Document Looao2ykJV6Zq7zobEzjXdMVw

PLAINTIFF'S EXHIBIT Riley Stoker Corporation Annual Report For the Year 1948 Fred H. Daniels Louis E. Griffith David K. Beach . Ollison Craig Max H. Kuhner David K. Beach . Officers Chairman and Vice-president President and General Manager Vice-president and Treasurer .............................................Vice-president .................................... Vice-president ..................................................... Secretary Directors Fred H. Daniels, Chairman David K. Beach Philip R. Mather Louis E. Griffith George N. Jeppson Chapin Riley Frank C. Smith, Jr. STOKER CORPORATION, WORCESTER, MASS. Boston Now York Philadelphia Washington Buffalo Pittsburgh Cleveland Now Orleans Memphis St. Louis Kansas Qty St. Paul Tulsa Houston Portland Seattle Datroit Denver Chicago Cincinnati Atlanta Salt Lake City Los Angeles COMPLETE STEAM GENERATING UNITS BOILERS PULVERIZERS BURNERS STOKERS SUPERHEATERS AIR-HEATERS ECONOMIZERS WATER-COOLED FURNACES STEEL-CLAD INSULATED SETTINGS FLUE GAS SCRUBBERS RS-001780 1/17/02 NUECES TO THE STOCKHOLDERS OF RILEY STOKER CORPORATION: There is submitted herewith for your consideration the audited Consolidated Balance Sheet as at December 31, 1948, the audited Statements of Consolidated Surplus, Profit and Loss, and Application of Funds for the year ended December 31, 1948. The net income was $2,581,185.17 after provision for Federal taxes. After deducting the Preferred Stock dividend, this is equivalent to $7.33 per share on the Common Stock and compares with similar figures of $2.21 for 1947, $1.68 for 1946, $.54 for 1945, and $.95 for 1944. The net income for 1948 exceeds that of any previous year. During 1948, dividends of $6 per share, amounting to $16,047, were paid on the Preferred Stock, and 50 cents per share, $175,000, on the Common Stock. As of July 1,1948, your Corpo ration purchased 205 shares of Riley Preferred Stock, paying an average price of $147 per share. Your Board of Directors voted at a meeting, held on January 28,1949, to acquire on March 30, 1949, the balance of the outstanding Preferred Stock amounting to 2572 shares at the redemp tion price of $156 per share. After this is accomplished, all of the Preferred Stock will be retired and the capital structure of the Corporation will consist only of 350,000 shares of Common Stock. After depreciation of $91,951.81, the net investment in land, buildings, and equipment increased during 1948 by $431,145.87, and the net current position improved by $1,810,871.62. The details of the absorption of the increase in the net current position are shown on the Consolidated Statement of Application of Funds. Production for 1948 was the highest on record, exceeding the best previous year, which was 1943, by forty-four per cent. Recent sales to Public Utilities include the largest and highest pressure steam generating units ever constructed by your Corporation, and the outlook for additional important business in the public utility field is excellent. Your Corporation has entered the year 1949 with a large volume of unfilled orders, and the new business taken during the first three months of this year is substantially in excess of that received during the corresponding period of 1948. The prospects for future business, both domestic and export, are very favorable. Yours very truly, Worcester, Massachusetts March 31, 1949 F. H. Daniels Chairman L. E. Griffith, President RS-001781 1/17/02 NUECES Consolidated Statement of Application of Funds For the Year Ended December ji, 1948 Funds Provided Net Income..................................................................................................... Add: Charges against income, requiring no expenditure of cash Depreciation......................................................................................... Less: Gain from Sale of Fixed Assets............................................... 391,951.81 1,130.63 32,581,185.17 90,821.18 Proceeds from Sale of Fixed Assets........................................................... Principal Payment received on Mortgage............................................... 1,527.89 900.00 Total Funds Provided..................................................................................................... Funds Applied Increase in Deferred Charges ........................................................... Additions to Fixed Assets ................................................................. Payments to Sinking Fund for purchase of Preferred Stock . . . Fire Loss: Reconstruction Cost to December 31,1948 ........................ Adjustment of Taxes and Other Charges applicable to Prior Years . Dividends Paid ................................................................................... 328,879.33 521,030.17 30,247.94 86,965.37 5,392.81 191,047.00 32,674,434.24 863,562.62 Increase in WorkingJCapital 31,810,871.62 Changes in Working Capital for the Year Increase in Notes and Accounts Receivable Reduction of Bank Loans ........................ 33.160.532.60 750,000.00 Deduct: Increase in Federal Income Tax Liability........................ Increase in Other Current Liabilities................................... Decrease in Other Current Assets......................................... 31,093,815.66 550,250.42 455,594.90 33.910.532.60 2,099,660.98 31,810,871.62 To the Board or Directors Riley Stoker Corporation Worcester 6, Massachusetts We have examined the consolidated balance sheet of the Riley Stoker Corporation and its subsidiary companies as at December 31, 1948, and the related statements of consolidated profit and loss and surplus for the year ended at that date; and have had submitted to us a report of other public accountants on their examination of the subsidiary not examined by us. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The Company changed its accounting procedure relative to drafting wages which were formerly charged to expense currently, but are now carried as engineering work in process until completion of the related contracts, at which time they become a cost of sales item. In our opinion, the accompanying consolidated balance sheet and statements of consolidated profit and loss and surplus present fairly the financial position of Riley Stoker Corporation and its subsidiary companies at December 31, 1948 and the results of their operations for the year ended at that date, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year, except for the change in accounting procedure set forth in the preceding paragraph, in which we concur. Worcester, Massachusetts March 17, 1949 George A. Smith and Company, Certified Public Accountants RS-001782 1/17/02 NUECES RILEY STOKER CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET D ec em ber 31, 1948 w p 3 3 < h so iJ c< c" -rot <T>3=5bCo 6 3 CL, m l*-*l HU & i-oSJ* 2E MD O', **> rs 'J' tO >Ti n o 00 O rn f'-' S UEo h u: tA bn < o <: < t0o4 OLOv toIs, VO ^ N O ^ N ^n O*oO <cSo O<Ss O-* t- Noo otoT oh' tmo" N 0, J3 c3 w < OM H ` 'jS ** 8 fe 3 d H [2 t Si g -5 | a O8 su 6 wa ;a8 1r2t n M 3 T*< rt Udo CVO <2O0 B u uopj 02 N^ Wcs_ tN^ O<0'^ \o oC -T vo" o--\ Co4 oNOo OM' b4 ,-T _r w u2 U S3 b Jorjt kV0,- s CO 8 .s S3. JV3 >"13 U r"uVQdt, *>ar So S*T* w 6S?. > CL, BS < 88 w 0ntJ3oJj g *Ua d u3. bCo JCA "C a crdt *1d) *Ou5' < I bco 'dc s > V, tto) m8a S8 1I A8 Prepaid Insurance, Interest and T a l e s .............................................. Supplies and M is c e lla n e o u s ............................................................... Fire Loss Cost of R e c o n s tru c tio n ................................................... *112,629.86 34,673.29 86,965.37 234,268.52 Ca p ita l SuRPLus-Per attached s ta te m e n t........................................................................... E arned Surplus--Per attached s t a t e m e n t........................................................................... 75,631.40 5,746,200.50 Statement of Consolidated Surplus For the Year Ended December 31, 1948 Capital Surplus Balance, December 31, 1947 ..................................................................................................... Less: Excess of cost over par value of 205 shares of Riley Stoker Corporation, 6% cumulative preferred stock reacquired and held in sinking fund..................................................... Balance, December 31, 1948 ..................................................................................................... 385,326.75 9,695.35 375,631.40 Earned Surplus Balance, December 31, 1947 .................................................................................................... Less: Adjustments of various tax reserves, additional State and Federal taxes and expenses affecting prior years........................................................................................................... Add: Net Income for Year........................................................................................................... Deduct: Dividends on Preferred Stock............................................................................. Common Stock............................................................................. 316,047.00 175,000.00 Balance, December 31, 1948 ..................................................................................................... 33,361,455.14 5,392.81 33,356,062.33 2,581,185.17 35,937,247.50 191,047.00 35,746,200.50 Consolidated Statement of Profit and Loss For the Year Ended December 31, 1948 Profit on Operations after selling and administrative expenses, but before depreciation . Depreciation ...:................................................................................................. Operating Profit............................................................................................................................ Other Income.................................................................................................................................. Other Deductions ...................................................................................................................... Net Income before Federal Income Tax................................................................................... Provision for Federal Income Tax............................................................................................... Net Income to Surplus................................................................................................................. 34,287,450.40 91,951.81 34,195,498.59 33,449.64 34,228,948.23 62,653.56 34,166,294.67 1,585,109.50 32,581,185.17 RS-001786 1/17/02 NUECES