Document DoM360kZ3Eb5Dxj1oJJn7jEQ

Deloitte HaskinsSells ASSOCIATION OF ASBESTOS-CEMENT PIPE PRODUCERS Financial Statements for the Years Ended December 31, 1980 and 1979 and Auditors' Opinion PLAINTIFF'S EXHIBIT ii CAPCO JEN 0032400 Deloitte Haskins Sells 1101 Fifteenth Street. N.W. Washington, D.C. 20005 (202) 862-3500 TWX 710-822-9289 AUDITORS' OPINION The Board of Directors Association of Asbestos-Cement Pipe Producers: We have examined the balance sheets of the Association of AsbestosCement Pipe Producers as of December 31, 1980 and 1979 and the re lated statements of revenue, expenses and changes in fund balance and of changes in financial position for the years then ended. Our examinations were made in accordance with generally accepted audit ing standards and, accordingly, included such tests of the account ing records and such other auditing procedures as we. considered nec essary in the circumstances. As described in Note 1, the balance sheets do not include amounts for furniture and fixtures, equipment, and leasehold improvements purchased and currently in use which is not in accordance with gener ally accepted accounting principles; such amounts are not depreciated, but included in the statement of revenue, expenses and changes in fund balance in the year acquired. In our opinion, except for the omission of fixed assets and depreciation in the financial statements as explained in the preceding paragraph, the accompanying financial statements present fairly the financial position of the Association at December 31, 1980 and 1979 and the results of its operations and changes in financial position for the years then ended, in conformity with generally accepted accounting principles ap plied on a consistent basis. March 4, 1981 CAPCO JEN 0032401 ASSOC IATICN OF ASBESTOS-CEMENT PIPE PROCUCERS BALANCE SHEETS, DECEMBER 31, 1980 AND 1979 NOTES ASSETS CURRENT ASSETS: Cash: Checking accounts and on hand Conmercial paper and certificate of deposit Savings accounts Accounts receivable-Special Counsel Interest receivable Total current assets TRAVEL ADVANCES PREPAID CHARCES TOTAL ASSETS LIABILITIES AND FUND BALANCE CURRENT LIABILITIES: Accounts payable-Special Counsel Accounts payable - other Pension contribution payable Total current liabilities UNEARNED INCOME FUND BALANCE: Designated special reserve Undesignated Total fund balance TOTAL LIABILITIES AND FLN3 BALANCE 4 1 See notes to financial statements. 1980 1979 $ 14,656 198,000 23,832 50,455 282 287,225 $ 1,023 100,000 18,322 685 120,030 600 600 3,710 4,310 5291,535 5124,940 $ 44,825 46,214 8,850 99,889 5 20,590 7,800 28,390 163,000 28,646 28,646 82,232 14,318 96,550 $291,535 $124,940 CAPCO JEN 0032402 ASSOCIATION OF ASBESTOS-CEMENT PIPE PRODUCERS STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN FUND BALANCE FOR THE YEARS ENDED DECEMBER 31, 1980 AND 1979 NOTES REVENUE: Membership dues Interest Sales of research, education, materials Conference fees Assessments - Special Counsel Other Total revenue and promotion 3 EXPENSES: Corrpensat ion Staff salaries Deferred salary expense Part-time personnel Payroll taxes Biployee group benefits Pension expense Total 2 4 Office Operating Office rent Office supplies Copying charges Telephone and telegraph Postage, express, and freight Leasehold inprovements and furniture Total 5 General Operating Employees' expenses Automobile expense Board, comnittee, and meetings Dues and contributions Subscriptions and publications Insurance Personal property and other taxes Total 1980 1979 $429,990 30,839 2,037 8,300 82,951 258 554,375 5379,995 27,255 8,351 10,739 244 426,584 139,980 1,496 6,758 10,217 9,475 167,926 126,475 2,382 1,303 5,995 8,475 7,800 152,430 14,018 4,284 7,541 5,880 5,004 239 36,966 13,666 3,577 7,007 6,258 5,592 338 36,438 38,063 749 48,454 1,752 3,154 10,214 495 102,881 35,508 397 32,146 1,305 3,078 6,007 807 79,248 CAPCO JEN 0032403 Research, Education and Promotion Public Affairs Program Technical Affairs Program International Affairs Program MIS programs Non-priority programs Total Professional Services Legal-General Counsel Audit and accounting Statistical Medical Advisory Total Other Miscellaneous Legal-Special Counsel Total Total expenses EXCESS OF EXPENSE OVER REVENUE FUND BALANCE, BEGINNING OF YEAR FUND BALANCE, END OF YEAR See notes to financial statements. NOTES 1980 1979 5115,359 54,138 7,764 2,213 __________ 179,474 $121,025 46,939 6,861 920 90 175,835 35,196 1,700 8,450 4,681 50,027 25,304 3,498 8,160 36,962 2,054 82,951 85,005 783 783 622,279 481,696 (67,904) (55,112) 1 96,550 151,662 $ 28,646 5 96,550 CAPCO JEN 0032404 ASSOCIATION OF ASBESTOS-CEMENT PIPE PROQJCERS STATEMENTS OF CHANGES IN FINANCIAL POSITION FOR THE YEARS ENDED DECEMBER 31, 1980 AND 1979 SOURCES (APPLICATION) OF FUNOS: Excess of expenses over revenues Increase in unearned income Decrease in travel advances and prepaid expenses Total funds provided (used) APPLICATION OF.FUNDS: Decrease in deferred salary payable INCREASE (DECREASE) IN WORKING CAPITAL ANALYSIS OF CHANGES IN WORKING CAPITAL: Increase (decrease) in current assets: Cash Accounts receivable - Special Counsel Interest receivable Total Decrease (increase) in current liabilities: Accounts payable - Special Counsel Accounts payable - other Pension contribution payable INCREASE (DECREASE) IN WORKING CAPITAL See notes to financial statements. 1980 1979 5(67,904) 163,000 600 95,696 5(55,112) 1,757 (53,355) $ 95,696 (4,367) 5(57,722) $117,143 50,455 (403) 167,195 5(43,790) (5,804 (49,594) (44,825) (25,624) (1,050) $ 95,696 (328) (7,800) 5(57,722) -5 - il CAPCO JEN 0032405 ASSOCIATION OF ASBESTOS-CEM PIPE PRODUCERS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1980 AND 1979 1. ACCOUNTING POLICIES . The financial statements of the Association have been pre pared on the accrual basis of accounting except that the cost of furniture, fixtures, equipment and leasehold improvements are charged to expense in the year acquired rather than being capitalized and depreciated over their estimated service lives. . The Association follows the practice of designating a portion of the fund balance for specified purposes. .. The designated fund represents accumulated interest income reduced in 1980 by project expenses of $84,000 approved by the Board of Directors. No expenses were charged to the reserve fund in 1979. . The Association is exempt from federal income taxes; accord ingly, no provision for income taxes is included in the finan cial statements. 2. DEFERRED SALARY PAYABLE Under a three-year employment agreement with the President, com mencing January 1, 1977, 52,000 of the President's total salary was deferred annually. The amount deferred was credited to the account of the President with interest at the rate of 6% a year. At Decem ber 31, 1979, ail amounts deferred under the agreement, plus inter est, had been paid to the President. In December 1979, a new two-year employment agreement was entered into by the President and the Association. No provision for salary deferral is included in the new agreement. 3. PUBLICATION SALES The Association follows the practice of charging companies for cer tain publications distributed to them. In 1979, the direct costs associated with printing and producing the publications were $8,034. This amount is included in expenses under market development and regulatory affairs. -6- ii CAPCO JEN 0032406 ASSOCIATION OF ASBESTOS-CEMENT PIPE PRODUCERS NOTES TO FINANCIAL STATEMENTS ' DECEMBER 31, 1980 AND 1979 4. PENSION PLAN During 1979, the Association adopted a trusteed contributory pen sion plan covering substantially all of its employees. The plan requires the Association to make contributions equal to 10% of the annual compensation of eligible participants. 5. OPERATING LEASE The Association has minimum annua! rental obligations of approx imately $12,000 for office space under lease agreements which expire November 30, 1981. The leases also provide for rental escalation payments based upon the Association's pro-rata share of increased building operating costs and real estate taxes. -7 - CAPCO JEN 0032407