e11vk
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Fiscal Year Ended December 31, 2006
OR
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 1-1520
A. Full title of the plan and the address of the plan, if different from that of the issuer named
below:
GenCorp Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principal
executive office:
GenCorp Inc.
P.O. Box 537012
Sacramento, CA 95853-7012
GenCorp Retirement Savings Plan
Financial Statements and Supplemental Schedule
As of December 31, 2006 and 2005
and for the Year Ended December 31, 2006
Contents
2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Plan Administrator of the
GenCorp Retirement Savings Plan
In our opinion, the accompanying statements of net assets available for benefits and the related
statement of changes in net assets available for benefits present fairly, in all material respects,
the net assets available for benefits of the GenCorp Retirement Savings Plan (the Plan) at December
31, 2006 and 2005, and the changes in net assets available for benefits for the year ended December
31, 2006 in conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Plan’s management. Our
responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplemental Schedule of Assets (Held at End of Year) as of December 31, 2006
is presented for the purpose of additional analysis and is not a required part of the basic
financial statements but is supplementary information required by the Department of Labor’s Rules
and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental
schedule has been subjected to the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
As
discussed in Note 1, the Plan adopted Financial Accounting Standards Board Staff
Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held
by Certain Investment Companies Subject to the AICPA Investment Company Guide and
Defined-Contribution Health and Welfare and Pension Plans, as of December 31, 2006
and 2005.
/s/ PricewaterhouseCoopers LLP
Sacramento, California
May 29, 2007
3
GenCorp Retirement Savings Plan
Statements of Net Assets Available for Benefits
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December 31 |
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2006 |
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2005 |
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Assets |
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|
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Investments, at fair value (Note 3) |
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$ |
365,978,988 |
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$ |
345,680,390 |
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Liabilities |
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Administrative fee payable |
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277,000 |
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— |
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Net assets available for benefits at fair value |
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365,701,988 |
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345,680,390 |
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Adjustment
from fair value to contract value for fully benefit-responsive
investment contracts (Note 1) |
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808,616 |
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1,047,852 |
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Net assets available for benefits |
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$ |
366,510,604 |
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$ |
346,728,242 |
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See accompanying notes to the financial statements.
4
GenCorp Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
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Year Ended |
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December 31, |
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2006 |
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Additions |
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Contributions: |
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Participant |
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$ |
19,463,986 |
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Company |
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8,322,686 |
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Rollovers |
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1,460,061 |
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Total contributions |
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29,246,733 |
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Investment income: |
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Dividend
income |
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12,980,548 |
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Net appreciation in fair value of investments (Note 3) |
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9,137,490 |
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Interest
income |
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487,628 |
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Total investment income |
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22,605,666 |
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Transfers (Note 1) |
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5,704,973 |
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Total additions |
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57,557,372 |
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Deductions |
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Benefits paid directly to participants |
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37,328,274 |
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Administrative expenses (Note 1) |
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446,736 |
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Total deductions |
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37,775,010 |
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Net increase during the year |
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19,782,362 |
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Net assets available for benefits |
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Beginning of year |
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346,728,242 |
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End of year |
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$ |
366,510,604 |
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See accompanying notes to the financial statements.
5
GenCorp Retirement Savings Plan
Notes to Financial Statements
December 31, 2006
1. Description of the Plan
The following description of the GenCorp Retirement Savings Plan (the Plan) provides only general
information. Participants should refer to the Plan document for a more complete description of the
Plan’s provisions.
General
GenCorp Inc. (the Company or the Plan Sponsor) established the Plan effective July 1, 1989. The
Plan is a defined contribution plan covering substantially all eligible employees of the Company
and participating subsidiaries. The Plan is subject to the provisions of the Employee Retirement
Income Security Act (ERISA), as amended.
On October 31, 2005, the Defined Contribution Pension Plan for Hourly Employees of GenCorp Inc. and
Certain Subsidiary Companies (the DC Hourly Plan) merged into the Plan. As a result of this merger,
net assets of $44,549 were transferred from the DC Hourly Plan to the Plan. All of the provisions
of the DC Hourly Plan continue within the Plan.
On March 31, 2006, the Aerojet Fine Chemicals Retirement Savings Plan (the AFC Plan) merged into
the Plan. As a result of this merger, net assets of $5,704,973 were transferred from the AFC Plan
to the Plan.
Contributions
Participants may elect to contribute to the Plan, on a pre-tax or after-tax basis, from 1% up to
50% of their eligible compensation as defined by the Plan document. Contributions must be made in
1% increments. Pre-tax contributions are subject to annual deductibility limits specified under the
Internal Revenue Code (the Code). Participants may direct employee contributions to any of the
Plan’s investment alternatives. The Company makes matching contributions equal to 100% of the first
3% of the participants’ compensation contributed and 50% of the next 3% of compensation
contributed. Company matching contributions are directed to the GenCorp Stock Fund. Plan
participants may elect to transfer matching contributions to any investment alternative in the
Plan. All participants may also contribute amounts representing distributions from other qualified
plans to the Plan.
Participant Accounts
Each participant’s account is credited with
the participant’s contributions and the Company’s
matching contributions, plus allocation of the Plan’s net earnings or losses. Each participant’s account
is also charged with an allocation of administrative expenses. Allocations are based on participant
account balances in proportion to all participants account balances.
Forfeited Accounts
Forfeited balances, including terminated participants’
nonvested accounts, are used to either
reduce the cash payment of Company matching contributions, or to offset administrative expenses.
There were no unallocated forfeited balances as of December 31, 2006 and 2005.
Vesting
A participant’s interest in his or her rollover contributions, if any, and employee contributions
that a participant has made are at all times vested and not subject to forfeiture. A participant’s
interest in the matching contributions made for his or her benefit is at all times vested and not
subject to forfeiture, except such forfeitures as may be required or permitted in order to meet the
non-discrimination provisions of the Code or other applicable provisions of law.
6
Participant Loans
Eligible participants may borrow from their fund accounts a minimum loan amount of $1,000 up to a
maximum equal to the lesser of $50,000 or 50 percent of their account balance, whichever is less.
Eligible participants may have two loans outstanding at any given time. Account balances
attributable to Company matching contributions are not available for loans, but are included in
computing the maximum loan amount. Loan terms range from 1 to 5 years or up to 10 years for the
purchase of a primary residence. The loans are secured by the balance in the participant’s account
and bear interest at a fixed rate of one percent above the prevailing prime rate at time of
issuance. Principal and interest is paid ratably through payroll deductions.
In-Service Withdrawals
For Company matching contributions made prior to January 1, 2004, participants who are active
employees of the Company can elect a voluntary in-service withdrawal of their plan shares after 24
months from the date of the matching contribution to the Plan. In-service withdrawals are not
allowed for Company matching contributions made after December 31, 2003.
Payment of Benefits
A participant’s benefit is limited to his or her vested account balance. Distribution of the vested
value of the participant’s account will be made available, in the form of full or partial lump sum
payments, upon termination of employment, financial hardship, or death.
Administrative Expenses
Expenses incurred in connection with the purchase or sale of securities are charged against the
investment funds whose assets are involved in such transactions. Legal, accounting, and certain
administrative costs of the Plan are paid by the Company but reimbursed by the Plan and allocated
to participant accounts based upon account balances. Non-discrimination testing fees and company
stock administration fees billed by Fidelity are deducted from the Trust and allocated to
participant accounts based upon account balances. All other expenses relating to participant
transactions are deducted from those participant accounts as transactions occur.
New Accounting Pronouncements
As of December 31, 2006, the Plan adopted
Financial Accounting Standards Board (FASB) Staff
Position FSP AAG INV-1 and Statement of Position No. 94-4-1, Reporting of Fully Benefit-Responsive
Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company
Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP). The FSP requires the
Statement of Net Assets Available for Benefits present the fair value of the Plan’s investments as
well as the adjustment from fair value to contract value for the fully benefit-responsive
investment contracts. The Statement of Changes in Net Assets Available for Benefits is prepared on
a contract value basis for the fully benefit-responsive investment contracts. The FSP was applied
retroactively to the prior period presented on the Statement of Net
Assets Available for Benefits as of December 31, 2005.
In September 2006, the FASB issued Statement on Financial Accounting Standards No. 157 (SFAS 157),
Fair Value Measurements. SFAS 157 establishes a single authoritative definition of fair value, sets
out a framework for measuring fair value and requires additional disclosures about fair value
measurement. SFAS 157 is effective for financial statements issued for fiscal years beginning after
November 15, 2007. The Company does not believe the adoption of SFAS 157 will have a material
impact on the financial statements.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared on the accrual basis of accounting.
Investment Valuation and Income Recognition
The Plan’s investments are stated at fair value.
The shares of registered investment companies are
valued at quoted market prices, which represent the net asset values of shares held by the Plan at
year end. Investment in the non benefit-responsive investment contracts are valued based upon the
quoted redemption value of units owned by the Plan at year end. The money market funds are valued
at cost plus accrued interest,
7
which approximates fair value. GenCorp Inc. common stock is traded on a national securities exchange and
is valued at the last reported sales price on the last business day of the Plan year. Participant
loans are valued at their outstanding balances, which approximate fair value.
The investment contracts are presented at fair value on the statement of net assets available for
benefits. The investments in the fully benefit-responsive investment contracts are also stated at
contract value which is equal to principal balance plus accrued interest. As provided in the FSP,
an investment contract is generally valued at contract value, rather than fair value, to the extent
it is fully benefit-responsive. The fair value of fully benefit-responsive investment contracts
is calculated using a discounted cash flow model which considers recent fee bids as determined by
recognized dealers, discount rate and the duration of the underlying portfolio securities.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded
on the accrual basis. Dividends are recorded on the ex-dividend date.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires the Plan Sponsor, who is a fiduciary of the Plan, to make
estimates, assumptions and valuations that affect the amounts reported in the financial statements
and accompanying footnotes. Actual results could differ from those estimates.
Benefit Payments
Benefit payments are recorded when paid.
3. Investments
Investments that represent 5% or more of the fair value of the Plan’s net assets are as follows:
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December 31 |
|
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2006 |
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2005 |
|
Fidelity US Equity Index Pool |
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$ |
70,211,773 |
|
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$ |
68,531,653 |
|
Fidelity Managed Income Portfolio II Class 2 |
|
|
66,984,563 |
|
|
|
70,436,951 |
|
GenCorp Inc. common stock |
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44,203,686 |
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53,161,357 |
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Fidelity Diversified International |
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32,964,920 |
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23,633,812 |
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Fidelity Low Priced Stock |
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25,231,194 |
|
|
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23,659,268 |
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Fidelity Mid-Cap Stock Fund |
|
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18,531,039 |
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During 2006, the Plan’s investments (including gains and losses on investments purchased and sold,
as well as held during the year) appreciated (depreciated) in fair value as determined by quoted
market prices as follows:
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Net (depreciation) |
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appreciation in fair value |
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of investments |
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Common stocks |
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$ |
387,980 |
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Common/collective trusts |
|
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10,033,820 |
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Registered investment companies |
|
|
9,774,790 |
|
GenCorp Inc. common stock |
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(11,059,100 |
) |
|
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$ |
9,137,490 |
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4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service (IRS) dated January
12, 2004, stating that the Plan is qualified under Section 401(a) of the Code and, therefore, the
related trust is exempt from taxation. Subsequent to this determination letter by the IRS, the Plan
was amended. Once qualified, the Plan is required to operate in conformity with the Code to
maintain its qualification. The Plan administrator believes the Plan is being operated in
compliance with the applicable requirements of the Code and, therefore, believes that the Plan is
qualified and the related trust is tax exempt.
8
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the right to terminate the Plan
subject to the provisions of ERISA. In the event of the Plan’s termination, all participants will
be 100% vested in their accounts.
6. Related Party Transactions
GenCorp Inc. Common Stock
Transactions in shares of GenCorp Inc. common stock qualify as party-in-interest transactions under
the provisions of ERISA for which a statutory exemption exists. During the year ended December 31, 2006, the Plan made purchases of
approximately $12.4 million and sales of approximately $10.3 million of GenCorp Inc. common stock.
At December 31, 2006 and 2005, the Plan held 3,152,902 and 2,995,006 shares of GenCorp Inc. common
stock, respectively, representing 12% and 15%, respectively, of the total net assets of the Plan.
Other than GenCorp Inc. Common Stock
Certain Plan investments are shares of mutual funds managed by Fidelity. Fidelity is the trustee as
defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions.
Fees paid by the Plan to Fidelity for investment management services amounted to $46,790 for the
year ended December 31, 2006.
7. Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various
risks such as interest rate, market and credit risks. Due to the level of risk associated with
certain investment securities, it is at least reasonably possible that changes in the values of
investment balances will occur in the near term and that such changes could materially affect
participants’ account balances and the amounts reported in the statement of net assets available
for benefits.
8. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available
for benefits per the financial statements to the
Form 5500:
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December 31, |
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2006 |
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Net assets
available for benefits per the financial statements |
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$ |
366,510,604 |
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Less: Adjustment from fair value to contract value for fully benefit-responsive investment contracts |
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(808,616 |
) |
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Net assets
available for benefits per the Form 5500 |
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$ |
365,701,988 |
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The following is a reconciliation of investment income per the financial statements to the Form
5500:
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December 31, |
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2006 |
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Total
investment income per the financial statements |
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$ |
22,605,666 |
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Less: Adjustment from fair value to contract value for fully benefit-responsive investment contracts |
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(808,616 |
) |
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Total
investment income per the Form 5500 |
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$ |
21,797,050 |
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9
GenCorp Retirement Savings Plan
EIN 34-024000, Plan #334
Schedule H, Line 4i — Schedule of Assets (Held At End of Year)
December 31, 2006
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(c) |
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Description of |
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Investment including |
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(b) |
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Maturity Date, Rate of |
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Identity of Issue, Borrower, Lessor, |
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Interest, Collateral, |
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(e) |
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or Similar Party |
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Par, or Maturity Value |
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Current Value |
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Registered investment companies: |
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Morgan Stanley Institutional Fund Small Company Growth
Portfolio Class B |
|
515,623 shares |
|
$ |
6,512,321 |
|
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American Beacon Lg Cap Value PlanAhd |
|
567,240 shares |
|
|
12,921,723 |
|
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Wells Fargo Small Cap Value CL Z |
|
6,423 shares |
|
|
199,940 |
|
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Goldman Sachs Mid Cap Value CL A |
|
4,583 shares |
|
|
177,026 |
|
| * |
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Fidelity Growth Company |
|
245,696 shares |
|
|
17,127,441 |
|
| * |
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Fidelity Investment Grade Bond |
|
1,588,079 shares |
|
|
11,704,144 |
|
| * |
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Fidelity Low Priced Stock |
|
579,495 shares |
|
|
25,231,194 |
|
| * |
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Fidelity Diversified International |
|
892,149 shares |
|
|
32,964,920 |
|
| * |
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Fidelity Mid-Cap Stock |
|
635,931 shares |
|
|
18,531,039 |
|
| * |
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Fidelity Freedom Income |
|
990,973 shares |
|
|
11,435,825 |
|
| * |
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Fidelity Freedom 2000 |
|
67,002 shares |
|
|
834,848 |
|
| * |
|
Fidelity Freedom 2010 |
|
364,883 shares |
|
|
5,334,597 |
|
| * |
|
Fidelity Freedom 2020 |
|
606,797 shares |
|
|
9,423,561 |
|
| * |
|
Fidelity Freedom 2030 |
|
246,662 shares |
|
|
3,953,998 |
|
| * |
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Fidelity Freedom 2040 |
|
205,627 shares |
|
|
1,949,342 |
|
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|
Common/collective trust funds: |
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Fully benefit-responsive investment contracts |
|
|
|
|
|
|
|
|
| * |
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Fidelity Managed Income Portfolio |
|
549,181 units |
|
|
543,716 |
|
| * |
|
Fidelity Managed Income Portfolio II Class 2 |
|
67,787,714 units |
|
|
66,984,563 |
|
| |
|
Non benefit-responsive investment contracts |
|
|
|
|
|
|
|
|
| * |
|
Fidelity US Equity Index Pool |
|
1,546,174 units |
|
|
70,211,773 |
|
| |
|
Money market funds: |
|
|
|
|
|
|
|
|
| * |
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Fidelity Retirement Money Market Fund |
|
13,873,784 shares |
|
|
13,873,784 |
|
| * |
|
Fidelity Institutional Cash Portfolio |
|
817,148 shares |
|
|
817,148 |
|
| * |
|
Northern Trust Company Collective Short Term Investment Fund |
|
45,020 shares |
|
|
45,020 |
|
| |
|
Participant-directed brokerage accounts: |
|
|
|
|
|
|
|
|
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Brokerage Link |
|
Various investments |
|
|
4,479,814 |
|
| * |
|
Participant loans |
|
Interest rates from |
|
|
6,517,565 |
|
| |
|
|
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5.25% to 10.5%, |
|
|
|
|
| |
|
|
|
maturing through |
|
|
|
|
| |
|
|
|
|
2016 |
|
|
|
|
| * |
|
GenCorp Inc. common stock |
|
3,152,902 shares |
|
|
44,203,686 |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Total investments |
|
|
|
|
|
$ |
365,978,988 |
|
| |
|
|
|
|
|
|
|
|
|
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|
|
| * |
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Indicates a party-in-interest to the Plan. |
| |
| ** |
|
Column (d), cost, has been omitted, as all investments are participant-directed. |
11
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, GenCorp Inc., as Plan
Administrator, has duly caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
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GENCORP RETIREMENT SAVINGS PLAN
|
|
| Date: May 30, 2007 |
By |
/s/ Yasmin R. Seyal
|
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Yasmin R. Seyal |
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Senior Vice President and Chief Financial Officer |
|
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12
EXHIBIT INDEX
| |
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| Exhibit No. |
|
Description |
Exhibit 23.1
|
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CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |