1
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
For the transition period from ..... to .....
Commission file number 1-5263
THE LUBRIZOL CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 34-0367600
(State of incorporation) (I.R.S. Employer Identification No.)
29400 Lakeland Boulevard
Wickliffe, Ohio 44092-2298
(Address of principal executive officers, including zip code)
Registrant's telephone number, including area code: (440) 943-4200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------------------- ----------------------
Common Shares without par value New York Stock Exchange
Common Share purchase rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Aggregate market value (on basis of closing sale price) of voting stock
held by nonaffiliates as of March 2, 2001 $1,634,057,451
Number of the registrant's Common Shares, without par value,
outstanding as of March 2, 2001 51,274,353
Documents Incorporated by Reference
-----------------------------------
Portions of the registrant's 2000 Annual Report to its shareholders
(Incorporated into Part I and II of this Form 10-K)
Portions of the registrant's Proxy Statement dated March 14, 2001
(Incorporated into Part III of this Form 10-K)
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PART I
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ITEM 1. BUSINESS
The Lubrizol Corporation was organized under the laws of Ohio
in 1928. The company began business as a compounder of special-purpose
lubricants, and in the early 1930's was among the first to commence research in
the field of lubricant additives. Today, the company is a global fluid
technology company concentrating on high-performance chemicals, systems and
services for industry and transportation. The company develops, produces and
sells specialty additive packages and related equipment used in transportation
and industrial finished lubricants. The company's products are created through
the application of advanced chemical and mechanical technologies to enhance the
performance, quality and value and reduce the environmental impact of the
customer products in which they are used. The company groups its product lines
into two operating segments: chemicals for transportation and chemicals for
industry.
PRINCIPAL PRODUCTS. Chemicals for transportation is comprised
of additives for lubricating engine oils, such as those used in gasoline,
diesel, marine and stationary gas engines and additive components; additives for
driveline oils, such as automatic transmission fluids, gear oils and tractor
lubricants; and additives for fuel products and refinery and oil field
chemicals. In addition, the company sells additive components and viscosity
improvers within its lubricant and fuel additives product lines. Chemicals for
industry includes industrial additives, such as additives for hydraulic fluids,
metalworking fluids and compressor lubricants; performance chemicals, such as
additives for coatings and inks and process chemicals; and performance systems,
comprised principally of fluid metering devices and particulate emission trap
devices.
Revenues within the chemicals for transportation segment
comprised 82%, 83% and 84% of consolidated revenues in 2000, 1999 and 1998,
respectively. Additives for lubricating engine oils comprised 53%, 53% and 52%
of consolidated revenues in 2000, 1999 and 1998, respectively. Additives for
driveline oils comprised 23%, 23% and 24% of consolidated revenues for these
same respective periods. Further financial information for the company's
operating segments is contained in Note 12 to the Financial Statements, which is
included in the company's 2000 Annual Report to its shareholders and is
incorporated herein by reference.
Additives improve the lubricants and fuels used in cars,
trucks, buses, off-highway equipment, marine engines and industrial
applications. In lubricants, additives enable oil to withstand a broader range
of temperatures, limit the buildup of sludge and varnish deposits, reduce wear,
inhibit the formation of foam, rust and corrosion, and retard oxidation. In
fuels, additives help maintain efficient operation of the fuel delivery system,
help control deposits and corrosion, improve combustion and assist in preventing
decomposition during storage.
Due to the variety of oil properties and applications, a
number of different chemicals are used to formulate the company's products. Each
additive combination is designed to fit the characteristics of the customer's
base oil and the level of performance specified. Engine oils for passenger cars
contain a combination of chemical additives which usually includes one or more
detergents, dispersants, oxidation inhibitors and wear inhibitors, pour point
depressants and viscosity improvers. Other chemical combinations are used in
specialty additive systems for heavy duty engine oils used by trucks and
off-highway equipment and in formulations for gear oils, automatic transmission
fluids, industrial oils, metalworking fluids, and gasoline, diesel and residual
fuels.
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The company's performance systems products principally involve
products used in emission controls, such as catalyst, exhaust and filter systems
and precision metering devices used in blending and additive injection
operations.
COMPETITION. The company's chemicals for transportation
segment and chemicals for industry segment are highly competitive in terms of
price, technology development, product performance and customer service. The
company's principal competitors within its chemicals for transportation segment,
both in the United States and overseas, are Infineum, a joint venture involving
two major petroleum companies (Shell Oil Company and Exxon Mobil Corporation);
Chevron Oronite Company, a subsidiary of Chevron Corporation, a major petroleum
company; and one chemical company (Ethyl Corporation). The petroleum companies
either directly or indirectly produce lubricant and fuel additives for their own
use and also sell additives to others. These petroleum companies are also
customers of the company and may also sell base oil to the company. The company
believes, based on volume sold, that it is the largest supplier to the petroleum
industry of performance additive packages for lubricants.
CUSTOMERS. In the United States, the company markets its
chemicals for transportation and chemicals for industry products through its own
sales organization. The company's additive customers consist primarily of oil
refiners and independent oil blenders and are located in more than 100
countries. In 2000, approximately 43% of the company's consolidated sales were
made to customers in North America, 30% to customers in Europe and the Middle
East and 27% to customers in Asia-Pacific and Latin America. The company's ten
largest customers, most of which are international oil companies and a number of
which are groups of affiliated entities, accounted for approximately 48% of
consolidated sales in 2000. The loss of one or more of these customers could
have a material adverse effect on the company's business. Exxon Mobil
Corporation, together with its affiliates, has been the company's largest
customer within its chemicals for transportation segment during the past two
years, comprising 11% of consolidated sales in 2000 and 12% in 1999. Mobil
Corporation and Exxon Corporation completed a merger during the latter part of
1999, and the 1999 percentage includes sales to Mobil, Exxon and their
affiliates prior to the merger as well as sales to the combined entity, Exxon
Mobil Corporation, following the consummation of the merger. Sales to Mobil
Corporation comprised 9% of consolidated sales in 1998. The company's chemicals
for industry segment is not materially dependent on a single customer or on a
few customers.
RAW MATERIALS. The company utilizes a broad variety of
chemical raw materials in the manufacture of its additives and uses oil in
processing and blending additives. These materials are obtainable from several
sources, and for the most part are derived from petroleum. Political and
economic conditions in the Middle East have, in the past, caused and may
continue to cause the cost of raw materials to fluctuate significantly; however,
the availability of raw materials to the company has not been significantly
affected when these conditions occurred. The company expects raw materials to be
available in adequate quantities during 2001.
RESEARCH, TESTING AND DEVELOPMENT. The company has
historically emphasized research and has developed a large percentage of the
additives it manufactures and sells. Technological developments in the design of
engines and other automotive equipment, combined with rising demands for
environmental protection and fuel economy, require increasingly sophisticated
chemical additives to meet industry performance standards. The frequency of
changes in industry performance affects the company's technical spending
patterns.
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Consolidated research and development expenditures were $86.4
million in 2000 and $78.3 million in 1999 and 1998. These amounts were
equivalent to 4.9%, 4.4% and 4.7% of the respective revenues for such years.
These amounts include expenditures for the performance evaluation of additive
developments in engines and other types of mechanical equipment as well as
expenditures for the development of specialty chemicals for industrial
applications. In addition, $64.4 million, $67.7 million and $72.7 million was
spent in 2000, 1999 and 1998, respectively, for technical service (testing)
activities, principally for evaluation in mechanical equipment of specific
lubricant formulations designed for the needs of petroleum industry customers
throughout the world.
Research, testing and development expenditures by operating
segment were as follows (in thousands of dollars):
2000 1999 1998
------- ------- -------
Research and development expenditures:
Chemicals for transportation $71,884 $66,268 $67,018
Chemicals for industry 14,511 11,984 11,265
------- ------- -------
Total $86,395 $78,252 $78,283
======= ======= =======
Testing expenditures:
Chemicals for transportation $55,998 $58,978 $64,641
Chemicals for industry 8,412 8,697 8,056
------- ------- -------
Total $64,410 $67,675 $72,697
======= ======= =======
The company has two research facilities at Wickliffe, Ohio,
one of which is principally for lubricant additive research and the other for
research in the field of other specialty chemicals. The company also maintains a
mechanical testing laboratory at Wickliffe, equipped with a variety of gasoline
and diesel engines and other mechanical equipment to evaluate the performance of
additives for lubricants and fuels. The company has similar mechanical testing
laboratories in England and Japan and, in addition, makes extensive use of
independent contract research firms. Extensive field testing is also conducted
through various arrangements with fleet operators and others.
Liaison offices in Detroit, Michigan; Hazelwood, England;
Hamburg, Germany; Tokyo, Japan; and Paris, France, maintain close contact with
the principal automotive and equipment manufacturers of the world and keep the
company abreast of the performance requirements for its products in the face of
changing technologies. These liaison activities also serve as contacts for
cooperative development and evaluation of products for future applications.
Contacts with the automotive and equipment industry are important so that the
company may have the necessary direction and lead time to develop products for
use in engines, transmissions, gear sets, and other areas of equipment that
require lubricants of advanced design.
PATENTS. The company owns a variety of United States and
foreign patents relating to lubricant and fuel additives, lubricants, chemical
compositions and processes, and protective coating materials and processes.
While such domestic and foreign patents expire from time to time, the company
continues to apply for and obtain patent protection on an ongoing basis.
Although the company believes that, in the aggregate, its patents constitute an
important asset, it does not regard its business as being materially dependent
upon any single patent or any group of related patents.
The company previously filed claims against Exxon Corporation
and its affiliates ("Exxon") relating to various commercial matters, including
alleged infringements by Exxon of certain of the company's patents. On October
12, 2000, the company reached a settlement of all pending patent litigation with
Imperial Oil Limited, a Canadian affiliate of Exxon Mobil Corporation. Further
information regarding litigation with Exxon is contained in Note 16 to the
Financial Statements, which is included in the company's 2000 Annual Report to
its shareholders, and is incorporated herein by reference.
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ENVIRONMENTAL MATTERS. The company is subject to federal,
state and local laws and regulations designed to protect the environment and
limit manufacturing wastes and emissions. The company believes that as a general
matter its policies, practices and procedures are properly designed to prevent
unreasonable risk of environmental damage and the consequent financial liability
to the company. Compliance with the environmental laws and regulations requires
continuing management effort and expenditures by the company. Capital
expenditures for environmental projects were $2.6 million in 2000, which
represented 3.0% of 2000 capital expenditures. The company believes that the
cost of complying with environmental laws and regulations will not have a
material affect on the earnings, liquidity or competitive position of the
company.
The company is engaged in the handling, manufacture, use,
transportation and disposal of substances that are classified as hazardous or
toxic by one or more regulatory agencies. The company believes that its
handling, manufacture, use, transportation and disposal of such substances
generally have been in accord with environmental laws and regulations.
Among other environmental laws, the company is subject to the
federal "Superfund" law, under which the company has been designated as a
"potentially responsible party" that may be liable for cleanup costs associated
with various waste sites, some of which are on the U.S. Environmental Protection
Agency Superfund priority list. The company's experience, consistent with what
it believes to be the experience of others in similar cases, is that Superfund
site liability tends to be apportioned among parties based upon contribution of
materials to the Superfund site. Accordingly, the company measures its liability
and carries out its financial reporting responsibilities with respect to
Superfund sites based upon this standard, even though Superfund site liability
is technically joint and several in nature. The company views the expense of
such remedial cleanups as a part of its product cost, and accrues for estimated
environmental liabilities with charges to cost of sales. The company considers
its environmental accrual to be adequate to provide for its portion of costs for
all such known environmental liabilities. Based upon consideration of currently
available information, the company believes liabilities for environmental
matters will not have a material adverse affect on the company's financial
position, operating results or liquidity.
EMPLOYEES. At December 31, 2000, the company and its
subsidiaries had 4,390 employees of which approximately 54% were in the U.S.
INTERNATIONAL OPERATIONS. Financial information with respect
to domestic and foreign operations is contained in Note 12 to the Financial
Statements which is included in the company's 2000 Annual Report to its
shareholders, and is incorporated herein by reference.
The company supplies its additive customers abroad through
export from the United States and from overseas manufacturing plants. Sales and
technical service offices are maintained in more than 30 countries outside the
United States. As a result, the company is subject to business risks inherent in
non-U.S. activities, including political and economic uncertainty, import and
export limitations and market risk related to changes in interest rates and
foreign currency exchange rates. The company believes the political and economic
risks related to its foreign operations are mitigated due to the stability of
the countries in which its largest foreign operations are located.
While changes in the U.S. dollar value of foreign currencies
will affect earnings from time to time, the longer-term economic effect of these
changes should not be significant given the company's net asset exposure,
currency mix and use of U.S. dollar-based pricing in certain countries. The
company's consolidated net income will generally benefit as foreign currencies
increase in value compared to the U.S. dollar and will generally decline as
foreign currencies decrease in value.
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ITEM 2. PROPERTIES
The general offices of the company are located in Wickliffe,
Ohio. The company has various leases for general office space primarily located
in Anaheim, California; Houston, Texas; Naperville, Illinois; Wilmington,
Delaware; Southfield, Michigan; and London, England. The company leases office
and laboratory space in Spartanburg, South Carolina. The company owns three
additive manufacturing plants in the United States; one located in the
Cleveland, Ohio area, at Painesville, and two near Houston, Texas, at Deer Park
and Bayport. Outside the United States, the company owns additive
manufacturing/blending plants in Australia, Brazil, Canada, England, France
(three locations), Japan, South Africa and Singapore. All of these plants, other
than Singapore, are owned in fee. In Singapore, the company owns the plant but
leases the land on which the plant is located. The company owns in fee research,
development and testing facilities in Wickliffe, Ohio; Hazelwood, England; and
Atsugi, Japan. The company also owns in fee a facility in Midland, Michigan, at
which air and refrigeration compressor lubricants are developed and marketed;
manufacturing plants in Countryside, Illinois; Mountaintop, Pennsylvania; and
Germany that manufacture performance specialty chemical additives for the
coatings and specialty metalworking fluid and industrial lubricant markets; a
manufacturing plant in Atlanta, Georgia, that manufactures fluid metering
devices; manufacturing plants in Newmarket and London, Ontario, Canada, and
Reno, Nevada, that manufacture particulate emission control devices; a
manufacturing plant in Fareham, Hampshire, England, that manufactures additive
injection equipment; and a manufacturing plant in Fountain Inn, South Carolina,
that manufactures antifoam and defoaming agents to the coatings, inks, textile,
food and metalworking industries. The company leases space in Countryside,
Illinois, at which specialty chemical additives for the coatings and specialty
metalworking fluid and industrial lubricant markets are manufactured.
Additive manufacturing/blending plants in India, Saudi Arabia,
and China are owned and operated by joint venture companies licensed by
Lubrizol. Lubrizol's ownership of each of these companies ranges from 49% to
50.05%.
The company has entered into long-term contracts for its
exclusive use of major marine terminal facilities at the Port of Houston, Texas.
In addition, Lubrizol has leases for storage facilities in Australia, Chile,
Denmark, Ecuador, England, Finland, France, Holland, Singapore, Spain, South
Africa, Sweden and Turkey; Los Angeles, California; St. Paul, Minnesota;
Bayonne, New Jersey; and Tacoma, Washington. In some cases, the ownership or
leasing of such facilities is through certain of its subsidiaries or affiliates.
The company maintains a capital expenditure program to support
its operations and believes its facilities are adequate for its present
operations and for the foreseeable future.
ITEM 3. LEGAL PROCEEDINGS
The company and its subsidiaries are not defendants in any
material pending legal proceeding other than ordinary routine litigation
incidental to the business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the vote of the security holders
during the three months ended December 31, 2000.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The following sets forth the name, age, recent business experience and
certain other information relative to each person who is an executive officer of
the company as of March 1, 2001.
Name Business Experience
---- -------------------
W. G. Bares Mr. Bares, age 59, became Chairman of the
Board on April 22, 1996, and Chief Executive
Officer on January 1, 1996. He has been
President since 1982.
J. R. Ahern Mr. Ahern, age 54, has been Controller -
Accounting and Financial Reporting and
Principal Accounting Officer since April 26,
1999. From 1993 to April 1999 he was
Controller - Operations.
J. W. Bauer Mr. Bauer, age 47, has been Vice President
and General Counsel since April 1992.
D. W. Bogus Mr. Bogus, age 53, joined the company and
became Vice President in May, 2000. Prior to
joining the company, he was with PPG
Industries, Inc., where he was Vice
President of Governmental Affairs from May
1999 to February 2000, Vice
President-Packaging Coatings from October
1998 to May 1999, Vice President-Industrial
Coatings from September 1996 to October
1998, and Vice President of Specialty
Coatings from January 1991 to September
1996.
C. P. Cooley Mr. Cooley, age 45, joined the company and
became Vice President, Treasurer and Chief
Financial Officer in April 1998. In June
1998 he also became responsible for
Corporate Strategic Planning. Prior to
joining the company, he was Assistant
Treasurer - Corporate Finance at Atlantic
Richfield Company.
S. A. Di Biase Dr. Di Biase, age 48, has been Vice
President since September 1993. He is
responsible for Research and Development.
J. L. Hambrick Mr. Hambrick, age 46, was elected Vice
President responsible for managing corporate
strategies in the Asia Pacific region in
May, 2000. From October 1998 to April 2000
he was global business manager - engine
oils. From January 1994 to September 1998 he
was FSU and China business development
manager.
G. R. Hill Dr. Hill, age 59, has been Senior Vice
President since 1988. He has been
responsible for Business Development since
October 1993. From 1996 to June 1998 he was
also responsible for Corporate Strategic
Planning.
J. E. Hodge Mr. Hodge, age 58, has been Vice President
since September 1993. He is responsible for
Operations.
K. H. Hopping Mr. Hopping, age 54, has been Vice President
and Secretary of the Corporation since April
1991.
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Name Business Experience
---- -------------------
S. F. Kirk Mr. Kirk, age 51, has been Vice President
since September 1993. On January 1, 1999, he
became responsible for Sales and Marketing.
From April 1996 to January 1, 1999, he was
responsible for Sales. From 1993 to April
1996, he was responsible for Segment
Management.
Y. Le Couedic Mr. Le Couedic, age 53, has been Vice
President since September 1993. He is
responsible for Management Information
Systems.
G. P. Lieb Mr. Lieb, age 48, has been Controller -
Commercial Analysis and Support since April
26, 1999. From 1993 to April 1999 he was
Controller - Accounting and Financial
Reporting. From 1994 to April 1999 he was
also Principal Accounting Officer.
M. W. Meister Mr. Meister, age 46, has been Vice President
since April 1993, and was named Chief Ethics
Officer in April 1998. He is responsible for
Human Resources.
L. M. Reynolds Ms. Reynolds, age 40, was named Assistant
Secretary in April 1995, and has been
Counsel since February 1991.
R. D. Robins Dr. Robins, age 58, became Vice President in
April 1996. Since January 1, 1999, he has
been responsible for Performance Systems
functions. From April 1996 to January 1999,
he was responsible for Segment Management.
From October 1993 to April 1996 he was
Passenger Car Segment Manager.
All executive officers serve at the pleasure of the Board.
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PART II
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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The common shares of the company are listed on the New York
Stock Exchange under the symbol LZ. The number of shareholders of record of
common shares was 4,628 as of March 2, 2001.
Information relating to the recent price and dividend history
of the company's common shares follows:
Common Share Price History Dividends
-------------------------- ---------
2000 1999 Per Common Share
---- ---- ----------------
High Low High Low 2000 1999
---- --- ---- --- ---- ----
1st quarter $33 1/2 $23 3/4 $26 7/8 $18 $ .26 $ .26
2nd quarter 28 1/16 21 30 3/4 21 3/8 .26 .26
3rd quarter 24 1/8 18 9/16 29 11/16 24 3/8 .26 26
4th quarter 26 19 1/16 31 3/8 23 .26 .26
----- -----
$1.04 $1.04
===== =====
ITEM 6. SELECTED FINANCIAL DATA.
The summary of selected financial data for each of the last
five years included in the Historical Summary contained on pages 42 and 43 of
the company's 2000 Annual Report to its shareholders is incorporated herein by
reference. Other income for 2000 includes a litigation settlement gain of $19.4
million and credits of $4.5 million for adjustments to the second program of the
company's cost reduction initiative. Other income (charges) for 1999 includes
litigation settlement gains of $17.6 million and special charges of $19.6
million for the second program of the company's cost reduction initiative and
adjustments to the first program of the company's cost reduction initiative.
Other income (charges) for 1998 includes litigation settlement gain of $16.2
million and special charges of $23.3 million for the first program of the
company's cost reduction initiative and of $13.6 million for the write-off of
purchased technology under development resulting from the acquisition of Adibis.
Other income (charges) for 1996 includes $53.3 million for gain on sale of
investments.
Total debt reported in the Historical Summary includes the
following amounts classified as long-term at December 31: $378.8 in 2000, $365.4
in 1999, $390.4 million in 1998, $182.2 million in 1997 and $157.6 million in
1996.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The Management's Discussion and Analysis of Financial Condition
and Results of Operations, including the company's cautionary statement for
"safe harbor" purposes under the Private Securities Litigation Reform Act of
1995, contained on pages 14 through 23, inclusive, of the company's 2000 Annual
Report to its shareholders is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information appearing under the caption "Quantitative and
Qualitative Disclosures about Market Risk" contained on page 23 of the
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company's 2000 Annual Report to its shareholders is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of the company and its
subsidiaries, together with the independent auditors' report relating thereto,
contained on pages 24 through 41, inclusive, of the company's 2000 Annual Report
to its shareholders, and the Quarterly Financial Data (Unaudited) contained on
page 41 of such 2000 Annual Report, are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information contained under the heading "Election of
Directors" on pages 3 to 7, inclusive, of the company's Proxy Statement dated
March 14, 2001, is incorporated herein by reference. Information relative to
executive officers of the company is contained under "Executive Officers of the
Registrant" in Part I of this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
The information relating to executive compensation contained
under the headings "Director Compensation" on page 9, "Executive Compensation
Summary Compensation Table" and "- Stock Incentive Plans" on pages 12 through
14, inclusive, and under "Employee and Executive Officer Benefit Plans - Pension
Plans" and "- Executive Agreements" on pages 17 through 20, inclusive, of the
company's Proxy Statement dated March 14, 2001, is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information relating to security ownership set forth under
the heading "Share Ownership of Directors, Executive Officers and Large
Beneficial Owners" on pages 10 and 11 of the company's Proxy Statement dated
March 14, 2001, is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information contained in footnote (1) under the heading
"Share Ownership of Directors, Executive Officers and Large Beneficial Owners -
Five Percent Beneficial Owners" on page 11 of the company's Proxy Statement
dated March 14, 2001, is incorporated herein by reference.
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PART IV
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K.
(a) Documents filed as part of this Annual Report:
1. The following consolidated financial statements
of The Lubrizol Corporation and its
subsidiaries, together with the independent
auditors' report relating thereto, contained on
pages 24 through 41, inclusive, of Lubrizol's
2000 Annual Report to its shareholders, and
incorporated herein by reference:
Independent Auditors' Report
Consolidated Statements of Income for the years
ended December 31, 2000, 1999 and 1998
Consolidated Balance Sheets at December 31,
2000 and 1999
Consolidated Statements of Cash Flows for the
years ended December 31, 2000, 1999 and 1998
Consolidated Statements of Shareholders' Equity
for the years ended December 31, 2000, 1999 and
1998
Notes to Financial Statements
Quarterly Financial Data (Unaudited)
2. Schedules
No financial statement schedules are required to
be filed as part of this Annual Report.
3. Exhibits
(3)(a) Amended Articles of Incorporation of
The Lubrizol Corporation, as adopted
September 23, 1991. (Reference is made
to Exhibit (3)(a) to The Lubrizol
Corporation's Annual Report on Form
10-K for the year ended December 31,
1999, which Exhibit is incorporated
herein by reference.)
(3)(b) Regulations of The Lubrizol
Corporation, as amended effective April
27, 1992. (Reference is made to Exhibit
(3)(b) to The Lubrizol Corporation's
Annual Report on Form 10-K for the year
ended December 31, 1999, which Exhibit
is incorporated herein by reference.)
(4)(a) Amendment to Article Fourth of Amended
Articles of Incorporation. (Reference
is made to Exhibit (4)(a) to The
Lubrizol Corporation's Annual Report on
Form 10-K for the year ended December
31, 1999, which Exhibit is incorporated
herein by reference.)
(4)(b) Indenture dated as of November 25,
1998, between The Lubrizol Corporation
and The First National Bank of Chicago
as Trustee. (Reference is made to
Exhibit (4)(b) to The Lubrizol
Corporation's Annual Report on Form
10-K for the year ended December 31,
1998,
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which Exhibit is incorporated herein
by reference.)
The company agrees, upon request, to
furnish to the Securities and Exchange
Commission a copy of any instrument
authorizing long-term debt that does
not authorize debt in excess of 10% of
the total assets of the company and
its subsidiaries on a consolidated
basis.
(4)(c) Amended and Restated Rights Agreement
between The Lubrizol Corporation and
American Stock Transfer & Trust Company
dated as of July 26, 1999. (Reference
is made to Exhibit 4.l to The Lubrizol
Corporation's Registration Statement on
Form 8-A/A dated August 17, 1999, which
Exhibit is incorporated herein by
reference.)
(10)(a)* The Lubrizol Corporation 1985 Employee
Stock Option Plan, as amended.
(10)(b)* The Lubrizol Corporation Amended
Deferred Compensation Plan for
Directors. (Reference is made to
Exhibit (10)(b) to The Lubrizol
Corporation's Quarterly Report on Form
10-Q for the quarterly period ended
March 31, 2000, which Exhibit is
incorporated herein by reference.)
(10)(c)* Form of Employment Agreement between
The Lubrizol Corporation and certain of
its senior executive officers.
(Reference is made to Exhibit (10)(c)
to The Lubrizol Corporation's Quarterly
Report on Form 10-Q for the quarterly
period ended September 30, 2000, which
Exhibit is incorporated herein by
reference.)
(10)(d)* The Lubrizol Corporation Excess
Defined Benefit Plan, as amended.
(Reference is made to Exhibit (10)(d)
to The Lubrizol Corporation's
Quarterly Report on Form 10-Q for the
quarterly period ended September 30,
2000, which Exhibit is incorporated
herein by reference.)
(10)(e)* The Lubrizol Corporation Excess Defined
Contribution Plan, as amended.
(Reference is made to Exhibit (10)(e)
to The Lubrizol Corporation's Quarterly
Report on Form 10-Q for the quarterly
period ended September 30, 2000, which
Exhibit is incorporated herein by
reference.)
(10)(f)* The Lubrizol Corporation Performance
Pay Plan, as amended. (Reference is
made to Exhibit (10)(f) to The
Lubrizol Corporation's Annual Report
on Form 10-K for the year ended
December 31, 1998, which Exhibit is
incorporated herein by reference.)
(10)(g)* The Lubrizol Corporation Executive
Death Benefit Plan, as amended.
(10)(h)* The Lubrizol Corporation 1991 Stock
Incentive Plan, as amended. (Reference
is made to Exhibit (10)(h) to The
Lubrizol Corporation's Quarterly Report
on Form 10-Q for the quarterly period
ended March 31, 2000, which Exhibit is
incorporated herein by reference.)
-12-
13
(10)(i)* The Lubrizol Corporation Deferred Stock
Compensation Plan for Outside
Directors, as amended. (Reference is
made to Exhibit (10)(i) to The Lubrizol
Corporation's Quarterly Report on Form
10-Q for the quarterly period ended
March 31, 2000, which Exhibit is
incorporated herein by reference.)
(10)(j)* The Lubrizol Corporation Officers'
Supplemental Retirement Plan, as
amended.
(10)(k)* The Lubrizol Corporation Deferred
Compensation Plan for Officers, as
amended. (Reference is made to Exhibit
(10)(k) to The Lubrizol Corporation's
Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2000,
which Exhibit is incorporated herein by
reference.)
(10)(l)* The Lubrizol Corporation Executive
Council Deferred Compensation Plan, as
amended. (Reference is made to Exhibit
(10)(l) to The Lubrizol Corporation's
Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2000,
which Exhibit is incorporated herein by
reference.)
(12) Computation of Ratio of Earnings to
Fixed Charges.
(13) The following portions of The Lubrizol
Corporation 2000 Annual Report to its
shareholders:
Pages 14-23 Management's
Discussion and Analysis
of Financial Condition
and Results of
Operations
Page 24 Independent Auditors'
Report
Page 25 Consolidated Statements
of Income for the years
ended December 31, 2000,
1999 and 1998
Page 26 Consolidated Balance
Sheets at December 31,
2000 and 1999
Page 27 Consolidated Statements
of Cash Flows for the
years ended December 31,
2000, 1999 and 1998
Page 28 Consolidated Statements
of Shareholders' Equity
for the years ended
December 31, 2000,
1999 and 1998
Pages 29-41 Notes to Financial
Statements
Page 41 Quarterly Financial Data
(Unaudited)
Pages 42-43 Historical Summary
(21) List of Subsidiaries of The Lubrizol
Corporation
(23) Consent of Independent Auditors
*Indicates management contract or compensatory plan or arrangement.
-13-
14
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three
months ended December 31, 2000.
-14-
15
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
March 26, 2001, on its behalf by the undersigned, thereunto duly authorized.
THE LUBRIZOL CORPORATION
BY /s/W. G. Bares
--------------------------------------
W. G. Bares, Chairman of the Board,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below on March 26, 2001, by the following
persons on behalf of the Registrant and in the capacities indicated.
/s/W. G. Bares Chairman of the Board, President and Chief
------------------------------- Executive Officer
W. G. Bares (Principal Executive Officer)
/s/C. P. Cooley Vice President, Treasurer and Chief
------------------------------- Financial Officer
C. P. Cooley (Principal Financial Officer)
/s/J. R. Ahern Controller, Accounting and Financial
------------------------------- Reporting
J. R. Ahern (Principal Accounting Officer)
/s/Jerald A. Blumberg Director
-------------------------------
Jerald A. Blumberg
/s/Peggy G. Elliott Director
-------------------------------
Peggy G. Elliott
/s/Forest J. Farmer, Sr. Director
-------------------------------
Forest J. Farmer, Sr.
/s/Gordon D. Harnett Director
-------------------------------
Gordon D. Harnett
/s/Victoria F. Haynes Director
-------------------------------
Victoria F. Haynes
/s/David H. Hoag Director
-------------------------------
David H. Hoag
/s/William P. Madar Director
-------------------------------
William P. Madar
/s/Ronald A. Mitsch Director
-------------------------------
Ronald A. Mitsch
/s/M. Thomas Moore Director
-------------------------------
M. Thomas Moore
/s/Daniel E Somers Director
-------------------------------
Daniel E. Somers
16
EXHIBIT INDEX
-------------
Exhibits
(3)(a) Amended Articles of Incorporation of
The Lubrizol Corporation, as adopted
September 23, 1991. (Reference is made
to Exhibit (3)(a) to The Lubrizol
Corporation's Annual Report on Form
10-K for the year ended December 31,
1999, which Exhibit is incorporated
herein by reference.)
(3)(b) Regulations of The Lubrizol
Corporation, as amended effective April
27, 1992. (Reference is made to Exhibit
(3)(b) to The Lubrizol Corporation's
Annual Report on Form 10-K for the year
ended December 31, 1999, which Exhibit
is incorporated herein by reference.)
(4)(a) Amendment to Article Fourth of Amended
Articles of Incorporation. (Reference
is made to Exhibit (4)(a) to The
Lubrizol Corporation's Annual Report on
Form 10-K for the year ended December
31, 1999, which Exhibit is incorporated
herein by reference.)
(4)(b) Indenture dated as of November 25,
1998, between The Lubrizol Corporation
and The First National Bank of Chicago
as Trustee. (Reference is made to
Exhibit (4)(b) to The Lubrizol
Corporation's Annual Report on Form
10-K for the year ended December 31,
1998, which Exhibit is incorporated
herein by reference.)
The company agrees, upon request, to
furnish to the Securities and Exchange
Commission a copy of any instrument
authorizing long-term debt that does
not authorize debt in excess of 10% of
the total assets of the company and its
subsidiaries on a consolidated basis.
(4)(c) Amended and Restated Rights Agreement
between The Lubrizol Corporation and
American Stock Transfer & Trust Company
dated as of July 26, 1999. (Reference
is made to Exhibit 4.l to The Lubrizol
Corporation's Registration Statement on
Form 8-A/A dated August 17, 1999, which
Exhibit is incorporated herein by
reference.)
(10)(a)* The Lubrizol Corporation 1985 Employee
Stock Option Plan, as amended.
(10)(b)* The Lubrizol Corporation Amended
Deferred Compensation Plan for
Directors. (Reference is made to
Exhibit (10)(b) to The Lubrizol
Corporation's Quarterly Report on Form
10-Q for the quarterly period ended
March 31, 2000, which Exhibit is
incorporated herein by reference.)
(10)(c)* Form of Employment Agreement between
The Lubrizol Corporation and certain of
its senior executive officers.
(Reference is made to Exhibit (10)(c)
to The Lubrizol Corporation's Quarterly
Report on Form 10-Q for the quarterly
period ended September 30, 2000, which
Exhibit is incorporated herein by
reference.)
17
(10)(d)* The Lubrizol Corporation Excess Defined
Benefit Plan, as amended. (Reference is
made to Exhibit (10)(d) to The Lubrizol
Corporation's Quarterly Report on Form
10-Q for the quarterly period ended
September 30, 2000, which Exhibit is
incorporated herein by reference.)
(10)(e)* The Lubrizol Corporation Excess Defined
Contribution Plan, as amended.
(Reference is made to Exhibit (10)(e)
to The Lubrizol Corporation's Quarterly
Report on Form 10-Q for the quarterly
period ended September 30, 2000, which
Exhibit is incorporated herein by
reference.)
(10)(f)* The Lubrizol Corporation Performance
Pay Plan, as amended. (Reference is
made to Exhibit (10)(f) to The Lubrizol
Corporation's Annual Report on Form
10-K for the year ended December 31,
1998, which Exhibit is incorporated
herein by reference.)
(10)(g)* The Lubrizol Corporation Executive
Death Benefit Plan, as amended.
(10)(h)* The Lubrizol Corporation 1991 Stock
Incentive Plan, as amended. (Reference
is made to Exhibit (10)(h) to The
Lubrizol Corporation's Quarterly Report
on Form 10-Q for the quarterly period
ended March 31, 2000, which Exhibit is
incorporated herein by reference.)
(10)(i)* The Lubrizol Corporation Deferred Stock
Compensation Plan for Outside
Directors, as amended. (Reference is
made to Exhibit (10)(i) to The Lubrizol
Corporation's Quarterly Report on Form
10-Q for the quarterly period ended
March 31, 2000, which Exhibit is
incorporated herein by reference.)
(10)(j)* The Lubrizol Corporation Officers'
Supplemental Retirement Plan, as
amended.
(10)(k)* The Lubrizol Corporation Deferred
Compensation Plan for Officers, as
amended. (Reference is made to Exhibit
(10)(k) to The Lubrizol Corporation's
Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2000,
which Exhibit is incorporated herein by
reference.)
(10)(l)* The Lubrizol Corporation Executive
Council Deferred Compensation Plan, as
amended. (Reference is made to Exhibit
(10)(l) to The Lubrizol Corporation's
Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2000,
which Exhibit is incorporated herein by
reference.)
(12) Computation of Ratio of Earnings to
Fixed Charges.
18
(13) The following portions of The Lubrizol
Corporation 2000 Annual Report to its
shareholders:
Pages 14-23 Management's Discussion
and Analysis of Financial
Condition and Results of
Operations
Page 24 Independent Auditors'
Report
Page 25 Consolidated Statements
of Income for the years
ended December 31, 2000,
1999 and 1998
Page 26 Consolidated Balance
Sheets at December 31,
2000 and 1999
Page 27 Consolidated Statements
of Cash Flows for the
years ended December 31,
2000, 1999 and 1998
Page 28 Consolidated Statements
of Shareholders' Equity
for the years ended
December 31, 2000,
1999 and 1998
Pages 29-41 Notes to Financial
Statements
Page 41 Quarterly Financial Data
(Unaudited)
Pages 42-43 Historical Summary
(21) List of Subsidiaries of The Lubrizol
Corporation
(23) Consent of Independent Auditors
*Indicates management contract or compensatory plan or arrangement.