 Schedule X
All other schedules have been omitted because the material is not applicable or is not required as permitted by the rules and regulations of the Securities and Exchange Commission, or the required information is included in notes to consolidated financial statements.
Financial statements of foreign affiliates in which Company ownership exceeds 20 percent, accounted for on the equity method, are not included herein since, in the aggregate, these companies do not constitute a significant subsidiary. Financial statements are incorporated herein by reference to the Company's annual report to its shareholders, the required number of copies of which were furnished to the Commission pursuant to Rule 14A-3.
Schedule V ----------
Schedule VI -----------
Schedule VIII -------------
Schedule IX -----------
Schedule X ----------
EXHIBIT INDEX -------------