Document 65qM8gNBQDM6J2zL2yR6qnyD6

PRODUCT PROFITABILITY Monsanto COMPANY HAY 1967 CONFIDENTIAL INFORMATION This document contains confidential Informa* lion Vvv.iri-, iS th orou-ifty ol Monsanto Com- ard vvh:!`.;i /fi-jM ,`o: br uuniosc-tftuoiher :i;v 'dt.!-/ Hollaruvlr.-idual'u : must not !>? si-*l o.t$i ilv company wiUxhii A/itt&n < -Ji. -To? rccip^nl te iccoKitdWj to* 'Is snd disT-osa, Thus 'JccnniJvt ri.Mna.rir> ths property of tWi-v tv. Ciifipjny, and must b`i returned irv-.: {f&ruand. 0633713 WATER PCB-00039823 PRODUCT PROFITABILITY ggftfcflilta PACE ORGANIC DIVISION........................................................................................................ ma FINE CHEMICALS........... ................... 71-79 PAPER CHEMICALS (oont'd) .. Aspirin..................... 72 Santobrite .............................. Bthavan ................ 73 PETROLEUM ADDITIVES ....... Fumatic Acid.............. 74 Santoluba 393 ........................ Phenacetin.................................... 75 Santolube 900 & 907 ...... saccharin......................... 76 Santopoid 23 RI 6 23 RIA . Santcphen #1.............. 7? PLASTICIZERS .............. 3,4,4, TriOhlorocarbanilide . 78 Santlcizer 141...................... Vanillin..................... 79 Santicizer 160................... FLUIDS............................................... 60-84 RESIN MATERIALS ...................... Aroclors and Therminol Fluids 81 Adipic Acid......... .................. Pyranol Fluids ........... .... ' 82 Eiaphenol A............................ Skydrol 500A, 500B and Maleic Anhydride ................. Skydrol 7000 ............................... 83 Phthalic Anhydride ....... Skylube 600 ......................... 84 RUBBER CHEMICALS ................... INTERMEDIATES ................................. 85-89 Flectol H................................ H Acid ............................................. 86 Santocure and Cydex ..... Orthcnitroanilins .................. 87 santocure M0R & M0R 90 ... Paranitroanilins........................ - 88 Santocure NS & Cyclex B .. Phenol ............................................. 89 Santoflex AW & Ajona E ... PAPER CHEMICALS............................ 90-94 Santoflex DD & Ajona DD .. Aluminum Sulfate ........................ 91 Santoflex 13 & Ajona UP .. Mersize RM, TFL, and Rosin Santoflex 77 & Ajona H ... Siae KIP ...................................... 92 Santowhite Crystal and Pentachlorophenol........... .. 93 Santonox ..................... 70-116 94 95-98 96 97 98 99-101 100 101 102-106 103 104 105 106 107-116 108 109 110 Ill 112 113 114 115 116 PACKAGING DIVISION................................................... ................................................ 117-120 BLOWNWARB........................ ................ PACKAGING MATERIALS .................... 118 TKERMOFORMED............................ 119 . 120 PLASTIC DIVISION 121-133 PLASTIC PRODUCTS .......................... 122 SAFLBX............................. RESINS ........................... 123-127 VINYL ACETATES ........................ Aminoplasta .......... 124 Eutvar .................. Formalin .................... 125 Fomvar..................................... Phenoplests ................. 126 Gelva......................................... Styrene ..........................- 127 Gelvatol ................. 128 129-133 130 131 132 133 TEXTILES DIVISION .............................. ............ ,.............................................. ACRILAN ............................................. 135-137 NYLON (ccnt'd) ....................... Carpet..................... 136 Textile................ Textile & Solution Dyed ..... 137 Textured.............. NYLON ................................................. 138-142 Tire ......................... Industrial ............................. 139 POLYESTER .................. 134-143 140 141 142 143 0633714 WATER_PCB-00039824 PRODUCT PROFITABILITY Contents GENERAL COMMENTS AGRICULTURAL DIVISION ... ANIMAL NUTRITION............. MHA ....................................... Santoquin Liquid ...... BLASTING AGENTS ........ ........................... . PESTICIDES .......................... Parathion ...................... Ramrod 200 ........................ Ramrod 65 Wp .................... Randox Granular ............. Randox Liquid ......... Roque .......................... .. HYDROCARBONS DIVISION ... ETHYLENE AND CO-PRODUCTS MONOMERS .............................. Acrylonitrile .................. Butadiene.......................... Methanol ........................ Styrene Monomer ............. Vinyl Acetate ................... Vinyl Chloride............. .. POLYMERS .............................. HDPE .................................. .. INORGANIC DIVISION ...................... .. DETERGENTS ........................................ ACL 'e ............... .................................. Alkylates .............................. .. All-CondenBed and fluffy ......... Sterox-Phenol and Alcohol .... ENGINEERING SAl.ES ............. Vanadium Catalyst ........................ HEAVY CHEMICALS........... Caustic Potash .................... Chlorosulfonic Acid........... .. Silicas............. .. Sulfuric Acid ................................ ..................................... Page 5- 7 PESTICIDES (oont'd) ......... 6 2,4-D Acid.......................... 7 2,4,S-T Acid...................... a PLANT FOODS ........................... 9 Ammonium Nitrate ....... 10-18 Anhydroud Ammonia ............ 11 Concentrated Nitrio Acid 12 DAP 18-46-0 ........................ 13 Nitrogen Solutions ......... 14 RETAIL OPERATIONS ............. 15 16 27 28-34 29 30 31 32 33 34 35-41 36 POLYMERS (cont'd) ............. LDPE ....................................... Luetran ................ Lustrex ................................ opalon............... .. ................ Ultron ............................... PRODUCTION AND EXPLORATION......... .. ............ REFINERY AND MARKETING .. Marketing............................. Refinery .............................. ............ 47-51 48 49 50 51 52-53 53 54-58 55 56 57 58 PHOSPHATES ........................... DCP-Anhydrous Dihyrate ............................ Pho's Acid - Food ............. Phoe Acid - Other ...... Potassium Phosphates ... MCP - All Grades.............. SMP ...................................... STP - All Grades............. TSP crystal ........................ TSPP ............................. SILICON ....................... EASE 1- 3 4-25 17 16 19-24 20 21 22 23 24 25 26-45 37 38 39 40 41 42 43-45 44 45 46-69 59-68 60 61 62 63 64 65 66 67 68 69 0633715 WATER PCB-00039825 EP&PVCT-EftPF WAPfl,m This report has been prepared to serve as a basic reference for volume, price, costs, profitability and potential of Monsanto's principal products. Such products sre listed alphabetically by division, broken down between Sales (external) and internal Use, The products covered herein account for 86% of the total domestic investment. The report will be issued annually or otherwise updated for major product additions, etc. This information is extremely confidential and special safeguards are recommended to maintain security. All return figures are calculated on the investment and profit on product sales made to outside customers. Quantities of product indicated for "internal use" are transferred as intermediate materials to end products. Investment and cost of intermediates are rolled forward to the end product and included in the profitability of the sale of end products to customers. Bales are for the domestic divisions only but include their U'.S, export sales to foreign customers, foreign subsidiaries and sales through Monsanto Europe. Sales of products manufactured by foreign subsidiaries are not included. For comparability with the earlier years included in this report, the year 1966 is reported on the same basis as financial reporting for that year rather than the 1967 financial statements. Budget 1967 has also been recast in the financial reporting for the years 1962-66 rather than the current financial statements. Therefore, excess SVb depreciation, direct central office expense and interest expense are included as part of Corporate Charges rather than as part of Operating Income-bivision as currently reported in the 1967 financial statements. Based on a current comparability study of prior years, it is anticipated that future reports will include these earlier years on the same financial reporting base as actual 1967. 0699716 -1- Results ftre shown for 1962-63-64-65-66 plus Budget 1967, and on a hypothetical basis of maximum output based on 1967 capacity. Such maximum is shown only as an approximation of current potential, with no attempt made to reflect any such results on Intermediate product costs. As a yardstick for viewing product profitability, return on gross investment of the Company and each diviaion la aa followsi lased on U.S. Domestic end Export Net Income Company Agricultural Hydrocarbons inorganic Organic Packaging Plastios Textiles X Return on Investment -------------- &S&U&L_____________ mi mi 12M im im 1967 Budget 4.7 4.6 5.7 5.6 5.0 5.1 .3 4.9 5.7 " 6.5 10.1 5.8 - 5.5 4.6 {1.1) 5.5 8.1 6.6 1.4 5.6 5.7 {4.1) 5.9 10.3 8.1 2.5 3.9 6.8 (4.7) 6.7 8.0 7.9 2.6 3,0 7.0 (2.5) 5.8 6.2 4.7 7.8 2.5 4.4 5.9 (1.1) 5.1 5.0 On page 3 there is a compilation of division returns grouped to show the amount of investment in products having a rate of return which ie (a) a loss, (b) low, 0-3X, (c) low to company average, 3-5X, and (d) above oompany average. The company average at 5X le baaed on U.S. domestic and export net income for the year 1966. -2 0633717 Total Total Total Total Total Total Total Combined Total -BlylsAgn :t Lobs 0 to 3% 3 to 556 Over 556 CMtlan .1 Loss 0 to 356 3 to 536. Over 5% i Lose 0 to 3S 3 to 556 Over 536 t Loss 0 to 356 3 to 556 Over 5?6 i Loss 0 to 3% 3 to 556 Over 5% < Loss 0 to 356 3 to 556 Over 556 i Loss 0 to 356 3 to 556 Over 556 i Loss 0 to 356 3 to 556 Over 556 Year 1.966 56 of Total Invest. In MM`a Corp. -invest. Met xngpisa 56 net, on Invest. 12.4 - 23.4 SAil 100.0 $ 28.1 * 53.3 5 227.4 $1 2.8) e- 2.4 IS.4 $ 18.0 _ 4.5 12,6 7.9 31.0 12.1 31.9 -.25^2 100.0 144.7 56.2 148.7 U6..4 $ 466.0 ( 3.1) 1.4 6.6 ___ Ixl 12.1 - 2.5 4.4 6.2 2.6 33.2 11.2 37.2 JMkS 100.0 11.4 43.0 2.1 100.0 82.8 17.2 100.0 $ 90.4 30.4 101.4 -SP.P 272.2 35.0 147.2 6.4 Jtiltl $ 306.5 $ 66.3 13.8 - $ 80.1 $( .6) .4 4.1 ___ 8.2 ( .) 3.8 .3 17.9 21.4 ( 2.1) .1 - $( 2.0) 1.3 4.0 8.6 3.0 _ 2.6 4.7 15.2 7,0 _ .7 . ( 2.5} 25.5 32.5 4.4 100.0 39.& 50.7 6.8 _S9,7 156.0 ( 1.7) 6 .3 3UI $ 9.1 1.6 4.4 16.5 5.8 9.0 - 7.4 .,93.,S 100.0 67.2 -a 55.1 mi $ 742.4 $(12.8) . 2.2 56.6 46.0 _ * 4.0 9.1 6.2 20.9 13.3 16.5 -.fit* 2 100.0 471.5 298.3 371.7 2. 250.6 (23.7) 6.5 15.9 -114.1 $112.8 *. 2.2 4.3 10.3 5.0 . 0633710 WATER_PCB-00039828 AGRICULTURAL DIVISION Division Profitability (5 in Millions) Actual 1967 jaa JM1 1964 -12.65 1966 Budget Sales Division Contribution Corp. Net income 73.7 19.0 7.0 81.7 21,3 8.4 95.5 122.9 159.4 26.9 33.6 38.9 10.8 15.7 18.0 179.9 49.8 20.0 Corp. Net income as % of Sales $ Sales/? investment 9.4 10.3 11.3 12.8 11.3 .54 ,57 .59 .63 .70 11.1 .67 % ROI - Corp, Net Income S.l 5.8 6.6 8.1 7.9 7.8 Gross Investment. 136.2 144.0 162.6 194.1 227.4 256.7 Product Group - % Return Animal Nutrition Blasting Agents Pesticides Plant Poods Retail operations 10.0 3.7 6.7 4.1 12.8 3,7 8.4 4.1 15.1 5.6 11.8 4.6 (13.0) 25.9 7.9 14.6 5.3 (11.5) 18.4 6.1 14.2 7.9 (10.0) 13.0 3.S 18.7 3.0 < .8) In 1966 investment in the divisions* products earned the following rates of return.i % of Total Investment Loss 0 to 3% 3 to 5% Over 5% 12.4 - 23.4 64.2 Product groups are reported on the following pages> Animal Nutrition Blasting Agents pesticides Plant Poods Retail Operations ms 5 6 10 19 25 Major products reported comprise 8394 of the divisions' investment in 1966. -40633719 WATER_PCB-00039829 ANIMAL MPTRITION - PRODUCT GROUP ($ in Millions) Actual_______________ _ _ 1967 1962 -12$2 -12S4 1965 1966 Budcet Sales Gross Profit SARE Other income Division Contribution Corp. Net Income 7.3 6.8 7.8 9.7 11.6 12.5 2.8 3.2 4.2 5.3 5.8 6.1 .7 .7 .8 1.3 1.7 1.8 2.1 2.5 3.4 4.0 4.2 .9 1.1 1.6 2.1 2.1 4.3 1.8 As % of Salesi Gross Profit SARE Corp, Net income $ Sales/S invest. 38.4 47.1 53.8 54.6 50.0 48.8 9.6 10.3 10.3 13.4 14.7 14.4 12.3 16.2 20,5 21.6 18.1 14.4 .81 .79 .74 .89 .98 .74 % ROI - Corp. Net income 10.0 12.8 15.1 19.3 18.4 13.0 Gross investment 9.0 8.6 10.6 10.9 11.4 13.8 Major products reported for the Animal Nutrition product group are as follows| MHA Santoquin Liquid Pace 6 7 -50633720 WATER PCB-00039830 HH A ($ in Millions) sales Gross profit SARE Other income Div. Contribution Corp. Net Income Selling Price/lb. Cost of Sales/lb. As % of salesi dross profit SARE Net income $ Sales/6 Invest. For salest % ROI (Corp. Het) Gross investt Sales internal Use Total Capacity - MM lbs t Sales Internal Use Excess Total , 19M $ 2.6 $ 1.2 $ .4 ? $ .8 9 .3 1.02 .54 47.0 16.0 12. S 1.49 18.6 $ 1.9 $ 9 1.8 2.6 .4 3.0 Actual 1963 -1964 2.4 1.1 ' .3 2.9 1.5 .4 .8 1.1 .3 .5 .97 .92 .54 .45 1965 3.9 2.0 .5 l.S .8 .88 .42 1967 .1966 Eudaet Can1 tv 4.9 5.3 5. 2.3 2,5 2.5 .7 .8 .r 1.6 1.7 1.7 .9 .7 .84 .79 .79 .45 .42 .4: 44.1 13.8 12.7 .88 50.8 12.5 17.8 1.09 52.0 13.6 20.5 1.30 47.0 14.3 18.4 1.32 47.2 1S.1 13.2 1.06 47.: . 15.1 13.2 l.Ot' 11.2 20.0 24.9 24.3 14.0 14. t 2.7 2.7 3.0 3.7 5.0 5.C 2.7 2.7 3.0 3.7 5.0 5.0 2.5 3.2 4.5 5.8 6.7 6.7 2.3 1.6 ( .3) .1 4.8 4.8 4.2 5.9 6.7 6.7 The year 1966 witnessed an increase in net income due to higher volume. Long range prospects for this product are very favorable, however, the BOI will decline from the 1965/66 peak due to continued price attrition. Capacity Was expanded in 1966 to 5.9MM lbs./yr. and a project ie currently under study to expand capacity to 8-10KM lbs./yr. by 1968 to keep pace with increased poultry consumption and shortages of natural methronine the chief competitive product. . -6- 0635721 WATER_PCB-00039831 Sales Gross Profit SAKE Other Income Div. Contribution Corp, Met Income Selling Price/lb. Cost of Sales/lb. As % of Salesi Gross Profit SARR Net income $ Sales/? Invest. For Sales* % ROI (Corp. Net) Gross Invest* Sales Internal Use Total Capacity - MM lbs* Sales Internal use Excess Total gANTOOUIH LIQUID (5 in Millions) 1962 $ 1.6 5 .8 $ .2 $ $ .6 $ .2 ? 1.08 $ .50 Actual 1963 1964 1,9 2.7 1.1 1.7 .2 .3 .9 1.4 .4 .6 1.04 .42 1.00 .38 JL3& 3.3 2.1 .4 1.7 .9 1.03 .37 1967 -im Budget gap.Lt 1 3.7 4.1 5. I 2.3 2.5 3. I .3 .6 2.0 1.9 2. I 1.0 1.0 1. 1.03 .98 .9 .39 .38 .3 j 53.$ 16.0 IS.9 .92 60.1 13.8 20.9 .78 62.1 12.5 24.0 .85 64.1 13.6 27.8 .82 62.1 14.3 27.0 .84 61.0 15.1 24.4 .90 61. 13. 25. 1.1 14.6 16.4 20.3 22.9 22.7 22.2 27. 1.7 2.4 3.2 4.0 4.4 4.5 4.' .7 .8 .7 .8 .9 .9 < 2.4 3.2 3.9 4.8 5.3 5.4 5,( 1.4 l.B 2.7 3.1 3.6 4.2 5.: .8 .9 1.0 1.2 1.2 1.1 1.) 2.8 2.3 1.7 1.8 1.4 1.1 5.0 5.0 5.4 6.1 6.2 6.4 6.4 Return on investment maintained its high level of .return (22.7%) in 1966, and future projections indicate the same pattern will prevail. Market development work is in progress to expand Santoquin into new markets, such as preservation of fish meal. Potential sales in this market are believed to range from $ltttto $3MM annually in Peru, this technology could also be applied to domestic fish meal production with an added ?,4MM potential. -7 0633722 WATER BDAgTJNO AGENTS - PRODUCT GROUP ($ in Millions) Actual____________ _ l$67 -1962 . 1963 . 1964 JA6 Budget Sales Gross Profit SAAB Other Income Division Contribution Corp. Met Income 5.2 5.6 7.7 10.7 12.3 13.0 1.6 1.8 2.3 2.8 2.9 2.9 .5 .6 .6 .7 .9 .9 1.1 1.2 1.5 2.1 2.0 .4 .4 .6 1.1 .9 2.0 .6 As # of Salesi Gross Profit BARB Corp, Net income $ Sales/? Invest. 30.a 9.6 7.7 .49 31.0 10.3 6.9 .54 29.9 10.4 7.8 .71 26.2 6.5 10.3 .76 23.6 7.3 7.3 .79 22.3 6,9 4.6 .75 % RQI - Corp. Net income 3.7 3.7 5.6 7.9 6.1 3.5 Gross Investment 10,7 10. B 10,8 14.0 14.8 17.2 The major product reported for the Blasting Agents product group is as follows I age ANFO (Ammonium Nitrate Fuel Oil) 9 -e- 0633729 WATER PCB-00039833 Sales Cross Profit SARIS Other Income Div. Contribution Corp, Net income Selling Price/['n Cost of Sales/ion As % of Salesi Gross Profit BARS Net Income $ Sales/; invest. For Salest % ROI (Corp. Net) Gross investt Sales Internal Use Total Capacity - M Tonsi Sales internal Use Excess Total AN/FO ($ in Millions) 1962 ftetwnl 1963 1964 9 1.0 1.6 4.3 9 .2 .3 1.2 9 .1 .2 .4 9 9 .1 .1 .8 9 .3 $ 87 87 87 9 70 71 63 1965 6.9 1.8 .5 1.3 .6 93 68 1967 -1.966 Budget Can'tv I 8.6 11.5 14. r 2.1 2.6 3.: .6 .8 .si 1.5 1.8 2,< .7 .6 . .102 112 li: 77 86 B( 20.0 10.0 .83 18.8 12,5 .84 27.9 9,3 7.0 .64 26.1 7.2 8.7 .92 24.4 7.0 8.1 .96 22.6 7.0 5.2 .96 22. t 6,.S. 1.1S 5.9 8.0 7.8 5.0 6.4 $ 1.2 1.9 5.1 7.5 8.9 12.0 12.5 9 9 1.2 1.9 5.1 7.5 8.9 12.0 12.5 11.5 2.9 14.4 18.3 4.6 22.9 49,5 12.4 61.9 74.5 18.6 93.1 83.9 21.0 104.9 103.0 25.7 120.7 120.7 128.7 The market tor AMFO baaed explosives is rapidly changing, and has replaced dynamite in most large volume uses, Monsanto is a leading marketer of ANFO based explosives, as operations are performed from a network of IS ANFO plants throughout the country serving the coal and metal mining areas. Return on investment on AH/fq falls in the intermediate return category, and long range projections indicate that this trend will continue. Sale of ammonium nitrate into the AN/FO market results in an improved ROI over alternate fertiliser sales. 063372* -q- WATER_PCB-00039834 PESTICIDES - PRODUCT GROUP ($ in Millions) -Actual_______________ 1967 1962 -1963 02M --1965 Budoet Sale* Grot* Profit SABS Other income Division Contribution Corp. Net income 22.4 8.0 2.3 S.7 2.3 29.0 11.2 2.9 .1 8.4 3.5 37.5 16.6 3.6 .1 13.1 S.7 50.2 24.4 5.8 18,6 9.6 57.1 26.7 7.8 18,9 9.4 74.1 40.3 8.3 32.0 15.3 As 7i of Sale*! Gross Profit SABS Corp. Net Income $ Sales/$ invest. 35.7 10.3 10.3 .65 38.6 10,0 12.1 .70 44.3 9.6 15.2 .78 48.6 11.6 19.1 .77 46.8 13.7 16.5 .77 54.3 11.2 20.6 .74 % ROI - Corp. Net Income 6.7 8.4 11.8 14.6 14.2 18.7 Gross Investment 34.2 41.5 48.1 65.6 66,4 81.9 Major product* reported for the Pesticides product group are as follows] Parathion Ramrod 20G Ramrod 65WP Randox Granular Randox Liquid Roque 2,4-D Acid 2,4,S-T Acid 11 12 13 14 15 16 17 18 -10' 0633725 WATER PCB-00039835 Sales Cross profit SAKE Other Income iv. contribution Corp. Net Income Selling price/lb. Cost of Sales/lb. As % of Salesi Cross Profit SARB Net Income $ Sales/$ invest. For Sales* % ROI (Corp. Net) Cross invest* Sales Internal Vse Total Capacity - MM lbs* Sales Internal Use Excess Total ARM?Hj[OM ($ in Millions) 1962 Actual J.963 _ 1964 $ 9.9 4.9 $ 1.6 3.3 1.4 12.7 6.S 1.8 5.0 2.2 14.1 7.5 1.8 5.7 2.7 .65 .64 .60 $ .33 .30 .29 1965 18.0 10.5 2.1 8.4 4.5 .60 .25 1967 1966 Budget Can't 14.1 6.8 1.8 20.6 10.4 2.2 26. 13. 2. 5.0 8.2 10. 2.5 4.1 S.3 .57 .54 .5 .29 .27 .2 49.4 16.0 13.8 .69 53.2 14.5 17.1 .79 52.8 12.8 19.1 .76 58.1 11.6 25.0 .76 48.2 12.8 17.7 .56 50.0 10.7 19.9 .81 50. 9. 20. .9 9.5 13,6 14.4 18.9 10.0 16.1 20. 14.4 $ $ 14.4 16,1 16.1 18.7 .7 19.4 23.8 23.8 25.0 .8 25.8 25.4 .8 26.2 26. 27. 15.3 5.1 20.4 19.8 ( .3) 19.5 23.4 1.2 ( .8) 23.8 30.3 5.7 36.0 24.7 1,2 16.1 42.0 37,9 1.4 10.7 50.0 43. 1. 50.i Return on investment In the parathion family declined in 1966 due to reduced cotton acreage in the U.S. and a generally poor cotton insecticide year both in the (7.6. and in the export markets. Further expansion of parathion capacity to 50MM lbs./yr, is in progress at Anniston, and will be on stream for 1967 sales. The long range outlook for Parathion Btill remains favorable, although competitive pressures from foreign imports have resulted in a market price reduction in 1967. -110633726 WATER_PCB-00039836 Sales Oross Profit SAKE Other Income Dlv, Contribution Corp. Net Income Selling Price/lb. Cost of Sales/lb, As % of Salesi Gross Profit SAKS Net Income f snlea/$ invest. Tor Sales* % ROI (Corp. Net) Gross investi Sales Internal Use Total Capacity - MM lbst Sales internal Use Excess Total Fwop-jog ($ in Millions} Actual _ A2S5L -.1.93? JL9Ji 1965 5 $ $ $ $ $ $ $ $ 9 $ . 1966 Budget Cap'ty 3.3 11.3 14.2 1.3 7.1 9.0 .4 1.2 1.3 .9 5.9 7.7 .5 3.0 3.8 .38 .38 .38 .23 .14 .14 39.4 12.8 15.2 .59 62.8 10.7 26.5 1,04 62.8 9.2 26.8 1.25 8.9 27.5 33.3 5.6 10.9 11.4 5.6 10.9 11.4 8.8 2.2 11,0 29.8 7.5 37.3 37,3 37.3 Ramrod is a highly profitable product with a return .on investment over the next five years forecast to range from a 26% minimum to a potential of 40%. Major expansion at the Muscatine plant (CIPA) and at the Krummrich Plant (KIPA) have been undertaken to fully exploit this product line which will be the major source of new profit growth over the next five years. This program will provide the necessary facilities to achieve forecast sales and. in addition, will provide reserve capacity to permit full exploitation of the corn/soybean herbicide market which has a realiatic sales potential of $80MM. 1967 12 0633727 WATER PCB-00039837 Bales Gross Profit BARB Other Income Div, Contribution Corp, Net Income Belling Price/lb. Cost of 8ales/lb. As % of Salesi Gross Profit BARB Net Income $ Sales/? invest. For Selesi % ROI (Corp. Net) Gross Invest! Sales Internal Use Total ' Capacity - MM lbs* Sales Internal use Excess Total BAKftQB., 65 wf. . (S in Millions) iSS?.. $ $ S $ $ $ 5 ? _________ Actual_____________________ ,, 1967 _AM2 _iM - 1965 , 1966 Budget Can'tv 1.1 7.0 e.f .5 4.7 5.! .1 .7 .1 .4 4.0 s.: .2 2.0 2.( 1.11 .67 1.40 .46 1.4( ,4< 45.5 12. B 18.2 .73 67,1 10.7 28.5 1.49 67.: 9.: 29.! 1.7f 13.3 42.5 52.( $ 1.5 4.7 5.C $ 5 1.5 4.7 5.C .9 5.0 6.3 .2 1.3 1.1 6.3 6.3 Ramrod WP, another member of the Ramrod/Randox family of herbicides also has an ROI potential in the 26-40% range. The major raw material expansions at Muscatine and Krummrich, discussed previously, {Ramrod 20 0) also pertain to this highly profitable product. The major uses are the same, the only difference being that Ramrod WP is a spray and contains 65% active material, and its sister product, Ramrod 20 o, contains only 20% active material. 0653728 -13- WATER_PCB-00039838 Sales Gross Profit SARE Other Income Div. Contribution Corp, Met income Selling prioe/lb. Cost of Sales/lb,. As X of Salest Gross Profit BARE Net Income $ Sales/S Invest. For Salesi X ROI (Corp. Net) Gross Invest* Sales Internal Use Total Capacity - MM lbst Sales Internal Use Excess Total ($ in Millions) 1962 $ 1.4 $ .4 $ .2 9 $ .2 ? .1 $ .30 $ .20 Actual__________________ _ 1967 1,961 1-231 -123S JJf.6.6 Budget Cap'ty 2.3 4.5 8.1 12.1 12.6 15.6 .9 2.0 4.7 6.8 7,5 9.3 .3 .6 .9 1.5 1.3 1.4 .6 1.4 3.0 5.3 6.2 7.9 .3 .7 2.0 2.6 3.1 4.0 .32 .32 .34 .34 .35 -35 .19 .18 .14 .15 .14 .14 31.9 16.0 5.0 .64 40.6 13. S 11.0 .67 44.5 12.5 14.9 .74 56.8 11.8 25.3 1.14 56.2 12.8 21.5 1.57 59.5 10.7 24.6 1.54 59.5 9.0 25.6 1.79 3.2 7.4 11.0 28.8 33.8 37.8 45.9 , $ 2.2 3.4 6.1 7.1 7.7 8.2 8.7 $ 2.2 3.4 6.1 7.1 7.7 8.2 8.7 4.7 7.7 12.4 7.2 5.2 12.4 14.1 9.2 23.3 23.7 15.6 39.3 35.1 8.8 43.9 35.8 8.9 44.7 44.7 44.7 Return on investment and net income made substantial, increases in 1966. The Ramrod/Randox family of products will be the major contributor to future growth of the Division, however, it is expected that sustained growth will be in Ramrod, while Randox sales will show a gradual decline due to the better performance and higher profitability of Ramrod, -14 0633729 WATER PCB-00039839 Sales Grose Profit SARE Other Income Div. Contribution Corp. Net Income Selling Price/Gal. Cost of Sales/oal, As % of Salesi Gross Profit SARIS Net Income $ Sales/$ invest. For Salest % roi (Corp. Net) Gross invest) Sales internal Use Total Capacity - MM Galst sales Internal Use Excess Total HASXOX LIQUID ($ in Millions) 1962 $ .6 $ .3 5 .1 $ $ .2 5 $ 5.57 $ 3.71 ASfeaai___________________ , 1967 13JS3 1965 Budget fiap^t; .a .9 1.1 1.2 1.1 2. .3 .4 .5 .7 .6 1.. .1 .1 .1 .1 .1 .2 .3 .4 .6 .5 l.l .1 .2 .3 .3 C 5.82 3.89 6.17 3.40 6.71 3.30 6.84 2.80 6.86 2.88 6.8' 2.8' 33.3 16.0 5.6 .86 33.1 13.8 7.4 .81 45.0 12.5 15.2 1.11 50,8 11.6 20.7 1.12 58.3 12.8 25.0 1.00 54.5 10.7 27.3 .92 54. 9. 23. 1.5' 5.0 6.0 16.8 23.2 25.0 25.0 35.' $ .9 1.0 .8 .9 1.2 1.2 1.- 9 $ .9 1.0 .8 .9 1.2 1.2 l.` .1 .1 .1 .1 .2 .2 t; .1 .1 .2 .2 .1 .1 .2 .2 .3 .3 .3 .3 .3 This formulated herbicide has shown excellent growth, with return on investment now at 25% in 1966. Long range projections however show a gradual decline in sales of this product, as was the case for its sister product, Randox Granular, This decline is again due to the higher performance and profitability of Ramrod, 0633790 -15' WATER_PCB-00039840 Sales Gross Profit BARE Other income Div. Contribution Corp. Ret income Selling Price/Gal. Cost of Sales/oal, As % of Salesi Cross profit SARX Ret income $ Sales/? invest. For Salesi K ROI (Corp. .Ret) Cross invssti Sales Internal use Total Capacity - MM Galst Sales internal Use Excess Total ROGUE (5 in Millions) $ .6 ? .3 ? .1 5 ? .2 S .1 $10.77 $ 4.23 AStMi__________________ - 1967 1963 1964 ^96S 3966 Buduet Cap'tv 2.1 2.9 3.6 5.1 4.4 13.9 1.4 2.1 2.5 3.6 2.6 8.8 .3 .4 .4 .6 .5 .8 1.1 1.7 2.1 3.0 2.3 8,0 .5 .9 1.1 1.5 1.2 4.0 10.60 10.36 10.25 10.20 3.51 2.90 3.11 3.00 7.33 2.67 7.33 2.67 60.7 16.0 19.3 .45 67.S 13.6 24.1 .56 72.0 12.5 29.2 .79 69.6 11.6 32.0 .61 70.5 12.8 29.4 .94 63.6 10.7 27,3 .73 63.6 5.8 26.8 1.85 e.7 13.5 23.0 25.6 27.6 20.0 53.3 $ 1.2 3.7 3.7 4.4 5.4 6.0 7.5 ? S 1.2 3.7 3.7 4.4 5.4 6.0 7.5 .1 .2 .3 .3 .5 .6 1.9 .2 .2 .1 .5 1.4 1.3 .3 .4 .4 .8 1.9 1.9 1.9 This product made an excellent contribution to division profits and produced a 27.8X return on investment in 1966. it has achieved widespread acceptance by rice growers for post-emergence treatment of barnyard grass and certain broadleaf weeds, and has very little competition in this area. The Rogue patent remains in litigation and the 1967 budget reflects com petition from imported material. The current outlook indicates that the patent status will be resolved in Monsanto's favor as early ae I960 or as late as 1970. When the patent is resolved, net income should approximate double that of 1966. -16- 0633731 WATER PCB-00039841 Sales Gross Profit SAKE Other income Oiv. contribution Corp. Met Income Selling Price/lb, Cost of Sales/lb. As X of Salesi Gross Profit BARE Met Income $ Sales/$ Invest. for Sales* % KOI (Corp. Met) Gross Invest* Sales Internal Use Total . Capacity - MM lbs* Sales internal use Excess Total 4-P- acid (5 in Millions) 1962 $ 2.6 $ .6 S .4 $ ? .2 $ $ .28 $ .22 Actual -A2M 2.8 3.4 .6 1.0 .4 .4 .2 .6 .1 .3 .28 .28 .22 .20 ______________ 1967 1965 i?66 Budcet Cap`tv 3.1 3.7 3.1 5.0 1.0 1.1 .8 1.3 .4 .5 .4 .5 .6 .6 .4 .8 .3 .3 .2 .4 .28 .28 .27 .27 .19 .20 .20 .20 21.9 16.0 .SI 21.7 13.8 1.9 .53 29.9 12.5 7.4 .62 32.0 11.6 9.3 .50 29.7 12.8 8.0 .55 25.8 10.7 6.5 .46 25.E 10. C 8.C .71 1.0 4,5 4.6 4,5 3.0 5.7 $ 5.2 5.3 5.5 6.2 6.7 6.7 7.C ? 2.3 2.1 2.2 1.9 2.3 2.3 2.3 7.5 7.4 7.7 S.l 9,0 9.0 9.3 9.5 5.0 4.7 19.2 9.9 6.9 2.4 19.2 12.0 7.1 .1 19.2 10.9 5.5 4.6 21.0 13.0 7.0 3.1 23.1 11.6 7.2 6.8 25.6 18.4 7.2 25.6 Ths 4.5# fceturn bn investment in 1966 represents 4 modest return for the year, and again bears out the effect of the reduced cost of oibhlorophenol and its intermediates. Government use of 2,4-0 mixtures in Vietnam is the major factor influencing current outlook. D acid products will be in short supply for 1967 as a result of increased government demand, and it is expected that the 1967 budget for government sales will be exceeded. 0633732 -1 7- WATER PCB-00039842 .. Sales Gross Profit SAKE Other Income Div, Contribution Corp. Net Income Selling Price/lb. Cost of Sales/lb. As % of Salesi Gross Profit BARE Net income $ Salee/$ invest. For Salesi % BOX (Corp. Net) Gross Invest] Sales Internal use Total Capacity - MM lbsi sales Internal Use Excess Total 2,4,5-T ACIP (9 in Millions} 1962 Actual _ 196.3 1964 5 1.7 9 .4 8 .2 $ $ .2 $ 9 .91 9 .67 1.7 .1 .2 ( .1) { .1) .84 .79 1.3 .4 .2 .2 .1 .84 .61 1965 1.6 .6 .2 .4 .2 .84 .52 1967 __1966 Budoet Cap'tv 1.5 1.5 3.8 .5 .6 1.5 .2 .2 .3 .3 .4 1.2 .2 .2 .6 .83 .88 .88 .56 .53 .53 26.3 16.0 2.3 .85 6.8 13.8 ( 5.3) .66 27.2 12.5 6.0 .52 38.3 11.6 11.0 .62 33.3 12.8 13.3 .44 30.0 10.7 13.3 .44 30.0 7.9 15,8 1.00 1.9 ( 3.5) 3.1 6.3 5.9 5.9 15.8 9 2.0 2.5 2.6 2.8 3.4 3.4 3.8 9 .9 .4 1.2 1.7 1.4 1.4 1.4 9 2.9 2.9 3.8 4.5 4.8 4.8 5.2 1.8 1.9 1.6 1.9 1.8 1.7 4.3 1.0 .6 1.3 2.3 1.8 1.8 1.9 ( .6) .3 1.1 .6 1.3 2.6 2.2 2.8 4.0 4,8 4.9 6.1 6.1 Return on investment was 5,954 In 1966, down slightly .from the comparable 1965 ROIi but still a marked Improvement over prior years. Over the 5 year period, cost reductions more than offset sales price decreases, and antici pated improvement in raw material yields will further reduce costs in 1967. Government use of 2,4,5-T mixtures in Vietnam is the major factor influencing current outlook. T products will be in short supply for 1967 as s result of increased government demand, and it is expected that the 1967 budget for government sales will be exceeded. -18- 0633733 WATER km FOODS - PRODUCT ncnr.D ($ in Millions) Sales Gross Profit Station Distr. SARE Other income Division Contribution Corp, Net income As % of sales, Gross Profit SARE Corp. Net income $ Sales/6 Invest. ll962 38.8 13.0 4.0 9.1 3.4 _Actual - 1964 -lies 40.1 38.5 41.4 13.1 14.4 13.9 4e0 4.0 2.5 .1 2 9.2 10.5 11.6 3.4 3.9 4.8 1966 udqet 57.5 20.4 1.0 2.9 .7 17,2 8.4 61.5(1 13.6(2 .9 3.1 9.6 3.2 33.5 10.3 s.a .47 32.7 10.0 S.5 .48 37.4 10.4 10.1 .45 33.6 6.0 11.6 .50 35.5 5.0 14.6 .54 30.0 6.6 6.8 .45 % EDI - Corp. Net income Gross Investment 4.1 02.3 4.1 83.1 4.6 85.4 5.3 7.9 89.9 106.8 3.0 105.0 Major product, reported Cor the Plant Food, product group are a. follow., Ammonium Nitrate Anhydrous Ammonia Concentrated Nitric Acid DAP 18-46-0 Nitrogen Solution &as 20 21 22 23 24 (l> tteiHtems?"16 ltSBB ?U*6 ' *11 related t0 Bal delude (2) Include, toss on Resale Items of 6.5m. 0633734 -19- WATER PCB-00039844 Sales gross Profit SARJS Other Income Div. Contribution corp. Met Income Selling Price/Ton Cost of SalesAon As % of Salest Gross profit SAKE Met Income $ Sales/$ invest. For Sales i % R01 (Corp. Met) gross invest) Sales Internsl Use Total Capacity - Tons Sales Internal Use Excess Total &MMOHIUM NITRATE ($ in Millions) 1962 $ 17.9 $ 5.9 6 1.2 ? 6 4.7 $ 1.6 $ 57 $ 30 Actual___________________ 1967 1?63 .1964 . 1965 1966 Budaet Cap1 tv 17.6 6.0 1.3 4.7 1.9 17.6 6.7 1.4 5.3 2.2 16.7 6.0 1.1 .1 5.0 2.2 15.7 5.3 ,8 .1 4.6 1.7 13.4 4.0 .8 3.2 1.0 17.8 5.2 1.0 4.2 1.4 55 54 53 52 45 45 36 34 34 35 32 32 33.0 7.0 0.8 .49 33.9 7.4 10.5 .49 38.0 7.8 12.5 .49 35.8 6.3 13.0 .44 33.8 5.0 10,8 .45 29.9 6.5 7.5 ,38 29.9 5.6 7.9 .49 4.3 5.2 6.1 5.8 4.9 2.6 3.9 $ 36.8 $ 1.2 $ 38.0 35.6 2.1 37.7 35.9 4.4 40.3 37.6 7.1 44.7 35.0 10.7 45.7 35,6 10.4 46.0 36.3 10.4 46.7 317 319 324 317 298 300 395 10 17 47 72 113 116 116 162 132 95 107 70 95 489 468 466 496 481 Sll 511 Return on Investment declined to 4.9% in 1966 due to-continued price attrition and slightly higher manufacturing costs, - While the long range outlook for ammonium nitrate is unfavorable, as indicated by the 1967 budget, current operations indicate that capacity will be sold out during Spring 1967 and the budget as presented will be exceeded. Marketing efforts are being devoted to channeling nitrate into the Blasting Agents market as fertilizer markets for ammonium nitrate are replaced by ammonia and 18-46-0. 200633735 WATER PCB-00039845 Sales dross Profit Station Dietr. SARE Other income Div. Contribution Corp. Net Income Selling Price/Ion Cost of sales/Ton As % of salesi Gross profit SARE Net Income 6 Sales/? invest. For Salesi % ROI (Corp. Net) Gross investi Sales Internal Use Total capacity - M Tons Sales Internal UBe Excess Total ANHYDROUS AMMONIA ($ in millions) ? 13.0 $ 5.6 ? $ .9 $ ? 4.7 $ 1.8 $ 66 $ 37 Actual 19,6? -MM 10.7 4.6 10.0 4.6 .8 .3 .1 3.9 3.8 1.6 1.6 68 70 38 38 .1361 13.6 6.0 .9 .1 5.2 2.5 64 35 1967 -1966 Budget Cao't- 16.3 8.2 1.0 .8 .5 6.9 3.2 13.9 6.1 .9 .9 4.3 1.6 18.: 8.i t 1.1 6.( 2,( 61 57 5` 30 32 3: 42.8 7.0 13.6 .43 43.8 7.4 15.2 .59 45.7 7.8 16.4 .56 44.4 6.3 18.1 .55 50.3 5.0 19.6 .62 43.9 6.5 11.5 .56 43.' 6.< 11.( .7: 5.9 8.9 9.2 10.1 12.3 6.4 7. f $ 30.4 $ 23.2 ? 53.6 18.2 37.8 56.0 17.8 39.7 57.5 24.5 42.4 66.9 26.1 42.4 68.3 25.0 43.8 68.8 25.; 43, 69.E 199 157 142 214 267 245 31S 304 427 427 472 540 561 561 4 26 27 67 74 503 588 595 713 874 880 880 Return on investment increased to 12.3% In 1966 as the full-year effect of the new Kellogg N43 installation at Duling greatly reduced the cost/ton of end product. Selling prices of ammonia decreased significantly in 1966 as anticipated because of the increased supply and the lower coats of the new type plants now in operation. Further price deterioration is budgeted for 1967 which accompanied by increased cost in the ahipping/warehousing area slashes the budgeted ROl to 6.4%. 0633736 -21- WATER_PCB-00039846 Sales Gross Profit SARE Other Income Div. Contribution Corp. Net Income Selling Prics/ion Cost of Sales/tyon As % of Sales: Gross Profit EARS Net income $ sales/$ invest. For Sales: % ROI (Corp. Net) Gross Invest: Sales Internal Use Total Capacity - M Tons: Sales Internal use Excess Total CONCENTRATED nitric acid ($ in Millions) .iiiL $ 2.0 $ .4 $ .1 ? ? .3 $ .1 6 67 $ 54 ftsfaiaA______________ _ _ 1967 1963 .MSA. -1965 W6 Udget Cap'tv 1.8 1.8 2.4 2.5 1,9 2.8 .5 .7 1.1 1.0 .8 1.3 .1 .1 .1 .1 .1 .1 .4 .6 1.0 .9 .7 1.2 .2 .2 .4 .4 .2 .4 65 60 62 61 58 58 45 36 32 36 31 31 20.1 7.0 2.5 .87 31.0 7.4 8.9 .52 40.6 7.8 13.8 .53 48.5 6,3 18.5 .65 40.0 5.0 16.0 .78 42.1 6.5 10.5 .54 42.1 3.6 14.3 .78 2.3 4.8 7.4 12.0 12.5 5.7 11.1 $ 2.3 3.4 3.4 3.6 3.2 3.5 3.6 $ 1.6 1.5 1.6 .9 1.6 1,8 1.8 $ 3.9 4.9 5.0 4.5 4.8 5.3 5.4 20 27 30 38 41 33 48 IS 16 17 20 21 24 24 12 2 11 3 15 47 45 58 58 65 72 72 Return on investment in 1966 reached a satisfactory 12 .S% due to the highest Alas volume attained over the past S years. Budgeted 1967 figures show a sharp decline, due to the diversion of more nitric acid to internal use by the Organic Division for manufacture of nitrated organic compounds and the overall decrease in demand for concentrated nitric acid and upgraded 42 Baums acid. The long range outlook for thia product indicatea that more nitric acid will hAve to be channeled to internal use and new markets exploited since the fall of 1967 will see the termination of the Kobay contract. Over the past years, Mobay has been our major customer for nitric acid and will complete ite own plant to meet its requirements this year. -22 0633737 DAP - 18-46-0 ($ in Millions) Sales Sross Profit SAAB Other Income Div. contribution Corp. Net Income Selling Price/Ton Cost of Sales/ron As % of Sales 1 Gross Profit BARE Net Income $ Sales/$ Invest, For sales1 % Roi (corp. Net) Gross investi Sales Internal Use Total ' Capacity - Tons* SaleB Internal use Excess Total -1.96.2 $ $ $ $ $ $ $ $ $ $ ? Actual________________.... . 1967 1963 . 1964 196S 1966 Budget Cap`t\ 1.5 14.8 13.0 25.! 3.9 2.6 5.; .1 .7 .8 1.; ( .1) 3.2 1.8 4.C ( .1) 1.2 .5 i.: 75 75 74 7< 74 55 59 5` 26.4 20.0 20.( 6.3 5.0 6.5 4.< 8.1 3.8 S.( .30 1.44 1.36 1.9( 11.7 5.3 9.1 5.0 10.3 5.0 10.3 9.5 14.! 9.5 14.! 20 197 176 35C 35 34 174 55 231 350 350 In the year 1966, the first full year of operation of the DAP plant at Lulinc the return on investment exceeded the request level of 9%. P2O5 shortages and price increases deteriorate 1967 budgeted ROI and will continue to affect product profitability until we become basic in thiB saw material. A mineral acquisition program is underway with the objective of securing 60MM tons of phosphate ore reserves, to be followed with mining and P2O5 manufacturing facilities by 1971. Current capacity is limited by the availability of P2O5, but will ease somewhat by mid-1968 based on a new supplier contract. Long range projections, once we become basic in P2O5, warrant a 10-12% return on investment. 0633738 WATER PCB-00039848 - Sales Gross profit SARE Other Income Div. Contribution Corp. Met Income Selling PriceAon Cost of Sales/Ton As % of Salesi Gross Profit SARE Net Income 9 Sales/9 Invest. For Salest % ROI (Corp. Net) Gross investi Sales Internal Use Total Capacity - M Tonst Sales Internal Use Excess Total NITROGEN SOLUTIONS (9 in Millions) 1962 $ 6.1 9 2.1 9 .4 9 9 1.7 9 .6 9 51 9 34 Asssial_____________________________ - 1967 -1.961 1964 .mi -ISM MdqgS, l& 6.7 5.4 5.0 3.9 3.2 12.8 2.4 2.0 1.8 1.2 .7 2.9 .4 .4 .3 .2 .2 .5 2.0 1.6 1.5 1.0 .8 .7 .7 .4 .5 2.4 .2 .8 48 49 47 46 44 44 30 30 30 32 34 34 34.4 7.0 9.6 .39 36.6 7.4 11.7 .44 37.2 7.8 12.1 .40 36.1 6.3 13.1 .43 30.8 5.0 10.3 .34 22.6 6.5 6;3 .27 22.6 3.9 6.3 .97 3.7 5.1 4.8 5.7 3.4 1.7 6.1 $ 15.6 `9 9 15.6 15.2 15.2 13.6 13.6 11.4 11.4 11.6 11.6 11.7 11.7 13.2 13.2 118 140 111 106 84 73 290 202 150 179 184 206 217 320 290 290 290 290 290 290 ^Return on investment in 1966 decreased further to 3.4?6. Return is forecast as declining from now on due to diversion of all available ammonia and nitric acid to more profitable usee and the decrease in demand for this type of product. ' -24- 063373? WATER PCB-00039849 RETAIL OPSJRATIPHS - PRODUCT GROW ($ in Millions) Actual .1962 .19^3 _1964 ________ 1967 1966 Budget sales gross profit Station Distr. BARE Other income Division Contribution Corp. Hat income As % of Salest Cross Profit SARB Corp. Net Income $ Sales/6 Invest. 5.9 16.6 37.1 1.3 3.6 9.0 2.5 5.1 9.9 .4 1.2 1.6 (1.6) (2.7) (3.4) (1.0) (1.9) (2.8) 55.2 13.9 10.8 2.S .6 ( .3) 21.6 6.9 (17.2) .75 21.6 7.2 (U.4) 1.01 21.6 4.3 (7.5) 1,32 25.2 4.5 ( .3) 1.42 K ROI - Corp. Met Income (13.0) (11.5) (10.0) ( ;ej gross investment 7.7 16.5 29.1 38.6 This product froup was established in 1964 to operate all phases of a distribution systems for the direct retailing of tha divisions1 products. All such products are transferred to this group at Wholesale selling prices so that group results represent only the retailing operation. The growth in this area has been such that 139 MAC'S were in operation in the year ended December 1966, with 152 to be fully operative for the 1967 spring selling season. These figures are comparable to the 02 in operation for the same period in 1965 and 40 the previous year. This rapid growth with its attendant development organisation and start up cost has prevented the program from reaching the breah-even point as yet. However, as the number of mature stations increase, steady progress toward that point is apparent. Long range projections indicate that a stable base of 250 stations will be reached by 1970 at which time ROI will trend upward to 5-65( at retail level. 0633740 25 IffPJfiCARBOtrS AND POLYMERS DIVISION Divlalon Profitability ($ in Millions) Sales (1) Division Contribution Corp. Met Income Actual_______________ 1967 ..m? -1-963 -1?64 1965 -1966 Budget 209.4 229.3 238.4 252.3 268.6 7.0 9.5 23.6 33.1 36.4 1.2 5.6 10.4 12.1 273.4 37.1 12.2 Corp. Met Income as % of Sales $ Sales/$ Investment .6 2.3 4.1 4.5 .51 .55 .59 .60 .38 4.5 .56 % R0I - Corp. Net income .3 1.4 2.5 2.6 2.5 Gross Investment 406.8 416.5 407.2 418.4 466.0 484,6 (1) Net of intergroup eliminations. Product Group - % Returm Ethylene & co-Products Monomers Polymers . Production & Exploration Refinery & Marketing (12.1) 4.8 < .6) 3.7 ( .4) ( 6.9) 3.8 ( 2.2) 3.0 .9 ( 2.7) 3.9 .3 3.4 ( .4) .9 < .8) 4.1 2.8 2.3 2.7 2.2 4.7 .8 .4 1.8 2.9 4.2 1.1 In 1966 investment in the divisions' products earned the following rates of returm ' % of Total investment Loss 0 to 3% 3 to 5% Over 5% 31.0 12.1 31.9 25.0 Product groups axe reported on the following pagest S3 Ethylene & Co-Products Monomers Polymers Prod. & Exploration Refinery & Marketing . 27 28 35 42 43 Major products reported comprise 100% of the divisions' investment in 1966. 0633741 WATER PCB-00039851 BTHYhENB & CO-PROPUCTS - PRODUCT GROUP ($ in Millions) Sales dross profit SAKE Other income Div, contribution Corp. Net Income For Ethylene Onlyi Selling Price/lb. Cost of Sales/lb. As % of Salesi Gross Profit SAPS Net income $ Sales/? invest. Fo^ Salesi % ROI (Corp. Net) dross investi Sales Internal use Total Capacity - MM Ibsi Sales Internal use Excess Total Ji _i263 ? 3.9 ${ 5.3) $ 2.5 ? ?( 7.6) ?( 4.1) 13.3 ( 2.8) 1.4 .2 ( 4.0) ( 2.3) I964 .Mtt 17.9 1.0 1.4 .2 ( .2) ( *8) 19.6 2.3 1.0 .2 1.5 .2 JLg 62_ 1966 Budget Can't 20.5 1.4 .9 .2 .7 ( .2) 19.2 2.0 .9 .1 1.2 19 2 $ .048 .048 .040 .039 .040 $ .048 .040 .036 .034 .029 59.0 .12 (21.1) 10,5 (17.3) .40 5.6 7,8 ( 4.5) .60 11.7 5.1 1.0 .84 6.8 4.4 ( 1.0) .79 10.4 4.6 .74 .04 .02 .10 4. .7' (12.1) < 6.9) ( 2.7) .9 ( .8) $ 33.8 $ 55.6 $ 89.6 33.3 62.7 96,0 29.4 60.9 90.3 23.4 62.8 86.2 25.8 60.4 86.2 25.8 69.1 94.9 25.f | 69. 94.1 335.9 (87.6) 248.3 56.6 399.9 144.9 601.4 78.5 488.2 33.3 600.0 117.5 515,5 (52.5) 580.5 125.7 549.9 (65.6) 610.0 65.0 622.2 707.2 85.C 622. 707.2 The portion of products used captively continues to rise, restraining sales. Hence, significant cost improvements from improved mechanical performance and higher operating rates will only he revealed in down-stream product areas. Although major added ethylene capacity will be completed in the Industry in 1967, our major products are all placed. Soma price declines will he noted later in 1967 in ethylene and benzene, with partial offsets in butylenes and xylenes. -270639742 WATER_PCB-00039852 MOBOMERS - PRODUCT GROUP ($ in Millions) Sales gross Profit SAKE Other Income Division Contribution Corp. Hat Income As % of Salest Gross profit BARE Corp. Net Income $ Sales/$ Invest. Actual_____________ ___ 1967 13U -1963 -1964 1965 1966 fiaiasi 43.6 11.4 2.1 .3 9.6 4.1 49.6 11.0 2.2 .6 9,4 3.3 53.3 11.2 2.2 .5 9.5 3.5 54.0 13.5 2.6 .6 11.5 4.3 57.0 11,8 2.7 .5 9.6 3.4 54.7 10.2 2.6 .7 8.3 2.1 26.1 4.S 9.4 .51 22.2 4.4 6.7 .57 21.0 4.1 6.6 .59 24.9 4.7 8.0 .51 20.7 4.7 6.0 .47 18.6 4.8 3.B .47 % ROZ - Corp. Net income 4.8 3.8 3.9 4.1 2.8 1.8 Gross Investment 86.3 87.6 89.6 104.9 121.1 115,4 Major products reported for the Monomers product group are as followst Acrylonitrile Butadiene Methanol Styrene Monomer Vinyl Acetate Vinyl Chloride 3 29 30 31 32 33 34 28 0633743 WATER PCB-00039853 Sales cross profit SAKS Other Income Div. Contribution Corp. net Income Selling Price/lb. Cost of Sales/lb. As % of Sales: Cross Profit BARE Net Income $ Sales/$ invest. For Sales: % HOI (Corp. Net) Cross Investi 6ales Internal Use Total Capacity - mm lbs: Sales Internal Use Excess Total ($ in Millions) _L962 ? 9.1 $ 1.3 $ .6 $ .1 $ .8 $ .3 $ .147 S .125 Actual__________________ ,_____ 1967 1963 1964 1965 -A?# Budget SP-'j 11.4 1.9 .6 .3 1.6 .5 10.1 1.8 .6 .2 1.4 .4 15.3 4.3 .7 .1 3.7 1.3 16.8 1.8 1.0 .2 1.0 ( .3) 19.9 1.6 1.0 .2 .8 ( .8) 32. 7. 1. 7. 2. .145 .121 .165 .137 .162 .115 .122 .110 .113 .103 .11 .06 14.3 6.6 3.3 .37 16.7 5.3 4.4 .43 17.8 5.9 4.0 .44 28.1 4.6 8.5 ,40 10.7 6.0 ( 1.8) .31 8,0 5.0 ( 4,0) .32 24. 3. 7. .5 1.2 1.9 1.7 3.4 { .5) ( 1.1) 3. $ 24.9 $ L8.6 $ 43.5 26.8 19.5 46.3 23.2 34,3 57.5 38.2 48.6 86.8 55.0 44,4 99.4 61.5 38.1 99.6 62. 38. 100. S5.1 48.0 (I 5.6) 97.3 74.8 65,5 (35.3) 105.0 56.3 92.3 (38.S) 110.1 90.4 150.2 (24.4) 216.2 135.0 131.1 91.4 357.5 179.7 137.5 112.8 430.0 292. 137. 430. Monsanto achieved the position of being the world's largest AH producer when AN-3 came onstream at Chocolate Bayou in May. A.Bharp drop in captive demand for textiles, and a progressively softening world market as the year progressed led to price decreases and demands below budget. Profitability aoffered as a result and AN-3 was shut down in December as a result of high inventories and low demand projections. A detailed study highlighted the need for a plant in the U.K. beginning in 1969-70 in connection with plane to shutdown our Texas City plant In late 1969. Programs advanced to utilize a new catalyst giving higher yields in the Chocolate Bayou plants and on recovery of HCN from these plants for use and sale. 06337*4 -29- sales gross Profit BARB Other Income Div. Contribution Corp. Net Income Selling Price/lb. cost of Sales/lb. As % of Salest Cross profit SARIS Net Income $ Sales/$ Invest. For sales % ROI (Corp. Net) Gross Invest] Sales Internal use Total Capacity - mm lbsi Sales Internal Use Excess Total BUTADIENE ($ in Millions) - 1962, $ 1.6 ;< .7) $ $ $( .7) $( .5) $ .100 $ .142 ASfrual___________________ 1967 -164 1?65 1966 Budget SAP'ty 6.3 8.1 7.9 B.3 7.9 7.9 ( .3) ( .1) 1.1 1.7 1.4 1.4 .3 .4 .4 .4 .4 .4 .1 .1 ( .6) ( .5) .7 1,3 1.1 1.1 ( .4) ( .6) .1 .5 .3 .3 .094 .098 .067 .089 .086 .075 .086 .069 .084 .069 .084 .069 (43,8) (31.3) .13 ( 4.8) 4.8 ( 6.3) .64 ( 1.2) 4.9 ( 7.4) .61 13.9 5,1 1.3 .60 20.5 4.8 6.0 .62 17.7 5.1 3.8 .64 17.7 5.1 3.8 .64 ( 3.9) ( 4.1) ( 4.5) .6 3.8 2.4 2.4 $ 12.7 9 $ 12.7 9.8 .4 10.2 13.2 .5 13,7 13.1 .6 13.7 13.3 .6 13.9 12.4 1.1 13.5 12.4 1.1 13.5 15.9 ( 2.6) 13.3 66.8 3.5 10.3 80.6 92,3 3.8 (15.5) 60.6 92,5 5.6 (18,1) 80.0 95.6 6.2 ( 6.5) 95.3 94.2 10.2 104.4 94.2 10,2 104.4 Higher volume and prices resulted in over budget profits, some purchases were required due to chocolate Bayou plant turnaround. Although the price held generally firm throughout the year, it is expected some declines will be experienced in 1967 and 1969 due to increased availa bility of by-product material and possibly imports. 063974$ WATER PCB-00039855 " Sales Gross profit SAAB Other Income Div. Contribution Corp. Met Income Selling Price/lb. Cost of Sales/lb. As % of Salesi Gross profit SARK Het Income $ Sales/6 invest. For Salesi % ROI (Corp. Het) Gross investi Sales Internal Vae Total Capacity - MM lbs* Sales Internal Vae Excess Total tssmwi ($ in Millions) .lag. Actual 1963 6 .3 $ .1 $ 6 6 .1 $ $ ,036 $ .024 .3 .1 .1 .038 .026 .3 .1 .1 .032 .027 1965 .7 .2 1967 1 1966 Budcet .8 .1 .2 .2 .1 .031 .022 .2 .1 .034 .025 .030 .022 .03 .02 33.3 33.3 33,3 28.6 25,0 14.3 12.5 . 50 .75 .60 1.00 .89 .33 .3 14.3 11.1 .6 .4 .5 .7 .9 .3 5.0 5.4 5.3 4.9 5,0 7.1 7.: 5.6 5.8 5.8 5.6 5.9 7.4 7.. 9,4 68.5 (11.5) 66.4 7.6 111.1 (32.5) 86.4 9.6 124.9 (48.1) 86.4 22.0 155.7 (91.3) 86.4 22.6 192.3 (128,5) 86.4 4.6 226,8 (80.2) 151.2 4.4 226.1 (80.: lsi.: Profit budget was net with slightly higher than budgeted prices end volumes. Due to a general shortage we were forced to withdrew from the merchant market to meet captive requirements. Also, we were forced to import materiel from Japan in spite of a 15.36/gal. duty to meet our demands. Duty drawback will be achieved due to export of methanol derivatives, however. We are planning a new major sired plant for 1970 in conjunction with the shutdown of the acetylene plant. This new plant will have appreciably lower production, costs and put us in the merchant market ae a significant factor. Hoyden's share of the plant will be acquired in March, 1967, but will still leave us a net buyar until we get a new plant. 310633746 Sales dross profit SARE Other Income Div. Contribution Corp. Net Income Selling Prlce/lb. Cost of Sales/lb. As % of Gales> Gross Profit GARB Net income $ sales/fi Invest. For Galesi % roi (corp. Net) Gross mvestt sales internal Use Total Capacity - MM Ibsj Sales Internal Use Excess Total mjSEEE- MPPQMSR (? in Millions) -JJtML $ 29.2 $ 10.5 $ 1.4 $ .2 $ 9.3 $ 4.3 $ .101 $ .064 ASfoaai____________________ 1963 J.964 ASSS 1?66 27.3 9.6 1.0 .2 8.8 3.5 28.7 9.0 1.0 .3 8.3 3.5 26.8 7.6 1.1 .3 6.8 2.9 26.6 7.6 1.1 .3 6.8 3.1 .095 .062 .085 .057 .076 .054 .076 .054 1967 ggP'tv 24.1 7.0 1.1 .4 6.3 2.6 24.1 7.0 1.1 .4 6.3 2.6 .076 .053 .076 .053 35.9 4.a 14.7 .74 35.2 3.7 12.a .68 31.4 3.5 12.2 .71 28.4 4.1 10.8 .60 28.6 4.1 11.7 .65 29,0 4.6 10.8 .67 29.0 4.6 10.8 .67 10.9 a.a 8.7 6.5 7.5 7.3 7.3 ? 39.4 $ 22.7 $ 62.1 39.9 25.4 65,3 40.4 26.2 66.6 44.5 26.4 70.9 41.1 29.8 70.9 35.8 37.4 73.2 35,8 37.4 73,2 299.5 205.4 11.1 516.0 295.7 248.3 8.0 552.0 328.7 303.2 (64.9) 567.0 327.1 319.3 (28.4) 618.0 316.0 348.1 (14.1) 650.0 298.9 440.0 (38.9) 700.0 298,9 440.0 (38.9) 700.0 fifties performance exceeded budget both in price and in volume giving an over budget profit performance Capacity was limiting and purchases were required. A 100MM lb./yr. increase in capacity will be available in the third quarter of 1967. but we will still be short of capacity. World-wide 1967 should see the resolution of our future position in Europe, Spain, Japan and Mexico, Including our equity position in Ethyl Synthase and Forth Chemicals, Ltd. Planning will begin on a second plant in the 0.8. for the 1970-72 period. -32- 0633747 Sales Gross profit BARE Other income Div. Contribution Corp, Met Income Selling Price/lb, Cost of Sales/lb. Ae % of Salesi Gross profit SAKS Met income $ Salee/S invest. For Galesi % BOX (Corp. Met) Groes Investi Gales internal Use Total Capacity - MM Ibsi Sales Internal Use Excess Total ma,ftCETAT ($ la Millions) 1962 $ .9 $< .1) 9 $ $< .1) $( .1) - 1963 2.4 ( .4) .2 ( .6) ( .3} _____________________________ _ 1967 -12H 1965 -iS.66 Budget Sl' 4.6 1.4 1.4 .3 .2 .2 .1 .1 .1 .1 .2 ( .1) .1 .1 $ .145 $ ,,160 .124 .147 .113 .106 .108 .092 .102 .091 .106 .094 1< .0' (11.1) (ll.D .27 (16.7) 8.3 (12.5) .38 6.5 2.2 ( 2.2) .50 14.3 7.1 .35 14.3 7.1 .47 1.00 l.C ( 3.0) ( 4.7) ( l.D 9 3.3 9 .7 9 4.0 6.4 9.2 4.0 3.0 .1 2.7 2.0 7.9 9.2 10.9 10. 9.1 11.2 11.9 12.2 11.0 11. 6.1 19.2 40.6 12.6 14.0 .7 a 4.9 9.0 9.9 52.9 55.4 106.3 106. 16.8 ( 5.S) (11.0) (11.8) (42.0) (42. 45.0 45.0 54.5 57.6 65.0 65. Higher sales price and volume resulted in better than budgeted profits Plant capacity was increased to 6S.0MM lba,/yr, but purchases were still required. Due to general tightness of market we essentially have withdrawn from merchant market in order to meet growing captive requirements. We plan to shut down our existing facilities in conjunction with the Texas City AM plant in late 1969 or early 1970 and bring on-stream a new large site plant using an ethylene process. The acetylene facilities will be shut down concurrently. 0633748 Sales Gross Profit EARS Other income Div. Contribution corp. Met Income Selling Price/lb, Cost of Sales/lb. As of Sales 1 oross Profit SARE Met income $ Sales/S invest. Por Salest X ROI (corp. Net) Gross Invest] Sales internal use Total Capacity - MM lbei Sales Internal Use Excess Total yj^-smpMPB ($ in Millions) - 1962 $ 2.5 $ .3 9 .1 9 9 .2 $ .1 3 .077 9 .068 Actual___________________ 1967 1963 -1964 1965 _ 1966 Budget Can'tv 1.9 1.5 2.0 3.1 2.6 2.6 .1 .1 .1 .3 .2 .2 .1 .1 .2 .1 .1 .1 .1 .1 .1 .2 .1 .1 { .1) ( .1) .077 .071 .070 .066 .065 .061 .065 .060 .056 .053 .056 .053 12.0 5.3 6.7 5.0 9.7 7.7 7.7 4.0 5.3 6.7 10.0 3.2 3,8 3.6 4.0 ( 6.7) ( S.0) .46 .45 .46 .44 .40 .49 .49 1.9 ( 3.2} ( 2.2) $ 5.4 9 16.4 $ 21.8 4.2 16.1 20.3 3.1 15.2 IS.3 4.5 14.3 18.8 7.8 17.6 25.4 5.3 18.1 23.4 5.3 18,1 23.4 32.0 104.3 1.7 136.0 24.6 117.1 ( 3.9) 136.0 20.4 123.6 ( 6.0) 138.0 30.8 126.8 (19.6) 138.0 35.6 130.5 (28.3) 138.0 24.5 130.3 ( 9.8) 145.0 24.5 130.3 ( 9.8) 145.0 Our VCM plant in Texas City will be shut down the first of 1969 and we will purchase our total U.S. requirement from Dow under a favorable 10 year contract, Alcoa's chlorine plant at pt. Comfort, Texas, came on-stream several months late causing us to purchase considerable CI2 which added to costa, per formance from a coat standpoint is still not satisfactory at the Clj plant. Responsibility for the Clj operations will be transferred to the Orgsnic Division beginning in 1966. 340633749 WATER PCB-00039859 POLYMERS - PRODUCT npmiy (f In Millions) -1262 Actual 1963 1964 1965 -A266 Bale* (1) Gross profit BARB Other income Div. contribution corp. Hot income i 81.9 10.3 11.4 1.3 .2 < 1.3) 81.3 6.6 10.3 .9 ( 2.8) < 3.7) 85.6 14.0 8.2 1.4 7.2 .5 95.7 19.5 8.7 1.7 12. S 3.7 106.4 23.1 9.5 1.6 15.2 5.0 A* % of Saleai Grose Profit BARB Corp, Net income $ Sales/? invest. % ROI - coxp. Net income Gross Investment 12.6 13.9 ( 1.6) .so 8.1 12.7 ( 4.6) .49 16.4 9.6 .6 .54 20.1 8.9 3.8 .61 21.7 8.9 4.7 .57 ( .8) ( 2.2) .3 2.3 2.7 162.7 164.9 159.7 159.1 186,8 (1) Net of intorgroup eliminations. 1967 Budget 118,3 27.1 10.7 2.1 18.5 5.9 22.9 9.0 5.0 .58 2.9 203.3 Major product* reported for the Polymers product group are as follows, H. D. P. E. L. D. P. E. Lustran Lustrex Opalon Ultron Page 36 37 38 39 40 41 0633750 35- WATER PCB-00039860 a. p... ($ in Millions) Sales Gross Profit SARE Other Income Div. Contribution Corp. Net Income Selling Price/lb. Cost of Sales/lb. As % of Salesi Gross Profit SAKE Net Income $ Sales/? invest. For Salest % KOI (Corp. Net) Gross invest* Sales Internal use Total -J1362 1963 $ 1.2 $< .1) $ 1.0 $ $( l.D ?( .6) .1 ( 2*9) .9 ( 3.8) ( 2.D 9 .310 ,310 $ .341 1.930 1964 1.3 ,1 .1 .104 .092 _ 1965 2.0 .2 .1 .1 .112 .102 J.V U_____ . 1966 Budcret Cac'tv 3.9 4.0 4.1 .8 .5 .6 .4 .4 .4 . .4 .1 .2 ( .1) .2 .139 .109 .138 .122 .138 .118 7.7 10.0 20.5 12.5 14.6 7.7 5.0 10.3 10.0 9.8 5.1 ( 2.5) .25 .01 .87 1.05 .54 .62 .63 (12.8) (21.2) 2.8 ( 1.5) $ 4.7 $ $ 4.7 9.9 1.5 1.9 7.2 6.5 6.5 13.6 13.3 10.3 12.7 12.7 9.9 15.1 15.2 17.5 19.2 19.2 Capacity - MM lbsi Sales Internal use Excess Total* * Incl. Tech. Grade 3.9 1.6 12.6 17.0 28.1 28.9 28.9 11.0 26.0 36.0 41,9 41.9 26,4 7.0 (10.7) ( .8) ( .8) 3.9 1.6 50.0 50.0 53.4 70.0 70.0 During 1966, HDPE continued the performance improvement trend of the past 2 years. Production exceeded budget by 13% and the .first quality cost of goods sold was 25% under budget. Improved product quality plus tighter industry supply resulted in doubling sales over 1965. Outlook for 1967 is for still better performance in all areas as the plant is debottlenecked to higher volume and lower costs, and new product models penetrate additional markets. -36- 0633751 WATER PCB-00039861 L. D. P- B($ In Millions) sales Gross Profit SAKE Other income Div. Contribution Corp. Nat Income Selling Price/lb. Cost of Sales/lb. ________ Actual 1962 19.63 1964 . 1965 9 20.3 $ 3.5 $ 2.6 9 .1 9 1.0 9 .1 15.8 ( .3) 2.1 ( 2.4) ( 1.7) 16.6 1.5 1.4 .3 .4 ( .6) 18.8 5.1 1.7 .2 3.6 1.2 9 .190 9 .157 .144 .146 .146 .132 .161 .118 1967 1966 Budoet SP`J 1 20.5 6.2 1.7 .3 4.8 2.1 19.2 5.3 1.5 .2 4.0 1.6 19.1 5, 1 1. I T1 1.1 .165 .115 .155 .112 .15 1 .111 As X of Salesi Gross Profit SARB Net Income 9 Sales/$ invest. 17.2 12.a .5 .41 ( 1.6) 13.3 (10.8) .38 9.0 8.4 ( 3.0) .42 27.1 9.0 6.4 .51 30.2 8.3 10.2 .55 27.6 7.8 8.3 .52 27. 7. a. .5 For Salesi X ROI (Corp. Net) .2 ( 4.1) ( 1.3) 3,3 5.7 4.3 4. Gross invsati Sales Internal Use Total 9 49.2 $ 9 49.2 41,9 1.9 43.B 39.4 1.2 40,6 36,6 2.0 38,6 37.1 1.5 38.6 37.0 1.7 38.7 37. 1, 38. Capacity - MM Ibsi Sales Internal Oae Excess Total* 107.0 30.5 137.5 109.9 4.4 13.7 128.0 113.6 3.7 3.4 120.7 116.5 6.6 ( 9.2) 113.9 124.0 5.6 ( 9.2) 120.4 123.7 6.3 130.0 123.` 6.: 130. t * Inclt Tech. Grade Continuing firm industry pricing together with improved plant performance and a richer product mix resulted in a record financial performance for tDPB. ' ' Over capacity in expected to cause aerioua price erosion in 1967, which will be only partially offset by improved plant costs and better product mix. 0633762 -37- WATER tPPTBflS (? in Millions) 1962 Actual _______________ 1967 - 1963 1964 1965 1966 Budget Can1 tv Sales Gross Profit SABS Other Income t>iv. Contribution Corp. Net Income $ 4.1 8.1 13.6 17.7 18.2 23.2 23.2 H 1.0) 1.9 4.1 6.1 5.3 7.3 7.3 $ 1.8 1.6 2.1 2.4 2.4 3.2 3.2 ? .1 .1 .1 .3 .2 .6 .6 $1 2.7) .4 2.1 4.0 3.1 4.7 4.7 $( 1.6) .5 1.7 1.1 1.4 1.4 Selling Price/lb. Cost of Sales/lb. ? .328 $ .408 .290 .220 .296 .208 .291 .190 .286 .202 .267 .182 .267 .182 As % of Salesi Gross Profit BARE Met Income ? sales/? invest. (24,6) 43.9 (39.0) .25 23.S 19.8 .48 30.1 15.4 3.7 .60 34,5 13.6 9.6 .74 29.1 13.2 6.0 .46 31.5 13.8 6.0 .51 31.5 13,8 6.0 .51 For Salest % ROI (Corp. Net) ( 9.5) 2.2 7.1 2.8 3.1 3.1 Gross investi Bales Internal Use Total 16.7 16.7 16.8 16.8 22.8 22.8 24.0 24.0 39.4 .4 39.8 45.6 4.0 49.6 45.6 4.0 49.6 Capacity - MM lbsi Sales Internal Use Excess Total * * Incl. Tech. Grade 12.6 5.3 17.9 27.9 .5 28.4 46.0 1.4 47.4 61.4 ( 3.1) 58.3 63.5 2.8 66.3 86.5 9.0 95.5 86.5 9.0 95,5 Lustran profitability continuas below the 7-8% return possible in this growing, high-margin product. The low budgeted return reflects high initial BARB and capital loads programmed to achieve market penetration. Actual results so far in 1967, Which are behind budget, reflect these loads and slippage in the product development schedule. Our product quality goals have now been achieved, but more than one year be hind our original schedule, and six months later than premised in setting the 1967 budget. As a result, sales were 28% behind budget in the first quarter of 1967 and can be expected to continue soft for several more months. With a fully competitive product line, we are, for the first time, in a position to apply the aggressive commercial measures called for by our strategy. These will take effect in the last half of 1967. Our objective is to regain as much as possible of the time lost and to be back at our original planned level of participation by end 1968. -38- 0633793 KZgTJBSy (? in Millions) Sales Gross profit SAKE Other Income Div. contribution Corp, Met Income -T962 $ 34.6 $ 7.0 6 3.8 $ .8 $ 4.0 6 1.6 Actual -HR 1964 34.4 7.0 3.5 .5 4.0 1.2 34.5 6.2 2.5 .8 4.5 1.3 -1965 34.0 5.4 2.4 .7 3.7 1.0 1967 -13.61 Budget S-SPJ. 1 39.4 8.2 2,5 .6 6.3 2.4 47.0 11.4 2.4 .8 9.8 3.8 53 1 13 1 2. 1 111 4. 1 Selling Price/lb. Cost of 6ales/lb. $ .188 6 .150 .159 .127 .148 .122 .140 .118 .144 .114 .149 .113 .14 .1C I As 71 of Sales i Gross Profit SAAB Net Income $ Salee/S invest. 20.2 11.0 4.6 .64 20.3 10.2 3,5 .62 18.0 7.2 3.8 .63 15.9 7.1 2.9 .63 20.8 6.3 6.1 .69 24.3 5.1 8.1 .70 25. 4. 9. 1 .7 For Salesi K KOI (Corp, Net) 3.0 2.2 2.4 1.9 4.2 5.7 7. Gross Invest* Sales Internal Use Hotel $ 53.8 $ $ 53.8 55.3 3.5 58.8 55.2 4.4 59.6 53.6 6.2 59.8 57.1 4.5 61.6 66.7 7.5 74.2 67, 7. 75. Capacity - MM lbs* Sales Internal Use Excess Total * * Incl. Tech, Grade 183.4 66,5 249.9 216.4 11.9 27.0 255.3 232.7 19.4 15.0 267.1 242,4 23.4 56.9 322.7 273.7 31.7 69.1 374.5 314.9 37.9 48.3 401.1 363.: 37.* 401.1 Polystyrene supply and demand came into balance in 1966 . Indications are that this balance will continue at least through .1967, resulting in firm prices and good profitability for Lustrex, Longer-term, profitability of this maturing product can be expected to cycle between 3% return in periods of oversupply and 7% return in periods of shortage. -390633754 WATER OPALOtJ ($ in Millions) Sales Gross Profit SARIS Other Income Div. Contribution Corp. Net income Selling Price/lb. Cost of Sales/lb. As X of Salesi Gross Profit SARB Net Income $ Sales/$ invest. For Salest % KOI (Corp. Net) Gross Invest* Sales Internal Use Total 1962 Actual___________________ _ 1967 . 19.61 -1965 _12iS Budget S&Elt-Y $ 16.7 $ .6 $ 1.8 $ .3 $< .9) $< .7) 17.2 .6 1.8 .3 ( .9) ( .9) 17.6 1.8 1.8 .3 .3 ( -5) 18.3 2.3 l.B .5 1.0 ( .1) 18.8 1.8 1.9 .5 .4 ( .6) 18.4 1.9 2.5 .5 ( .1) ( .7) 21.1 2.3 2.6 .5 .2 ( .5) 9 .171 9 .164 .162 .156 .169 .151 .164 .144 .165 .150 .172 .154 .172 .153 3.6 10.8 { 4.2) .54 3.5 10.5 ( 5.2) .53 10.2 10.2 ( 2.8) .55 12.6 9.8 .54 9.6 10.1 { 3.2) .53 10.3 13.6 ( 3.8) .50 10.9 12.3 ( 2.4) .57 ( 2.3) ( 3.8) ( 1.6) ( .3) ( 1.7) ( 1.9) ( 1.3) J 30.7 $ $ 30.7 32.4 32.4 32.1 32.1 34.0 34.0 35.3 .2 35.5 36.8 1.0 37.8 37.2 1.0 38.2 Capacity - mm lbsi Sales Internal Use Excess Total * 97.9 1.2 99.1 106.3 8.4 114.7 104.1 11.9 116.0 111.2 10.3 122.0 113.7 1.8 5.6 121.1 107.2 3.2 15.5 125.9 122.7 3.2 125.9 * Incl. Tech, Grade Income from Opalon declined in 1966, although it was .significantly ahead of budget. Price erosion, not quite as severe as budgeted, combined with a gradual increase in cost produced unit margins 73% of those in 1965 with little change in volume, in addition, lower royalties from foreign operations than budgeted and a deliberately higher research expensiture reduced income. The 1967 budget predicts more price erosion and even greater research expendi tures to produce future profits. Early indications are that the budgeted profit can be achieved in spite of slow sales. The basic problems continue to be non-competitive monomer cost and a heavy commitment to commodity-type resin products. The forward program involves continuing expansion of paste reBin, a high-margin product, and emphasis of bottle materials for sale and for Packaging Division, it also involves purchase of VCM at a competitive price starting in 1969. 40- 0633755 nmm ($ in Million*) Actual___________________ - jaa. , jl963 , 1964 _126i 1967 Salt Sales Gross Profit SARK Other Income Div. Contribution Corp, Met income Selling Price/lb. Cost of Sales/lb. $ 5.0 $ .3 $ .4 $ $( .1) ( .1) $ .344 $ 322 5.7 .3 .4 ( .1) ( .2) .306 .290 5.8 .2 .3 ( .1) ( .2) .287 .274 6.2 .4 .3 .1 ( .1) .287 .266 6.2 .3 .3 ( .3) .281 .269 6.2 .4 .4 ( .1) .283 .264 6. 1 (. .20 .26 As ft of salest Gross Profit BASE Met Income $ Sales/S Invest. 6.0 6.0 ( 2.0) .66 5.3 7.0 { 3.5) .66 3.4 5.2 ( 3.4) .68 6.5 4.8 ( 1.6) .69 4.8 4.8 ( 4.8) .70 6.5 6.5 ( 1.6) .69 6. 6. ( 1. .6 For Salesi % ROI (Corp. Met) ( 1.3) { 2.3) ( 2.3) ( l.D ( 3.4) < l.D ( 1. Gross invest! Sales Internal Dee Total $ 7.6 8.6 8.5 9.0 8.9 9.0 9.' $ $ 7.6 8.6 8.5 9.0 8.9 9.0 9.' Capacity - mm Ibei Sales Internal Use Bxcese Total * * incl. Tech. Grade 14.5 14.5 18.7 4.5 23.2 20.3 4.7 25.0 21.5 ( .1) 21.4 38.4 38.4 38.4 22.0 22.0 22. < 22. t Ultron contribution declined in 1966, slightly more than budgeted. Declining price end slightly higher cost served to cut the unit margin in half. There was no Change in SARK. The performance of Dltron is hampered by relatively high-cost resin based upon our non-competitive monomer, as well as highly competitive pricing. He are budgeting 1967 performance slightly better than that achieved in 1966. The budget may be achieved in spite of very slow sales in the first 3 months, because of more favorable costs than expected. 0633766 41- WATER PCB-00039866 PRODUCTION AMD EXPLORATION - PRODUCT GROUP {$ in Millions) 1962 Actual__________________ - 1967 1963 -12M 1965 J&tt Budget Sales Gross Profit SABS Other income - Depletion Tax credit Div, Contribution Corp. Net Income 5 24.0 5 1.6 5 .4 $ $ 2.4 5 3.6 5 2.7 23.7 3.0 .5 1.4 3.9 2.2 23.8 3.8 .6 2.1 5.3 2.6 24.3 3.6 .7 1.8 4.7 1.7 26.1 5.0 .5 2.5 7.0 3,7 27.0 4.8 .4 2.1 6.5 3.6 As 14 of sales > Gross profit SARE Net income 5 Eales/5 invest. 6.7 1.7 11.3 .33 12.7 2.1 9.3 .32 16.0 2.5 10.9 .31 14.8 2.9 7.0 .31 19.2 1.9 14.2 .33 17.8 l.S 13.3 .32 For Salest 14 BOI (Corp. Net) 3.7 3.0 3.4 2.2 4.7 4.2 Gross Invest* Sales Internal Use Total 5 72.3 5 5 72.3 74.3 74.3 77.0 77.0 76.7 76.7 7B.3 78.3 84.8 84.8 Salesi Cr. Oil-MM bbls. Nat, Gas-MM MCF LPG - MM bbls. 7.1 23.9 .6 6.6 28.0 .7 6.4 32.4 .7 6.6 35.9 .7 6.6 44.7 .8 6.7 47.8 .8 Average sales price for crude oil in 1967 will be approximately on budget but about 2C per barrel less than in 1966, An intradivision cut in the average Bales price of Venezuelan crude amounting to 340 per barrel will result in a 5314M under budget realisation from these sales. Gas sales price will increase about ,40/MCP. Oil and gas sales are budgeted to increase 1% and 6% respectively. The probability of sales exceeding budget is quite favorable and an improvement of 3% is anticipated. ' P&E expenses are budgeted to increase 51.15mm (5,414) as a result of (1) operating more wells, (2) increased cost of gas purchases due to better product prices, (3) increased cost of goods and services, and (4) additional depletion and depreciation as a result of increased sales. Depletion credit will be lower in 1967 as intangible development costs ware taken in 1966 on several high cost development wells in progress at year-end. Net income in 1967 will be about 314 over budget, and therefore, roi will be slightly over budget. The purchases of ABC-financed properties yield at least an 834 discounted cash flow return but these acquisitions do result in deficits during the retire ment period of the production payment. Benefits from major acquisitions will not ba apparent until 1971. -42 0633757 REFINERY & MARKETING - product flpmip ($ in Millions) ----------------- -- Actual1967 -12& -1163 .125.4 _196S _,1966 Budget Sales (1) Gross Profit SARB Other income Division Contribution Corp. set income 59.8 6.6 5.5 .1 1.2 ( .2) 65.1 8.8 5.8 66.1 7.9 6.1 3.0 1.8 .5 < .2) 67.7 9.4 6.4 3.0 .4 As % of Salest Gross Profit SARE Corp. Set Income $ Sales/? invest. 11.0 9.2 ( .3) 1.16 13.5 8.9 .8 1.15 12.0 9.2 ( .3) 1.28 13.9 9.5 .6 1.25 X ROI - corp. Met Income < -4) .9 ( .4) .8 Gross investment 51.7 56.4 51.5 54.2 (1) Hot of intorgroup sliminstions. 68.4 10.9 7,2 3.7 .2 15.9 10.5 .3 1.27 .4 54.0 62.6 10.3 7.7 2.6 .6 16.5 12.3 1.0 1.13 1.1 55.5 Major products reported for the Refinery & Marketing product group are as followsi . Marketing Refinery i>3 44 45 0633756 43' WATER sales Gross Profit SARK Other Income Div. Contribution Corp, Net Income Selling Price/Gal. Cost of Sales/Gal. As % of Salesi Gross Profit BARE Net Income $ Sales/# Invest. For sales i X ROI (Corp. Net) Gross Invest* Sales Internal Use Total Sales - mm Gallons itomnw ($ in Millions) 1962_ Actual___________________ _ 1967 1963 1964 . 1965 1966 Budget Can'tv $ 23.3 $ 3.3 $ 4.4 9 .1 91 1.0) $( .8) 9 .139 9 .120 25.0 4.7 4.7 ( -3) .144 .117 25.7 5.1 5.0 .1 ( .3) .140 .116 27.4 5.3 5.3 ( .4) .143 .116 28.7 4.1 5.9 ( 1.8) ( 1.7) .145 .124 31.0 5.5 6.5 ( 1.0) < .7) .149 .123 14.2 18.9 ( 3.4) 1.43 18.8 18.8 ( 1.2) 1.40 19.8 19.5 ( 1.2) 1.57 19.3 19.3 ( 1.5) 1.69 14.3 20.6 ( 5.9) 1.72 17.7 21.0 ( 2.3) 1.77 ( 4.9) ( 1.7) ( 1.8) ( 2.5) (10.2) ( 4.0) . 9 16.3 $ 9 16.3 158.9 17.8 17.8 166.0 16.4 16.4 178.3 16.2 16.2 190.6 16.7 16.7 197.3 17.5 17.5 208.7 Marketing fell below budget in 1966 - end fell sharply below 1965 largely because of below-budget sales prices and above-budget transfer price* from the refinery. (The latter contributed to above-budget refinery performance). Pricing did improve late in 1966 and is con tinuing firm into 1967. We have withdrawn from several unattractive marketing areas, but anticipate increased volume in 1967 nevertheless. The combination of improved volume and prices and more attractive pattern ie expected to result in a substantial reduction in the division (contribution) loss in 1967. Continuing strategy is to seek incremental profit improvement without significant capital commitment. -44- 0633759 JtEF INERT ($ in Millions) -1362 Sales gross profit SAKE Other Income Div. contribution Corp. Net income $ 54.4 $ 3.3 $ 1.1 $ $ 2.2 .6 Selling Price/Bble. Cost of Sales/Bble. $ 4.05 3.60 As % of Select Cross Profit SAKE Net income $ Sales/$ invest. 6.1 2,0 1.1 1.54 For Salest % BOX (Corp. Net) 1.7 gross invest) Salea Internal Use Total 35.4 1.2 9 36.6 Sales Refined Oil-MM Sbla. 12.2 Actual___________________ ________1967 . 1963 1964 1965 1966 BWfaet SRl 56.5 4.1 1.1 59.9 2.8 1.1 61.0 4.0 1.0 62.6 6,8 1.3 55.4 4.8 1.2 55. 4, 1. 3.0 1.7 3.0 5.5 3.6 3. .6 .1 .8 1.9 1.3 1. 4.08 3.78 3.90 3.71 4.07 3,78 4.27 3.75 4.26 3.91 4.2 3.9 7.0 1.9 1.4 1.52 4.7 1.8 .2 1.71 6.6 1.6 1.3 1.60 10.9 2.1 3.0 1.68 8.7 2.2 2.3 1.46 8. 2. 2. 1.4 2.1 .3 2.1 5.1 3.4 3. 38.6 1,2 39.8 35.1 35.1 38.1 38.1 37.3 37.3 38.0 38.0 38.1 38.( 12.5 13,4 12.9 12.6 12.8 12.1 Performance in 1966 was significantly improved! over budget and over 1965 as a result of continuing improvements in sales price and refinery cost performance. (Refinery improvement against 1966 budget more than offset the Marketing shortfall on a consolidated baBis). . The 1967 budget is at a lower level of profit, as the shortage of Arkansas crude stock increases local prices and forces purchase of more expensive East Texas crudes. The combined result is significantly higher crude costs, continuing rsflnery operations cost reductions can only partially offset the crude increeses. The level of refinery operations which will yield optimum profit* is under continuing review in view of current crude positions and trends. 0635760 IKORGftMIC CHEMICALS DIVISION Division Profitability (? in Millions) _1S2 Actual__________ _ 1967 JL2M 1965 J&S.6 Budcet Sales Division Contribution Corp. Net income 132.4 146.2 161.2 163.0 175.8 19,3 24.6 28.6 23.6 24.0 8.1 10.2 11.6 9.3 8.2 196.7 32.8 12.6 Corp. Net Income as % of Sales $ Sales/$ Investment 6.1 7.0 7.2 5.7 4.7 .79 .78 .78 .68 .65 6.4 .69 % KOI - Corp. Met. Income 4.9 5.5 5.6 3.9 3.0 4.4 Gross Investment 167.3 187.0 207,4 240.7 272.2 284.4 Product Group - % Return> Detergents Engineering sales (1) Heavy chemicals Phosphates Silicon 5.7 9.0 4.9 (17.4) 4.2 6.9 6.8 (13.4) 2.9 11.5 6.8 ( 3.5) ( .3) 34.6 8.3 4.5 (11.4) 2.5 35.3 5.9 2.0 6.7 2.8 30.1 9.4 4.8 8.3 In 1966 investment in the divisions' products earned the following rates of returni % of Total Investment Loss 0 to 3% 3 to 5% Over 5% 33.2 11.2 37.2 18.4 Product groups are reported on the following pagest . Paw Detergents Engineering Sales Heavy Chemicals Phosphates Silicon 47 52 54 59 69 Major products reported comprise 77% of the divisions' investment in 1966. (1) Years 1962/64 included as part of Heavy Chemicals product Group. -46' 0633761 WATER PCB-00039871 JSETMSSNTS_- PRODUCT GROUP (5 in Millions) ... Actual -Jaa _iiM -A2SA 1967 . 1966 Budget Sale* Cross profit SAKE Other Income Division Contribution Corp. Net Income 34.3 7.9 2.6 .1 5.4 2.2 37.7 8.9 3.6 .1 5.4 2.0 39.8 8.3 3.3 .1 5.1 1.6 40.1 4.9 3,1 .1 1.9 ( .2) 41.1 7.6 2.8 .1 4.9 1.5 41.6 8.0 2.8 .1 5.3 1.6 As X of Sales 1 Gross Profit GARB Corp. Net Income $ Sales/? Invest, % ROI - Corp. Net income Gross investment 23,0 7.4 6.4 .69 5.7 38.4 23.7 9.6 5.3 .79 4.2 47.5 20,8 8.3 4.1 .71 12.2 7.6 ( >4) ,72 18.6 6.8 3.6 .71 2.9 < .3) 2.5 56.1 56.0 57.9 19.3 6.7 3.6 .72 2.8 58.2 Major product* reported for the Determent product 9roup ere as follows[ ACt's Aklyates ALL-Condensed 6 Fluffy Sterox-Phenol A Alcohol A3S 48 49 50 51 0633762 47- WATER_PCB-00039872 Sales Gross Profit EARS Other Income Oiv. Contribution Corp. Net income Selling Price/lb. Cost of Sales/lb. As % of Salesi Gross profit BAKE Net Income 9 Sales/f invest. For Salesi % KOI (Corp. Net) Gross Invest! Sales Internal Use Total Capacity - MM lbsi Sales Internal Use Excess Total ACL'a ($ in Millions) 1962 $ 4.5 $ 1.2 9 .4 9 9 .8 9 .3 9 .609 9 .451 Actual___________________ 1967 1963 - 1964 1965 1966 Budaet CaD'tv 7.0 6.8 6.7 6.3 6.9 8.7 1.6 2.7 2.7 2.4 3.2 4.8 .7 .6 .6 .5 .5 .5 .9 2.1 2.1 2.0 2.7 4.3 .3 1.0 1.0 .9 1.2 2.0 .338 .415 .527 .318 .483 .291 .498 .307 .488 .264 .490 .220 25.9 7.7 7.3 .69 22.9 9.6 4.5 .53 39.7 8.3 14.2 .53 39.9 8.6 15.4 .51 38.4 7.4 14.6 .48 45.9 6.8 17,4 .53 55.1 5.9 23.2 .60 5.0 2.4 7.5 7.8 7.0 9.2 13.9 9 6.5 9 9 6.5 13.3 13.3 12.8 12.8 13.2 13.2 13.0 13.0 13.0 13.0 14,5 14.5 7.4 13.1 12.3 13.9 12.6 14.1 17.7 .1 .1 .2 2.0 .2 .2 10.3 10.7 11.9 4.9 3.6 7.7 23.5 23.7 27.8 17.7 17.7 17.7 On ACL sales 37% in to Colgate for the dry bleach "Action". Colgate changed "Action's" formula in 1966 to the new product ACL 66. However sales volume declined relative to recent years and large future growth is not expected. The fastest growing market use is for swimming pool chemicals. Sales to this market are expected to grow at a rate of 26%/year over the next five years, A broad concentrated effort is under way to capture 60% of the market and reduce coste, increase productivity and improve return on investment. future profitability is projected in the B-12% range. 0633763 WATER_PCB-00039873 Sales Gross Profit SARE Other Income By-Prod. Gr. Prof. Div. contribution Corp. Net Income Selling Price/lb. Cost of Sales/lb. As % of Salesi Gross Profit SARE Met income $ Sales/$ invest. For Salesi % ROI (Corp. Met) Grose Investi Sales internal Use Total Capacity - MM Ibsi Sales Internal Use Excess Total ($ in Millions) -A2SL 9 12.4 $ 4.2 9 1.0 S 9 .4 9 3.6 9 1.5 9 .104 9 .069 Aa.u?.L _122 JlMl U.i 3.5 1.1 11.4 2.8 .9 .3 .5 2.7 2.4 1.1 .9 .097 .066 .095 .072 1965 12.1 .6 .9 .1 ( .2) ( .5) .098 .093 1967 1966 Budaet 13.9 3.0 1.1 .4 2.3 .8 13.4 3,6 1.3 .6 2.9 1.1 14. 3. 1. 3. 1. .100 .078 .102 ,075 .10 .07 33,6 7,7 12.2 1.00 12.2 31.7 9.6 10.2 .60 S.l 24.2 8.3 B.l .45 5.0 7.2 ( 4.5) .51 21.7 8.2 5.9 .74 3.6 ( 2.3) 4.4 26.9 9.6 8.0 .70 5.6 26. 9. 8. .7 6. 9 12.5 9 9 12.5 14.0 .4 14.4 25.3 .3 25.6 23.6 .8 24.4 18.7 .9 19.6 19.2 .9 20.1 19. 20. : 119.9 14.4 5.7 140.0 114.8 13.2 22.0 150.0 119.8 28.7 (22.1) 126.4 123,6 ( 3.0) 29.4 150.0 137.1 16.9 (4.0) 150.0 131.0 21.5 12.5 165.0 .;143.; 21 16S.0 Th results of a broad profit improvement program, initiated in mid 1965, were seen in 1966. This improvement is projected to continue into 1967 and the future. Industry excess capacity has already had the effect of a price cut to 10,04/lb. in early 1967. This will reduce net backs to 9.656/lb., which are expected to hold during the present over supply situation. The results of continued cost reduction programs are projected to keep returns in the S-7M range, Monsanto's process is superior to all other in costs and quality. 0633764 -49- Sales Gross Profit EARS Other Income Depletion Tax Cr. Div. Contribution Corp. Net Income Selling Prioe/lb. Cost of sales/lb. As of Sales> Gross Profit SARB Net Income $ Sales/6 Invest. For Salesi % SOI (Corp. Net) Gross Investi Sales Internal Use Total Capacity - MM lbs Sales Internal Use Excess Total M.L - CONDENSED AMP FLUFFY ($ in Millions) $ 6.6 $ .9 $ .5 6 9 9 .4 9 .1 9 .073 $ .063 Actual 1963 1964 8.3 6.3 1.3 1.0 .a .7 .1 .1 .6 .4 .2 .070 .059 .066 .058 ___________ 1967 -1161 -136 Budget CP'tv 8.4 6.B 6.9 10.3 .5 .1 ( .4) .3 .6 .1 .2 .3 ( .1) ( .3) .065 .061 ( .2) .065 .064 ( .6) ( .5) .063 .066 ( .6) ( .5) .063 .064 13.2 7.7 l.S 1.02 15.a 9.6 2.2 1.05 11.5 6.3 .4 1.02 5.4 7.1 { 3.7) .94 1.7 1.4 (2.8) .74 (5.8) 2.9 (7.0) .74 (2.7) 2.8 (4.5) ' 1.07 1.9 2.3 .4 ( 3.5) (2.1) (5.2) (4.8) $ 6.4 7.9 8.1 8.9 9.2 9.3 9.7 $ $ 6.4 7.9 8.1 8.9 9.2 9.3 9.7 S9.B 73.6 163.4 119.3 41.9 161.2 126.4 ( .3) 39.8 165.9 130.1 1.6 33.3 165.0 105.5 58.7 164.2 110.0 55.2 165.2 165.2 165.2 The product:"ALL" derives its profits from the Monsanto made raw materials. STP and Sterox. The conversion, packing and shipping are done at cost and reimbursed by Lever. In 1966 two changes lowered profits. STP prices were cut and the Sterox was changed from Alkyl Phenol based to Alcohol basis. The latter change had greater impact on profits and will continue to affect future profitability (See Sterox-'Phenol and Alcohol). Research effort ie being directed to a new- formulation for "ALL" Which will improve profitability. 50 0633766 WATER PCB-00039875 Sales Gross Profit SARE Other Income Div. contribution Corp. Met Income Selling Price/lb. Cost of Sales/lb. Aa % of Sales* Gross profit SARE Hat income $ sales/$ invest. For Sales* % mi (Corp. Net) gross Invest* Sales Internal Use Total Capacity - MM lbs* Sales Internal Use Excess Total STBROX -PHENOL AMD ALCOHOL ($ In Millions) -1962 9 4,0 9 .5 $ .3 9 5 .2 $ .1 9 .143 9 .124 3.8 1,0 .4 .6 .2 .145 .108 _____________________ _ 1967 -1964 .im Budget Sss.% 4.9 4.6 5.2 4,7 8. 1,2 .5 .9 ( .1) .4 .4 .5 .4 #; .8 .1 .3 ( .1) .4 ( .5) ( .. .1 ( .4) ( .141 .106 .136 .121 .132 .110 .133 .135 .13: .12i 13.5 7.7 1.3 1.12 25.3 9.6 5.9 1.03 25.4 8.3 6.9 1,26 10.9 8.1 ( 1.5) 1.25 16,7 9.7 .9 1.24 (1.2) 9.3 (8.4) 1.13 3. 6. (3. 1.8 1.5 6.1 8.7 ( 1.9) 1.1 (9.5) (6-f 9 3.5 3.7 3.9 3.7 4.2 4.2 4.i 9 S 3.5 3.7 3.9 3.7 4.2 4.2 4.C 27.7 7.3 19.1 54.1 26.2 9.7 21.5 57.4 34.4 11.4 18.4 64.2 34.1 10.9 22.1 67.1 39.3 10.1 22.1 71.5 35.6 11.2 28.5 75.3 64.1 11.5 75.3 The switch to biodegradable actives reduced the volume of Alkylphenol based steroxes, however sales volumes have to be maintained above breakeven. The necessity to convert high cost Olefins into Alcohols by Houdry has made the biodegradable segment of this business unprofitable in 1966 and 1967. By the fourth quarter of 1967 lower cost purchased alcohols will be used. However, it is anticipated that product prices will also be reduced as an over supply of straight chain Alcohols become available. This segment of these products are projected to breakeven in the near future. 0633766 -51- WATER_PCB-00039876 EKfllKBBltnig SA1.ES - PRODUCT GROUP ($ In Millions) ftCtual______________________________ JL?.62 .im. -1964 _12 .1966 Budget Sales Oroes Profit BARE Other Income Division Contribution Corp, Met Income 4.4 2.4 Years 1962/64 included .1 as part of Heavy chem- 1.2 icals Product Group 3.5 2.0 3.2 1.6 .2 2.5 3.9 2.2 3.7 1.7 .2 l.a 3.3 1.6 As % of Salesi Gross Profit BARE Corp. Net income $ Sales/$ invest. 54,S 3.3 44.7 .79 50.9 7.6 66.6 .53 44.7 4.9 44.2 .68 M ROX - Corp. Net income 34.6 35.3 30.1 Gross investment S.6 6.1 5.4 Major product reported for the Engineering Sales product group is as follows I 1967 vanadium Catalyst Page S3 -52 0633767 WATER PCB-00039877 sales Gross Profit SAKE Other Income Div. contribution Corp. Met income Selling Price/ltr. Cost of Salss/ltc. As % of sales Gross Profit SARE Net Income $ 6ales/$ invest. For Salest X ROI (Corp. Net) Grose invest) Sales internal Use Total ' Capacity - MK Iitrn Sales Internal Bse Excess Total VANADIOM CATALYST (? In Millions) $ 1.4 $ .9 9 .1 9 .2 $ 1.0 $ .4 $ 1.66 5 .637 1963 1.2 .6 .1 .5 .2 1.60 .617 W4 2.1 1.1 .1 1.0 .5 1.63 .785 1965 3.5 2.0 .1 1.9 1.0 1.57 .661 62.1 10.4 31.6 1.26 49.0 6.3 19.8 .76 51.8 4.7 23.6 1.84 58.0 4.2 28.8 2.16 40.0 15.1 43.4 62.4 $ 1.1 1.5 1.1 1.6 $ 9 1.1 1.5 1.1 1.6 .6 .7 1.2 2.2 ( .1) .3 .4 .6 ( .3) 1.1 1.1 1.8 l.a 1967 1966 Budget csp.;t 2.1 2.2 2, 1.3 1.2 1. .2 .1 L.l 1.1 1. .6 .5 1.50 .59 1.39 .60 1.3 .6 60.6 7.8 27.5 1.17 56.8 5.2 24.7 1.21 56. 5. 24. 1.2 32.1 30.1 30. 1.8 1.8 1. 1.8 1.8 1. 1.4 1.6 1. .1 .5 ] .4 1.9 2.1 2. Vanadium Catalyst sales are closely tied to the sale of new sulfuric acid plants by Engineering Sales, This in turn is dependent upon the expansion programs of industry as occurred in 1964 and 1965, Catalyst is produced at WGK. MCL and a license in India, Price competition has forced a reduction in Monsanto pries. However} this product is expected to continue to be highly profitable. . 0633768 -53- WATER_PCB-00039878 HSAVY_CHBHICALS - BRODPCT GROUP ($ in Millions) Actual____________ _ 1967 * 1962 1963 _ 1964 Jjljj -y>M Budget Sales Gross Profit SARB Other income Division Contribution Corp, Hat income As X of Salesi Gross Profit BARE Corp. Net income $ Sales/? invest. X R01 - Corp. Net Income Gross investment 15.3 4.1 1.3 1.4 4.2 1.8 17.6 4.9 1.1 1.0 4.8 2.0 20.6 6.0 1.2 l.S 6.3 2.8 18,6 S.2 1.2 .3 4.3 2.0 18.8 4.8 1.2 .2 3.8 1.6 20.2 6.2 1.1 .3 5.4 2.4 27.0 3.7 11.7 .77 9.0 19.9 28.0 6.3 11.4 .79 8.9 22.6 29.2 5.9 13.6 .85 11.5 24.3 28.1 6.2 10.8 .77 8.3 24.1 25.6 6.5 8.6 .69 5.9 27.4 30.9 5.3 11.8 .80 9.4 25.3 Major products-reported for ths Heavy Chemicals product group are as follows t Pace Caustic Potash Chlorosulfonic Acid Silicas Sulfuric Acid 55 56 57 SB Motei Years 1961/64 includes Engineering Sales product Group. -S4' 0633769 WATER PCB-00039879 CAVSTIC POTASH ($ in Millions) Sales Gross Profit BARE Other Income Div. Contribution Corp. Net income Selling Price/lb. Cost of sales/lb. As 96 of sales i Gross Profit BARS Net income $ Sales/? invest. For Salesi 96 ROX (corp. Net) _________Actual 1962 .1262 -1961 $ 1.2 1.9 2.8 5 .3 .4 .7 $ .1 .1 .2 $ $ .2 .3 .5 S .1 .1 .2 $ .067 $ .048 .066 .052 .068 .051 1965 3.0 .7 .2 .5 .2 .070 .053 -12,66 Budget Cap 2.5 2.7 5. .5 .6 1. .1 .1 .4 .5 1, .1 .2 .069 .057 .070 .054 ,0< ,06 28.2 8.9 7.1 .35 20.5 6.3 5.4 1.03 24.2 5.9 7.6 .88 23.4 5.7 7.3 1.23 18.3 2.5 5.6 .60 23,0 2.7 8.2 .66 30. 2. 13. 1.1 2.5 5.5 6.7 9.0 3.5 5.4 15. Gross investi Sales Internal Use Total $ 3.5 1.8 3.1 2.5 4.1 4.1 4. $ $ 3.5 1.8 3.1 2.5 4.1 4.1 4. Capacity - MM lbs Sales Internal Use Excess Total 18.1 16.1 14.0 48.2 28.3 33.0 19.7 81.0 40.8 39.8 5.0 85.6 43.3 32.1 18.2 93.6 35.8 28.2 33.8 97.8 39.0 32.1 34.7 105.8 73. 32. 105. KOH is used captively at WGK foe ACL and for TKPP at Carondelet and Kearny. Sales are primarily for TKPP for liquid detergent manufacture. After several years of rapid growth, the use of TKPP declined in 1966. The future sales for this market are not expected to grow. Because KOH and NaoH can he made in the same equipment, some price attrition is expected in the future. This will lower the return to the 5--796 range. Monsanto is protected on Potassium Chloride with an attractive price for five years. 0633770 >55- WATER Salas ' gross profit CARS Other Income Div, Contribution corp. Net Income Sailing Price/lb. Cost of Sales/lb, Aa % of Salesj gross Profit CARE Net Income 9 Sales/? Invest. For Salesi % ROI (Corp. Net) Gross investi Sales Internal use Total Capacity - MM lbsi Sales Internal Use . Excess Total ($ in Millions) Actual___________________ 1967 .mi _!m. jass Budget Can'tv ? .7 .9 .8 .7 .8 1.0 1.4 $ .4 .5 .4 .3 .4 .5 .8 $ .1 .1 .1 .1 .1 $ $ .3 .4 .4 .3 .3 .4 .7 9 .1 .2 .2 .1 .2 .2 .4 9 .037 9 .017 .037 .016 .035 .016 .034 .019 .034 .019 .037 .018 .037 .017 54.7 8.9 20.4 .99 56.4 6.3 22.6 1.32 53.4 5.9 22.4 .95 42,2 6.4 18.1 .82 43.0 6.0 18,8 .85 50,7 4.9 22.1 ,96 53.5 4.1 24.5 1.41 20.2 29.9 21.4 14.9 16.1 21.6 34.6 $ .7 .7 .8 .9 1.0 1.0 1.0 9 .4 .3 .4 .9 .8 .8 .8 9 1.1 1.0 1.2 1.8 1.8 1.8 1.8 19.4 24.3 ( .5) 43.2 23.1 23.6 ( 3.5) 43.2 22.5 30.1 ( 4.6) 48.0 21.7 40.9 ( .6) 62.0 24.4 37.3 .3 62.0 26.0 41.2 13.2 80.4 39,2 41.2 80.4 6054 of the chlorosulfonic Acid is used captively by the Organic Division, The sales portion has been able to sustain a high level of profitability. 90% of the sales are in bulk tank car shipments. The balance is in drums. Prom recent analysis of drum business Which returns less than 10%. ROI strategies have been implemented which will raise the profitability of this segment of the business. . -56- 0633771 WATER_PCB-00039881 SILICAS ($ in Millions) Sales Gross Profit BARE Other Income Olv. Contribution Coxp. Net Income Selling Price/lb. Cost of Sales/lb. As % of Salesi Gross Profit SAKE Net Income $ Sales/$ Invest, 1252 $ 2,6 $ .8 $ .3 $ $ .5 $ .2 ? .294 $ .210 ASilial_____________________ 1967 1963 -1264 1265 1966 Budoet Cap't\ 3.2 3.3 3.4 3.5 4.4 4.1 1.1 1.1 1.1 .2 .2 .3 .9 1.5 1.1 .5 .4 t i .1 .9 .9 .8 .4 1.2 l.; .4 .4 .4 .1 .5 .1 .302 .198 .295 .196 .312 .211 .323 .238 .297 .196 .27: .17: 28.3 8.8 7.6 .80 34.5 6.3 13,1 .74 33.3 6.1 12.1 .75 32.1 8.7 11.0 .65 26.2 15.0 3.9 .64 34.1 9.9 11.0 .80 37.: 9.; is.: *8f For salesi % KOI (Corp. Net) Gross Investi Salss Internal use Total Capacity - MM Ibst Sales Internal Use Excess Total 5.9 9.3 $ 3.5 $ $ 3.5 4.3 4.3 9.4 .1 3.7 13.2 10.5 2.6 13.1 9.1 4.4 4.4 11.2 .7 1.1 13.0 7.1 5.2 5.2 10.9 .2 3.9 15.0 2.5 5.5 5.5 10.9 .3 8.3 19.5 8.8 il.: 5.5 5.! 5,5 S.` 14.9 2.6 17.5 17. E 17.5 The silica chemicals, Gantocel and Syton, are manufactured at Everett by a process which has soma common processing steps and equipment. Because of this, profitability is best looked at in combination to avoid inconsistencies due to allocation of costs and investment between the products. A major effort was expended in 1966 on plant expansion which was vitally naeded. The higher BARE is due to an accounting change in allocating costs to major products within the Heavy Chemicals group. In 1967 cost reduction and new product research on further capacity increases are being pressed. Sales are budgeted to Increase $.9MM (20%). 0633772 57- SULFURIC ACID ($ in Million*} Sales Gross profit SARK Other Income Div. contribution Corp. Net income Gelling Price/lb. Cost of Sales/lb. -X962 $ 4.5 $ 1.3 $ .4 $ $ .9 $ .3 9 .009 $ ,007 Actual___________________ . 1967 _A22 0254 lg&> 1966 Eudqefc Cap'tv 4.6 5.1 5.4 5.8 5.7 5.7 1.5 1.8 1.8 1.9 1.8 l.B .3 .3 .3 .3 .3 .3 1.2 1.5 1.5 1.6 1.5 1.5 .5 .7 .7 .8 .6 .6 .009 .006 .009 .006 .009 .006 .009 .006 .010 .007 .010 .007 As % of Salesi Gross Profit SAKE Net income $ Sales/$ Inveet. 28.1 8.9 7.6 .85 32.5 6.3 11.0 .66 35.9 5,9 13.4 .83 34.2 5.7 13.9 .87 32.3 4.6 13.2 .64 31.5 5.4 11.1 .66 31.5 5.4 11.1 .66 For Salesi % KOI (Corp. Net) 6.5 7.2 11.2 12.0 8.5 7.3 7.3 Gross investi Sales Internal use Totel 9 5.3 7.0 6.1 6.2 9.1 8.7 8.7 $ 3.3 3.1 3.0 3.2 3.0 3.0 3.0 $ 8.6 10.1 9.1 9.4 12.1 11.7 11.7 Capacity - MM lbsi Salas Internal Use Excess Total 486.5 412.0 38.7 937.2 503.8 396.7 42.7 943.2 548.3 395.2 943.5 565.9 448.1 (70.4) 943.6 609.0 585.5 417.6 466.2 (83.0) 943.6 1051.7 585.5 466.2 1051.7 The major change in sulfuric acid in 1966 -was the start of construction of the #9 unit at W. G. Krummrich to replace #6 and #7. #9 was started up in February 1967 and achieved design conditions within 'the month. The shortage of sulfur has not reduced production to date. Price increases have been passed on to the customer but surplus spent acid from reactivated arsenals and conversion of steel plant to HCL pickling have had the effect of forcing wider distribution end more freight absorption. The drop in 1966 ROX was due to the investment associated with the con struction of the #9 unit. The 1967 ROI is down due to budgeted start-up costa on the new unit and the obsolescence associated with the planned retirement of the #6 and #7 units. All plants are expected to operate at capacity and profitability Bhould return to the 8-12% range. 58' 0633773 PHOSPHATES - PRODUCT OSOPP {$ in Millions) Actual_ ..Jflfil -1964 _i2S -1?6.S Budget sales Gross Profit SAKE Other Income Division Contribution Corp, Met Income 80.5 14.4 4.6 1.7 11.5 5.1 88.5 19.5 4.7 1.9 16.7 7.5 94.9 21.7 4.7 1.4 18.4 7.9 93.7 18.6 4.9 1.7 15.4 6.6 100.9 15.6 5.4 1.3 11,5 3.4 113.6 25.6 6.1 1.4 20.9 8.5 As of Sales* Gross Profit BARE Corp. Net Income $ Sales/$ Invest. 17.9 5.7 6.3 .79 22.0 5.3 8.4 .80 22,9 5.0 8.4 .81 19.9 5.3 7.0 .64 15.5 5.4 3.4 .60 22.5 5.4 7.5 .64 X ROI - Corp. Net Income Gross investment 4.9 6.8 6.8 4.5 2.0 103.9 110.5 117.4 146.1 169.4 4.8 176.9 Major products reported for tbs Phosphate product group are as follows* Page DCP-Ahhydrous & Dihyrate Phos, Acid - Food Phos. Acid - Other Potassium Phosphates MCP - All grades SMP STP - All orades TSP - Crystal TSPP 60 61 62 63 64 65 66 67 68 Note t Heavy investment, high cost Phosphorus as ,a result of Investment and start-up have caused unusually low returns throughout this group In 1965-J.966 and 1967 to a lesser extent. 1967 0633774 59' WATER PCB-00039884 Sales Gross Profit BARB Other Income Depletion Tax Cr. Div. Contribution Corp. Net Income Selling Price/lb. Cost of SalesAb. As % of salesi Gross Profit BARS Net Income $ Sales/? Invest. For salesi % ROI (corp. Not) Gross Investi Sales Internal Use Total Capacity - MM lbsi Sales Internal Vse excess Total DCP-ANHYPROOS AMD PIHYRATB ($ In Millions) 1962 $ 2.4 $ .7 $ .1 $ $ .6 $ .3 $ .075 $ .054 Actual___________________ 1967 Am 1964 Am Budget 2.5 2.6 2.7 2.8 2.7 4.1 .7 .8 .6 .8 .8 1.5 .1 .1 .1 .2 .2 .2 .6 .3 .074 .053 .7 .3 .076 .052 .5 .2 .072 .055 .6 .3 .076 .054 .6 .3 .075 .053 1.3 .6 .077 .048 28.0 6.0 10.7 .94 29.0 5.2 11.2 .92 31.3 5.0 12.7 .69 23.4 6.5 7.8 .57 29.0 7.9 10.1 .56 29.5 7.8 9.9 .53 36.9 6.0 15.1 .78 10.1 10.2 8.7 4.5 5.6 5.2 11.9 $ 2.5 2.8 3.7 4.7 5.1 5.1 5.3 $ $ 2.5 2.8 3.7 4.7 5.1 5.1 5.3 31.8 19.1 8.9 59.8 34.2 22.2 .1 56.5 34.1 19.9 2.3 56.3 36.9 20.2 23.1 80.2 37.0 22.6 21.8 81.4 36.0 22.4 17.8 76.2 53.8 22.4 76.2 Sales of DCP into the dentifrice market were hurt by increase in the use of IMP and TCPP, products which are compatible with fluorides. Monsanto sales of TCPP were well over budget and IMP waa on budget, and Monsanto's parti cipation in the total dentifrice market remains at 60% and 1b growing. Future prospects for IMP and TCPP are excellent While DCP will continue to be partially replaced. Since DCP ie a raw material for TCPP, no idle plant capacity will result from the market shift. -60- 0693775 WATER_PCB-00039885 Sales Gross profit SAAB Other Income Depletion Tax Cr, Div. Contribution Corp, Net Income Selling Price/lb. Cost of Sales/lb. As % of Salesi Gross Profit BARB Net Income $ Sales/? invest. For Salesi . '% ROI (corp. Net) Gross invest! Sales Internal use Totel ' Capacity - MM Ibat Sales Internal use Excess Total fWS. ftClP. - FQOP ($ in Millions) -J-9&? $ 4.0 $ 1.3 $ .2 $ $ .1 $ 1.2 S .5 $ .097 $ .065 Actual JJ12 -1-964 4.2 4.5 1.5 1.6 .2 .2 .1 .1 1.4 1.5 .6 ,7 .095 .062 .095 .061 ____________ .___ --- +*1967 .1365 -ISM Budget Can't 4.9 5.1 5.3 7, 1.6 1.3 1.9 2. .3 .4 .4 .1 .1 .1 1.4 1.0 1.6 2. .7 .4 .8 1. .095 .065 .096 .071 .096 .062 ,0` .0! 32.8 6.0 13.8 .88 35.0 5,3 15,1 .83 35.9 5.0 15.5 .83 32.1 5.0 15.0 .69 25.7 7.8 8,9 .57 36.0 6.4 14.5 .58 39 5 16 12.1 12.5 12.9 10,4 S.O 8.5 12 ? 4.5 5.0 5.5 7.1 8.9 9.0 9. $ $ 4.5 5.0 5.5 7.1 8.9 9.0 9. 41.2 493.0 30.9 565.1 43.9 550.7 37.1 631.7 47.6 591.4 40.8 679.8 51,0 611.2 29.0 691.2 52.7 609.7 157.8 820.2 54.6 734.4 18.4 807.4 73, 734, 807. Price pressure .in the food acid market (mainly aluminum bright-dip) in the form of special allowances tended to force the net back value down, but a program to eliminate unprofitable sales resulting from the allowances helped hold Monsanto*n net back constant. Sales volume suffered slightly as a result, but this will be recovered. 0633776 -61 WATER PCB-00039886 Sales Gross Profit SAKE Other Income Depletion Tax Cr. Div. Contribution Corp. Met income selling price/lb. Cost of Sales/lb. As % of Salesi Gross Profit SAKS Met Income $ Salee/$ invest. For SbIsbi X ROI (corp. Met) Gross investi Sales Internal Use Total Capacity - MM Ibsi Sales Internal Use Excess Total ($ in Millions) _12$2_ $ 8.0 $ .3 $ *5 $ $ .3 $ .1 $ .1 $ .065 $ .063 APJatfJr--___________________ 1963 -1.9.64 -19.65 -19.66 8.8 8.6 8.7 9.0 .9 1.1 1.0 .7 .5 .4 .5 .3 .3 .2 .3 .2 .7 .9 .8 .6 .4 .4 .3 .1 .066 .059 .066 .058 .067 .059 .069 .064 1967 Cap'tv 12.8 2.5 .6 27,3 6.0 1.0 .3 .3 2.2 5.3 .9 2.5 .069 .056 .070 .054 4.0 9.9 12.5 11.4 7.3 19.2 21.8 6.0 5.3 5.0 5.1 3.3 4.5 3.4 .9 4.1 4.4 3.4 1.1 7.0 9.2 .63 ,68 .62 .44 .48 .68 1.32 .6 2.8 2.7 1.5 .5 4.7 12.1 $ 12.7 $ $ 12.7 12.9 12.9 13.8 13.6 19.7 19.7 18.5 18.5 19.0 19.0 20.7 20.7 121.9 72.3 194.2 133.1 101.1 234.2 130.7 88.1 218.8 129.9 101.2 231.1 129.7 207.8 337.5 186.0 206.6 392.6 392.6 392.6 Pricing in the fertiliser and feed phoB . acid market firmed as demand OXceeded supply and sulfur pries rose, only the limited availability of phosphorus prevented increased sales level at profitable prices. -62 0633777 WATER PCB-00039887 sales roes Profit SARE Other Income Div. Contribution Corp. Met Income Selling Price/lb. Cost of Sales/lb. As % of Salest Gross Profit SARE Met Income $ Sales/? Invest, For Salesi % ROI (corp. Net) Grose investt Sales internal use Total ' Capacity - KM lbei Sales Internal Use Excess Total POTASSIUM PHOSPHATES ($ In Millions) 1362,. $ 2.1 $ ,S ? .1 $ .4 ? .2 $ .122 $ .090 AS&S&I___________________ --- 1967 --1-963. -196.4 . 1965 . 19$$ Budget gap'tj 3.6 5.6 5.3 5.4 5.5 e.c 1.2 2.3 1.9 1.4 1.9 3.C .2 .3 .3 .3 .3 1.0 2.0 1.6 1.2 1.7 2.: .5 1.0 .8 .5 ,8 l.: .120 .079 .125 .073 .125 .080 .117 .086 .117 .076 .lit .07* 25.8 6.0 9.0 .78 34.2 5.3 13.1 .92 41.5 5.0 17.3 1.18 36.0 S.3 15.7 .89 26.5 4.6 10.1 .79 35.0 4.6 14.1 .80 36, ( '4.C 15.? 1.13 7.0 12.1 20.4 13.9 8.0 11.2 17.` $ 2.7 3.9 4.7 6.0 6.8 6.9 7.: $ $ 2.7 3.9 4.7 6.0 6.8 6.9 7.; 17.5 .1 9.1 26.7 29.8 .4 4.1 34.3 44.3 1.4 3.9 49.6 42.4 .5 ( 2.7) 40.2 46.0 21,6 (5.5) 62.1 46.9 { .3) 22.1 68.7 69,0 ( .3 68.7 Monsanto's biggest volume TKPP customer is losing ground in the liquid detergent market with a consequent downward trend, on sales volume, in creased effort is being made to improve our sales participation with other customers, Monsanto's market share is 40%. 0633778 63 WATER PCB-00039888 sales Gross Profit BARE Other income Div. Contribution Corp. Net Income Selling Price/lb. cost of sales/lb. AS % of Salesi Gross Profit BARE Met Income $ Sales/$ Invest. For Salest X ROI {Corp. Met) Gross investi Sales Internal use Total Capacity - MM lbsi Sales Internal use Excess Total - gJEAP^.S ($ in Millions) 1962 $ 1.6 $ .3 $ .1 6 $ .2 $ .1 $ .071 6 .059 Actual __________________ 1967 -1252 -1965 . 1116 Budget gjpita 1.7 1.7 1.7 1.6 1.7 2.1 .4 .4 .4 .3 .4 .6 .1 .1 .1 .1 .1 .1 .3 .3 ,3 .2 .3 .5 .1 .2 .1 .1 .1 .2 .071 055 .071 .054 .072 .056 .075 .061 .076 .056 .074 ,052 16.6 6.0 5.5 .78 22.4 5.3 8.4 .84 24.5 5.0 9.4 .79 21.7 5.3 9.1 .71 18.5 7.7 3.9 .71 25.7 8.2 7.7 .75 29.5 7.1 10.5 .91 4.3 7.0 7.5 5,8 2.8 5.8 9.6 $ 2.3 2.0 2.1 2.4 2.2 2,3 2.3 ? 6 2.3 2.0 2,1 2.4 2.2 2.3 2.3 25.3 .2 1.5 27.0 24.1 .3 2.6 27.0 23.7 < .1) 3.4 27.0 23.8 ( 1.0) 4.2 27.0 21.1 .3 5.6 27.0 22.6 .3 6.1 29.0 20.7 .3 29.0 Prices on food phosphates were up in 1966 and sales volume was generally firm. MCP levening acid was down slightly but companion products in the newer BAI.P line were up. Profits in these products were limited by manu facturing capacity, which is being increased. -64' 0633779 WATER Sales Gross profit SAKE Other income Depletion Tax Cr, Div. Contribution Corp. Net Income Selling Price/lb. Cost of Sales/lb. AS % of Salesi Gross Profit SAMS Net Income $ Sales/S invest. For Sales i % ROI {Corp. Net) Gross Invest* Sales Internal Ose Total . Capacity - MM lbsj Sales Internal Use Excess Total &4E (? in Millions) -19$?.. $ 1.2 $ .7 .2 .1 3 .6 3 .3 3 ,081 $ ,062 Actual . i?fe? *964 3.3 3.9 .9 1.1 .2 .2 .1 .1 .8 1.0 .4 .5 .081 .059 ,081 .053 - 1965 4.0 .9 .2 .1 .8 .4 .080 .061 1967 --1966 Budget Can't 4.2 5.0 5. .7 1.4 1. .2 .2 .1 .1 .6 1.3 1. .2 .6 .079 .065 .083 .059 .08 .05 23.1 6.0 8.6 .85 27,0 5.3 10.8 .85 28.6 5.0 11.5 .91 24.2 5.0 9.8 .68 17,6 3.9 5,5 .65 29.5 4.5 u. e .66 31. 4. 12. .6 7.4 9.3 10.4 6.7 3.6 7,8 8,` 3 3.7 3.9 4.3 5.9 6.4 7.6 7.< $ 5 3.7 3.9 4.3 5.9 6.4 7.6 7f 39.3 1.3 3.9 44.S 41.1 1.3 2.8 45.2 48.5 1.6 ( 7.7) 42.4 49.8 1.2 { 1.1) 49.9 52.9 1.2 6.4 60.5 60.2 2,0 62.2 60.2 2.0 62.2 Sales of SMP were limited by production capacity which was expanded late In 1966 and will be expanded again in 1967. Net bach suffered by freight on material purchased for resale. Price and volume will both be up in 1967. -650633760 WATER_PCB-00039890 Sales Gross Profit SAKE Other Income Depletion Tex cr,, Piv. Contribution Corp. Met Income Selling price/lb. Cost of sales/lb. A3 % of Salest Gross Profit SAKE Met Income $ Sales/S invest. For Salesi % KOI (Corp. Met) Gross invssti Salas Internal Use Total Capacity - MM lbsi Sales Internal Use Excess Total STP AU, GRAPES ($ in Millions) . im.. $ 31.2 $ 4.9 S 1.9 $ $ .6 ? 3.6 $ 1.6 $ .069 $ .038 Actual___________________ 1967 _iSM . ,V9M 1965 J366 Budoot Cap1 tv 35.4 6.7 1.9 .7 5.5 2.4 37.5 7.4 1.9 .6 6.1 2.7 37.4 5.7 1,9 .7 4.5 1.7 40.5 3.0 1.7 .1 .4 1.8 ( .4) 46.0 7.1 2.1 .6 5.6 1.9 59.3 10.7 2.5 .6 8.8 3.6 .068 .055 .066 .053 .064 .054 .063 .059 .064 .054 .064 .053 IS.5 6.0 5.0 .72 18.8 5.3 6.8 .76 19. B 5.0 7.1 .76 15.3 5.1 4.6 .60 7.5 4.3 ( .9) .54 15,6 4.6 4.2 .60 18.0 4.2 6.0 .76 3.6 5.2 5.4 2.7 ( .S) 2.5 4.6 $ 43.2 $ $ 43.2 46.6 46.6 49.4 49.4 62.3 62.3 75.1 75.1 76.5 76.5 78.1 78.1 457.6 36,9 97.6 592.1 521.5 48.2 128.3 698.0 572.0 52.3 98.7 723.0 587.3 46,8 107.1 741.2 638.2 42.0 273.3 953.5 713.4 44.0 206.2 963.6 919.6 44.0 963.6 The market for STP is excellent and in spite of shortages customer relations are good. Expansions are complete and costs are improving. Prices are trending upward. Monsanto is aggressively pursuing a large overseas market and already has increased'export sales from 49MM lbs. in 1966 to'about 100MM lbs. in 1967. -660633781 WATER_PCB-00039891 Sales Gross Profit SARE Other Income Depletion Tex Cr, Div. Contribution Corp. Met Income Selling Price/lb. Cost of Sales/lb. As % of sales Gross profit 6ARB Met Income $ Sales/9 Invest, For Salest ROI (Corp. Met) Gross invest) Sales Internal use Total capacity - MM Ibst Sales Internal use Excess Total IgJLCJflTSTAti {$ in Millions) 1962 Actual 1963 1964 9 2.9 2,6 2.7 9 .7 .6 .8 9 -2 .1 .1 9 .5 .7 .7 .3 .3 .3 $ .040 9 .030 .040 .027 .042 .029 2.4 .6 .1 .5 .2 .042 .031 25.3 6.0 9.0 1.05 31.3 5.2 12.1 .95 31.6 5.0 12.4 1.00 25.6 5,0 9.9 .77 1967 1966 Budget Can't 2.7 3.1 3. .7 1.0 1. .1 .1 .6 .3 .044 .033 24.7 3.9 9.3 1.07 .9 .4 .045 .030 32.9 4.5 13.1 1.21 1. .04 .02 1 33. 4. 12. 1.4 9.4 11.4 12.5 7.7 10.0 15.8 17. 9 2.7 2,7 2.6 3.1 2.5 2.6 2. 9 $ 2.7 2.7 2.6 3.1 2.5 2.6 2.. 72.2 2.6 75.0 65.7 16.3 64.0 63.5 20.5 84,0 58.0 26.0 84.0 61.1 22.9 84.0 66.7 15.3 84.0 84. < 84.0 TSP market is stable. Sales to Climaline, our largest single customer, elowl | declines, but other customers growth and other uses balance this loss. 0633762 -67- WATER_PCB-00039892 Sales cross Profit SARB Other Income Depletion Tax cr. Div. contribution Corp. Net Income Selling Frice/lb. Cost of sales/lb. As % of Sales* Cross profit SARB Het income $ Sales/S Invest. For Sales* % KOI (Corp. Net) Cross Invest* Salss Internal Use Total Capacity - HH lbs* Sales Internal Use Excess Total TSPP ($ in Hillions) 19-62- $ 4.6 $ .8 9 .3 9 9 .1 9 .6 9 .3 9 .062 9 .052 Actual___________________ 1967 _12M ;96$ Budcet gap'tv 4.8 4.5 4.0 4.1 4.4 5.6 1.0 .2 .8 .2 .5 .2 .3 .2 .6 1.0 .2 .2 .1 .9 .4 .062 .048 .1 .7 .3 .060 .049 .1 .4 .1 .058 .051 .1 .2 .058 .053 .4 .1 .059 .051 .8 .3 .059 .049 16.8 6.0 5.8 .95 21.3 5.3 8.1 .95 18.0 5.0 6.3 .89 12.0 5.0 2.7 .73 8.1 13.2 17.6 4.1 4.5 4.1 3.0 5.8 .67 .70 .88 5.5 7.8 5.6 2.0 ( .2) 2.1 5.1 9 4.8 5.1 5.1 5.4 6.1 6.3 6.4 9 $ 4.8 5.1 5.1 5.4 6.1 6.3 6.4 73.7 2.9 33.1 109.7 78.8 3.2 18.0 100.0 75.9 3.8 20.3 100.0 68.8 3.9 27.3 100.0 71.0 4.8 24.2 100.0 74.3 4.6 21.1 100.0 95,4 4.6 100.0 TSpp is an old lins product which is primarily used by Lever Bros. Their volume was down so the demand for TSPP was down also, crowing sales of the granular by-product and the development of improved granular yields in 1966 tend to offset the declining Lever Bros, requirements. TSPP is expected to remain a stable product for some time. -600613781 WATER_PCB-00039893 Sales Oross profit SARE Other Income Div. Contribution Corp. net Income Selling Price/Oram -Slice CoBt of Sales/Gram -Slice As K of Salesi Gross Profit SAKE Net Income $ Sales/S Invest. For Salesi X KOI (Corp. net) Gross Invest] Sales Internal Use Total Capacity - mm Grams Sales Internal Use Excess Total Capacity - MM Slices Sales . Internal Use Excess Total gmCQN - PRODUCT GROUP ($ in Million*) wa. $ 2.4 S( .9) $ .9 $ $( 1.6) $( .9) $ 1.31 $ $ 1.79 $ JsJaiai___________________ 1967 , 1963 1964 -ia 1966 Budget Cap1tv 2.4 ( .7) .8 5.9 .7 1.2 6.3 10.6 15.3 15.3 2.7 3.7 4.1 1.4 .9 1.0 1.0 t 1.5) ( .5) ( 1.4) 1.8 2.7 3.1 ( .8) ( .3) ( 1.0) .7 1.1 1.3 .76 1.01 .71 1.80 .55 1.67 .67 1.56 .52 1.64 .65 1.64 .46 1.25 .62 1.56 .40 1.24 #62 1.5 .4) 1.2) (36.6) 39.2 (33.3) .45 (29.4) 34.4 (33.7) .40 12.0 19.5 ( 5.5) .63 .1 22.3 (16.7) .68 25.5 8.9 6.B .98 24,4 6.9 7.0 1.19 27.t 6.5 e.: lilf (17.4) (13.4) ( 3.5) (11.4) 6.7 6.3 9.5 $ 5.2 6.0 9.3 9.1 10.7 12.9 12.5 4 $ 5.2 6.0 9.3 ,9.1 10.7 12.9 12.5 1.8 3.1 2.7 3.9 5.9 8.7 8.' .1 .1 .1 1.2 2.1 3.1 2.4 .8 3.1 5.3 5.9 6.3 6.7 8.7 8.7 2.2 2.6 4.1 6.3 6.3 .1 .4 1.6 .8 2.7 4.2 4.9 6.3 6.3 The turnaround in costa of mid 1965 combined with shies at capacity in every area except Epitaxial resulted in the first profitable year for Silicon in 1966. ' An expansion was initiated in the third quarter of 1966 Which will increase capacity as the various projects are completed through mid 1967. Sales are expected to grow at 10J4 per year and profitability is expected to be between 6-10X, _6g_ 0633764 WATER PCB-00039894 SftGMIIC CHEMICALS DIVI5I0H Division Profitability ($ in Millions) Sales Division Contribution Corp, Met Income Corp. Met Income as % of Sales 6 Sales/? Investment Actual_______________ 1967 -vm. 196? ,1964 1965 1966 fiudoet 181.9 168.4 201.5 217.0 248.3 34.5 31.5 38.3 42.3 49.1 13.7 11.7 14.7 18.7 21.4 256.2 51.6 19.6 7.5 6.2 7.3 8.6 8.6 .76 .74 .78 .79 .81 7.7 .77 % HOI - Corp. Met Income 5.7 4.6 5.7 6.8 7.0 5.9 Gross investment 239.9 254.5 256.9 273.4 306.5 331.8 Product Group - % Returns Fine chemicals Fluids Intermediates Paper Chemicals Petroleum Additives Plasticisers Resin Materials Rubber Chemicals 9.3 16.3 6.6 7.5 6.1 2.1 2.0 10.2 6.5 14.2 5.5 5.8 7.1 1.4 .5 8.0 3.9 11.7 5.4 3.0 7.5 4.3 3.1 10.6 9.2 11.2 9.2 1.4 3.S 5.7 2.8 11.2 8.5 14,0 10.0 4.9 .3 6.2 3.1 11.1 7.8 11.4 6.1 4.0 3.3 4,9 2.1 11.1 In 1966 investment in the divisions' products earned the following rates of returnt % of Total lavpatroant Loss 0 to 3% 3 to S% over 5% 11.4 48.0 2.1 3?. 5 Product groups are reported on the following pages> Fine Chemicals Fluids Intermediates Paper Chemicals W 71 80 85 90 Petroleum Additives plasticisers Resin Materials Rubber Chemicals Page 95 99 102 107 Major products reported comprise 55% of the division's investment in 1966. -70 0633765 WATER_PCB-00039895 EIKB CHEMICALS - PRODUCT group ($ in Millions) Sales Gross Profit SAKE Other income Division Contribution Corp. Met Income As % of sales Gross profit SAKE Corp. Met Income $ Sales/# invest. .ftc&aj.. -im -1963 -MM 25.3 9.1 1.8 .1 7.4 3.2 24.7 8.0 1.9 .1 6.2 2.4 27.5 8.7 2.3 .2 6.6 2.6 32.3 10.8 2.3 .2 8.7 4.1 1967 1966 Budget 36.2 10.7 2.2 J 9.0 4.1 36.7 12U 2,7 10 To 4a 36.0 7.1 12.4 .75 32.2 7,8 9.9 .66 31.6 8.3 9.3 .63 33.5 7.2 12.8 .72 29.5 6.1 11.4 .75 33.9 7.5 11,1 .70 X KOI - Corp, Met income 9.3 6.5 5.9 9.2 8.5 7.8 Gross investment 33.9 37.5 43.3 45.0 58.6 52.6 Major products reported for the Fine chemicals product group ar aa follows Aspirin Ethavan Fumaric Acid Phenacetin Saccharin Santophen #1 3,4,4, Trichlorocarbanilide Vanillin tftgft 72 73 74 75 76 77 78 79 0633706 71- WATER_PCB-00039896 &3im {$ in Millions) Sales Gross profit SARK Other income Dlv. Contribution Corp. Met Income 6 5.0 8 i.a $ .3 6 $ 1.5 9 .6 Ag&jfiA___________________ - 1967 -12&4 Msa Byflqafc Can'tv 5.8 6.2 7.6 7.6 8.1 9.1 2.1 2.2 3.4 2.7 3.7 4.0 .4 .5 .5 .2 .3 .3 1.7 1.7 2.9 2.5 3.4 3.7 .7 .7 1.5 1.3 1.5 1.7 Selling price/lb.(1) 9 .570 cost of saleeAb. (l) 9 .360 .558 ,354 .555 .356 .561 .309 .560 .360 .547 .297 .547 .306 As % of Sales* Grose Profit SARK Hot income $ Sales/6 Invest. 36.8 7.1 12.8 .69 36.7 7.8 12.1 .75 35.9 8.2 11.9 .71 44.9 7.0 19.9 .82 35.7 2.5 16.6 .59 45.6 4.1 18.5 .59 44.0 3.8 16.2 .65 For Sales* % KOI (Corp. Hot) 8.8 9.1 8.5 16.3 9.8 10.9 11.9 Gross Invest* Sale* internal Use Total Capacity - MM lbs* Sales Internal Use Excess Total 9 7.2 7.7 8.6 9,3 12.9 13.8 13.9 9 .1 .1 9 7.3 7.6 8.6 9.3 12.9 13.8 13.9 8.7 .1 1.2 10.0 10.4 ,1 ( .5) 10.0 11.1 .3 11.4 13.6 (1.2) 12.4 13.7 ( .5) 13.2 14.8 1.9 16.7 16.7 16.7 (1) 100% weight Monsanto1s share of the world market in aspirin will continue at about the same level and the domestic sales will continue to grow at approximately 5 or 6% per year. Aspirin costs were high in 1966 due to unfavorable variances and need to purchase aspirin to satisfy demand, but 1967 is expected to show considerable Improvement in costs. Met income will remain at approximately the present levels because of expected price attrition due to the reduction of tariffs. The current budget for selling price is about 1.5$ per pound less than recent past years as two major accounts have exerted price pressure to the point where this concession has already been made. Capacity for aspirin is now adequate for the first time in two years to supply entire Monsanto demands, salicylic acid capacity is barsly adequate for the current year but a major expansion will be available in the early part of 1968 Which should cover all demands for salicylic acid for the next five years. -72 0633787 E1HAVAM ($ in Nilliona) Sales Gross Profit SASE Other Income Oiv. Contribution Corp. Net Income Selling Price/lb. Cost of Sales/lb. As X of Salesi Gross Profit SAKE Net income $ 6ales/$ invest. . MS?, $ 1.9 $ .8 $ .1 $ $ .7 $ .3 $6,237 $3,577 Actual -Mil . ISPA 1.9 2.0 .8 .8 .1 .2 .7 .6 .3 .3 6.100 6.192 3.532 3.802 .. 1967 -Mil -Mii Budget Cap't 2.3 2.3 2.5 2.9 1.0 .9 1.3 1.5 .2 .2 .3 .3 .1 .8 .8 1.0 1.2 .4 .4 .4 .5 6.139 6.340 6.679 6.679 3.516 3.762 3.337 3.334 42,6 7.1 15.6 .82 41.2 7.8 14.7 .77 38.6 8.2 13.4 ,73 42.7 6.8 18.6 .81 40.7 9.2 17.7 .82 50.0 11.7 17.7 .89 50.1 10.5 18.6 1,02 Por salesi X SOI (Corp. Net) 12.7 11.3 9.8 1S.1 14.4 15.8 18.6 Gross investi Sales Internal use Total $ 2.3 2.5 2.8 2,9 2.9 2.9 2.9 '$ $ 2.3 2.5 2.8 2.9 2.9 2.9 2.9 Capacity - MM lbei Sales Internal Use Excess Total .3 .3 .3 .4 .4 .4 .4 .3 4 3 .3 * .4 .4 * Multipurpose equipment Which cau&48 a fluctuating capacity. The recent Incremental capacity increase for this 'product give* us adequate capacity to supply the U.S. market. The recent price increase of 554 per pound will hold until such time as tariff reduction* permit foreign athavan to be imported into the U.S.A. Very modest sales Increases are forecast for the current year and income will remain at its present level. ' 0633788 73- WATER_PCB-00039898 EjZMARIC ACID (INCLUDES COLD WATER SOLUBLE) (5 in Millions) sales gross Profit GARB Other income Div. Contribution Corp. Met Income Selling Price/lb. Cost of Sales/lb, As X of Sales i Oross Profit SARB Net Income 6 Salea/$ invest. For Salesi % mi (Corp, Net) Cross Invest] Sales Internal Use Total Capacity - MM lbs* Sales Internal Ubs . Excess Total ------- ------------------ Actual1967 ji.ftfr.?. JM -ISM - 1965 _1966 Budget Cap'tv 9 1.3 9 9 .1 9 $( .1) 91 .1) 1.4 ( .1) ,1 ( .2) ( .1) 1.4 .2 .1 .1 ( .1) 2.4 .2 ( .2) ( .2) 3.4 3.7 .3 .4 .2 .3 .1 .1 ( .1) ( .1) 3.9 .5 .3 .2 9 .197 9 .193 .162 .167 .165 .142 .175 .177 .182 .185 .165 .164 .185 .160 3.2 ( 5.6) .37 < 3.6) 8.6 ( 7.6) .34 14.1 7.6 ( 4.3) .26 ( ) 6.9 (10.3) .44 8.8 7.1 ( 2.7) .56 11.7 9.0 ( 2.0) .55 13.6 8.7 ( .7) .58 < 2.0) ( 2.6) ( 1.1) ( 4.5) ( 1.4) ( l.D ( .4) 9 3.6 4.0 5.3 5.4 6.1 6.8 6.8 9 .6 .5 .B .4 .4 .4 .4 9 4.2 4.5 6.1 $.8 6.5 7.2 7.2 6.7 1.3 5.2 13.2 a.5 i.i 2,2 11.8 8.3 13.6 1.4 1.4 6.3 2.4 6.0 17.4 18.9 1.6 1.3 21.8 20.2 1.5 1.0 22.7 21,2 1.5 22.7 The total resin, food and cold water-soluble fumarie acid is reported here and operations are at near capacity. However, the extremely depressed price for both the food and the resin use causes profits to be entirely unsatisfactory. Cold water-soluble fumarie acid will show an interesting growth during the year 1967 and the price for this product is about 269 per pound as opposed to the average price of 18-1/26 indicated here. -74 0633789 WATER_PCB-00039899 - Sales Gross Profit BARE Other Income Div. Contribution Corp. Hot income Selling Price/lb. CoBt of Sales/lb. As X of Salest Gross Profit SAKE Net Income f Sales/$ invest. For Sales* % KOI {Corp. Net) Grose inveeti Sales Internal Use Total Capacity - MM Iba* Sales Internal ose Excess Total PHENftCBTIN ($ in Millions) _i22_ 9 3.0 $ 1.5 $ .2 $ 9 1.3 9 .6 $ .915 9 .455 Actual 1964 1.9 1.7 .9 .8 .1 .1 .8 .7 .3 .3 .866 .439 .840 .436 .mi 1.7 .8 .1 .7 .4 .827 .428 1967 -ISM Budget 2.0 1.5 .8 .5 2.( l.t .8 .4 .787 .459 .5 .2 .737 .479 1.0 .5 .737 .443 SO.3 7.1 19.3 ,97 49.3 7.7 18.1 .81 48.2 8.2 18.7 .81 48.3 8.2 21.3 .67 41.7 2.6 22.5 .98 35.1 4.0 14.9 .76 39.9 3.2 18,3 1.25 18.7 14.7 15.0 14.3 22.0 11.3 22.8 $ 3.1 2.4 2.2 2.5 2.0 2.0 2.1 9 9 3.1 2.4 2.2 2.5 2.0 2.0 2.1 3.3 2.2 2.1 2.0 2.5 2.0 3.5 .1 1.3 1.4 1.5 1.0 1.5 3.4 3.5 3.5 3.3 3.5 3.5 3.5 The total market for phenacetin continues to be surprising in view of the adverse publicity concerning its use. Forecasted price reduction budgeted here will not occur unless tariffs are reduced more quickly than expected. In fact# the German import price was recently raised 50 per pound and Monsanto^ price will come up somewhat above the current average 790 price. Earnings for this product will be improved over those forecast. The lower SAKE ratio in 1966 and 1967 is due mainly to a shift in research and development effort. . 0633790 -75- WATER S&fiSHWH ($ in Millions) Sales gross Profit SAKE Other Income Div. Contribution Corp. Met Income Selling Price/lb,(1) Cost of Sales/lb.(1) As % of Sales: Oross Profit SARE Met Income $ Sales/$ invest. for Sales: * HOI (Corp. Met) Gross invest: Sales Internal use Total $ 2.0 $ .7 $ .2 $ $ .5 $. .2 $1.S69 $1,040 Actual Am Am 2.0 2.4 .3 .6 .2 .2 .1 .4 .1 1.653 1.621 1.463 1.214 _____________ 196? . ,1365 Am uda& *p 'Sly. 2.2 i.e 2.0 .2 .i .2 .2 ( .2) .2 3.2 .5 .3 ( .1) ( .i) ( .1) .2 .1 1.454 1.492 1.360 1.360 1.347 1.386 1.217 1.145 33.7 7.1 11.3 .92 12.9 7.8 .9 .39 25.1 8.2 5.4 .57 7.3 7.0 ( 4.6} .49 7.1 9.4 ( 6.5) .42 10.5 11.7 { 4.9) .49 15.8 8.5 1.0 .74 10.4 .5 3.1 ( 2.3} ( 2.7) ( 2.4) .7 $ 2.2 $ $ 2.2 3.3 4.2 4.5 1.9 3.3 4.2 6.4 4.4 4.2 .1 4.5 4.2 4.3 4.3 Capacity - MM lbs: Sales Internal Use Excess Total {1) 100?$ weight 1.3 1.3 1.5 1.5 1.3 1.5 2.3 .1 .2 .1 .4 .9 8 1.4 1.5 1.6 1.9 2.2 2.3 2.3 The budgeted quantity of saccharin will be substantially improved since we are price competitive with U,e. competition and more nearly competitive with-Japanese imports. However, the price indicated at $1.36 per pound will not be met because of recent price reductions. Process improvement plans in the entire toluene eulfonChloride family will result in cost Improvements in saccharin although a minimum amount of thiB cost improvement will be felt in 1967. -76- 0633791 WATER PCB-00039901 Sales Gross profit SAKE Other income Div. Contribution Corp. Hot income Selling Price/lb. Cost of Sales/lb, As % of Salesi Gross Profit BARE Net Income 6 Sales/f invest. For Salesi X KOI (Corp, Net) Grose investi Sales Internal Use Total Capacity - MM IbSi Sales Internal Use Excess Total SANTOPHEN #1 (INCL. SOLN. 1 (? in Hilliona) .i9K. 9 .9 9 .4 $ .1 $ $ ,3 $ .1 9 .641 9 . 392 Actual__________________ _ 1967 _12i JUS* 1965 OS66 Budget 8&1 1.0 1.3 1.4 1.6 2.0 2.9 .4 .8 .9 .8 1.1 1.6 .1 .1 .1 .1 .1 .1 .3 .7 .7 .7 1.0 1.5 .1 .3 .4 .3 .5 .7 .635 .380 .636 .292 .638 .286 .622 .602 .323 .263 .602 .256 38,8 7.1 13.7 ,63 40,1 7.8 13.8 .60 5S.8 8.2 22.4 .73 55.2 7.3 26.2 .79 48.2 5.5 21,2 .70 56.2 4.3 24.0 .93 57.5 3.6 25.8 1.29 8.6 8.2 16.4 20.7 14. S 22.2 33.3 9 1.4 1.7 1.8 1.8 2.2 2.1 2.2 9 9 1.4 1.7 1.8 1.8 2.2 2.1 2,2 1.4 1.6 2.1 2.2 2.5 3.3 4.7 .6 .3 ( .1) .6 .5 1.5 2.0 1.9 2.0 2.8 3.0 4.7 4.7 The remarkable growth of Santophen #1 sales will be somewhat arrested during the year 1967 by two factors, A principal customer will reformulate its hospital germicide without the use of Santophen #1. There Is a possibility that other germicides more active on Pseudomonas will threaten certain uses for Santophen #1. secondly, a domestic competitor is now aggressively marketing the same chemical compound so that a small percentage of our business will be lost, . -770633792 WATER_PCB-00039902 2mAj4 TRICHLPROCARBABILIDE ($ in Millions) sales arose Profit BARE Other income Div. Contribution corp,- Bet income $ 3.2 $ 1.6 $ .2 $ $ 1.4 $ .6 ijssaal_________ ___________ ____ 1967 1964 -i-ses -1966 Budget fispUar 3.2 3.0 3.5 3.9 4.3 6.0 1.4 1.6 1.8 2.2 2.5 3.5 .2 .2 .2 .2 .2 .2 1.2 1.4 1.6 2.0 2.3 3.3 .5 .7 .9 1.1 1.1 1.6 Selling Prlce/lb. Cost of Sales/lb. $1,893 1.891 1.933 1.926 1.911 1.912 1.912 $ .940 1.026 .877 .927 .848 .810 .780 As 54 of Salesi arose profit SAMS Bet income $ Sales/$ invest. 50.3 7.1 19.3 1.41 45.7 7.7 16.5 1.08 54.6 8.2 22.7 1.10 51,9 7.6 25.5 1.10 55.6 5.9 27.1 1.41 57.7 5,0 25.3 1,35 59,2 4.2 27.0 1.76 For salesi 54 SOI (Corp. Net) 27.2 17.6 24.9 26.0 38.2 34.0 47.5 Gross invest] Sales Internal Ose Total $ 2.3 3.0 2.7 3.2 2.8 3.2 3.4 $ $ 2.3 3.0 2.7 3.2 2.8 3.2 3.4 Capacity - MM Ibat Sales Internal t7se Excess Total 1.7 1.7 1.5 1.8 2.0 2.3 3.1 1.1 .8 * * * '* 3.1 3.1 3.1 * Multipurpose equipment which causes a fluctuating capacity. A 1054 growth rate is forecast for 1967 and the price, of this proprietary product is safe. It appears that the forecast for sales and earnings can be viewed with confidence. -78' 0633793 WATER_PCB-00039903 Sales Gross Profit SAW! Other income Div, contribution Corp. Net Income Selling Price/lb. CoBt of Sales/lb. As % of Sales< Gross Profit SAKE Net Income $ Sales/? Invest. For Salesi % ROI (Corp. Net) Gross Investi Sales Internal use Total Capacity - MM lbst Sales Internal use Excess Total ($ in Millions) 1962 Actual__________________ _ 1967 _ia3 -1964 Budoet fiSEit $ 2.6 2.4 3.1 3.3 3.7 3.9 4.2 $ 1.2 1.1 1.4 l.S 1.8 2.1 2.1 $ .2 .2 .3 .2 .3 .5 ,5 $ .2 .1 .1 $ 1.0 .9 1.1 1.3 1.7 1.7 1.7 $ .5 .4 .5 .7 .9 .6 .8 $2'.192 2.218 2.214 2.195 2.188 2.336 2.336 $1 .160 1.171 1.219 1.167 1.146 1.130 1.156 47.1 7.1 17.7 1.12 19.9 47.2 7.7 17.1 .94 16.1 44.9 8.2 17.8 1.24 22.1 45,9 7.4 22.0 1.46 32.1 47.7 9.8 24.2 1.45 51.6 11.8 20.3 1,56 35.1 31.6 50,5 11.2 20.0 1.64 ' 32.7 ? 2.4 2.6 2,5 2.3 2.6 2.5 2.6 $ $ 2.4 2.6 2.5 2.3 2.6 2.5 2.6 1.2 1.1 1.4 1.5 1.7 1.7 1.8 .1 .2 < .1) ( .1) < .3) .1 1.3 1.3 1.3 1.4 1.4 1.8 1.8 The 1967 budget for vanillin is overstated primarily because of excessive inventory built by principal customers in 1966. Monsanto's share of market is not threatened and the 1966 price increase of 250 per pound iB expected to hold. Profits will remain excellent but growth of vanillin sales will not occur. 0633794 -79- WATER PCB-00039904 FLUIDS - PRODUCT GROW ($ in Millions) Sales Gross Profit SAWS Other Income Division Contribution Corp. Met Income Acfojal_______________ 1967 -1963 . 196? OSM . 1965 -1266 Budoet 11.4 S.3 1.6 3.7 1.6 12.5 5.9 2.1 3.8 1.7 13.3 6,9 2.4 4.5 2.0 14.1 6.5 2.5 4.0 1.9 17.7 8.6 3.2 5.4 2.7 18.5 8.6 3.6 tl 5.1 2.2 As Jt of Salesi Gross profit GARS Corp. Met Income $ Sales/6 invest. 46.5 14.0 14.0 1.16 47.2 16.8 13.6 1.04 51.9 18.0 15.0 .78 46.1 17.7 13.5 .83 48.7 18.2 15.3 .91 46.6 19.4 11.8 .96 K BOI - Corp. Met Income 16,3 14.2 11.7 11.2 14.0 11.4 Gross Investment 9.8 12.0 17.1 16.9 19.5 19.2 Major products reported for the Fluids product group ar as followsi Aroolor and Therminol Fluids Pyrandol Fluids Skydrol 500A, 500b and Skydrol 7000 Skylube 600 Pace 81 82 83 84 -BO' 063379$ I WATER PCB-00039905 AKOCEOR AND THERKIKOI. FLUIDS (5 in Millions) Sales Grose Profit SARE Other Income Div, Contribution Corp. Met Income $ 5.3 $ 2.5 $ .5 $ .1 $ 2.1 $ .9 Selling Price/lb. Coet of Sales/lb. $ .154 S .080 As % of Saleei Grose Profit BARE Net Income $ Sale/$ invest. 47.7 9.4 17.4 .94 Por Salesi % KOI (corp. Net) 16.4 Grbse invest! Sales Internal Uee Total $ 5.7 $ 1.6 5 7.3 Capacity - MM lbst 6ales Internal Use Excess Total - 34.6 12.2 9.6 56.4 -Assasl. -13.62 1M 5.7 6.6 2.7 3.6 .7 .9 2.0 2.7 .8 1.2 .153 .082 .151 .069 46.7 12.5 14.4 .81 54.2 13.1 18.9 .83 11.7 15.8 7.1 7.9 1.6 2.1 8.7 10.0 37.3 11.4 7.7 56.4 43.6 14.8 .4 58.8 -i3.6S 7.3 3.8 .5 3.3 1.7 .150 .073 51.5 7.4 23.7 .85 20.1 8.6 2.2 10.. 8 48.7 16.4 4.5 69.6 1966 9.0 4.7 .8 1967 Budaet aa11 9.6 10. ] 5.3 6,71 1.0 1.(1 3.9 4.3 2.0 2.0 5,( I 2.< .153 .154 .074 .069 .15' .061 | 51,7 9.1 22.4 .94 55.0 9.9 20,8 1.00 55.E 9.1 21.E 1.1C 21.2 20.7 24.1 9.6 2.3 11.9 9.7 1.8 11.5 9.8 1.8 11.6 59.0 16.7 11.1 86.8 62.7 17.4 7.5 87,6 70.2 17.4 87.6 Sales and profitability of this family of products can be expected to continue in 1967. . Beyond 1967, sales growth may be reduced due to the substitution of plastic film for paper In capacitors since less aroclors are used per XVAft in units made with plastic film. However, all eigne lead to continued good profit ability on the aroclore and definite growth for the heat transfer fluids. -SI0633796 WATER PYRANOL FLUIDS ($ in Millions) Sales Gross Profit SARB Other Income Div, contribution Corp. Net Income Selling price/lb. Cost of Sales/lb. As % of Salest Gross Profit SARB Net Income $ Sales/? Invest. $ 1.7 $ .6 $ .2 $ $ .4 $ .2 $ .160 $ .102 Actual_____________ . 1967 -1962 1964 1966 Bpteat gap'ty 1.6 l.S 2.2 2.3 2.3 4.7 .6 .7 .6 .9 .8 1.7 .3 .3 .1 .1 .2 .4 .3 .4 .7 .6 .6 1.3 .1 .2 .4 .4 .3 .6 .196 .102 .196 .094 .149 .093 .191 .093 .144 .093 .144 .092 16.4 12.1 10.3 1.17 35.2 16.4 6.5 1.15 40.7 16.4 10.8 1.13 37.9 6.4 16.6 1.06 36.3 9.2 17.5 1.11 35.5 7.8 12.2 1.13 36.1 8.1 13.4 2.05 For Salesi % ROI (Corp. Net) 12.1 7.7 12.2 17.9 19.4 Gross Investi Sales Internal Use Total Capacity - MM lbst Sales Internal Use SXOOS8 Total $ 1.4 1.4 1.6 2.0 2.1 $ S 1.4 1.4 1.6 2.0 3'1 10.3 10.2 11.4 14.5 15.4 * '# * * * Multipurpose equipment Which causes a fluctuating capacity. 13.6 2.0 2.0 16.1 16.8 32.9 27.5 2.3 2.3 32.9 32.9 Sales growth can be expected to continue at a modest level and profitability will remain in the high earnings category. Although price reduction was budgeted for 1967, this is not expected to materialise. Profitability in 1967 will only be effected by higher SARB and Corporate Charge allocations. 62 0633797 WATER PCB-00039907 SKYDROL 500ft, 500B, AND SKYDROL 7000 ($ in Millions) Sales Gross Profit SAKS Other Income Div. Contribution Corp. Met Income -1961. $ 3.2 6 1.7 $ .5 $ $ 1.2 $ .6 .lafii 3.3 1.6 .5 1.1 .5 .im. 3.5 1.7 .5 1.2 .6 1? 65 3.6 1.9 .7 1.2 .7 v t1jL967 -2966 Budget 5.4 5.7 2.8 3.1 ,7 .9 2.1 2.2 1.1 1.1 Selling Price/lb, Cost of Sslss/lb. 61.468 1.459 1.447 1.526 1.602 1.626 $ .665 .452 .771 .708 .753 .740 As % of Sslest Gross Profit SAMS Net Income $ 6aLes/$ Invest. 54.9 14.1 18.2 1.69 53.8 15,9 17.0 1.54 51.6 15.2 17,5 1.45 53.9 20.0 16,8 1.65 53.0 13.6 21.2 1.31 54.5 15.0 18.7 1.72 For Sslest X ROl (Corp. Net) 30.8 26.1 25.2 30.8 27.8 32.2 Gross Invest t Sales Internal use Total . $ 2.0 2.1 2,4 2.4 4,1 3.3 $ $ 2.0 2.1 2.4 2.4 4.1 3.3 Capacity - MM ibst Sales Internal Use Excess Total 2.1 2.2 2.3 2.3 3.4 3.5 * * * * * 3.5 * Multipurpose equipment Which causes a.fluctuating capacity. Sales and profitability will continue the trend already established. the most significant event in 1966 was the final acceptance by the Industry of Skydrol 500B, our anti-cavitation fluid, to replace Skydrol 500A. this has thrown an obstacle in the -path of our potential competitors who have bsen near a breakthrough in developing a competitive product to Skydrol 5Q0A, Profitability is expected to continue at present high levels, Skydrol 7000 sales, for piston engine aircraft, will continue to decrease as the older planes are replaced by jets. 0633796 -83 fiKttPBE- 600 ($ in Millions} 1M2_ ASSafii___________________ . 1967 _ 1963 -1964 . 1965 _1966 Buduet Can'tv Sales gross Profit SAAB Other Income Div. Contribution Corp. Met income Selling Price/lb. Cost of Sales/lb. $ .9 1.6 1.2 1.1 1.3 1.5 1.5 $ .5 1,0 1.1 .4 .8 1.0 1.0 9 .1 .3 .2 .5 .8 .6 .6 9 9 .4 .7 .9 ( .1) .4 .4 9 .2 .3 .4 < .1) ( .1) .2 .2 $17,569 16.542 16.490 16.462 16.494 16.500 16.500 $ 6.961 6.448 .759 10.677 6,123 6.022 5.233 As % of Sales a gross Profit SAKE Net Income $ sales/$ invest. 60.4 15.2 20.3 1.71 61.0 18.4 18.7 .96 93.4 16.9 33.1 .26 35.1 41.1 (12.7) .26 62.9 60.1 ( 5.3) .26 63.5 37.7 11.6 .42 68.3 37.7 14.1 .42 For Sales* % ROI (Corp. Met) 34.7 18.0 8.5 ( 3.3) ( 2.0) 4.9 5.9 Gross Investi Sales Internal Use Total $ .5 1.7 4.6 4.2 3.6 3.5 3.5 $ $ .3 1.7 4.6 4.2 3.6 3.5 3.5 Capacity - MM lbst Sales Internal Use Excess Total .1 .1 .1 .1 .1 .1 .1 * + # * * .1 .1 * Multipurpose equipment Which causes a fluctuating capacity. Sales in 19&6, although greater than 1965, were leas' than 50% of budget due to over optimistic forecasting on the assumption that requirements would increase due to tho Vietnamese war. We are now convinced that only minor growth will occur until some future governmental action occurs to boost this program. At any rate, we will have at least 2 years notice before a major increase in demand is to be satisfied. In the interim, profitability can be expected to remain at near the same general level. Efforts are continuing to find other usee for the large scale plant which has never been used. Mo need has been uncovered to date. The low cost experienced in 1964 reflects the flow of highly favorable variances from intermediate materials (Meta Chlor phenol, M-Phenoxyphenol and OS124). The high cost in 1965 resulted from production difficulties plus intermediate requirements fulfilled from inventories produced in 1964, -840633799 INTERMEDIATES - product GROUP ($ in Millions) Sales Gross profit SARE Other income Division Contribution Corp. Met Income As % of Salesi Gross Profit SARE Corp. Net income $ Bales/? Invest. .my1962 Actual ____________ 1967 1964 _W6 1966 Budget 20.4 6*4 1.6 4,8 1.9 22.6 5.9 1.1 .1 4.9 1.9 22.5 5.9 1.1 .1 4.9 1.9 22.5 7.5 1.0 .1 6.6 3.1 27.5 8.7 .9 .1 7.9 3.9 25.2 7.3 1.0 6.3 2.5 31.2 7.9 9.5 .69 25.8 4.7 8.2 .67 26. S 4.6 8.2 .65 33.2 4.5 13.7 .67 31.9 3.3 14.3 .70 28.9 4.2 9.9 .61 % ROI - Corp. Met income 6.6 5.5 5.4 9.2 10.0 6.1 Gross investment 29.5 34.0 34.6 33.8 39.2 41.2 Major product* reported for the Intermediate* product group are as follows I H Acid Orthonitroaniline paranitroaniline Phenol 33. 86 87 88 89 0633800 WATER_PCB-00039910 Sales Gross Profit SAKE Other Income Div. Contribution corp. Net income selling Price/lb. Cost of Sales/lb. As K of Sales* Gross Profit GARS Net Inoome $ Sales/6 Invest. For Salest % ROI (Corp. Nat) Gross invest* Sales Internal use Total Capacity - MM lbs* Sales Internal use Excess Total H.Kffi ($ in Millions) _1262_ $ 1.6 6 .5 $ .1 9 9 .4 9 .2 9 .943 9 .641 ASjuel_________________ _ _ . 1967 --VISA .326.5 JL2SS Budget sspJJa: 1.7 1.9 1.9 1.8 1.9 2.3 .4 .4 .5 .4 .4 .4 .1 .1 .1 .1 .1 .1 .3 .3 .4 .3 ,3 .3 .1 .1 .2 .1 .1 .1 .837 .632 .837 .670 .949 .682 .960 .769 .859 .680 .859 ,697 32.1 7.9 9.9 .83 24.5 4.7 7.6 .79 19.9 4.9 5.5 .82 28.1 5.1 10.4 .66 19.9 3.5 6.7 .59 20. B 4.6 5.6 .64 18.8 4.2 5.3 .76 8.4 6.0 4.5 6.8 4.0 3.6 4.0 9 1.8 2.1 2.3 2.9 3.0 3.0 3.0 9 9 1.8 2.1 2.3 2.9 3.0 3.0 3.0 1.7 2.0 2.3 2.0 1.8 2.3 2.7 .7 .4 .1 .7 .9 .4 2.4 2.4 2.4 2.7 2.7 2.7 2.7 Recent information from dye manufacturers Indicates that the derivatives of H. Acid for the gray and black colors will not be in demand this year. The indicated sales of 2.3MM pounds are substantially overstated. Several months' downtime will be required during the summer to work off inventories and this product will wait for the fashion colors to change. So far, no threat from foreign imports hae occurred although with substantial world over-capacity probable, some price attrition will undoubtedly occur before the year-end. However, this price attrition will not go below the 664 per pound which ie the budgeted net price. -86- 0633601 WATER_PCB-00039911 orthonitroaniline ($ in Millions) Sales Gross Profit bare Other income Div, contribution Corp. Met income Selling Price/lb. Cost of Sales/lb, As X of Salest Grose Profit SAKE Set Income $ Sales/$ invent. For Salesi X R0I (Corp. Net) -JM8- $ .8 $ .5 $ .1 $ $ .4 9 .2 $ .446 9 .170 61.8 7.9 24.0 1.11 26.8 -12M .5 .7 .2 ,4 SJL_____ _i2S Budget .8 1.0 .8 .5 .6 .5 .8 .5 .2 .1 .434 .258 ,4 .2 .421 .203 .5 .3 ,424 .143 .6 .3 .427 .182 .5 .3 .403 .126 .5 .3 .403 .121 40.6 4.7 15.0 .77 51.7 4.8 22.6 1.05 66.4 4.0 33.9 .68 57.S 3.0 30.0 .98 68.8 4.0 32.0 1.18 70.0 4.0 32.7 1.19 11.6 23.6 23.0 29,5 37.9 38.8 Gross investi Sales Internal use Total 9 .7 .6 .7 1.2 1.1 .7 .7 $ 9 .7 .6 .7 1.2 1.1 .7 .7 Capacity - MM lbs* Sales Internal use Excess Total 1.7 1.1 1.7 1.9 2.5 2.0 2.0 * ' * * * * 2.0 2.0 * Multipurpose equipment Which causes a fluctuating capacity. A stronger sales volume and sales price are indicated for this product and operations are expected at capacity, A new, continuous process is being investigated for installation within two years providing pilot plant demonstrations are successful. -870633802 WATER PCB-00039912 wwaMwajm ($ in Millions) Sales gross profit GARB Other income Div. Contribution Corp. Met income Selling Prlce/lb. Coat of Salea/lb. 9 2.3 $ .7 $ .2 $ 9 .3 9 *2 $ .430 9 .305 Actual -1SL62 2.3 2.4 .7 .7 .1 .1 .6 .6 .2 .2 .429 .308 .416 .293 1.8 .7 .1 .6 .3 .427 .261 1967 -A2SS Budget fiSP-Ity. 2.4 3.2 3.2 .6 1.1 1.1 .1 .1 .6 1.0 1.0 .3 .4 .4 .404 .300 .390 .247 .390 .253 As % of Salesi gross Profit SAAB Met Income $ sales/g invest. 29.1 7.9 8.5 .55 28.2 4.7 9.3 .56 29.5 4.9 9.8 .64 38.9 4.0 15.6 .45 25.7 3.0 10.6 .65 36.7 4.0 13.8 .58 35.1 4.0 13.0 .58 For Salesi % KOI (Corp. Met) 4.7 5.3 6.3 6.9 6.9 8.0 7.6 Gross Investi sales Internal Use Total 9 4.1 4.1 3.7 4.1 3.8 5.5 5.5 5 .2 .4 .9 ,9 .9 .9 $ 4.1 4.3 4.1 5.0 4.7 6.4 6.4 Capacity - MM lbsi Sales Internal Usa Excess Total 5.3 5.4 5,8 4.3 6.0 e.i 8.1 .3 .7 1.0 1.6 2.5 2.5 * * * * Hr 10.6 10.6 * Multipurpose equipment which causes a fluctuating capacity. Substantial volume increase on PNA is forecast partly to supply the shortage of another PMA manufacturer. A price increase of 26 per pound has been effected in 1967. but not anticipated in the budget, and will be maintained throughout the current year. A new, continuous process for PMA is being demonstrated in the pilot plant and the 1927 plant currently used will be replaced if sufficient justification exists. ' -88' 0039809 WATER_PCB-00039913 PHENOL (? in Millions) ... Sales (1) Gross profit SARE Other income Div, Contribution Corp. Net income 1962 $ 6.3 $ 1.3 $ .5 $ $ .8 $ .3 Actual -km 6.2 5.2 .5 1.4 .3 .3 .2 1.1 .4 1965 4.5 1.4 .2 1.2 .5 1967 - 1966 Budaet SSPlt 4.6 3.8 1.4 1.3 .1 .2 3.8 1.3 .2 1.3 1.1 .6 .4 1.1 .4 Selling Price/lb. Cost of Sales/lb. As % of Salest Gross profit BARE Net Income $ Salas/$ Invest. For 6alest % ROI (Corp. Net) $ .126 $ .099 21,2 7.9 5.0 .40 2.0 .092 .084 .089 .066 .094 .066 .096 .100 .066 .067 .100 .067 8.3 26.0 30.1 31.7 33.4 33.4 4.7 4.9 4.5 3.2 4.0 4.0 .1 6.8 10.9 12.9 10.6 10.6 .41 .47 .53 .46 .39 .39 3.2 5.8 6.0 4.1 4.1 Gross Invest! Sales Internal use Total $ IS.9 $ 30.0 $ 45.9 15.1 28,8 43.9 11.1 34.5 45.6 8.4 35.6 44.0 9.9 36.6 46.5 9.9 38.8 48.7 9,9 38.8 48.7 Capacity - MM Ibsi Sales (1) Internal Use Excess Total (2) 50.4 119.1 ( 5.5) 164.0 67.5 146.0 (21.9) 191.6 58.3 196.0 (20.1) 234.2 47.3 218.9 (27.2) 239.0 47.6 38.0 206.9 219.6 ( 8.2) ( 3.4) 246,3 254.2 38.0 219.6 < 3.4) 254.2 (1) includes purchases for resale. (2) Avon annual capacity of 33.6MM lbs. included in 1962. The phenol market price ie especially weak and unquestionably the budgeted price indicated here is too high by at least Id. The volume of phenol available for sale is somewhat greater than budgeted and the product will be sold at a level about 15% above budget. Continued price pressure will be felt from substantial overcapacity developing from oil companies and from Union carbide. Efforts will be made to avoid expansion of phenol capacity in view of the deteriorating price. An effort will be made to substitute cyclohexanol/cyclohexanone products from Pensacola into adipic acid manufacture, thereby conserving phenol capacity. -89063360* WATER_PCB-00039914 PAPER CHEMICALS - PRODUCT GROUP ($ in Millions) Sales gross Profit SAKE Other Income Division Contribution Corp, Net Income Actual________________ 1967 1962 -1961 -im 1965 -list Budget 13.5 4.0 1.5 2.5 1.1 14.0 3.8 1.7 .1 2.2 .9 12.9 3.4 2.0 .1 1.5 .5 12.6 2.9 2.1 .8 .2 14.1 3.7 1.8 .1 1.9 .7 15.1 3.8 1.9 .1 2.0 6 As % of Sales Gross Profit SAKE Corp. Net Income $ Sales/6 invest. 29.7 11.3 7.8 .96 27.5 12.0 6.1 .95 26.4 15.6 3.5 .86 23.1 16.8 1.5 .96 26.0 12.5 5.2 .95 25.2 12.4 4,1 .97 # SOI - Corp. Net Income 7.5 5.8 3.0 1.4 4.9 4,0 Gross Investment 14.1 14.7 15.0 13.1 14.9 15.4 Major products rsportftd for the Paper Chemicals product group are as follows t Pace Aluminum Sulfate Mereise RE, TFL & Resin Sise KIP Pentaehlorophenol Eantobrite 91 92 93 94 90' 0633809 WATER_PCB-00039915 Sales Gross Profit BARE Other income Siv, Contribution Corp, Met income selling price/lb. Cost of sales/lb. As Jt of Sales i Gross Profit BARE Met Income ? Sales/? invest. For Salesi % ROI (Corp, Met) Gross invest] Sales Internal Dee Total Capacity - MM Ibsi Sales Internal Use Excess Total ALOMIMWM SUTiFATB (? In Millions) 1962 $ 1.5 $< .1) ? .2 $ $1 .3) ?{ .2) $ .017 $ .019 Actual____________ __________ 1967 1963 . MM -1965 . 1966 Budget Ap.:.t 1.5 1.5 1.7 1.6 1.6 ( .1) ( .2) ( .1) .1 .1 .2 .2 .3 .2 .2 1.9 .3 .2 ( .3) ( .4) < .4) ( .1) ( .1) ( .2) { .3) ( .1) < .1) ( .1) .1 .018 .019 .018 .020 .018 .020 .019 .019 .017 .018 .019 .016 ( 8.4) 11.4 (12.4) .60 ( 6.5) 12.0 (10.1) .57 (10.9) 15.6 (17.3) .56 ( 6.8) 16,6 (16.5) .99 8.3 12.4 < 5.7) .83 6.6 12.2 ( 6.7) .89 15.6 11,3 < 1.1 1.01 ( 7.5) ( 5.8) ( 9.6) (16.3) ( 4.7) ( 5.9) < 1.1 ? 2.6 2.7 2.7 1.7 1.9 1.8 1.8 $ ? 2.6 2.7 2.7 1.7 1.9 1.8 1.8 69.4 34.0 122.4 87.9 20.1 108.0 83.7 14.7 98.4 90.6 66.9 157.5 85.0 13.4 98.4 85.0 13.4 98.4 98.4 98.4 1967 will find alum in the second year of a modest gross profit in spite of the January 1 price increase due to additional cost of handling Bauxite and increased sulfur prices. ' -91- 0633806 | WATER PCB-00039916 HERSIZB RE, TFL ft BQS1M. SIZEKIP tlBCL. CP-2 & CD-2 DRV) ($ in Millions) Gales Cross Profit SAKE Other Income Div, Contribution Corp. Net Xnoome Selling Price/lb. Cost of Sales/lb. JUtS2- | 8.2 2.2 . 9 2.) 1.1 $ .177 f .108 AStSifil___________________ - 1967 1963 1964 jim Budget fiPE-'ty 8.6 7.5 6.8 8.0 6.5 8.5 3.2 2.7 2.2 2.4 2.9 2.9 1.0 1.2 1.1 1.0 1.1 1.1 2.2 1.5 1.1 1.4 1.8 1.8 1.0 .7 .5 .7 .8 .8 .170 .107 .157 .101 .146 .099 .141 .112 .098 .074 .112 .074 As ft of Sales i Cross profit SAM Met income 1 Sales/f Invest. 38.9 11.3 13.1 1.33 37.3 12.0 11.4 1.38 35.9 15.6 9.1 1.18 32.4 16.8 7.8 1.24 30.3 13.5 8.6 1.38 34,0 13.5 8.9 1.47 34.0 13.5 8.9 1.47 for Salesi % eoi (Corp. Met) 20.1 18.7 10.8 9.7 11.8 13.1 13.1 Cross Investi Sales internal use Total f S.4 6.3 6.4 5.5 8.8 5.8 5.8 1 S 8.4 8.2 6.4 8.5 8.8 8.8 5.8 Capacity - kh Ibsi Sales Internal use Excess Total 48, S * 80.3 * 47.8 * 46,6 * 86.4 75.8 75.8 ( 3,7) ( 2.7) 73.1 73.1 * Multipurpose equipment Which cause* e fluctuating capacity. Profits and volume oontlnue gratifying in these products. Continued efforts to hold else prices in the face of a declining resin market is major objective. A complete review of crude tall oil future position and effect on aiaa sales is expected to further increase profits. -92' 0633807 WATER_PC B-00039917 flBffMffiPFPPHBUPli ($ in Millions) Gales Gross profit SAKE Other income Div. contribution Corp. Net Income _ii62_. $ 1.6 $ .6 $ .2 $ $ .4 $ .2 ftctmil___________________ -. 1967 _ 1963 .1964 1965 -IMS Budget gap' ty 1.7 1.6 1.8 2.0 2.0 4.5 .5 *6 .5 .7 .8 2.C .2 .2 .3 .3 .2 .4 .3 .4 .2 .4 .6 l.t .1 .2 .2 .2 Selling Price/lb. Cost of Sales/lb. As % of sales t Gross Profit SARE Net income $ 6ales/$ invest. $ .169 $ .102 .161 .109 .156 .095 .142 .105 .144 .096 .152 .090 .is; ,oe: 39.8 11.3 13, B .59 31.8 12.0 8.0 .72 39.4 15.6 9.8 .72 26.2 17.1 2.1 .62 33.5 12.5 7.8 .59 40.9 12.3 9.4 .60 44.1 s.; 15. t 1.2: For Salesi X KOI (Corp. Net) 8.2 5.7 7.0 1.3 4.6 5.7 19. ( Gross Investi Sales Internal Use Total $ 2.7 2.4 2.3 2.9 3.4 3.3 3.( $ .6 1,0 1.0 .3 .8 .6 .< $ 3.5 3.4 3.3 3.2 4.2 3.9 4.; Capacity - MM Ibst Sales Internal Use Excess Total 9.4 10.4 10.5 12.6 14.0 13.2 29.: 3.6 5.6 5.5 4.9 4.1 4.1 16.1 * * * it * 33.4 33.4 * Multipurpose equipment Which causes a fluctuating capacity. The return from 25% to a 2054 discount on sales to Hood Treating Chemicals Company, plus a firming of prices in the market will increase the gross profit margin to the previous high level. 0633608 WATER_PCB-00039918 Sales Gross Profit SAKE Other Income Div, Contribution Corp. Met Income Selling Price/lb. Cost of sales/lb. As % of Salesi Gross Profit SAKS Met income $ Sales/$ invest. For Sales; % KOI (Corp. Net) Gross invest; Sales Internal Use Total Capacity - MM lbs; Sales Internal Use Excess Total SftNrppmg ($ in Millions) 1963- $ 1.1 6 .2 9 .1 $ 9 .1 6 $ .234 9 .194 ASJaaJ___________________ - 1967 1963 1964 1965 1966 Budost Can'tv 1.2 .9 .9 .9 1.0 1.6 .1 .1 .2 .3 .6 .1 .2 .2 .1 .1 .2 ( .1) { -1) ( .1) .1 .2 < .1) ( .1) ( .1) .4 .2 .225 .213 .229 .212 .227 .199 .224 .221 .176 .151 .221 .138 21.5 11.3 1.3 .42 5.5 12.0 ( 6.4) .43 7.4 15.6 (10.0) .34 12.2 17.2 ( 7.5) .50 21.1 12.5 1.8 .37 31.6 12.6 3.0 .46 37.6 10.0 10.0 .72 .6 ( 2.7) ( 3.4) ( 3.8) .7 1.4 7.2 9 2.7 2,7 2.8 1.8 2.5 2.2 2.3 9 $ 2.7 2.7 2.8 1.8 2.5 2.2 2.3 4.9 5.2 4.1 4.0 4.1 4.6 7.4 2.4 3.5 4.3 3.2 3.1 2.8 7.3 8.7 8.4 7.2 7.2 7.4 7.4 Volume is expected to grow only moderately; however, profit# will improve as cost targets are. achieved in 1967. . -94 0633609 WATER PCB-00039919 PETROLEUM ADDITIVES - PRODUCT GROUP {$ in Millions) Actual______________ _ 1967 1?6? 1963 1964 jm 1966 Budqet Sales Gross Profit BARE Other income Division contribution Corp. Met income As X of Salesi Gross Profit BARE Corp. Net Income 6 Sales/$ invest. 18.9 5.3 2.5 .1 2.9 1.1 19.3 5.3 2.5 .1 2.9 1.2 20.9 5.7 2.7 3.0 1.2 21.5 5.2 3.1 .1 2.2 .8 23.3 4.3 3.0 .1 1.4 .1 24.5 6.5 3.2 .2 3*5 i.i 27.9 13.0 5.8 1.05 27.6 13.1 6.0 1.19 27.3 12.9 5.9 1.26 24.2 14.4 3.5 1.00 18.7 13.0 .4 .80 26.6 13.0 4.4 .74 % ROI - Corp. Net Income 6.1 7.1 7.5 3.5 .3 3.3 Grose Investment 17.9 16.3 16.6 21.5 29.0 33.1 Major products reported for the Petroleum Additives product group are as follows j ' Santolube 393 Santolube 900 6 907 Santopoid 23 Ri & 23 KIA fl 96 97 98 950635810 WATER_PCB-00039920 smokm js?, ($ in Millions) Sales dross Profit SARJB Other Income Div. Contribution Corp. Net Income Selling Price/lb. Cost of Sales/lb. As % of Sales* Gross Profit SARE Net Income $ Sales/S invest. For sales* X ROX {Corp. Net) Gross invest* sales Internal Use Total Capacity - mm lbs* Sales Internal UBe Excess Total $ l.S $ .5 $ .2 $ 5 .3 9 .1 $ .230 $ .158 Actual___________________ 1967 -1211 JL2M -1111 Buduet Can'tv 1.7 1.9 1.9 1.8 1.8 3.1 .7 .7 .8 .6 .8 1.4 .3 .3 .3 .2 .2 .3 .4 .4 .5 .4 .6 1.1 .2 .2 .2 .2 .3 .5 .244 .145 .256 .163 .253 .153 .251 .259 .167 .141 .259 .139 33.5 13.9 0.1 1.74 40.8 14.2 11.3 1.35 36.2 13.7 11.0 2.87 39.3 15.6 13.2 2.32 33.4 14.1 10.2 1.80 45,6 15.0 15.1 1.45 46.3 11.1 17.7 2.25 14.1 15.2 31.7 30.7 18.3 21.9 39.8 9 .9 1.2 .7 .8 1.0 1.2 1.3 9 .6 1.4 .7 .7 .9 .9 .9 9 1.5 2.6 1.4 1.5 1.9 2.1 2.2 6.4 6.8 7.6 7.5 7.3 6.8 11. e 7.6 8.6 9.1 9.4 10.7 9.5 9.5 5.0 * * * * * 21.3 21.3 * Multipurpose equipment which causes a fluctuating capacity. Sales dropped in 1966 due to a major change in formulation by our major customer. However, the loss was recouped by increased sales in other products. Returns are still favorable and will remain bo in 1967. 1966 coat of goods were higher than budget or 196S actual due to price increase on a major caw material. Costs were also adversely affected by poor yields and process difficulties which will be corrected in 1967. A plant for this inhibitor will go into operation in Japan in the 3rd quarter, 1967. Plans are also underway to justify an installation in the U.K. 96' 0633811 SANTOLUBS 900 & 907 (? in Millions) Sales dross Profit SAKE Other income Div, Contribution Corp. Net Income Selling ?rice/Xb. Cost of sales/lb. As % of Salesi dross Profit SAKE Net Income $ sales/? invest. For Salest K KOI {Corp. Net) Orose investr Salas Internal use Total Capacity - MM Ibst Sales internal use Excess .Total 1962 $ $ $ $ $ $ $ 5 $ $ S 1953 _1964 ,2 .280 .229 1965 .3 .264 .225 9J Budget finp'ty .4 1.1 4.0 .1 .5 .2 .3 ( .1) < .1) .2 .1 .218 .196 .204 .184 .204 .178 20.6 9.7 5.2 2.541 14.7 13.2 <5.7) .332 10.2 13.4 (5.5) .675 9.7 14.1 (4.5) .789 12.7 8.2 1.7 2.292 13.1 (1.9) (3.7) (3.6) 3.9 .1 1.0 .6 1.4 1.8 .0 l.S 2.9 2.6 2.S .9 2.5 3.S 4.0 4.3 .5 1.3 l.S 5.5 19.6 7.3 7.0 11.9 15.0 15.0 14.1 * * * 34,6 34.6 * Multipurpose equipment which causes a fluctuating capacity. yields and capacity in this new plant were demonstrated for the first time in 1966 hut returns continue at an unsatisfactory level. The prospect for these products was originally forecasted to show & 11.OK KOI in 1966. The poor performance was due to (1) a 1.94/lb. unanticipated royalty to Luhrizol, (2) over optimism on aales expected and (3) Serious price attrition greater than anticipated. forecasted salea growth in the next 3 years will reach an annual rate of 35MM lbs. This, along With known process improvements, should bring the ROI to a 4% level by 1970. 0633612 -97- WATER_PCB-00039922 SANTOPOIP 23. R1 & 23 RlA (? in Millions) Sales Gross Profit BARE Other Income Div. Contribution Corp. Net Income -L22_ $ 2.2 $ .8 ? .3 $ $ .5 $ .2 Actual____________ ________ ______ 1967 -1SS3 -196* 1965 -Lass Budget CaD'tv 2.4 2.4 2.8 2.3 l.B 2.1 .8 .8 1.1 .8 .9 1.0 .3 .3 .4 .3 .3 .3 .5 .5 .7 .5 .6 .7 .2 .2 .4 .3 .3 .4 Selling Price/lb. Cost of Sales/lb. $ .306 9 .201 .303 .201 .306 .201 .304 .188 .303 .297 .191 .156 .297 .155 As K of Salesi Gross Profit SAKE Net Income $ Sales/S Invest. 34,5 13. B 8.6 1.52 33.8 14.2 8.0 1.43 34,2 13.8 9,5 1.64 38.2 15.3 12.6 1.84 36,8 14.4 11.2 1.11 47.4 14.9 15.6 1.23 47.9 13.6 16.7 1.40 For Salesi % KOI (Corp. Net) 13.0 11.4 15.5 23.2 12.4 19.3 23.4 Gross Invest! Sales internal Use Total $ 1.5 1.7 1.5 1.5 2.0 1.5 1.5 $ $ 1.5 1.7 1.5 1.5 2.0 1.5 1.5 Capacity - MM lbsj Sales Intsrnal Use Excess Total 7.2 7.8 7.9 9.3 7.5 6.1 7.1 1.0 * * * * 7.1 7.1 * Multipurpose equipment Which causes a fluctuating capacity. Costs in 1966 increased over 1965 due to the poor performance on Santolube 393, a major component of this gear additive. Bales remained at a high level due to government orders because of the Vietnam conflict;. However, losses in sales are being experienced due to market acceptance of a com petitive product of different composition. Further losses are expected in 1967 due this competitive action and an anticipation of lower sales to the government. The end of 1967 should see us well along in development of a new product to combat competitive in-roads. Profit margins on the remaining 23ri & A business will continue in the high return category. -98- 0633813 PLASTICIZERS - PRODUCT GROUP ($ in Millions) Sales Gross Profit SAKE Other Income Division Contribution Corp. Met Income Actual______________ i967 1962 JM 1964 .Jag 1966 Budoet 39.4 5.6 2.2 .2 3.6 1.2 41.9 5.9 2.5 .1 3.5 .a 46.5 9.9 2.8 .1 7.2 2.5 51.0 11.0 2.7 ,2 8.5 3.6 58.1 13,5 3.3 .2 10.4 4.2 58.6 13.1 3.1 .1 10.1 3.6 As % of Sales> Gross profit BARE Corp, Net Income $ Salee/S invest. 14.2 5.7 2.9 .71 14.0 5.9 2.0 .69 21.3 6.0 5.5 .78 21.6 5.3 7.0 .81 23.3 5.7 7.2 .87 22.4 5.3 6.1 .80 % KOI - Corp. Net Income 2.1 1.4 4.3 5.7 6.2 4.9 Gross investment 55.3 60.4 59.5 62.7 67.1 73.3 Major products reported for the Plasticizers product group are as follows < santicizer 141 santicicer 160 Page 100 101 0633814 -99 WATER PCB-00039924 ($ in Millions) Sales Gross Profit SAKE Other Income Siv. Contribution Corp. Net Income Gelling Price/lb. Cost of Sales/lb. As % of Salasi Gross profit GARS Net Income $ Sales/$ invest. $ 3.1 $ 1.3 $ .1 $ $ 1.2 S .5 S .327 $ .191 Actual___________________ 1967 1963 -ISM , 1865 -li>66 Bplapt Cap-tv 2.9 2.8 2.6 2.4 3.2 3.2 1.3 1.3 1.4 1.1 1.3 1.3 .2 .2 .2 .1 .2 .2 1.1 1.1 1.2 1.0 1.1 1.1 .5 .5 .7 .5 .5 .5 .325 .178 .320 .168 .331 .157 .327 .262 .175 .157 .262 .157 41.6 5.7 16.5 .86 45.1 5.9 16.3 .92 47.6 6.0 19.4 .85 52.4 5.4 26.1 1.00 46.5 6.1 20.8 .93 40.3 5.9 15.3 .82 40.3 5.9 15.3 .82 for Selesi X ROI {Corp. Net) 14.1 15.9 16.5 26.1 19.3 12.6 12.6 Gross Invest* Sales Internal uae Total 5 3.7 3.0 3.3 2.6 2.6 3.9 3.9 8 .3 ,5 .8 .5 .4 .3 .3 $ 4.0 3.5 4.1 3.1 3.0 4.2 4.2 Capacity - MM lbat Salas Internal Use Excess Total 9.6 8.9 8.7 7.8 7.4 12.3 12.3 .9 2.2 2.5 2.1 1.4 1.3 1.3 ( .5) ( .5) * * * * 13.1 13.1 * Multipurpose equipment Which causes a fluctuating capacity. Prices remained firm in 1966 with cresylic acid, therefore TCP, short. Raw material prices plus higher percentage shipped overseas with attendant higher packing costs account for increased costs. Strategy Change, past budget, will see us holding current prices and combating TCP with two new phosphate esters, intent is to hold food grade business with our S-141, at about past levels and building future volume with the new ones. -100- 0633615 WATER PCB-00039925 SAMTICIZBR 160 ($ in Millions) A$Sl___________________ 1967 _12_ _12il 1964 1965 0266 Budget Sales Gross profit SAKE Other income Div. Contribution Corp. Met income Selling Price/lb. Cost of Sales/lb. As % of Salesi Gross Profit SARE Met Income $ Sales/S invest. 6 6.6 $ .5 $ .4 $ 6 .1 $ $ .190 ? .177 6.8 1.1 .3 .8 .2 .167 .139 8.2 2.8 .5 2.3 1.0 .162 .107 8.9 3.3 .6 .1 2.8 1.4 .159 .100 10.4 3.7 .7 3.0 1.5 .153 .098 9.3 3.6 .5 3.1 1.4 .157 .096 u.i 4*3 e5 3,8 1.7 .157 .096 6.8 5.7 ( .7) ,60 16.6 5.9 3.3 .63 33.9 6,0 12.2 .83 37.2 6.8 16.2 1.00 35.8 6.9 14,1 .96 39.0 5.7 14.8 .87 39,0 5.2 15.5 1.03 For salesi X ROI (Corp. Met} ( .4) 2.1 10.2 16.3 13,7 12.9 15.9 Gross investi Sales Internal use Total $ 11.0 $ 3.6 S 14.6 10.7 5.2 15.9 9.8 4.3 14.1 8.9 4.0 12.9 10.8 5.2 16.0 10.6 4.9 15.5 10.8 4.9 15.7 Capacity - MM lbsi Sales Internal Use Excess Total 34.9 13.0 * 40.3 21.4 26.6 88.3 50.4 26.1 ( 4.2) 72.3 56.0 31.5 * 67.8 39.7 * 58.8 34.3 11.9 105.0 70,8 34.2 105.0 * Multipurpose equipment which causes a fluctuating capacity. 1966 saw major volumes moving to Europe preparatory to Antwerp start-up. Drop in pricing reflects the lower net-back, from this effort. 1967 volume down as Antwerp picks up Europe and some rest of world business. For future we see within 2 to 3 years again selling out domestic capacity however, there will be some price attrition in the flooring end of the business perhaps as low as 13 to 140/lb. 0633616 101- WATER_PCB-00039926 RES1H MATERIALS - PRODPCT GROUP ($ in Millions) Gales Gross Profit 8Wffl Other Income Division Contribution Corp. Met Income Actual_____________ ,, 1967 _13.62. 0.963 OSM .jaa -1966 Eadaafc 20.3 4.2 1.7 2.S .9 1B.7 3.1 1.6 1.5 1.1 20.6 5.3 1.5 .1 3.9 1.2 22.6 5.2 1.6 .3 3.9 1.2 24.0 5.4 1.2 .1 4.3 1.5 26.6 5.4 1.3 .1 4.2 1.2 As X of Salest Gross Profit SARB Corp. Hat Income 0 Sales/$ Invest. 20.6 8.4 3.9 .51 16.5 8.7 1.0 .48 25.6 7.3 5.9 .52 23.0 7.3 5,5 .51 22.4 4.8 6.1 .51 20.3 4.9 4.5 .48 X KOI - Corp. Met Income 2.0 .5 3.1 2.8 3.1 2.1 Gross investment 39.7 38.9 39.6 44.1 47.2 55.3 Major products reported for the Resin Materials product group are as follows t Adipic Acid Bisphenol A Maleic Anhydride Phthalic Anhydride Page 103 104 105 106 -102 063981? WATER PCB-00039927 Sales Gross Profit SAKE Other Income Dlv, contribution Corp. Net Income Selling Price/lb. Cost of Sales/lb. Aa % of Sales* Gross Profit SAKE Met Income $ Sales/$ Invest. For Seles * ' K ROI (Corp. Net) Gross invest* Sales Internal Use Total Capacity - MM lbs* Sales Internal Use Excess ' Total MIEIC ACID (8 in Millions) 1962 $ 6.1 $ 3.0 $ .5 $ .1 $ 2.6 8 1.1 8 .257 8 .129 ASSaal__________________ 1967 _1S2 1964 -19.65 --19,66 P.yd.ge Cap1 tv 5.7 6.8 9.0 9.5 8.6 8.9 3.0 4.1 4.4 4.7 4.3 4.S .5 .5 .6 .5 .5 .4 .1 .1 .2 .1 2.6 3.7 4.0 4.3 3.8 4.1 1.0 1.7 2.0 2.2 1.7 1.8 .259 .121 .240 .096 .225 .115 .209 .104 .194 .097 .194 .096 49.8 8.2 17.3 .59 53.2 8.7 18.1 .79 60,0 7.4 24.4 .74 48.9 7.0 22.7 .67 50.2 5.3 23.0 .61 49.9 5.3 19.3 .64 50.5 5.2 19.9 .67 10.3 14.2 18.3 15.2 14.0 12.4 13.3 8 10.3 8 2.8 8 13.1 7.2 6.1 13.3 9.3 6.3 15.6 13.4 5.3 18.7 15.5 3.5 19.0 13.4 2.7 16.1 13.4 2.7 16,1 23.7 7.3 3.8 34.8 21.9 23.7 (8.7) 36.9 28.5 22.8 (11.0) 40.3 39.8 IS.7 (7.5) 48.0 45.2 11.5 (2.7) 54.0 44.2 8.0 1.8 54.0 46.0 8.0 54.0 Volume improved in 1966 end costs improved enough to counteract price attrition. vie expect further price attrition in 196? as textile adipic enters the market place, we intend to remain competitive in order to hold our 65% market share in the non-nylon market. - Longer range prices will deteriorate further reaching 166 within 2 years. Even with thia pricing adipic acid will be a good profit earner. 0633818 103' WATER PCB-00039928 6 ales oroes Profit SAM Other income Div. Contribution Corp, Met Income Selling Price/lb. Cost of Sales/lb. As X of Sales i Gross Profit SAM Met income 9 Sales/? invest. For Sale*i % poi (corp.- Met) Gross Investt Sales Internal Use Total Capacity - MM lbs Sales Internal Usa Excess Total - ($ in Millions) $ 2.6 e . ? .2 $ 9 .7 $ .2 ? .256 9 .172 Actual _________________ 1967 . 1?64 -.12& JL2M Budcet ap.:*y 3.3 3.4 3.1 3.3 4.5 4.6 1.1 1.3 1.0 .2 1.2 1.2 .3 .3 .2 .1 .2 .2 .a 1.0 .3 .4 .8 .1 1.0 .3 ( .1) .4 1.0 .4 .224 .149 .225 .217 .142 ..147 .205 .205 .192 .150 .205 .150 32.7 8.4 9.4 .57 33.6 8.7 9.1 .71 37.0 7.4 12.4 .63 32.3 7.0 10.6 .46 6.2 4.6 ( 4.3) .42 26.8 4.7 e.o .50 26.8 4.6 8.0 .51 5.4 6.5 7.8 4.9 ( 1.8) 4.0 4.1 9 4.6 4.6 S.5 6.8 B.l 9.0 9.0 9 .1 .1 .1 .2 .3 .3 .3 $ 4.7 4.7 5.6 7.0 8.4 9.3 9.3 10.2 .2 3.1 13.5 14.6 .4 ( 1.4) 13.6 15.3 .5 ( 1.8) 14.0 14.4 1.6 ( 2.0) 14.0 16.3 .7 4.0 21.0 22.0 .8 .2 23.0 22.2 .8 23.0 1966 saw an unsuccessful polycarbonate grade BPA start-up. At year-end we still do not have an operating polycarbonate plant and it will be most of 1967 until we do. We expect to hold and grow in the epoxy grade marhet, however, we will be hard pressed to neat the 1967 budget without polycarbonate grade sales. We do not see any major price attrition over the next several years. Maximum effort will be expended in plant revisions and demonstration,. -104' 0633819 WATER_PCB-00039929 * Sales Gross Profit SARIS Other Income Div. Contribution Corp, Net Income Selling Prlce/lb. Coat of Salea/lb. Aa % of Salasj Oroas Profit BARS Net Income $ Sales/? inveat. For Salesi % ROI (Corp. Net) Grose Investi Sales Internal Nee Total Capacity - MM lbe Sales Internal vse Excess Total ($ in Millions) _A262_ $ 3.4 $ .6 .3 .3 $ .1 6 .170 ? .143 Afit.MSl___________________ lj)63 . 1?64 1965 -1266 2.9 3.4 3.9 4.4 .3 .4 .3 .7 .3 .3 .3 .2 1967 Budget 8g.:ia 5.1 5.1 .4 .4 .2 .2 .1 ( .1) ( .1) ( .2) .5 .2 .2 .1 ( .1) < .1) .134 .121 .120 .105 .112 .104 .126 .130 .109 .119 .130 .119 16.7 8.4 2.1 .46 9.6 8.7 < 1.8) .40 12.5 7.4 ( 1.7) .44 7.0 7.0 ( 4.9) .48 14,9 4.6 2.5 .62 8.0 4.6 ( .7) .69 8.0 4.6 ( .7) .69 1.0 ( .7) ( .8) ( 2.3) 1.5 ( .5) ( .5) 7.3 6 3.4 10.7 7.3 3.6 10.9 7.7 4.0 11.7 8.2 3.B 12.0 7.1 4.3 11.4 7.3 4.3 11.6 7.3 4.3 11.6 19.7 10.3 18.0 48.0 21.9 12.2 11.0 45.1 27.4 15.8 .6 43.8 35.1 18.4 ( 5.5) 4B.0 34.6 23.7 ( 2,5) 55.8 39.2 23.1 (12.2) 50.1 39.2 23.1 (12,2) 50.1 Prices firmed markedly during last half of 1966 and look firm for 1967 *3 demand and capacity meet, current pricing 15.5d/lb. Our expansion will come on stream at mid-year, Costa in 1967 reflect start-up expense to be Charged off. We will then be the largest domestic supplier of maleic. Long term we should be in the best competitive' position with this product. 1050633620 WATER_PCB-00039930 Sales Gross Profit SAKE Other income Div. Contribution Corp. Met income Selling Prics/lb. Cost of Balee/lb. As % of salesi Gross Profit SARK Met Income $ Sales/S invest. For Salesi % SOI (Corp. Met) Gross Invest! Sales internal Use Total Capacity - MM lbst Sales Internal use Excess Total mBflhlg AHfflfPMP? {$ in Millions) 1962 S 5.3 ( .2) $ .4 $ $( .6) S( .4) $ .137 ? .141 ftfifolSi___________________ _ 1967 1963 - 1964 j.9?? 1966 Budget Cab*tv 3.B ( 1.3) .3 ( 1.6) ( .6) 3.8 .1 .3 ( .2} ( .3) 3.3 ( .2) .3 .1 ( .4) ( .4) 3.6 .4 .2 .2 ( .1) 4.9 1.1 .2 .9 .3 6.6 1.5 .3 1.2 .6 .091 .123 .100 .096 .081 .086 .092 .099 .083 .077 .099 .077 ( 3.1) 8.3 ( 6.6) .48 (34.7) 8.7 (21.6) .29 2.4 7.4 ( 7.6) .41 ( 5.5) 7.9 (13.2) .36 10.3 5.2 ( 2.4) .40 22.2 4.6 5.4 .48 22.4 3.9 6.9 .63 ( 3.2) ( 6.2) ( 3.0) ( 4.8) ( .9) 2.6 4.4 $ 11.1 $ 15.0 $ 26.1 13.3 16.7 30.2 9.6 12.6 22.2 9.0 11.7 20.7 9.1 12.2 21.3 10.2 10.8 21.0 10.4 10.8 21.2 38.5 54.3 69.5 162.3 41.7 58.6 62.7 163.2 37.6 75.2 28.2 141.2 40.2 77.1 ( 8.8) 108.5 39.4 49.1 87,5 84.6 (18.1) 17.6 10B.8 151.3 66.8 B4.5 151.3 Prices firmed considerably in last quarter of 1966 and at 1st of 1967. Current market firm at 129, supply/demand still snug and should remain so in 1967 and 1968. ' Chocolate Bayou due to come on stream in mid-1967, we will shut down Queeny at end of year. 1966 will see Monsanto with largest volume - least cost facilities. Long term feed stock supplies - naphthalene or Ortho xylene will govern phthalic profitability. We are planning now to he in an advantageous position. . 1060631621 RUBBER CHEMICALS - PRODUCT GROUP ($ in Millions) Actual ____________ 196? 1962 1963 -im 1965 1966 Budget Salas Cross Profit SAKE Other Income Division Contribution Corp. Nat Income 23.5 7.7 1.9 .2 6,0 2.5 23.4 7.2 2.2 .2 5.2 2.1 24.9 8.3 2.3 .2 6.2 2.7 26.6 9.1 2.4 .2 6.9 3.4 32.2 10.3 2.6 .2 7.9 3.8 37,1 12.0 2.8 .2 9.4 4.0 As % of Salest Gross Profit SAKS Corp, Nat Income $ Sales/? invest. 32.a 6,1 10.6 .96 30.7 9.4 9.1 .98 33.5 9.2 10.9 .97 34.3 8.9 12.8 .88 32.0 8.1 11.7 .95 32.3 7.6 10.6 1.03 X ROI - corp. Net Income 10.2 8.0 10.6 11.2 11.1 11.1 Gross Investment 24.4 26.5 25.7 30.4 34.0 35.9 Major products reported for the Rubber Chemicals product group are as followsi 2*3& Flectol H Santocure and Cyclex Santocure MOR and MOR 90 Santocure NS and Cyclex b Santoflex AM and Ajone E Santoflax DP and Ajona DD Santoflex 13 and Ajona HP Santoflax 77 and Ajona H Santowhite crystals and Santonox 108 109 110 111 112 113 114 115 116 -1070633822 WATER Sales Gross Profit SAKE Other Income Div. Contribution Corp. Net Income Selling Price/lb. Cost of Sales/lb. As K of Saleet Grose Profit SANE Net income $ sales/8 invest. For Salest % SOI (Corp. Net) Gross Invest! sales Internal use Total Capacity - mm lbst Sales Internal Use Excess Total lUStSfb Jt ($ in Millions) .,19.63, $ .6 ?( .1) ? $ $( .1) $( .1) $ .541 $ .594 Actual___________________ . 1967 1963 1965 1?6$ Budget Cap'ty .6 .6 .6 .9 .9 1.0 .2 .2 .2 .3 .4 .4 .1 .1 .1 .1 .1 .1 .1 .1 .1 .2 .3 .3 .1 .1 .1 .2 .546 .403 .537 .387 .545 .377 .539 .548 .337 .324 .548 .318 ( 9.7) 6.1 (11.3) .63 26.3 9.4 6.0 .59 27.9 9.3 6.1 .52 30.8 8.8 8.5 .50 37.5 8.0 13.9 .72 40.9 7.6 13.9 .72 41.9 7.3 14.9 .77 ' ( 7.1) 3.5 3.3 4.3 10.0 10.0 11.5 $ .9 5 t .9 .9 1.1 1.3 1.2 1.3 1.3 .9 !>1 1.3 1.2 1.3 1.3 1.0 1.0 1.1 1.2 1.6 1.7 1.6 1.7 .9 .7 .6 .2 ,1 2.7 1.9 1.6. 1.8 1.8 i.e 1.8 This product continues to lmprove"in profitability, and we expect the improvement to be maintained through 1967. increased business in both tire end non-tire market is foreseen. The improvement in the sales/investment ratio is due to a change in allocation of Nitro Industrial Corporation investment in 1966 and 1967. -108- 0633823 WATER PCB-00039933 SANTOCURB & CYCLEX ($ in Millions) Sales Gross Profit SAKE Other income Div. Contribution Corp. Net Income 1962 $ 1.6 $ .8 $ .1 $ $ .7 $ .3 Actual__________________ _ 1967 . as 0264 1965 1966 Budget 4EOi 1.5 1.6 1.7 1.1 1,2 1.4 .7 .8 .9 .5 ,7 .8 .1 .1 .2 .1 .1 .1 .6 .7 .7 .4 .6 .7 .3 .3 .4 .2 .3 .3 Selling Price/lb. Cost of salea/lb. $ .641 $ .331 ,651 . 344 .633 .317 .578 .280 .636 .587 .342 .259 .587 .253 Ab X of Sales> Gross profit sare Net Income $ Sales/$ Invest. 48.4 8.1 18.1 1.74 47.1 9.4 15.8 1.37 49.9 9.3 20.3 1.53 SI.7 8.8 23.5 1.06 46.2 8.1 20.4 1.15 55.8 7.7 22.6 1.03 56.9 7.0 23.9 1.20 For Sales< % ROI (Corp. Net) 31.5 23.0 31.4 25.0 23.4 23,4 28.6 Gross Investi Sales Internal use Total 9 .9 1.1 1.0 1.6 1.0 1.1 1.2 9 .1 $ 1.0 1.1 1.0 1.6 1.0 1.1 1.2 Capacity - MM IbSi Sales internal use Excess Total 2.5 2.4 2.5 3.0 1.8 2.0 2.4 5 .4 * * * * * 2.4 2.4 * Multipurpose equipment Which causes a fluctuating capacity. Loss of the American Cyanamid business due to their decision to make their own material, plus a switch to NS by O.S. Rubber, reduced volume in 1966. Costs were high due to the need to rework material. Profitability and volume will improve in 1967. 0633824 -109- WATER_PCB-00039934 SAHTOCURB MOR & MOR 90 ($ in Millions) 1962 Afifaal_____________________ . 1967 1963 J964 _ 19.65 1966 Budget Cap1ty Bales gross Profit BARB Other Income Div. Contribution Corp. net Income Selling Price/lb. Cost of Sales/lb. As X of Balest Gross Profit SARE Net Income $ Sales/$ Invest. For salesi X SOI (Corp. Net) Gross Investi Sales Internal Use Total $ .1 $( .3) $ $ $< .3) $( .1) .3 ( .2) .1 ( .3) ( !> $ .640 .658 63.200 1.105 .6 ( .1) .1 ( .2) ( .1) .671 .747 .8 .1 ( .1) ( .1) .669 .650 1.4 .1 .1 .679 .623 1.8 .4 .1 .3 .1 .673 .505 1.8 .4 .1 .3 .1 .673 .505 (400.0) 7.8 (232.8) .05 (68.0) 9.4 (42.6) .30 (11.4) 9.3 (14.5) .54 2.8 B.8 ( 5.9) 1.08 8.2 8.0 ( 1.9) 1.15 25.0 7.7 6.5 .95 25.0 7.7 6.5 .95 (12.4) (12.B) ( 7.8) ( 6.3) ( 2.2) 6.1 6.1 6 1.2 1.1 1.2 $ .2 $ 1.2 1.3 1.2 .8 1.2 1.9 1.9 .8 1.2 1.9 1.9 Capacity - MM lbst Bales Internal Usa Excess Total .1 .5 1.0 1.2 2.0 2.7 2.7 ( .6) ( .6) * * * * * ' 2.1 2.1 * Multipurpose equipment Which causes e fluctuating capacity. In 1966 a large portion of the sales included material supplied from the OK until the quality of U.S, produced material was checked and accepted by b.F. Goodrich, a new major customer. This portion of the sales in 1966 were made at aero profit. In 196? we expect to increase business, specifically with B.F. Goodrich, thereby improving both profitability and ROI. It will be noted that the investment shows a marked increase. This is due to utilising the facilities full time for this product in 1967 compared with utilizing them part time for other products in 1966. -110- 0633626 fiMWagVRg as ANDCYCLBXB (XHCL. PELLETS) ($ in Millions) Sales Gross Profit BARE Other Income Div. Contribution Corp, Net income Selling Price/lb. Cost of Sales/lb. As % of Salesi Gross Profit EARS Net Income $ Sales/6 Invest. 1962 $ 3.0 $ 1.0 $ .2 $ $ .6 $ .4 $ .484 6 .315 Actual -ia 1964 3.1 3.5 .9 1.1 .3 .3 .6 .8 .3 .3 .439 .310 .421 .295 1965 4.0 1.2 .4 .8 .4 .407 .288 _____ 1967 1966 Budget Can't 5.0 5.3 1.8 2.0 .4 .4 6.3 2.4 .4 1.4 1.6 .7 .7 2.0 .9 .416 .410 .267 .258 .410 .251 34.9 8.1 11.8 1.08 29.4 9.3 8.4 .89 30.0 9.2 9.0 .97 29.4 8.9 9.9 .92 35.7 8.1 13.8 .92 37.1 7.6 13.3 1.04 38.8 6.8 14.8 1.20 For Salesr 54 ROI (Corp. Met) 12.8 7.5 8.7 9.1 12.6 13.8 17.9 Grose Invest i Sales Internal Use Total $ 2.8 3.5 3.6 4.4 5.4 $ $ 2.8 3.5 3.6 4.4 5.4 Capacity - MM lbsi Sales Internal Use Excess Total 6.2 7.0 8.3 9.8 12.0 * * *** * Multipurpose equipment Which causes a fluctuating capacity. 5.1 5.1 12.9 2.4 15.3 5.2 5,2 15.3 15.3 A modest increase in sales ie budgeted for 1967, with an equivalent improve ment in gross profit and ROI. 0633626 -lll- WATER SMTQPtEX AW MP AJPNE 15 (INC!.. A-31. A-85. GAW> ($ in Millions) Sales Gross Profit SAKS Other Income Div. Contribution corp. wet Income -jaaL 5 6.5 ? 3.3 $ .5 $ .1 $ 2.9 5 1.3 Actual -13S1 . 1964 5.9 3.7 3.3 2.1 .6 .3 .1 .1 2.6 1.9 1.3 .9 ________ -- 1967 -1.P6.5 Jl6 Budcet Cap'tv 2.5 1.7 1.3 2.6 1.5 .9 .7 1.5 .2 .1 .1 .1 1.3 .6 .6 1.4 .7 .4 .3 .7 Selling Price/lb. Cost of salesAb. $ .606 $ .292 .582 .255 .614 .257 .603 .245 .554 .467 .253 .214 .467 .203 .As % of Salesi Gross Profit SARA Net income $ Sales/$ Invest. 51.6 6.1 19.7 1.07 56.2 9.4 21.8 1.00 56.1 9.2 24.2 1.07 59.4 8.6 26.4 1.11 54.3 8.0 24.6 .94 54.2 7.6 21.3 .83 56,5 5.2 25,2 1.51 For Salsai % KOI (Corp. Net,) 21.0 21.9 25.6 31.7 23.4 17.6 37.9 Gross investt Sales Internal Use Total $ 6.1 5.9 3.5 2.2 1.8 1.6 1.7 $ 1.6 1.9 2.3 2.5 3.2 2.8 2.6 $ 7.7 7.8 5.8 4.7 5.0 4.4 4.5 Capacity - MM lbst Sales internal Use Excess Total 10.7 10.2 6.0 4.1 3.1 2.8 5.6 3.3 4.3 5.1 6.5 7.0 7.2 7.2 2.8 * * * * 12.8 12.6 * Multipurpose equipment which causes a fluctuating capacity. This product is becoming obsolescent, showing reduced, but still high, profitability and KOI. We generally expect such losses in AW to be made up by gains in Santoflexes 13 and 77. -112' 0633B27 WATER_PCB-00039937 SANT0F1.SX DP_ftPP_ftKHe Ei>. (IMg., BANTOFLEX 75, AJONB DDXl ($ in Millions) ^----- 1962 Actual____________________ _ 1967 -1963 1964 1965 1966 Budcet Sales Gross Profit SAKE Other Income I>iv, Contribution Corp. Net Income Selling Price/lb. Coet of Sales/lb. As % of Sales* Cross Profit BARE Net Income $ Seles/? invest. For Salesi % roi (Corp. Net) Cross investi Sales Internal Use Total Capacity - MM lbs> Sales Internal Use Excess Total ' 9 4.2 9 1.9 $ .3 9 S 1.6 9 .7 9 .415 9 .231 3.6 1.6 .3 1.3 .6 .410 .228 2.9 1.4 .3 1.1 .5 .391 .207 2.8 1.2 .2 1.0 .5 .387 .219 3.1 1.5 .3 1.2 .7 .379 .200 3.0 1.3 .2 1.1 .6 .388 .214 4.0 1.9 .3 1.6 .8 .388 .207 44.4 a.l 16.8 1. 32 44.4 9.4 16.1 1.09 46.9 9.3 18.5 1.27 43.4 9.0 19.0 1.03 47.2 8.2 21.7 1.54 45.0 7.6 IB.4 1.57 46.7 6.3 20.2 1.99 22.1 17.6 23.5 19.6 33.5 29.0 40.3 9 3.2 3.3 2.3 2.7 2.0 1.9 2.0 9 $ 3.2 3.3 2.3 2.7 2.0 1.9 2.0 10.1 8.7 7.4 7.2 8.2 7.7 10,3 2.6 * * * 4 * 10.3 10.3 * Multipurpose equipment Which causes a fluctuating capacity. Reduced sales in face of the trend toward Santoflexes 13 and 77 give reduced profitability and ROI. These still remain well above average, however, and we expect them to continue in this way. The improved sales/investment ratio in 1966 and 1967 results from lower "buy-in" investment from Inorganic due to discontinuance of hard Alkybenzene production. -1130633626 WATER SANTOFtEX 13 AND AJONE HP (ItfCIi. 8AHT0FLEX 361 ($ in Millions) Sales dross Profit BARS Other income Div, Contribution Corp. Net Income Selling Pries/lb. Cost of Salss/lb, As % of Salesi dross profit SAAB Not income $ Sales/S invest. 1962 $ 3 $ 9 9 9 9 $ Actual___________________ 1967 1983 . lift* 1965 . 13&S Budget Can'tv .2 3.2 5.3 7.6 9.1 10,2 ( .1) .9 1.8 2.3 3,3 3.8 .3 .5 .6 .7 .7 .1 .1 .1 ( .1) .6 1.3 1.8 2.7 3.2 .3 .6 .8 1.2 1.4 1.100 1.100 1.460 .790 .999 .671 .830 .884 .576 .563 .384 .555 (32.6) 9.3 21.2 .29 23.4 9.1 7.9 .79 32.8 8.9 11.7 .78 30.6 8.2 10.6 .86 36.3 7.5 12.9 1.00 37.2 7.0 13.9 1.11 For Salesi % Rpl (Corp. Not Income) 6.3 6.2 9.2 9.2 13.0 15.4 Gross Invest: Sales Internal use Total $ 9 $ .6 4.1 6.7 8.8 .2 .5 .6 4.1 6,9 9.3 Capacity - MM lbs: Sales Internal Vse Excess Total ' .2 2.9 5.3 9.2 .1 .6 .4 .6 * * * * Multipurpose equipment which causes a fluctuating capacity. 9.1 .1 9.2 10.3 .2 1.3 11.8 9.2 .1 9.3 11.6 .2 11.8 A general improvement in profitability and BOX as sales and plant throughput improved in spite of losses (due to our own manufacture) in Canada, Further factors are a higher proportion of non-Firestone sales and a substantial reduction in negative variances and cost of goods due to the recovery of values from 4-NDPA intermediate. -114- P633829 WATER SAHTOFLEX 77 AND AJOHE H ($ In Millions) Sales Gross Profit BARE Other income Div. Contribution Corp. Met Income $ 9 9 9 $ $ Actual JM1 1964 .3 1.6 .4 .1 .3 .1 ______________ 1967 1965 1966 udS& ity 1.7 2.4 3.3 3.8 .6 .7 1.2 1.4 .1 .2 .3 .2 .S .5 .9 1.2 .3 .3 .4 .5 Selling price/lb. Cost of Salss/lb. 9 9 .879 .742 .868 .608 .696 .435 .626 .638 .435 .414 .638 .402 As K of Sales: Gross profit SARS Met income 9 Salea/$ invest. 15.5 9.3 1.7 2.18 30.0 9.3 9.4 1.23 37.5 8.9 14.6 .80 30.6 8.2 10.6 .93 35,0 7.5 12.8 1.22 37.0 6.9 14.3 1.38 For sales: % ROI (Corp. Met) 3.8 11.4 11.6 10.0 15.7 19.8 Gross invest: Sales Internal use Total .$ 9 9 .1 1.3 2.2 2.5 2.7 2.7 .1 1.3 2.2 2.5 2.7 2.7 Capacity - MM lbs: Sales Internal Use Excess Total .3 1.8 2.5 3.8 5.2 6.0 .1 .3 .8 .6 * * * 6.0 6.0 * Multipurpose equipment Which causes a fluctuating capacity. A general improvement in profitability and ROI as -sales and plant through put improved in spite of losses (due to our own manufacture) in Canada, Further factor 1b the higher proportion of non-Firestone sales. 0633830 -lis- WATER PCB-00039940 fiMKasiITB CRYSTALS AMD 6AOT0N0X (INCb, SANTONQX tO ($ in Million*) Sales dross profit SAKE Othsr Income Div. Contribution Corp. Net income 196.JL $ 2.1 $ .7 $ .1 $ $ .6 $ .3 AStaal___________________ _ 1967 - 1963 1964 -1965 --196.6 Budoet Can'tv 2.0 2.0 1.7 1.9 1.6 2.0 .8 .5 .4 ,S .5 .7 .2 .1 .1 .1 .1 .1 .6 .4 .3 .4 .4 .6 .3 .2 .1 .2 .2 .3 Selling Price/lb, Cost of Sales/lb, $1,806 1.830 1.771 1.616 1.533 1,517 1.517 $1,166 1.145 1.297 1.203 1.087 .996 .944 As X of Salesi Gross Profit SAME Net income $ Sales/$ Invest. 35.5 6.9 12.7 1.70 37.4 7.4 12,5 1.20 26.8 7.3 8.4 1.05 25.6 7.9 8.3 89 29.1 7.6 10.7 1.26 34.3 7.5 12.2 1.13 37.7 6.4 14.8 1.39 For Salest % ROI (Corp. Net) 21.7 15.0 8.8 7.3 13.6 13.8 20.7 dross Investi sales Internal Use Total . $ 1.2 1.6` 1.9 1.9 1.5 1.4 1.4 $ .1 .1 .3 .1 .1 .1 .1 $ 1.3 1.7 2.2 2.0 1.6 1.5 1.5 Capacity - MM lbst Sales Internal use Excess Total 1.2 1.1 1.1 1.1 1.2 1.0 1.3 .3 * 4 4 4 4 1.3 1.3 * Multipurpose equipment which cause* a fluctuating capacity. In spite of a alight reduction in sales forecast, due largely to competitive activity by American Cyanamid in the rubber chemicals area, smaller negative variances are anticipated and we expect to show marked improvement in profitability and a slight increase in ROI, The improved sales/investment ratio in 1966 is due to lower utilisation of multipurpose equipment and reduced inventory ($,2mm) -116- 0693631 WATER PCB-00039941 PACKAGING DIVISIOH Division. Profitability (5 in Millions) Sales Division Contribution Corp. Met Income Corp. Met Income as 14 of Sales $ Sales/? investment Actual __________ 197607 1962 -1253 196? -1966 Budgretp $ 42.0 43.6 41.8 46.9 55.9 6 < .3) < 3.6) ( 2,9) ( .3) 2.3 $ ( .6) { 2.9) ( 3.5) ( 2.0) ( 1.0) ( 1.4) ( 6.7) ( 8.4) ( 4.3} ( 1.8) .83 .63 .56 .59 .63 14 KOI - Corp. Net Income Gross Investment ( 1.2) ( 4.2) < 4.7) ( 2.5) ( 1.1) $ 50.3 69.2 74.8 80.1 89.3 Product Group - 14 Return i Blownware Packaging Materials Thermoformed < l.B) ( 5.3) ( S.8) ( 2.7) ( 1.4) ( 2.7) .7, ( 4.9) ( .9) .6 ( 3.3) In 1966 investment in the divisions' products earned the following rates of returni Loss 0 to 354 3 to 514 Over 514 % of Total Investment B2.8 17.2 - Product groups are reported on the following pagest Blownware Packaging Materials Thermoformed EMfi lie 119 120 Major products reported comprise 10014 of the divisions' investment in 1966. 0633832 -117- WATER PCB-00039942 &gwWARE- - PR9PVCT qppyg ($ in Millions) Seles dross Profit SAKE Other income Div. Contribution Corp. net Income $ $ $ $ $ $ ftctUftj___________________ . 1967 - 1963 JL2H JL& -lass Budget Cap'tv 30.6 2.7 3.4 .1 ( .6) { .6) 31.8 ( .1) 4.0 .1 (4.0) (2.7) 29.2 .7 3.9 .1 (3.1) (3.1) 31.2 3.5 3.8 .1 ( .2) (1.4) 35.4 5.0 4.0 .3 1.3 ( .5) 43.9 9.5 4.5 .3 5.3 1.6 Selling Price/M Units $ Cost of Sales/M Units $ 71.63 63.01 57.78 52.69 54.49 54.45 65.49 63.30 56,40 46.90 46.84 42.95 As K of Sales Gross Profit SAKE Met Income $ Salea/$ invest. e.e 11.1 (2.0) .90 ( .3) 12.6 (8.5) .62 2.4 13.4 (10.6) ,55 11.2 12.2 (4.5) .60 14.1 11.3 (1.4) .64 21.6 10.3 4.1 .76 For Salest K HOI {Corp. Net) (1.8) (5.3) (5.8) (2.7) ( .9) 3.1 Cross Investa Seles $ 33.9 51.6 53.1 52.0 55.4 58.0 internal Use $ Total $ 33.9 31.6 53.1 52.0 55.4 58.0 Capacity - MM Units Sales internal Use Excesa Total 435 485 504 591 680 840 40 20 146 59 160 475 505 650 650 840 840 The decline in celling prices since 1963 reflecting row materiel price decreases passed ori to customers) intense competition, and volume pricing, has firmed up for 1967 and is expected to be relatively firmer in the future. The apparent increase in selling prices is due primarily to mix. Major profit leverage' points ace in selling out plant capacity, debottlenecking present equipment for greater capacity, improving gallonware and decorating costs, in the gallonware and decorating areas, new machines are being in stalled with improved rates, scrap levels, and decreased labor costs. Marketing's specific objectives include selling out blownware plants. Manu facturing plant performance has improved significantly. Present strengths srsi,market coverage and marketing ability, process economies, technical research and process engineering abilities, resin position. -118- 0633833 PACKAGING MATERIALS - PRODUCT GROUP * (9 in Millions) 1962 Sales Gross Profit SAKE Other income Div. Contribution Corp. Met Income $ $ $ $ 5 9 Selling Price/M Units $ Cost of Sales/M Units 9 As X of Salesi Gross Profit SAAK Net Income $ Sales/9 Invest. Actual___________________ _ 1967 -im -1964 1965 1966 Buduet Cap't 9.2 9.6 9.7 10.8 12.4 14. 1.8 1.6 1.1 1.7 2.3 3, 1.6 1.5 1.3 1.2 1.4 1. .2 .2 .1 .1 .2 .3 .6 1.0 1, ( .2) ( .4) .1 .1 .570 .456 .519 .433 .490 .440 .464 .391 .465 .362 .46 .27 19.6 17.4 .71 16.7 15.6 (2.1) .68 11.3 13,4 (4.1) .66 15.7 11.1 .9 .78 18.5 11.3 .8 .80 22. 10. 3. .8 For Salesi # ROI (Corp. Net) (1.4) (2.7) .7 .6 2. Gross investi Sales $ 12.9 14.1 14.7 13,8 15.7 17. Internal Use 9 Total $ 12,9 14.1 14.7 13,8 15.7 17. Capacity - MM Units Sales Internal Use Excess Total 16,6 3.4 25.0 18.3 9.7 28.0 18.8 17.2 36.0 21,0 2.0 15.0 38.0 20.5 7.0 10.5 38,0 38. 38. * Represents a combination of Vuepak, Polyflex and Meat Trays. The product group represents eight Polyflex machines, eight Kerkoff machines for meat tray production, and the Vuepak operation at Springfield. Polyflex selling prices have declined due to continued industry over capacities but seems to have stabilized in 1967. Vuepak prices were increased in 1966 due tc a temporary industry shortage. Meat trays are premium priced vs. pulp but ari weakening slightly. - Polyflex strategy is to improve outside sales through concentrating efforts or large end medium-size accounts and developing distributors for small accounts, and divert excess capacity into meat tray stock (or other formed shapes) pro duction which allows forming scrap to be reused in sheet extrusion. Vuepak strategy is to operate the plant at full capacity and to compete for folded lid bueinesB at larger accounts. Major Polyflex technical effort ie to lower costs through a cheaper cost mass polymer and improved operating efficiencies (machine speeds). -119- 0633894 THSRMOFORMED - PRODUCT GROUP {$ in Millions) Sales Cross Profit SARE Other Income Div. contribution Corp. Met income $ $ $ e $ Selling Price/M Unite 9 Cost of Salss/M Units 9 As % of Selesi Gross Profit SARE Met Income $ Sales/? Invest. For Salest % ROI (Corp. Met) Actual__________________ . 1967 -1964 JM1 1966 Budget Cao'tv 2.2 2.2 2.9 4.9 8.1 22.8 .7 .4 ,9 .5 1.6 6.2 .6 .3 .7 1.2 1.6 2.0 .1 .1 .2 < .7) 4.2 ( .7) ( .6) 2.8 7.S5 4.83 7.51 4.58 7.19 4.96 8.15 7.27 8.71 7.00 8.71 4.87 31.8 27.3 .63 18.2 13.6 .63 31.0 24.1 .41 10.2 24.5 (14.3) .34 19.8 19.8 (7.4) .45 27.2 8,8 12.3 .89 (4.9) 0.3) 10.9 Gross Invest* Sales Internal use Total Capacity - MM Units Sales Internal Use Excess Total 9 9 9 3.5 3.5 7.0 14.3 18.2 25.5 3.5 3.5 7.0 14.3 18.2 25.5 290 296 403 598 926 2,100 193 187 80 122 1,174 483 483 483 720 2,100 2,100 Thermoformed products include three Polyhedral cup lines at MelroBe park, three new improved Polyhedral lines for cups or tubs,' and two more lines to be completed at Bri.dgeview. in addition, there are five smeller lines at Bridgeview for margarine tubs and lids and cup and tub printing facilities, Thie area of businese offere the greateet profit potential to the Packaging Division based on (1) its strong leadership position in the plestic vending cup market, and (2) timely entry into.growth market for soft margarine tubs. 1966 product group profits -were severely reduced by Bridgeview start-up costs which have continued Into first quarter of 1967. Recent plant performance is significantly improved. Future technical efforts will involve reducing cycle time of process and also increase number of cavities in molds - both designed to increase capacity with small capital. -120 0633835 , ELASTIC PRODUCTS AND RESINS DIVISION Division Profitability ($ in Millions) 1962 1963 1964 J&li 1966 Budget Sales Division Contribution Corp. Net Income 71.3 11.1 5.0 92.7 102.6 112.2 124.5 15.0 18.0 20.3 22.3 6.4 7.5 9.3 9.1 129.6 23,1 8.9 Corp, Net Income as % of Sales $ Sales/6 investment 7.0 6.9 7.3 8.3 7.3 .93 .79 .81 .81 .81 6.9 .74 % ROI - corp. Net Income 6.5 5.5 5.9 6.7 5.8 5.1 Grose Investment 76.5 116.7 126.6 139.2 156.0 175.9 Product Group - % Returni plastic Products Resins Gaflex Vinyl Acetates 5.3 21.4 ( 1.1) 5.4 13.2 4.0 ( 2.0) 5,0 13.8 8.6 < 1.8) 5.6 16.2 9.7 ( 3.8) 2.6 18.1 9.2 ( 1.3) 3.4 14.8 8.8 In 1966 investment in the divisions' products earned the following rates of returnr ' % of Total Investment Lobs 0 to 3% 3 to 5% Over 5% 25.5 32.5 4.4 37.6 Product groups are reported on the following pagesi Plastic Products Resins saflex Vinyl Acetates 122 123 128 129 Major products reported comprise 96% of the division's investment in 1966, 0633836 -121- WATER PCB-00039946 MASTIC PRODUCTS ($ in Millions) Sales Gross Profit BARE Other Income Div. Contribution Corp. Net Income $ 22,6 $ 3.7 $ 3,8 $ $< .1) $ Actual___________________ 1963 -13M Ji . 1967 Budoet 2S.5 4.4 4.2 .2 ( .3) 29.0 4.D 4.0 ( .6) 32.0 4.3 4.1 .2 ( .7) 33.S 3.8 4.4 ( .2) ( .8) (1.3) 36.8 5.2 4.4 ( .3) ( .5) ( .5) 53.5 11.9 6.2 ( .3) S.4 i.a Selling Prtce/lb. Cost of Sales/lb. 6 $ .169 .149 .169 .145 .172 .133 As % of Sales; Gross Profit SARE Net Income $ Sales/6 Invest. 16.4 16.8 1.01 17.3 16. S (1.2) .97 13.8 13.8 (2.1) .94 13.4 12. S (2.2) .98 11.3 13.1 (3,9) .98 14.1 12.0 (1.4) .93 22.2 11.6 3.4 1.27 For Sales; 54 ROI (Corp. Net) (1.1) (2.0) (2.2) (3.6) (1.3) 4.3 Gross Invest t . Seles Internal Use Total 6 22.3 $ $ 22.3 26.2 26.2 30.7 30.7 32.6 32.6 34.2 .1 34.3 39.7 .1 39.8 42.2 .1 42.3 Capacity - MM lbs; Sales Internal Use Excess Total 198.7 11.5 66.7 276.9 217.9 11.5 93.9 323.3 311.8 11.5 323.3 Dollars of sales have shown a steady increase of: about 10% per year while division contribution dropped markedly in 1966 due to a Blow construction economy, eliding prices and added charges for write-off of Good-will. Recovery to earlier levels is budgeted in 1967 with the elimination of many marginal products and expensive orders, reduced COGS achieved through an intensified PT effort and tighter inventory control, and a reduction in SARIS as a percent of sales. Further improvement is mandatory and is being sought viai the creation of a research effort for these products to achieve a technical competency leading to further modification of our product lines; imaginative new marketing concepts; and, a much more detailed system of controls administered by an integrated team of well-trained pereonnel. Investment opportunities are being defined. Debottlenecking will provide capacity and flexibility required this year with capital aimed in this direction and towarde other cost reduction projects. 0633037 122 SESJMS, - PRODUCT GROUP (? in Millions) Sales Gross Profit BARE Other Income Division Contribution Corp. Met Income As % of Sales( Gross Profit SARB Corp, Met Income $ Sales/? invest. % ROI - Corp. Met Income Gross Investment 1962 31.4 8.7 4.1 .6 5.2 2.2 Actual 1963 1964 1965 32.6 9.1 3.8 .5 5.8 2.4 36.0 10.2 4.2 .4 6.4 2.3 34,9 9.2 3.8 .5 5.9 2.7 1967 1966 Budaet 37.2 9.0 4.6 .3 4.7 1.4 40.7 10.2 4.2 .3 6.3 2.1 27.6 13.0 6.9 .77 5.3 40.8 27.9 11.7 7.3 .73 5.4 44.6 28.3 11.5 6.5 .77 5.0 47.0 26.5 11.0 7.6 .73 5.6 47.6 24.2 12.4 3.8 .68 2.6 54.4 25.1 10.3 5.2 .65 3.4 62.4 Major products reported for the Resina product group are as follows> Aminoplasts formalin Phenoplasts Styrenes ms 124 125 126 127 0633838 WATER Sales Gross Profit SARA Other Income Div, Contribution Corp. (let Income Selling Price/lb. Cost of Salea/lb. As % of Sales: Gross Profit SAKE Net Income 6 Sales/S Invest. For Salesi * BOI (Corp.-Net) Gross invest: Sales Internsl use Total Capacity - MM lbs: Sales Internal use Excess Total AMINOPhASTS ($ in Millions) 1962 $ 9.5 $ 2.4 $ 1.0 $ .1 $ 1.5 $ .6 $ .235 $ .177 Actual_________________ 1967 .1963 -22M 1965 -1966 Budaet saeia: 9.7 9.0 8.9 9.4 10.4 11.4 2.7 2.4 2,2 1.7 2.3 2.6 .9 .8 .9 .9 1.1 1.1 .1 .1 .1 1.9 1.6 1.3 .8 1.3 1.6 .8 .6 C .2 .5 .6 .242 .175 .223 .165 .195 .147 .136 .111 .127 .099 .129 .100 24.8 10.1 6.3 1.06 27.7 9.0 8.2 .96 26.1 8.9 6.7 .96 24.7 10.1 6.7 ,9a 18.1 9.6 2.1 .84 22.1 10.6 4.8 .87 22.8 9.6 5.3 .94 6.7 7.9 6.4 6.6 1.8 4.2 5.0 5 8.9 10.1 9,4 9.1 11.2 11.9 12.1 $ $ 8.9 10.1 9.4 9.1 11.2 11.9 12.1 40.2 16.7 56.9 40.1 17.9 58.0 40.4 27.6 68.0 45.6 32.0 77,6 69.1 13.4 82.5 82.2 6.1 88.3 88.3 88.3 Although sales quantities are up, price attrition caused by a price reduction by American'Cyanamid of 54/lb. on melamine laminating resin, coupled with a higher percentage of low price (5.24/lb.) and lower profit urea adhesive resinB, explain the lower profit in 1966. The new lower cost source of raw material melamine, the reduction in manufacturing costa, and the development of melamine laminating resin syrups are expected to furnieh the needed recovery in 1967. -124- 0633639 WATER_PCB-00039949 EafiMMB; ($ in Millions) Sales gross Profit SARE Other Income Div. Contribution Corp, Net Income Selling Price/lb. Cost of Sales/lb. As % of Sales* Oross profit SAAB Net Income $ Sales/S Invest. For Sales* % ROI (Corp. Net) Oross Invest* Sales Internal Use Total Capacity - MM Ibst Sales Internal Use Excess Total 1962 $ 2.4 5 .8 $ .1 9 $ .7 9 .3 9 .028 9 .019 33.4 4.7 12.5 .75 9.4 9 3.2 9 2.0 9 5.2 82.3 49.6 23.1 15S.0 flgj-gfli___________________ 1967 1964 1965 1966 Budoet 2.S 3.5 3.1 3.7 4.1 4.1 .8 1.0 1.0 .9 1.1 1.1 .1 .1 .2 .1 .3 .3 .1 .1 .1 .1 .8 1.0 .9 .9 .8 .8 .4 .4 .S .4 .3 .3 .027 .018 .026 .019 .024 .017 .025 .019 .025 .019 .025 .019 33.6 4.9 16.0 .74 27.6 4.4 11.7 1.00 32.3 6.5 16.1 1.92 24.3 2.7 10.8 1.09 26.8 7.3 7.3 .89 26.8 7.3 7.3 .89 11.8 11.4 19.2 11.8 6.5 6.5 3.4 3.5 2.6 3.4 4.6 4.6 2.0 2.0 2.0 2.0 3.3 3.3 5.4 5.5 4.6 5.4 7.9 7.9 90,8 51.9 22.3 165.0 135.3 54.7 30.0 220.0 127.4 99.2 53.4 280.0 146.0 87,5 233.5 190.0 138.4 328.4 190.0 138.4 328.4 The higher buy-in cost of methanol and the pattern effect of higher formaldehyde content sales with their resulting lower gross profit margins adversely affected 1966 profits. Although methanol costs will be lower in 1967 When PP&R assumes responsi bility for the Heyden half of the Texas City plant, higher buy-in investment and associated research and engineering expense plus the new Formalin plant at Fort Plastics depresses R.O.I. 0633840 125- WATER PCB-00039950 Sales Gross Profit BARE Other Income Civ. Contribution Corp. Met Income Selling Prioe/lb. cost of sales/lb. As % of salest Gross Profit SAKE Net Income $ Sales/6 Invest. For salesi * SOI (corp. Net) Gross investi Sales Internal use Total Capacity - MM Ibsi Sales Internal Use Excess Total PKENOPLASTS ($ in Millions) 13.6.2- 6 12.5 $ 3.1 $ 1.5 $ .2 $ 1.6 $ .8 6 .130 $ .096 Skifil___________________ _ 1.967 -12.61 ~ -12.64 1965 1966 Budget Ssp.lta 13.4 3.4 1.6 .1 1.9 .7 14.8 3.9 1.7 .2 2.4 .7 14.8 3.3 1.7 .1 1.7 .5 16.9 4.1 1.9 .1 2.3 .6 18.1 4.1 1.9 .1 2.3 .7 29.6 8.5 3.0 .1 5.6 2.1 .116 .087 .100 .073 .091 .071 .085 .065 .087 .067 .089 .064 24.9 12.3 6.4 .67 25.4 12.1 5.2 .65 26.3 11.3 4.7 .60 22.3 11.5 3.4 .57 24.3 11.2 3.6 .57 22.7 10.5 3,9 .54 28.7 10.1 7.1 .84 4.3 3.4 2.9 1.9 2.0 2.1 5.9 $ 18.6 $ $ 18.6 20.6 20.6 24.5 24.5 26.1 26.1 29.8 29.8 33.7 33.7 35.4 35.4 95.8 41.0 136.6 115.6 47.9 163.5 147.2 25.9 173.1 163.0 90.2 253,2 197.8 100.2 298.0 208.5 123.0 331.5 331.5 331.5 Record sales in plywood and bonding resins accounted for the profit improve ment in 1966. Lower business levels in 1967 are going to make achieving budget difficult. Efforts are being concentrated on higher profit sales and gaining entry in new markets for Monsanto. Costs are expected to improve in 1967 when the new port plastics Formalin unit will commence operations. ' -126 0633641 WATER_PCB-00039951 Sales Gross Profit BARS Other Income Div, Contribution Corp, Net Income Selling Price/lb. Cost of Sales/lb. As of Salesi Gross Profit BARE Net Income $ SaleB/S invest. For Salest K ROI (Corp. Net) Gross Investi Sales Internal Use Total Capacity - MM lbs Sales Internal Use Excess Total STYRENES ($ in Millions) -1962 $ 5.4 $ 2.2 $ .9 $ .2 $ 1.5 $ .7 $ .232 $ .137 Actual ________________ 1967 1963 1964 1965 _1966 Budget Can' tv 5.5 6.0 6.3 6.0 6.8 9. E 2.3 2.8 2.7 2.3 2.7 4.2 .8 .6 .8 1.5 .8 1.1 .2 .1 .1 .1 .1 1.7 2.2 2.0 .9 2.0 3.2 .8 1.0 1.1 .3 .9 l.E .198 .115 .181 .096 .190 .109 .161 .099 .168 .100 .ie< ,10f 40.7 16.7 13.0 .90 41.8 14.5 14.5 .86 46.7 10.0 16.7 .94 42.9 12.7 17.5 .95 38,3 25.0 5.0 .88 39.7 11.8 13.2 .92 42. ( li.; 16.: 1.2< 11.7 12.5 15.6 16.7 4.4 12.2 20.: 5 6.0 6.4 6.4 6.6 6,8 7.4 7.5 $ 6 6.0 6.4 6.4 6.6 6.8 7.4 7.S 23.2 25.5 48.7 27.5 20.7 48.2 33.5 6.4 39.9 33.2 14.0 47.2 37.3 16.6 53.9 40.4 12.8 53.2 53.2 53.2 Price erosion in the previously attractive latex cup coating market plus further deterioration of the textile siring market forced profit margins down in 1966, The $.7MM increase in SARB for 1966 is due to the inclusion of development costs on RJ-100 coatings. Profit recovery is anticipated in 1967 mainly through increased sales of RJ-100 coatings. 0639642 -127- WATER PCB-00039952 SAFLEX -PRODUCT GROUP ($ in Millions) , Sales Cross Profit SAKE Other Income Div. contribution Corp. Net Income -i&L $ 17.3 $ 6.B 8 1.0 $ .2 $ 6.0 $ 2.9 Selling Prioe/sg.Ft. 9 .151 Cost of Ssles/sq.Ft. $ .092 As % of salesi Gross Profit SAAB Net Income $ Sales/$ invest. 39.0 5.5 16.5 .129 For Salesi % KOI (corp. Net) 21.4 Gross Investt Sales Internal Use Total $ 13.4 $ $ 13.4 Capacity - KM Sq. irti Sales Internal Use Excess Total 115.1 186.1 301.2 AatoaA___________________ -1262 -1964 -lili 1966 1967 Cap'tv 17.7 8.3 1.3 .3 7.3 3.6 19.1 9.2 1.4 .6 8.4 4.0 23.8 10.5 1.5 .6 9.6 5.1 29.7 14.5 1.7 .5 13.3 6.8 25.9 13.1 1.7 .4 11. B 5.6 34.9 16.6 2.3 .4 14.7 7.0 .155 .083 .160 .083 .245 .137 .227 .112 .233 .116 .240 .126 47.0 7.2 20.1 .66 48.1 7.2 21.1 .65 44.3 6.1 21.5 .75 45.9 5.4 21.5 .79 47.8 6.2 20.4 .68 47.6 6.6 20.1 .89 13.2 13.8 16.2 18.1 14.8 17.8 27.0 27.0 29.1 29.1 31.6 31.6 37.5 37.5 37.9 37.9 39.3 39.3 114.2 68.9 183.1 119.9 49.9 169.4 98.7 42.2 140.9 130.6 31.3 161.9 111.2 34.3 145.5 145.5 145.5 196$ salsa increase results from (1) an increase in market participation from 48% to 58% in the automotive portion of the market and (2) increased sales for aircraft and architectural uses, part of this market participation increase stems from the competitor's product problems, but also results from quality improvements and introduction of new Saflex models. Cost reductions are reflected in improved prose profit (45.9% of sales)r however, reduced auto production will limit 1967 sales and profit to below the 1966 levels, Future domestic growth will depend on auto production and success of research programs aimed at windshield design Improvements. The overseas growth rate will be higher, with the switch to 30 gaugs not yst affected and the opportunity to replace tempered glaSB with lsminated glass still available. -128- 0633843 TM acetates - product group ($ in Millions) Sales Oross Profit SAKE Other income Division Contribution Corp. Net income As % of Salest gross Profit SAKE Corp. Net income $ Sales/? invest. % ROI - corp. Net Income gross investment Actual 1967 Li962 ,1963 -19-14 1965 J6 Buduet 1S.1 4.3 2.7 .1 1.7 .8 20.5 5.7 2.5 .1 3.3 1.7 22.0 7.3 2.4 4.9 2.4 23.8 7.8 2.2 5.6 2.6 25.5 8.8 2.6 6.2 2.7 23.6 14.8 4.2 .95 4.0 18.9 27.6 12.0 8.3 1.03 8.6 19.9 33.2 11.1 11.1 .88 9.7 25.0 32.6 9.2 10.9 .84 9.2 28.3 34.5 10.2 10.6 .83 8.8 30.6 Major products reported for the Vinyl Acetates product group are as followsi Butvar Formvar Gelva Gelvatol f9 130 131 132 133 0633844 129- WATER PCB-00039954 mm ($ in Millions) Sales Gross profit SAKE Other income Div. Contribution Corp. tret income Selling Price/lb.(1) Cost of Bales/lb.(1) As % of Salesi Gross Profit SARB Met income $ Sales/$ inveet. For Salesi % KOI (Corp. Met) Ocoss investi sales Internal use Total Capacity - MM lbst Sales Internal use Excess Total $ 6 $ $ $ $ 9 9 $ 9 9 Actual_____________________ 1967 -JL251 JAM -19.61 flslaai gR'*Y 3.7 4.0 5.6 6.2 5.8 10.9 1.1 1.5 2.3 2,5 2.1 5.6 .4 .4 .3 .4 .4 1.0 .7 1.1 2.0 2.1 1.7 4.6 .4 .6 1.1 1.1 .8 2.2 1.010 .525 .988 .528 .995 .526 .969 .518 .917 .491 .940 .457 29.7 10. B 10. S 1.27 37.5 10.0 15.0 1.29 41.1 5.4 19.6 1.27 40.3 6.5 17.7 1.38 36.2 6.9 13.8 1.26 51.4 9.2 20,2 L.9S 13. B 19.3 25.0 24.4 17.4 39.3 2.9 3.1 4.4 4.6 4.6 5.6 2.9 3.1 4.4 4.6 4.6 5.6 11.0 3.4 14.4 12.9 6.5 19.4 23.5 2.6 26.1 23.0 3.1 26.1 21.4 5.5 26.9 26.9 26.9 (1) Excluding Ethyl Acetate by-product units. The Butvar data above represents a composite of Specialty Resins (non-Saflex), Butvar Dispersion, and the by-product, Ethyl Acetate. Sales and profits have increased steadily in the 1963 through 1966 period, prices have been firm in the domestic market but there has been some erosion from price competition in the export market. Costs have been reduced slightly in 1966 and will be further reduced in 1967 and beyond by (1) conversion coBts reduction achieved through the current Bircham Bend automation project and (2) projected lower vinyl acetate monomer prices. Monsanto has a firm competitive position in the domestic market and a growing position world-wide. The outlook is for continuing growth despite the dip budgeted in 1967. -130- 0633B45 FORMVAR ($ in Millions) Sales Gross Profit SAKE Other Income Div, Contribution Corp, net income Selling Price/lb.(1) Cost of Sales/lb.(l) As X of Salesi Gross Profit SARK Met Income $ Sale*/? invents 1962 $ ? 9 9 9 9 9 Actual___________________ 1961 -1.9.6 3 -1964 _ 1965 -1966 Budget SSEjtl 4.1 5.0 5.1 5.0 5.0 5,5 l.S 1.9 2.0 2.3 2.4 2.5 .5 .4 .3 .3 .5 .5 1.0 1.5 1.7 2.0 1.9 2.0 .5 .8 .9 1.0 .9 1.0 .911 .578 .877 .544 .864 .526 .758 .409 .739 .388 .786 .429 36.6 13.2 12.2 1.08 38.0 8.0 16.0 1.22 39.2 5.9 17.6 1.04 46.0 6.0 20.0 .89 48.0 10,0 18.0 .79 45.5 9.1 18.2 .66 For Salest X ROI (Corp. Net) 13.2 17.7 18.4 17.9 14.3 15. Gross Invests Sales Intsrnal Use Total Capacity - MM lbst Sales Internal Use Excess Total $ $ 9 3.5 3.8 4.9 5.6 6.3 6.4 3.5 3,8 4.9 5.6 6.3 6.4 4.5 5.7 . 5.9 6,6 6.8 7.0 1.5 .3 ,1 .3 .2 6.0 6.0 6.0 6.9 7.0 7.0 (1) Excluding Acetic Acid by-product units. Growth in sales volume was counteracted by further price attrition in the export market during 1966. However, a substantial rsduction in costs was made possible by process improvements and lower vinyl acetate price, significantly raising the gross profit level, Formvar is a 30-year old, mature product, and future growth will be limited by increasing competition from new wire enamel resins in the domestic market and other polyvinyl formal producers overseas. Prospects are for a modest increase in sales through 1970. Further reduction in coste will more than offset a continuing decline in average selling prices, thus maintaining profits at a relatively high level. -1310633646 WATER_PCB-00039956 Sales Gross profit SARK Other income Div. Contribution Corp. Net Income Selling Prlce/lb. Cost of Sales/lb. As X of Salesi Gross Profit SARK Net Income $ Sales/$ invest. For Sales % X ROI (Corp. Net) Gross investi Sales internal use Total Capacity - MM lbs> Sales internal Use Excess Total OSLVA ($ in Millions) 1962 $ $ $ $ 5 $ $ AS^liai_____________________ . 1967 1963 -im JL2Si 1966 Budost 6.1 6.7 7.0 7.7 9.3 10.9 1.0 1.3 1.8 2.0 2.9 3.7 1.0 .9 1.1 .9 1.1 1.2 .4 .7 1.1 1.8 2.5 .2 .3 .5 .8 1.2 .209 .180 .198 .169 .205 .152 .205 .152 .209 .144 .236 .1S6 16.4 16,4 1.11 19.4 13.4 3.0 1.08 25.7 15.7 4.3 1.13 26.0 11.7 6.5 1.01 31.2 11.8 8.6 1.19 33.9 11.0 11.0 1.36 3.2 4.8 6.6 10.3 15.0 $ 4.9 5,6 6.1 7,6 7.8 8.0 $ .2 .2 .2 .2 .8 .8 $ 5.1 5.8 6.3 7.8 8.6 B.8 28.4 1.4 ?1 36.9 32,0 1.1 9.4 42.5 34.2 1.6 11.2 47.0 37.5 1.6 7.9 47.0 44.4 5.0 1.7 51,1 46.1 5.0 51.1 Salsa and profits of the Gelva products (emulsions, solutions, and solids) have shown uninterrupted growth' in the past four years, even though emulsions are sold in highly competitive markets for adhesives end paints. Profits have been maintained in this business by a successful program of cost reduction through automation, while upgrading the remainder of the products line by introduction of higher-value specialties. Overall growth rata of the industry has been and will continue at about 10X per year, and growth of oelva sales Is projected at a slightly higher rate than this. Costs and profits will be further improved by the volume effect end the prospect of vinyl acetate monomer price reductions. -132- 063364? flgkvAm (? in Millions) . 13.62 Actual____________________ 1967 1965 1966 Budaet Cao'tv sales Gross profit BARE Other income Div. Contribution Corp. Net income $ ? ? ? ? ? 4.1 4.8 4.3 5.0 5.4 5.9 .7 .9 1.2 1.0 1.4 1.6 .7 .7 .7 .6 .6 .6 .2 .5 .4 .8 1.0 ,1 .1 .3 .4 selling Prices/lb.(1) ? Cost of Sales/lb. (1) ? .684 .586 .637 .517 .587 .425 .515 .412 .448 .323 .527 .386 As X of Salest Gross Profit SAKE Net income 9 Sales/? Invest. 17.1 17.1 ,56 18.8 14.6 2.1 .69 27.9 16.3 2.3 .46 20.0 12.0 .49 27.5 11. e 5.9 .48 27.1 10,2 6.8 .53 For Salesi X BOX (Corp. Net) 1.5 1.1 2.8 3.7 cross invest) Sales internal uae Total $ ? $ 6.7 6.6 8.8 9.7 10.7 10.8 .7 .6 .6 .6 .6 .6 7.4 7.2 9.4 10.3 11.3 11.4 Capacity - MM Ibsi Salas Internal use Excess Total , 5.8 7.0 7.3 9.7 10.3 11.1 .5 .6 .6 6 .6 .6 3.3 2.0 1.7 .5 .8 9.6 9.6 9.6 10.8 11.7 11.7 (1) Excluding Acetic Add and Methyl Acetate byproduct units. The aelvatol market is undergoing a major change from high-price, lowvolume to medium-price, medium-volume. Price erosion in the past three years has been steep, but the new price levels are opening up large new markets in the textile industry. Gelvatol costs and profits during this period do not reflect the true potential for Monsanto as (1) costs are heavily dependant on vinyl acetate monomer and,Monsanto's vinyl acetate monomer costs ere not fully competitive, and (2) the present production facility in Bircham Bend is not year geared to the product mix and capacity required to serve the developing market profitability. Strategies and programs are currently being developed to correct both of these apparent shortcomings. 0633648 -133- IBM&S.BffliSttB Division Profitability ($ in Millions) Sales Division Contribution Corp. Net Income AsSHii_______________ 1967 . 196.1 . mi. -19&3 m? -1966 Ug& 265.5 285.0 354.3 369.7 374.3 391,6 86.5 95.3 136.4 123.7 108.8 92.0 40.6 39.4 59.4 57.6 46.0(1) 41.9 Corp. Net Xnoome as X of Sales $ Sales/$ Investment 15.3 13.8 16.8 15.6 12.3 .66 .58 .61 .53 .50 10.6 .50 X ROI - Corp, Net income 10.1 8.1 10.3 8.2 6.2 5.0 Gross Investment 400.3 488.7 576.2 699.3 742.4 785.7 Product Group - X Returnt Acrilan Nylon polyester 3.5 11.8 5.8 7.9 6.1 4.5(2) 4.2 8.8 12.4 11.4 10.3 8.1 (14.3) (ll.D (1) Divisional information is nst of the $6.lMM Polythene Goodwill write-off and the $6.0MM profit on the sale of Vonneel and AC6A. However, the Acrllan product group data on page 135 excludes the profit on the sale of the foreign interests. The Spandex group which was Charged with the Goodwill write-off is not included in this report. (2) ROI for Acrilan excludes profit on sale of vonnel and ACSA. In 1966 investment in the divisions' products earned the following rates of returni Doss ' 0 to 3% 3 to 5* Over 5% % of Total investment 9.0 '- 7.4 83.4 Product groups are reported on the following pagesi Page .Acrilan Nylon Polyester 135 138 143 Major products reported comprise 98X of the division's investment in 1966. -134- 0633849 ftSRIW --PBPWT SftOME ($ in Millions) _fcgtyaj,___________ __ 1967 JLS.61 _123 .1964 -1335 1966 Budget Sale* Ores* Profit SAAB other income Division Contribution Corp. Net Income 34. a 17.1 12.7 .7 S.l 2.3 48.3 24.6 14.8 1.3 11.2 4.4 71.2 38.1 16.8 1.7 23.0 9.4 82.2 41.8 18.7 1.7 24.9 10.7 91.0 96.2 40.6 42.3 20.6 22.6 1.5 ( .5) 21.6 19.1 8.4(1) 8.2 A* fi of Salesi Gross profit SAAB Corp. Net Income $ Sales/$ Invest. 49,0 36.4 6.7 .52 51.1 30.7 9.1 .63 53.5 23.6 13.2 .60 50.9 22.7 13.0 .47 44.6 43.1 22.6 23.0 9.2(1) 8.4 .49 .50 74 SOI - Corp. Net Income 3.5 s.a 7.9 6.1 4.5(1) 4.2 Gross investment 66.5 76.5 119.3 175.0 186.7 195.7 (1) Excludes $6.0MM profit on sale of Vonnel and ACSA. Major product* reported for the Acrilan product group are a* follow*t Page Acrilan - carpet 136 Acrilan-Textile & Solution Dyed 137 0633850 135- WATER PCB-00039960 AQfflkflE-r. .CNffH ($ la Millions) Sales Gross Profit GARB Other Income Div. Contribution Corp. Hat income Selling Price/lb. Cost of Sales/lb, As % of Salest Gross profit GARB Met Income $ 6ales/$ invest. 1962 $ 11.6 $ S.2 $ 4.8 $ .3 $ .7 $ .3 $ .73 $ .40 Actual_________________ - 1967 1963 -12S3 1965 flHdqeS, Cap'tv 25.4 12.3 8.2 .7 4.8 2.2 42.6 22.0 11.0 1.1 12.1 5.1 54.8 29.9 7.7 .4 22.6 11.4 54.1 54.8 27,1 23.4 8.2 9.2 1.5 ( .3) 20.4 13.9 9.2(1) 7.1 88.3 48.5 10.3 ( .3) 37.9 18.3 .73 .71 .73 .73 .60 .60 .37 .34 .33 .36 .34 .27 45.0 41.5 2.6 .48 48.5 32.1 8.7 .62 51.6 25.8 12.0 .59 54.6 14.1 20.8 .43 50.1 42.7 15.2 16.8 17.0(1) 13.0 .42 .40 54.9 11.7 20.7 .64 For Salesi % ROX (Corp. Net) Gross Invest; Sales Internal use Total Capacity - MM lbsi Sales Internal Use Excess Total 1.2 5.4 7.1 8.9 7.2(1) 5.2 13.2 ? 24.1 $ $ 24.1 40.9 40.9 71.9 71,9 128.1 128.1 127.3 127.3 136.8 136.8 138.8 138.8 15.9 7.0 22.9 35.0 59.7 74.9 ( 1.0) ( 2.6) 34.1 34.0 57.1 109.0 74.4 72.7 147.1 91.8 55.3 147.1 147.1 147.1 (1) Excludes profit on sale of Vonnel and ACSA. Selling prices remained stable compared to 1965r costs increased $.03 per pound primarily the result of idle plant facilities. R.O.I. decreased to 7.2% from the 1965 high of S.9%. In 1967 sales volume is up 23%; sales prices deteriorate by $.13 per pound causing sales revenues to remain at the 1966 level. Cost of sales de creases by $.02 per pound -- the result of increased sales/production, R.O.I. decreases to 5.2% influenced by selling prices, more plant facilities and buy-in's. . -136- 0633851 flffmAjLrJIgJgnS fr-SfiWTiPtJ pygffl ($ in Millions) Sales Gross profit EARS Other income Dlv. contribution Corp. Net income Selling Price/lb, Coet of salee/lb. As % of Salesi Gross Profit BARE Net Income $ Sales/$ Invest. $ 23.1 $ 12.2 $ 7.7 $ .1 $ 4.6 $ 2.4 $ .91 $ .44 Actual___________________ 1967 1964 . 1966 Budget Cap'tv 21.6 12.0 5.9 6.1 2.9 26.2 15.5 5.6 .6 10.5 4.7 24.5 11,8 9.9 1.0 2.9 .6 28.9 32.7 13.1 16.8 10.9 12,3 1.0 ( .2) 3.2 4.3 .4(1) 1.0 36.7 19. B 12.4 ( .2 7.2 2.9 .85 .89 .89 .83 .76 .76 .38 .36 .46 .45 .37 .35 52.8 33.3 10.4 .59 55.6 27.3 13.4 .68 59.2 21.4 17.9 .61 48.2 40.4 2.4 .57 45.3 51.4 37.7 37.6 1.4(1) 3.1 .52 .51 54.0 33.7 7.9 .67 For Salest % ROI (corp. Net) 6.2 9.1 10.9 1.4 .7(1) 1.7 S. 3 Gross investi Ssles Internal Use Total Capacity - MM lbsi Sales Internal Use Excess Total $ 39.0 $ $ 39.0 32.0 32.0 43.0 43.0 42.8 42.8 55.1 55.1 54.6 54.6 54.9 54.9 25.3 13.3 38.6 25.4 3.8 29.2 29.3 ( 1.3) 28.0 27.4 9.5 36.9 34.9 13.4 48.3 43.2 5.1 48.3 48.3 48.3 (1) Excludes profit on sale of vonnel and ACSA. Sales income increased 18% -- a high for the five-year span -- due to an increase in volume (27%). The volume increase was partially offset by a $.07 per pound decrease in selling price. Lower cost of $.01 per pound reflects a lower level of high cost Vonnel bought and resold during the period, investment is up 29% over 1965 due to increased usage of plant facilities for Textile production and higher buy-in allocations and results in lower ft.0,1. . in 1967 sales income is up 11% on sales volume increase of 24%. The budget sales rate represents an all-time high for the category. Sales revenue per pound is down $.073> cost of sales decreases $.085 per pound, the result of a higher sales/production rate. jt.O.l. increases to 1.7% reflecting the higher sales/cost ratio. 0633652 -137 HYLON - PRODUCT GROUP ($ in Millions) Sales gross Profit BARE Other Income Division contribution Corp. Net income ft.tfwd;, 1962 1963 -1964 -i2Si -1966 229.1 108.9 26.9 .8 82.8 39.0 235.4 114.9 30.0 .6 85.4 35.6 282.1 152.3 30.1 .6 122.8 55.1 284.4 267.6 141.4 132.2 28.2 27.1 ( .5) 1.0 112,7 106.1 56.0 50.7 1967 265.7 121.5 30.0 ( 2.8) 88.7 42.4 As X of Selest gross Profit SARB Corp. Net Income $ Seles/$ invest. 47.5 11.8 17.0 .69 48.8 12.7 15.1 .53 54.0 10.7 19.5 .64 49.7 9.9 19.7 .58 49.4 10.1 18.9 .54 45.7 11.3 16.0 .51 X ROI - Corp. Net income 11.8 8.8 12.4 11.4 10.3 8.1 gross Investment 330.0 404.3 443.9 489.8 492.8 521.2 Major products reported for the Nylon product group ere as followsi Nylon - industrial Nylon - Textile Nylon - Textured Nylon - Tire Page 139 140 141 142 -139. 0633853 WATER PCB-00039963 NYLOK - INDUSTRIAL <? in Millions) -1962 Actual____________________ 1967 1963 1964 Budget CAP'tv Sales Gross Profit EARS Other Income Div. Contribution Corp, Met Income $ 17.0 $ 7.3 $ 2.1 5 $ 5.2 $ 2.4 20.3 7.3 2.8 .1 4.6 1.9 16.3 7.5 2,3 5.2 2.3 17.6 7,5 1.2 .1 6.4 2.9 19.6 9.0 1.7 .1 7.4 3.4 17.5 7.5 1.2 { .2) 6.1 3.1 16.5 7.1 1.2 ( .2 5.7 2.9 Selling Price/lb. Cost of salee/lb. $ 1.16 $ .66 1.02 .65 .98 1.00 1.07 1.01 1.01 .53 .57 .58 .58 .58 As % of Salesi Gross Profit SARK Not Income $ Sales/$ invest. 43.0 12.9 14.1 .62 35.9 13.6 9.4 .53 46.0 14.1 14.1 .50 42.6 6.8 16.5 .56 45.9 8,7 17,3 .52 42.9 6.9 17.7 .52 43.0 7.3 17.6 .50 For Salesi % ROI (Corp. Net} 8.7 4.9 7.0 9.2 9.0 9.3 8.7 Gross Invest) Sales Internal Use Total $ 27.6 $ $ 27.6 38.4 38,4 32.9 32,9 31.4 31.4 37.9 37.9 33.5 33.5 33.4 33.4 Capacity - mm Ihst Salas Internal use Excess Total 14.6 1,4 16.0 20.0 1.0 21.0 16.6 2.9 19.5 17,6 ( 4.2) 13.4 18.4 .1 18.5 17.3 ( 1.0) 16.3 16.3 16,3 1966 not income is up 18% due to a $.07 increase in selling price. The improvement in selling price is a result oft more emphasis on industrial yarns produced on textile equipment, reduced output/sales of second grade products and increased activity in warped products (premium price), cost of sales increased slightly, the result of higher costs associated with warping and tha further utility of Textile facilities. The 1966 net income is the best ovsr the five-year span since 1962. Higher investment held the R.O.I, at the 1965 level. In 1967 R.O.I. is projected at 9.3% primarily the result of reduced plant facility and buy-ln investment allocations and the benefit of product sales from inventory. Sales prices decline 5%; cost of sales remains relatively stable. 0633854 -139' NYfrON - TEXTILE ($ in Millions) 1962__. _____________________ - 1967 1963 -196.4 1965 1966 Budoet CSD'tV Sales gross Profit BARE Other income Div, contribution Corp. Net Income $126.1 $ 66.4 $ 11.1 $ .6 $ 55.9 $ 26.6 130.0 67.3 10.5 .6 57.4 23.5 146.2 84.0 13.4 .5 71.1 32.1 133.6 75.7 12.3 .5 63.9 31.1 114.0 55.5 12.2 ..6 43.9 20.7 109.0 47.8 14.9 ( 1.4) 31.5 14.2 133.8 62,2 15.4 ( 1.4) 45.4 24.9 Selling price/lb. Cost of Salee/lb. $ 1.81 $ .66 1.74 .64 1.56 .66 1,57 .68 1.39 .71 1.32 .74 1.32 .71 As % of Salesi gross Profit BARB Net Income $ $alee/$ Invest. 52.7 6.6 21.1 .69 51.6 8.1 16.1 .62 57.5 9.2 22.0 .65 56.7 9.2 23.3 .52 48.7 10.7 18.1 .48 43.9 13.7 13.0 .46 46.5 11.5 18.7 .57 For Salesi % ROI (Corp. Net) 14.6 11.3 14.1 12.1 8.8 6.1 10,6 Cross invest* Sales Internal Use Total $162.2 $ $162.2 208.3 208.3 227.3 227.3 257.6 257.6 235.1 235.1 234.5 234.5 236.0 236.0 Capacity - MM lbst Sale* Internal Use Excess Total 69.7 .3 70.0 74.7 13.3 68.0 93.8 28.7 122.5 84.9 22.9 107.8 81.9 14.5 96.4 82.5 16.9 101.4 101.4 101.4 1966 R.O.I. is down to 6.6%, a decrease for the second successive year. Net income decreased 34% from 1965 due to sales price erosion ($.16 per pound) and increased manufacturing costs -- the result of idle facilities and in creased by-product levels (11.6% to 14,2%), Selling prices per pound are down 23% over the five years since 1962 while unit cost of sales has decreased 17%. Investment decreased 9% from 1965 due to assignment of plant investment to Textured and Industrial categories and reduced buy-in allocations. 1967 R.O.I. down to 6.1%. Net income down 31%. Sales volume is at the 1966 level with sales revenue down 15% due to another .07 per pound reduction in selling price. Investment down due to assignment of Textile equipment to Tire yarn production. -140- 0633855 ($ in Millions) .-19.62 Actual_____________ - 1967 1963 .1964 1965 1966 Budaet Cat) Sales dross profit SAKE Other Income Div. Contribution Corp. Het Income Selling price/lb. Cost of sales/lb. $ 23.0 $ 11.5 $ 2.2 $ $ 9.3 $ 4.4 $ 1.44 $ .71 15.1 6.3 1.5 4.8 2.0 1.36 .79 22.8 12.7 2.7 10.0 4.6 1.15 .50 24.0 12.1 5,1 .1 7.1 3.0 1.11 .55 26.8 13.5 5.2 .1 8.4 3.7 1.09 .54 30.8 12.3 5.7 ( .3) 6.3 2.3 37.0 15.6 5.a ( .3 9.5 4.3 .95 .95 .57 .55 As 54 of Sales > Gross profit SARB Het Income $ Sales/$ Invest. 50.0 9.7 19.1 .65 41.6 9,9 13.2 .61 55.7 11.8 20.2 .56 50.4 21.3 12.5 .38 SO.4 19.4 13.8 .42 39.9 18.5 7.5 .38 42.2 15.7 14.C .46 For Salesi 54 ROI (Corp. Net) 12.4 8.0 11.1 4.8 5.9 2.8 5.3 Gross Investi Sales Intsrnsl Use Total 35.5 $ $ 35.5 24.9 24,9 41.4 41.4 62.7 62.7 63.1 63.1 80.9 80.9 81.5 81.3 Capacity - MM lbsi Sales Internal Use Excess Total 16.0 7.0 23.0 11.1 5.9 17.0 19.9 6.3 26.2 21.6 4.7 26.3 24.5 9.4 33.9 32.3 6.7 39.0 39.0 39.0 1966 R.O.I. increased to 5.954 with only a slight increase in investment from year-end 1965. Net income increased 2554 from 1965 due to increased sales volume and lower cost of sales.-- the absence of costs associated with starting:up new'facilities in 1965, The sales revenue is the highest in the five-year span, 1962-1966. The increased volume and lower cost of sales more than offset a reduction in sales price of $.02 per pound, 1967 sales volume up 3254 but sales income increases only 1554 as the effect of a $,14 per pound erosion in selling price is felt. Cost of sales increase due to start-up of new facilities. R.O.l. down to 2,654 as the effect of new plant investment at year-end without the benefit of a full year's output. . 0633656 -141 pagur nm {$ in Millions) -1951 Actual_______________ __ 1967 1963 1964 1965 1966 Budaat ap'tv Sales Gross Profit GARB Other Income Div. contribution Corp. Bet income Selling Frice/U>. Cost of Sales/lb. As % of Sales a Gross Profit SAKE Net Income $ $ales/$ Invest. $ 45.6 $ 19.3 $ 6.9 $ .1 $ 12.5 $ 5.9 $ .91 $ .53 47. S 19.9 6.9 13.0 5.3 .91 .53 70.2 39.5 10.6 26.9 13,2 .90 .39 69.9 34.8 6.5 ( .1) 28.2 13.2 .84 .42 75.3 37.3 5.3 32,0 15.4 .81 .41 83.1 44.6 7,1 ( .9) 36.6 IB.7 87.7 49.2 7.2 ( .9) 41.1 21.2 .80 .80 .37 .35 42.1 15.0 12.9 .50 41.9 14.5 11.2 .47 56.3 15,1 16.8 .55 49.8 9.3 18.9 .52 49,5 7.0 20.3 .48 33.7 8.5 22.5 .49 56.1 8.2 24.2 .52 For Salesi % R0I (Corp. Net) 6.4 5.3 10.2 9.9 9.8 11.1 12.6 Gross Investa Sales Internal use Total $ 92.0 $ $ 9.20 100.5 100.5 129.5 129.5 133.2 133.2 156.7 156.7 167,9 167.9 168.2 168,2 Capacity - MM lbs a Sales Internal Use Excess Total 50.2 6.6 59.0 52.3 33.7 66.0 77.9 14.0 91.6 83.2 11.6 94.8 93.2 2.0 95.2 103.4 6.2 109.6 109.6 109.6 1966 r.o.X. of 9.6% was down slightly from 9.9% experienced in 1965. Met income increased over 1965 by 17% to the highest level in five-year span - primarily the effect of higher volume. Selling price per pound decreased by $.03 While cost decreased $.01 per pound. SAKE expenses for 1966 were down 18% as less RIDAR efforts were directed toward nonflat spotting yarns, investment increased 16% due to new plant facilities and increased buy-in allocations. 1967 budgeted sales volume up ll%a sales income up 10%. Cost of sales down sharply -- $.04 per pound as a result of increased production/sales volume. -142- 0633857 fQLVSSTSR--<IMCUroES.PYElNG AND FINISHING) ($ in Millions) _ J_912. . Actual - ^1M3 . 1964 Sales Gross profit SApB Other Income Dlv. Contribution Corp. Hot Income $ $ $ $ $ $ Selling price/lb. (Fiber only) Selling price/lb.(incl. Dye. & Fin.) Cost of sales/lb,(Fiber only) Cost of sales/lb.(Incl. Dye, & Fin.) As % of Salesi Gross Profit SAKE Net Income $ Sale*/? Invest. 1967 Budget gap'tv 11.3 ( 5.2) 6.0 ( .4) (11.6) ( 7.5) 21.3 2.4) 8.5 ( .4) (11.3) ( 6.3) 39.6 7.8 9.1 < .4) ( 1.7) ( 1.3) .60 1.10 .79 1,64 .68 1.18** .75 1,32** .68 .88 .75 .71 (46.3) 53.3 (66.2) .22 (11.3) 39.9 (29,6) .38 19.7 23.0 ( 3.3) .68 For Sales i % KOI (Corp. Net) Gross Invest; Sales Internal Use Total Capacity - MM lb*i Sales Internal Use Excess Total ? $ $ (14.3) (11.1) ( 2.2) 52.3 52.3 56.6 56.6 58.5 58.5 10.2 3.3 13.5 18.0 27.0 45.0 45.0 45.0 ** Dyeing end Finishing operation is at capacity in 1967 budget. 1966 reflects a loss position of ?7.SMM on a year-end investment of ?52.3MM. Dyeing and Finishing operations contributed $2.7MM of the loss and represented $17.1MK of total investment. 1966. sales revenue includes $5.iMM and coats of sales includes $8.7MM from the Dyeing and Finishing operation. 1967 budgeted sales revenue increases 68%; cost of sales increases 41%. The net loss is projected $i;2MM lower than 1966. sales price of polyester fiber increases to ?.68/lb.> cost of sales decreases to ?.75/lb. Dyeing and Finishi operations, which are budgeted at capacity, contribute ?8.7MM to Bales revenue and $10.2MM to cost of sales. The net loss at both budget and capacity levels for the Deying and Finishing operation is ?1.2MM with an investment of $17.6mm 0633858 143