Document NMd5rnBvJNKjaxp4GonyDNgR

GAF CORPORATION f PLAINTIFF'S EXHIBIT GF-1948 I 1 I ANNUAL REPORT 1976 HCWGAFREACHED-1 BILLION v es:j"esy;pe.v3. o OAF ( public March#, IMS #alac ^65 $416,677,000 New products -'ccce 3-p cc .es'e' za=ez Plant expansions See z izz z-zze- zza'- z z a~` - - "C'c- 'e- 5 s".c:'50-~ sr; s' 5 y -reasc 1966 $484,062,000 Acquisitions ubsidi*^. I I 1967 $504,584,000 1968 $554,264,000 Corporate 'iame cnanged to GAF CORPORATION 1969 $592,066,000 1970 S583,482,000 1971 1972 S683,762.000 S768,460,000 1973 $848,886,000 '^oauceG-^ 500 s"ce1 were s `as*es: zc>o' * '** '"T'oauceGaico'e' ate*'oancac.ng 'z< `e-' es ir-oojce 90-seco~c Drocess ng ..'ay l-m trt'oc jce 9 garages lr'r',oouC6T"^'De'l'^e, asona-' 'oo^g s^rgies nt'ocuce S^'e-Stix * `oo' 'ne 'V00uC GAp C0'0r Df,r,t Mn^^ocuce Ta' ^g v-e*-Vaste' / eA'5 lr'rrocuceGa,'C ' O'essv'eresseiine'sysie^s :n,,oojceCeDna` ca^g-owm regu'a'of r'e*aavecis.r'g :anca gr 'eati/ng He^'yFo^ca G af 0* cac ,"`i o' Gisr,e.ar,2 ana Wait Di$ne, i/to'c By '9Tc Gap inm stfriiiariy oes gnaiec ai some 20 natona' :our s' a:ua :t;crs "trocjcevangua'3' . ~. sc ano sf''-fters mi'ocuce ' iCoooe'ca^e-as Sta'!-uc of S20-^ mo* acevene c^emcais cani at Te*asC \ StO-miiicr Texas C tv aooton *of agr,cu^u'aic"'e^cais S'S-^i'i'or aadmcr atB^gnam ton to co*o' oaoer coat^-g S2 5-^iiiionexoa^sof* a la *e" C'iv couoes D'coocton c Gantrez'DoiyrT-e' Sta^-.co S'C*"- acr-c- aA'"''ena' =a *c czc^zrza<~ '=' O'snee' .'n. -zrz-^2 Bee - 0'zz^.z' c' y e'oo-Cs:a" c '. ' i;c eS'6L.5.;'f:-: ... Esac s- ~a-? : 5-veoe' -cao''e^orsc ca'er ^ec'Dg'aon^cs Esao snSwCs:afe* ^ "a-', ana \or*a. .. -C2w.fL - I:c- 3 a': : P*>croCo -crc::,i'''S"e- ne Modes' Es ao s- ~a'-e--e i.cs - i - a.s" a 2~z S.% a*.: EsiaC'S'-a-'-e'-g^ci 'a ^sr~'2'" Sc^Ts.-c' 'n^oa^ce *C :o'C e> I 1974 1975 <976 S948,809,000 $964,421,000 in^oc-ceGa,e.'a- ' 9- 'e-Bo^owremare-?."acec nC^,-5. j-ee* vc "or--g SI,060,507,ooo e ~e ;a 9eg - S9-~i- "or e^ca-s r i-'ocea^ ero:c i*~c * s' 5'n;.\,h.,aas Bee 530-'~-"'Or c.'a-o; r a-' yVes'Ge"^a. Bee *'530-"' c'ee' . g ^ ar '? 2rc Beg'-co'S".: r" g-a.-c^e* coliS cacn '20 a-- a .c e 01 -0207 M = -ec ;3 u". 5'3'es 3a; GAF 12029 ....... \,-3+A*' ' G AFsproducts are its face to the world =ac-.vear new developments in cnemionoto and repro. and During 1 laterals on oj' l,nes ol proven orod, ms-oennance sales TABLE OF CONTENTS 2 Message `ron the President 4 Chemical 8 Photo &Reprc 12 BuilOirg Materials 18 international 17 Corporate 19 Directors ana Oncers 20 Review at Conscnda:ec Financial l"forma::Cn 23 Summary of Sigcitica": Accourtmg Pollies 24 Consolidated Balance Sheet 26 Consondatea Statement of mcc^e 27 Consolidated Statement of Changes m Financial Position 28 Notes to Consolidated Financial Statements 32 Auditors'Opinion 33 GAP Products anc Services 34 GAF Locations C>' The 1977 Annual Maating of Shareholders will ba haW at ifeOO a.m.,1V*sday, April 28, at Tha Continantal Plaza, North Michigan and Delaware, Chicago, III. Siock Transfer Agents ano Registrars Citibank N A 111 Wan Street New York N Y. 10015 First Jersey National Bank One Exchange 3iace Jersey C ty N J 07303 Fcrng)-K as filed with me Securities ancfibhange Commission may oe obtffheo freeofcnarge by writing to invesjor Reiators Dept GAF COR^5Ra~ion iaoWest 51 Street New York N v 10020 Financial Highlight* Salat Nat Income Earning* por Common Shara . D r,ied Cash Dividend* por "'e e'-ec Snare Z ~~zr Snare -* -:on ^97? ; * 1978 81,080,807,000 8 18,700,000 81.21 81.14 $1.20 $ .88 S964J21 000 $ 30 946 000 $2 06 Si 79 Si 20 5 52 D1-0S07CT5 GAF 12030 I MESSAGE FROM THE PRESIDENT 2 Despite GAF's histone achievement o* over $1 oiliion m annual sales a rise of 10% over 1975 earnmgs for 1976 were disappointingly ow --the result of a complex mix of economic factors Earnings for the yeaf oroooeo 36% to SI 9 7 million versus S30 9 mil non in 1975 Of the $112 million earnings oecime $9 2 million is accounted for Dy the unusual conjunction of a number o' spe cial items--a non-recurrmg S4 mihon net gain m 1975 on the saieottecrnoiocv and Know-now to theGAF rtuis omt venture currercy fluctuations mat resulted in an after-tax loss cf S3 0 m.Iion in 1976 compared with a SO 5 m,llior gam in 1975 and the impact of ire silver less, discussec Deow V in addition increased unit manufac turing costs of over S35 million prime- \ for raw materials, laoor and energy exceeded price increases o> over S' 0 million Year started strong The continuing worldwide recessor in 1976 combined with contm jaiiy esca lating costs of operation, had a mixed effect on GAF First quaner results showed the <md of promise we expected wen earnmcs turning up strongly follow ng a f.rm fourth quaner 1975 Direciooeratirg profits to' tnePhoto& Repro group were negative however, as they would oe m tnree of tne four ouaners of tne year Your company found it increasingly difficult to operate profitably m tne consume' sector of tne highly dominated photograpnic mcus"v Sales continued strong into the seccrnc quarter ana except tor the non-recurnng S4 million gam a year eamer earnings were nigher Chemicals arc Buiidmg Materials contm jeo meir prov able oehormance Dut signs of siioomc began to snow uo m the third Quarter Oue pr-mari-y to :he inability ;c pass increased costs aiong Saies CCnlirueo tocump m the tnrO cuaner arnpugn eam.ngs .'eves oeci nea '-on a yea' eame' -n gooc caas a result ct tne vagar es of toregrency fluctuations i" me founn Quaner results were ius: aDove b'eaK-even Eammgs 'or me cuaner ano for tne v3' were erocec Oi a pre-tax reserve fora silver snonage ot apprpximaieiy S3 : mill on The cause cf tne snertage ras not as vet Deer oetermmec out it it s "e result of tnef" recovery tn-ougn msurance may oe possible G A" reserved J 323 3 i GAF 12031 1 I irjr Te estimated amount of tne short age, ana the impact or fourth-quarter earr-mgs was a negative Si 7 million after taxes or '3c per share of primary earrings A tull-scaie investigation is under *vay prices fluctuated widey in 1976. and increases did not aways hold For the cocooraton as a wrote price increases o,o -,ot xeep pace with increasing costs Of production distribution ana setting Management intensified its efforts to tower costs and tighten controls A per sonnel reduction program was under lain in tne autumn to reduce our workforce oy some 500 people While such reduct-ons cause a short- term increase in costs-mamiy because of severance benefits-tne effect will soon show up m lower payroll expenses Positive tgns 7nere were a number of positive md ica- tions r 1976 r GA F substantially strengthened its capi ta1 st'ucture In addition to a S10 million can from three banks to finance a wastew-atenreatment facility at our lmoer n j plant me company strength ened its capital structure in April 1976 wiin a 565 million private placement with lour major insurance companies The med-rare long-term loan enabled us to 'eoav intermediate-tem bank debt, thus lengthening me average life of the corn- cam- s aeot This reouces GAF's vuiner- ao"Tv torate fluctuations ana increases ^ecraeri,ness of payments Just two 'ee-'s ago on February 3, me company cccudeo a S40 million private piace- ' " 'hreeoftnesame four msur='_eco'-Danies. Also a fixeo-rate :a` ' D'cviae a solid Dase for :ac -a' D'ogramS - -- j e'^e^o lures for I976were at an 3 r gn-S46 4 milnon--msupport -ca-scr-atncrreandaproac GAP continues to move ahead m its product development efforts aimec at broadening product lines and penetratmg more deeply into profitaoie markets A number of tnese new products and expanded lines are higniighted in the ensuing pages Product development is a costly process and often a risky one but even a reasonably mooest record of success can wen repay me company s efforts :One promising area for GAF is medical and dental x-ray films ana cnermcals. now consolidated under the umbrella name of Gafmed `in December me com pany acquired the medical products division of United States Radium Cor poration of Morristown, N. J . for some $2.5 million The acquisition will enable G A F to manufacture intensifying screens, film cassettes, illuminators, ana otner hardware to complement the company s x-ray line. In November the company announced plans for a $2.5 million modernization and expansion program at its disperse oyes facility m Rensselaer. N. Y The pro gram includes new equipment to increase production capacity aimed at tne needs of the synthetic fibers indus try Work on the plant is expected to be completed in late 1977 As an incentive to expand me plant, the local industrial development agency authorized the issuance of tax-free donas to enable GAFto finance uo to$f million at favor able rates : Toward the end of the year, the company began snipping bulk quantities of THF (tetrahydrofuran), a specialty solvent, fromthe Lmaen. N.j. plant GAFisone of only three U.S firms manufacturing this chemical, which is used m coatings for magnetic tape and vm-yi upholstery, m adhesives for plastic plumbing and as a chemical intermediate GAFisone of tne world s leading producers of butanediol from which THF is derived Lawsuit against Eastman Kodak in the company s antitrust sun agams: Eastman Kodak, intensive oremai act.vities continued with oral aepos.tiors oemg taken on bom sides GA F s case had earner been linked by me court for pretrial proceedings wim another cor'"pany s claims against Eastman Kooa At the request of G AF ano me omer plaintiff the court has now oraereo secarate tnais m me two cases As preparations have intensified coun sel on both sides ana the iudge have agreed that G AF s case win oe scneculeo for trial m April 1976 Company laartar, stronger GAFwentOff stridem 1976 Slowing our ambitious plans, but tnis merely deiayec ourtimetaDletorgrowtn Even down turns offer certain Dene'its. princioaiiy the opportunity for business to regrouo to trim the fat that tends to accumulate during bettertimes. toget m shape We feel we have come through tne oenoo leaner and more determined than ever to make the best of what the future holds m store Our long-term plans are mtenaed-not only to preoare us for future growtnjgut more imDonantly tonelous shapejs'ur destiny so that growth car occur k3ur capabilities are strength ened a?fa we have the people who know h'3w to use them While some first-quarter 1977 signs seem encouraging it is too early to predict a? marked upturn in tnecomipany s fortunes certainly tne weather m tne earf?part of tne vear ao not cooper ate Improvement in profitability will no! be easy ^ut the management o' G Ac is dedicated to mating it hapoen By Ordetol the 8oard of Directors : in June the newly founded G A F Broad casting Company took over operation of New Yom classical music radio station WNCN-FM Tne story received consideraoie attention m the media anoGAF was highly praised for its corporate social responsibility Tne station has increased its audience substantially m the eight months of GAF ownersnio. ana advertising revenues have gone up more than proportionally Chairman o' the Board and President February 17, 1977 01-0237C7 i GAF 12032 CHEMICAL Group Not Soloa Millions) Nei Sa.es Direct Operating Profit =.c-3csa-a oca'eaC:foo'aieS*oe''ses 1976 *267.7 S 39.6 Chemicals AgricuitureSpec.aities Dyes ana Pigments intermeaiates Iron PowOe'S Latex Polymers and Comoouncs Monomers Polymers I Worldwide sales for G AFs Chemical group rose 14% in 1976 to a record $267.7 million. Direct operating profit was down 2% from last year, as the S3 5-rroiiion reserve tor the silver short age eroded what would have been an 8% rise Recovenng from the severe recession that plagued tne chemical industry during 1975, demand for chem ical products was very strong in the first half of 1976 After leveling off during the summer monthly sales began to rise again in October. GAP produces hundreds of chemical products m various fields and serves a broad base of customers Thus, when the agricultural chemicals market declined sharply, as it did m 1976. the effect on GAPs dollar sales was mitigated by increases m other, less profitable areas Sales of acetylene chemicals improved by more than 28% dunng 1976 led by strong oemand tor butanedioi. used m manufacturing vanous plastics and fipers 4 THF solvant bi production Among new developments GAF began producing THF (tetrahydrofuran) denvea from outanedioi. at its Lmaen, N J . plant m Novemoer This solvent is used for coating magnetic tapes and m protective coatings for automobile uphoistery and vinyl roofs it s a basic ingredient m solvent mixtures usee to cement PVC pipe Butaneda-oasea oiasucs 9am -g Ace j$ ajcs Also based on butaneaioi Gafite'PBT tooyoutyiene terephtna.atei engmee-mg thermoplastic is unae' market neveopment The polymer displays an excellent combination of s-,engtn :ov, density moiaabmty sovent resistance and neat resistance GAF s first enr< into the fieia of narj thermooiastics Gafite poivme' 'S now toeing used ter automotive aistr butor caps aooiance nous.ngs electronic connectors ana motor housings The comoanv s new production 'aci ity `or manutactureO' Gaf'teresinsatCa'venCt'. Kv snoue oecome *ui v ooerat onai curing 19?' PVP sales good GAF s PVPipoivvinypy'roiidone] fam > continued to seii wei' m ' 976 7rree<ev oroducts in this group are M-Pyrol! tmethyipyrronoone) V-Pyroi - (vinylpyronoone) and Poiyciar* tpoiyvmyipolypyrondonei M-Pyrol solvent is GAF 12033 Soivenrs Specialty Chemicals Surtactarts Textile Chemicals Tnermopiastic Molding Resms F*lts and Fitters Designer Felts Filter Media Gaskets inaustnal Felts Liauid and Gas Filtration Devices Mineral FiDer Products Papermakers'Fens Piano Felts Poiisnmg Felts Pressure Vessel Filter Systems Wicking and Lubricating Felts OranuiM Mineral Granules used ior lube oil processing m theoii industry as a purifier of natural gas. and as a solvent tor a variety of vinyls, ureth anes ana acrylics A contract was signed with a ma/oroilcompany last yea- to suDC'y M-Pyrol solvent for its re-ne'ies V-Pyroi monomer is used m formulating coating tor ultraviolet curing applicatcns Tms technique has found its place m GA F s own manufacturing processes as a means of Donding a poiyuretnane coa'.ng onto floor we and sneer vmy) ' OO'-ng - - : sc 3ee- .: a- acsoroent s useo as a cianfer r. -v o w.ne-makmg to improve ' :'3C a~d to prevent prawning sa sc usee to stable -:j-j'o-'jt'uices . -"a- PVP proaucrs PVP-iocune . - 2- -op-s'.pgng nome antiseo- ssaSuigcaiscruD GAP* eccient .s usecasa - :a 'aoietoismtegrant r's a-e oocuia' 'av acac -vei :c mgnuai i'c?'C".eca25o $ -cocarbc^ Specialty chemical sales up G AF's specialty cnemicais had a good year, witn increased sales of surfac tants textile auxiliaries. Uvinul ultravio let absorbers, caroonyl iron powders, and silver salts Among surfactants, sales ot the igepal. Antarox8: Gafac * and Igepon lines used in formulating detergents ana cleaning products as well as in cosmetics and toiletries, were strong. GAF silver salts are used m making miniature energy cells for watcnes. and GAF is now considered a mapr supplier of silver oxide to battery manufacturers Sales of Uvinul absorbers were uo by more than 40%. Used in various plastics in the auto industry. Uvinul absorDers helo protect vinyl car roots ana paints from the sun's ultraviolet rays A similar application extends color stability in polyester carpet yarns Sales of carbonyl iron powders, pri marily used m electronic applications increased almost 50% last year re covering from depressed market conditions m 1975 Latex products sales advanced 7% m 1976. with oarticuiar strength in the area of paoer coatings Latex coatings not only provide paper and cardboard with superior grease resistance, but also imDrove printing characteristics GAF latex is widely used as a backing ad hesive for carpet improved latex manufac turing equipment was installed at G A F s Chattanooga. Tenn plant miate 1976. Tne product now being made there is not only of mgner quality but also less expensive to manufacture La*e coalings aoo g-ease resistance ic oaoer Dye and pigment sales, whicn have been depressed for some time, increased more than 40% last year despite the textile ndustry's slow Dace of recovery from me 1975 recession Over me oast few years. GAFhas eval uated the dye and pigment area care fully. and naseliminated a numoerof unprofitable products fromtne line By concentrating on promising areas the company believes dye profitability wt1. be improved substantially 0 v GAF 12034 GAPere** Oye* for ootyssief 'acr.es One o# these promising markets for dyestuffs is paper colorings. GAF has long been regarbed as a maior supplier of dyes to the fine-paper industry, and in 1976 the company gained a good foot hold in supplying the household paper (toweling and tissues) market as well Another growth market involves the sales of disperse dyes for use on tex tured polyesters. One of these dyes is Genacron* Orange, a disperse dye paste introduced in 1976. which works exceptionally well with the modern rapid printing equipment now in use Additional disperse dye production capability is being developed through an expansion of the company s Rensselaer. N Y . plant Begun in 1976. the upgraded facility will be producing disperse dyes m commercial volume in 1977 Agrlehom sale* down As previously mentioned, sales of agri cultural chemicals for GAF and the industry in general were down for the year A company for which GAF manu factured a hertoicide under contract is terminating that arrangement Also a farmworkers strike and unseasonai rams m California depressed sales of Cepha* plant growth regulator Sales of Cepha regulator were good in the east ern part of the country, however, and the comDany s distribution effort for the product is being expanded on a region al basis GAFis a maior supplier of semi-ceramic granules totne roofing industry, includ ing the company sown Building Materi als group These granules are used as the surface layer m shingle and indus trial roofing, as a filler mother asphalt roofing applications and in all-weather surfaces for tennis courts Dollar sales were up for this product line in 1976 Cue primarily tc pnee increases while actual sales volume remained unchanged from 1975 GAPo5,n''fS`'e'g-te'';c>c-'s --er - - s The company is a mapr factor m re let and felt-based filtration market ana sales were up some 35% last year With its IFC filter cartridges GAF is expancmg its role as a supplier of filters for the paint, chemicals, food processing anc pharmaceutical industries GAF* filter products are also finding apolicat.ons as pollution control devices -UVt /%-0 f - 0 7 tKrsH 0 Oafit*! Resina In 1976, OAF continued develop ing He first commercial hard thermoplastic--Oafite*. With Its unusual range of properties, this PST (polybutylene terephthelate) engineering plaetic ie new ueed to mako motor housings, automotive distributor cepe, electronic connectors, end applF ance housings. Hundreds of other application*, from food packaging to textiles to pan barrels, ere being inves tigated both by OA F end by potential customers. O AF ie expanding He Calvert City^f Ky., plant to manufacture this versatile plastic and expects to produce OafKe resins in mid-l 9"' GAF 12035 7 PHOTO & REPRO Iroup Net Sal** (millions) Net Sales Direct Operating ProM (loss)' = c joes unai ccatec Cyscraie oe^ses 1976 6371.1 6 (2.8) 1975 S357 0 S 48 Photo Products Accessories Cameras Diazo Photopiates Films Graphic Arts Materials Papers Photo Chemicals 0i For Photo &Repro. 1976 worldwide sales were 4% higher than in 1975. but the group experienced a loss as cost increases exceeded selling price increases Consumer Mm sales lagged well benmd 1975 levels Camera sales did not reach expected levels due pri marily to the failure ot several key equip ment suppliers to deliver sufficient pro duct m time to meet customer demands Raw material costs continued at near record higns with the price of silver, a nasic ingredient in photo manufacturing, declining only slightly from 1975 levels The unit cost of raw materials was $3 million greater than in 1975 Technical problems encountered in creating a new color print film compa tible with processing methods required tor the film that dominates the industry are being resolved, and the new film is berng moved from pilot production into full-scale manufacture pOOuiar l02Ahom^r-iov(#ca'^9'aZOO^S .'JOCi Ne<* coTMoacNo*e2020ca^e'ac`Oses id: ooce( <oon<yn. flash, and the 330 TeleScopic" oocxe: cameras are tiny, easy-to-use cameras that use popular 110 si2e film The iooa compact 8mm movie camera arc tne 102A model with zoom lens are easy :o operate and fit neatly into the paim of tne hand. The 2100R remote-controi suae protector is a lower priced version m me popular GAF Hush-A-Matic* line The 2020. the 2020S and the 102A achievec the unusual distinction of being selected for the (New York) Museum of Modem Art s prestigious design collection ana all were particularly wen received m the marketplace The other new GAF development m 1976. the XL-2 camera, is the lowest priced quality sound movie camera available . 0 The $2 9-billion amateur photography market is dominated by one company There are several domestic competitors lor small segments of the total market, but GAP is the only other U S company that offers an across-the-board product line--film, paper, chemicals ano pro cessing. still and movie cameras ano proiectors New photo products During 1976. GAF expanded its product line with six new cameras and a new slide proiector The compactibie 2020. the 2020S with self-contained electronic I Lo^esi-D'iceoQuail'-can-e-a ci ic-ce tCunC "iO'i'9S 3^0'CdO 9 'C "anv 'arm.ns 8 -1-ODCV- GAF 12037 Pnotc Processing Service Phctofesisis Picicna1 Slides Pro]ecto-s Suae Viewers Specialized Professional Maieriais Siereo Picture Rees Siereo Viewers X-ray Films. Chemicals, and Accessories Business Systems Products Business Forms Contract Manufacturing Service Copying Supplies Diazo Copiers Document Retrieval Units Microfilm Equipment Microfilms Overhead Transparencies Among omerGAFphotoproducts the Mickey Mouse motif 126 film camera for children ties in with GAP's marketing oosrtion as "The Official Film" at Disney land and Walt Disney World. G AF is the film supplier at twenty dther leading theme parks m the United States. includ ing Sea World. Opryland Great Adven ture and Kings Dominion --f- "lesc^e T,cv*e cartas sairstv even tr* rs:""'`a,"'ga'T,teu*>''rr,i'kes vew-Master* pictorial products sales maintained 1975 levels, supported Dy such -ew features as the Six Million Denar Man Happy Days Scooby-Doo, K.-g hong, and a senes ot reels ceieora'.ng Americas bicentennial In 1977 me comoany will introduce a new stanoa-c v.ewer that achieves contemporary Stv mg Winout sacrificing the durability o' simoiie-ty of operation that nave built me dua'.ty reputation View-Master prod-cs en-oyed tor decades - u a - s s m 'inching business, sales o'o.ec to- tie year as the company 7 "-n-^ocea emphasis on serving i at cr-a1 accounts Operating improvements enhanced the com pany s ability to meet the quality and ser vice requirements df discerning customers. GAF is one ot the nation's largest photo processors, handling its qwn film and that of other manufacturers at 18 photo service plants in the United States and two in Europe. A new plant opened early in 1977 in the San Fran cisco Bay area G A F s i nvolvement in industrial pho tography is being expanded Sales in this area increased more than 20% last year Medical x*ray expanding GAF is intensifying its efforts in the $400miilion medical x-ray market Sales rose significantly for GAF*x-ray products m 1976. as the product line was broad ened to better serve the needs of the market. Under its new Gafmed " label, the company offers a wide variety ot products for the medical and dental industries, from sophisticated x-ray films and cnemicals to hospital-type Ousiness forms In December. GAF acquired the medical products division of the U S. Radium Cotp . further expanding the Gafmec ime with intensifying screens, x-ray film cassettes, illuminators, and accessories New products introduced in 1976 included a new medical x-ray film. Gafmed SR.-1 Gafmed SC/90 developer-replenisner. an industry first m mat it requires no starter solution, and Gatmed SR/S orthochromatic blackand-white film tor photofluorography ThreeofTianv newV'ev^-Maste'leases aooa h 76 The Gafmate*and Gaftype" graphic arts product lines fared well in 1976 with sales up more than 30%. The photo typesetting and grapnic arts markets are estimated at $375million and GAF. with less than 10% of the tota-. sees the potential for growth as excellent. In 1976 a new newspaper film was successfully introduced and plans tor 197 7 include augmenting me existing lines with a new phototypesetting paper GAF 12038 ir " Compact dlaso machine Reprographic sales mcreasea slightly in 1976 with particular Strength in the a.azoarea GAF is a major manufac ture' of diazo equipment paper anp chemicals Saies of aiazo paper and chemicals were even with last year s ieveis in revenue Put down sngntly in vol ume The company enhanced its posi tion m diazo hardware m 1976 when it introduced the172 FL printer, a com pact. oesk-too machine priced at under a thousand dollars A maior breakthrougn m diazo technology the small machine is ideal for users with limited space as wen as for customers who want to decentralize tneir oiazo opera tions The 172 FL features a negativepressure developer tank for ventiess operation in micrographics. GAF introduced the 5000 MRP microfiche reader-printer last year GAF is presently a small factor m the S950-million micrographics market Put through an expanding product nne the company hopes to improve its posi tion TheGAF* line of micrographics products now includes microfiche dupli cators. readers reaoer-prmters and the only U S -made 16mm diazo roil film duplicator. Also, in 1976 an improved diazo microfilm was introduced Repro graphic service revenues were slightly ahead of last year s levels While the marxet for business forms in general declined last year. GAF achieved an 18% increase in sales. By concentrating its efforts on major mar kets and specific types of forms. GAF was aole to make mapr sales gams GAF forms are designed for retail-' wholesale, food industry, health care and industrial applications By specializ ing. GAF can offer customers forms that are oetter suited for their needs and are competmveiy more attractive vew cor'oac:c.M:rac-"-ec''e'5s-a s; : methods and equipment, improvement of technology, and implementation of more cost-effective processes are oes gned to nave a positive effect on profits m 1977 in addition to active efforts in Photo & Repro product development and marxetmg an ambitious cost-reduct on program'sunder way Elimination of unprofitable products, reduct-on of manufacturing expenses and plant overhead, installation of more efficient Qafmed" Medical Products The company's medical products wars grouped together in 1 >76 under the Oafmed brand-name. Now, whether customers nsed x-ray film and chemicals, x-ray illuminators, or hospital-type forms, they can tnrserved by the same OAF sales team. Such x-ray hardware as illumin*- tors and fHm cassettes wars added to the Gafmed lino in December,.when the company thisacquired medical products division of U.S. Radium Corp. CAF has long been considered a leader _ in x-rey photographic technology, i and the new hardware enables V the company to bettor fill its 10 medical customer*' needs. Oj J7 -r'Cu GAF 12039 I 11 GAF 12040 BUILDING MATERIALS Qroup Net Salas (millions) Net Sa es Direct Operating Profit * :woes ur*<iocai(3 CyDO'are ED*n$ 1976 $421.7 $ 49.4 1975 S3 72 3 t 5 488 Root Products Aahesive-BacKec Fioor':e Adhesives and Fniers Flooring Felt Installation Too's Resilient Floor Tile S G AF Building Materials achieved record sales of 5421 7 million in 1976 Profits we'e somewhat lower than the record levels of 1975. due to cost increases that outpaced unit sales and price increa ses. and to highly competitive market conditions that precluded price increases on some products Despite tnese problems. 1976 showed one of the highest profits in the Building Materials group history New construction rose in 1976 to a rea sonably healthy 1,5-million starts, up from the depressed i. i -million level of 1975 with 1976 remodeling jobs increasing as well. Unli ke new construc tion. which can fluctuate widely, the ren ovation market has expanded at a steady pace m recent years Two factors influenced the growth in renovations: families are reluctant to move, as the price of the average new home has risen to $48,000 (compared with $32,800 m 1973). and some 45-million American homes are now 20 years old or more-and many are ready for new roofs, new siding, and new floor coverings The soft spot in the building industry last year was the industrial/commercial and multi-residential segment of the market As new mdustriaircommercial starts continued atdepressec levels, saies suffered in the company 's Architectural series of commercial flooring. Expens predict that this type of construction will increase in 1977 Renovations tneraasa Asm 1975, GAF gained much of its strength from the growing renovation and remodeling market. GAF estimates that wen over half of its sales of building materials go into renovation proiects Thus. G AF s line of building materials, which is equally well suited for new con struction or renovation, is enjoying good saies gams As industrial/commercial construction picks up in 1977. GAF will be ready wm a coordinated sales effort and product line. Of particular interest: Mineral Shield* cold-applied roofing system s generally regardeo as a superior prod uct in both durability and ease of appli cation. and Gaftemp'* insulation, a new product offered by GAF. will comple ment the product line by offering an excellent polyurethane and perlite insu lation for roof decks. MiHitt positions good Desp^e strong competitive pressures GAFifvaintaineO or improved its oositcr in aUfijiapr building products markets : serves. The largest manufacturer of aspbSit shingles in the world. G AFcortmuedto maintain its leadersnip Saies of premium Timbe'lme* shingles were up 50% over 1975 as the durable naturai-looK.ng shingles continued tc gam popularity GAF almost ooubiec is sales of vinyl Sicmg with its attractive Vanguard1 ime and now ranks hfr among vinyl sidmg manufacturers Stratalite and Paneistone * mmera1 feesiOmgs are the dominant proaucis m their fields Gaistar* floor products. oc-r sneet vmyi ana floor tne also sold wei GAF now ranks seconc m the floor tne and thiro in the sneet vmyi flooring markets | Durao<e 'i-ioef'f'e'oo^ng oeaufi-es D'oiecs w 12 01 -ri20'246 GAF12041 Seam Fusing System Sheet Vmy1 F;00fS Viny! Cove Base Roofing, Siding and Insulation Asphalt Roof Shingles Automotive Souna-Deadening Products Building Board Buildmg Insuiatior Built-up Roofing Materials Canal Bulkheads Driveway Sealer Foundation Coatings Mineral Siding Plastic Cements Roll Roofing Roof Coatings Vinyl Shutters Vinyl Siding 3ua> r> zz^ro- assies custom* satis'aciicK' Tne company is constantly improving crochet 'ines and expanding distribu tion, During 1976 GAF's popular sneet uin-,1 `loonng i ne was enhanced by the excanoed senes oi Gafstar urethaneccated no-wax' flooring products With a 'OLgn layer of high-gloss urethane O'ignt attractive patterns printed c -ew oropnetaryprocesses, the floor-g -as been welcomed warmly in tne ~a--etoiace G - : S' le-So-d" floor file brings tne -c s'tages o' urethane coating to tne " '.oj'se'f floor tne market mtro:-:sc -'975 tneBnte-Bondline Cj.ckiy and has been - ca-ceo with several new colors i' i :i'te'-$ GAF Droa0fi3 OrStTiOul'Oi'1 'or Varg^a'C Viryt siO'f'g snuffers Distribution improved In 1976, the company added six inde pendent flooring distribution points and expanded G A F distribution centers in Cincinnati and San Diego, A new centenn Eimsforo. N Y . to serve the Mew York and suburban areas openeo in early 1977 Furtner expansion is planned tor 1977 GAF flooring is now represented in 125ma|0rU S markets through independent distributors, suo- plemented by six company-owned dis tribution centers This networx serves the retail flooring dealer, the mass mer chandiser, and the manutactjreo home industry Strengthening distribution ot other G AF .building materials, a new sales organi zation is being lormed to supply tne company s roofing, siding, and insula tion west of the Rockies Also. Vanguard vinyl siting is gaming acceotance outsideof the Nortneast. its traditional stronghold Sentinel" glass-based shingleSrYnhich were test-marketed succesifSSy m Fonda last year, are now being aigujOuted trroughout the Southeast- i 4-> -C. 0 : -0 2072m7 13 GAF 12042 I '.e ja-va- .\a -e-'a-escecara: -ceas. Ga`siar! self-adhesive wan tile went into testmarxe'in 1976 With inis attractive new product, tne do-it-yourselfer will be able to install new wall coverings as eas ily as me comcany s Bnte-8ondTM lloor tile. An innovation in tne do-it-yourself market, tne wan me is expected to do well m broadened distribution in 1977 Auto podding us* up GAP s ten technology formed the basis for its business in automotive fiprous paobing Tnere are almost 60 square feet of vibration- and sound-deadening padd.ngs m me average new car with GA= supplying more tnan one-tnird of me market Production of fibrous pad ding is being increasec to meet higher protected demand as small cars reauire proportionally more padding for Quiet operation The new production capacity at GAP s joiiet III plant is expected to enhance me profitability of this product me in 1976. GAP signed a maior contract to supply mineral fiber-cement procucts used in cooling towers for power plants The GA F filler material acts as a baffle to the constantly flowing water and ofovioes optimum surface area to coo: the water within a relatively small cnamoer More than a million dollars worth of min eral fiber-cement is needed for each tower The Peoerai Power Commission estimates that, m me next oecaoe. utilities pian to build hundreds of new power plants Many of these will have cooling towers that use mineral fibercement. Sales of this material, up 50% m 1976. bear out the rising trend On the manufacturing side, improved methods, better manpower utilization. Getter energy utilization, and mote effi cient equipment compmed to control costs and reduce overhead At tne asphalt roofing plant m Miliis Mass , for example, a low-energy system was installed last year to reciaim^Ssphait fumes if is estimated that tn^;sysiem w. save tne company almost $00,000 a year in energy costs Othe&SA F plants Gapscorvnefcfooting sc-o-ceov-cusa-as are piannmg-similar installations Also an automated floor tile packag mg sys tem now m operation at the Long Beach Calif. plant has oeen work ng success fully reducing costs appreciably cs '3? 8 GAF 12043 Brite-Bond" Floor Til* On* of GAPs now entrios into floor coverings is ftrlte-Bond Sure-Stik* adhasiv*-back*d til*, which brings a "nvwax", ursthanxoaiM^niih to th* do- it-yourself merit *i^in a wide rang* of pattamtiM colors, th* til* has a tb% polyurethane cgating forv^jigh-gloss surface -<tfit require *tOnly damp meppinf to look as good as new. w* . The protective wear layer is bonded to the vinyl by ultraviolet curing, a technology GAF helped pioneer. Patterns are printed by s proprietary offset process, ****,r`L ing vivid colors and pattern elanty* The Brite-Bond "no-wax" finish is also available in G A Ft Gafstar Brito-Bond lines of sheet vinyl. I I INTERNATIONAL international sales of GAF products, loth those exported from the United tates and those produced abroad, totaled $174-miihon. an increase of 5% over 1975 (these figures have been abstracted from the results reported for the various preceding sales groups) Slow recovery from the worldwide reces sion. as well as the actions of foreign governments to control inflation, dam pened the growth of sales abroad Price controls, coupled with intense competi tion, hampered the company s ability to raise prices enougn to offset increased production ana operating costs In terms of local currencies. G AFs international profitability was off due to slow economic recovery in Western Europe. Currency fluctuations further reduced pre-tax profit from international operations, as measured in U S dollars, by approxi mately 19% or $2.4 million ($2.2 million aftertax) international sales of GAF chemicals increased i8%over 1975 levels, with acetylene chemicals continuing as the mapr product line in revenue Building materials up Building materials sales outside of the United States increased 12% over 1975 sales Gafstar- sneet vinyl flooring con tinued as tne revenue leader in interna tional sales for this product group Increaseo sales of Strataiite' mineral siding and sales of GAF floor tile also contributed to tne sales growth. A stucco-textured mineral fiber siding was introduced to tne European market during 1976 International pnoto & repro sales were on par with 1975. Consumer photo sales decreases were offset by increased sales of industrial pnoto and repro products GAF'scompactibie pocket cameras were intro duced and well received in international markets. As in the domestic market, camera sales were restricted by limited product availability The international micrographics market continues to grow, paced by the 7700 DMR and 7800 DMR microfiche readers, which have exceeded sales forecasts. In Australia alone, more than 1,000 GAF microfiche readers were sold last year under a contract with the Australian government Sales of the non-venting 176 FL diazo machines were particularly strong in the United Kingdom and Australia. The new compact 172 FL was recently intro duced to the international market and has been well received. The larger 185 FL is also selling well. Among the heavier duty diazo machines. the 1200 DA has surpassed sales expectations in Europe Expanding manufacturing The company s $30-mii|ion-pius sheet vinyl flooring plant under construction in Mullingar, Ireland, is proceeding on schedule One of the largest smgie-story factories m Ireland, the new facn ty is due to be in production m late 1977 Construction of the butanediol plant in Mari. West Germany, by the GAF Huls Chemie GmbH pint venture is also on schedule This plant is also expected to be in production in late 1977 All facilities and equipment have been moved into the new photo manufac turing plant in Smt-Nikiaas. Belgium Tne plant, which makes View-Master' viewers. GAF* protectors and convers and packages x-ray. graphic arts ana consumer film, is expected to be in full operation by mid-1977 Once these facilities become produc tive, GAF's competitive position m the Common Market countries will be ennanced. as import duties will oe eli minated or lowered on the company's products made and sold there. Transportation and distribution costs will be reduced significantly as well Sales potential for G A F i n the Comnor Market is second only to that m tne United States Because supply and distribution consid erations in Hawaii are similar to those outside of the United States, a new sub sidiary. GAF Hawaii Inc . was formed under the International group to market flooring and photo products r-sn`ic>ori-g Diar: jnoe'way ope^s r '~Q-725o i 1ft GAF 12045 I CORPORATE DMMKh and Davatopmant or regulatory changes. GAF is making in 1976. Research ana Development con- significant progress towaro full muea its efforts to develop superior compliance. croaucts a"d manufacturing processes Ot oaracular note process improvements Milestones reached in 1976 include nave Drought costs down in the manufac 2 Connection of the wastewater treatment ture ofsurfactants ayes ana pigments, facility at the Rensselaer N Y, dye and ana x-ray film chemical plant to the county treatment facility tor final processing Deveiooments maoe Oy Research ana - Construction of a complete wastewater Development m 1976 are aiscussed treatment facility at the Linden, N.J.. n :ne operating group parts of this report chemical plant. Completion is sche Among me most significant were duled for 1977. A new color onnt f.lm which is compatible " Construction of an effluent-recycle sys Aitntne processing methods required for tem for the Bound Brook, N J . granules me inm that dominates the photo service plant which will be in operation shortly. ncusry 7ne new product, whicn is in tne : Completion of arrangements to link the process o' moving from pilot production Chattanooga chemical plant to the cityS inio full-scale manufacture, has excellent waste treatment facility, avoiding tne coicr wioe exposure latitude, staple necessity of building a separate treat latent image and superioraging ment facility there. The plan has been craracteristics jitravioiet curing of a nigh-gloss wear approved by all appropriate government agencies and will be implemented in the aver fof noor tile This process is used in summer of 1977 Ga'sia'' 3nte-Bond tile for a no-wax ' a Completion of a wastewater neutral ` "sr A ^ew orocess for manufacturing THF ization system at the St Louis Duilding materials plant e.-anyorofuran) was conceived and : improved control of emissions was "cemented producing nigh-yield. high tv ~atenai This solvent has many - c.sinai applications including protec- achieved at the building materials facil ities m South Bound Brook N j . and Mt Vernon, Ind .e c oatmgs for vinyl and in cement for 2 Acceptable levels of treatment for all ".C cpe wastewaters and sanitary wastes achieved, on schedule, at tne Joliet, ill, 1 rocuc; ana process developments building materials plant ~aoe m vinyl siding. sheet vinyl tloor- "ro resment me. fibrous padding for In its role as internal consultant to all units souno deadening, dyestuffs ot the company, the corporate i ndustriai - - chemicals, surfactants, agricui- Engineering department was involved m : remcas iatex products, inorganic several protects to reduce costs and :a:s <-ra/tiim andphotograpnic increase efficiency m tne areas of manu facturing and distribution As energy costs rise, conservation oecomes increasing'/ ttnlcM important for the company cc-trot continued `obe amajor - i x .cmmitment m 1976. with sev- Purchasing way through the year *- >- 5 mtii.Qr i3s* year to carry ms.-e o'ogram to improve air The company s first nne of defense against rising prices is its Purchasing department Much of the impact of infla Pollution controls ana liquid/ tion is first felt by this function when it ." ;."Isoosa'Systems Since the . r =roqram was undertaken in J" as spent almost $45 million ouys the materials the company neecs to make its products tn^ci systems In 1976 the department was able tc negotiate a numoer o( favorable con ^ sociiul On control proiects - x mtr-. commitments _ -s sta'e anc lederai agen- tracts to provide GA F witn raw materials at realistic prices both m tne United States and abroad instability caused by uni0reseen legislative inflation and recessionary pressures IS > expected to continue in 1977. outtoa lesser degree than m pas; years r*** -* nMOxt.- v In 1976. thedeparTmen;surveyeatne company s utility contracts to ensure that energy neecs arc other utility requirements were oemg filed mosi economically While tne study showed the company was controlling ,;s ut iity consumption effectively, further savings will be made as recommendations from tne study are implemented Marketing Service* The company continued as strong advertising ana promotion efforts through 1976 to support its products during a perioo of rapidly changing ~a-ket conditions. With continued emphasis on consumer research, trade media, point-ofpurenase promotions, and innovative packaging design, a coordinated pro gram was carried out aimed at selling GAP products Television radio, news papers. and magazines were all used to bring the GAF story both to mass audi ences and specialized markets Afternearly 100TVcommercials Henry Fonda and GAF ended their advertising relationship The company is grateful to Mr Fonda for his unique contribution. Tne seven-year campaign attracted enormous attention to GAF products The company s 1977 commercials will lealure GAF photo products and Ouiiding materials m the style ol humorous vignettes One mus.cai tneme will be caned through all the commercials to reinforce the GAF product ana com pany Identity in 1976, GAFs acvemsing ana product design were singled out tor special rec ognition A-aciocampagr to Duild awareness for GAF proexts in Canaoa was awa'oea go.o meaais at tne Toronto Art Directors Snow lor Demg the best radio commercial done m Canada ana a: a major New York advertising group show as the best international radio commerc.-ai of the year Tne Brussels Desgn Center m Belgium selected twoof the company s movie cameras two ooctet cameras and a side projector for design excellence awards GAF 12046 I WNCN Upon licensing approval of me Federal ^ommunicatonsCommission GAF 5roaacastmg Company Inc . a new suosid'ary look over the operation of New York radio station WNCN on June 7 Negotiations to purchase the station and transfer its license nad taken more than a year The FM station attracted national atten tion in 1974, when its classical music audience vigorously protested a change to rock programming In acquir ing the station. GAF promised to return to a classical music fine arts approach GAF s purpose in purchasing the station was twofold-to provide the highest duality programming for New York City anc to buiio a new profitaDie venture for me company Toward these ends, the station s facilities have been considerably upgraded since GAF took the reins Anew 10.000watt transmitter installed in the Empire State Building wilt give the station added broadcast range, new sound equipment -the best available--will give >t the finest sound m broadcasting; new studios, scheduled for comoietion by mid-1977, complete the physical picture The listener outcry that resulteo when the station turned to rock music has turned into listener support for WNCN's classical music format. Advertising sales since GAF began operating the station nave been very encouraging Foenusic finesar'O-vvNCN in 1977, listeners will be able to subscribe to a new WNCN prog ram guide, which will not only help them plan which music to hear but aiso help to reinforce long term audience loyalty for the station. Penoniwl At the end of 1976. GAFemployed 20 499 people, of whom 17.524 were located in the United States and 2 975 m foreign countries This reduction of more than 500 employees from earlier 1976 levels was the result of attrition and layoffs under the company s cost-cut ting program Thirty-four labor contracts were nego tiated in 1976 Two brief work stoppages were ended quickly-at the distribution facility in San Francisco and among a small group of employees at the Binghamton piart Neither hao a signif icant effect on oroduction or shipping Employment of minority group members and women remamec relatively stable last year making up approximately '5% of the GAF workforce P'ogresswas made in advancing some of these employees into management sales technical ano professional positions Oovommont Sales GAF increased sales to me feoera gov ernment significantly last year Tne Washington, D C office opened m 1975 expanded its activities arc secured a variety of contracts for eacn nj the company s prcouct groups GAF is now listed as a supphe' of floor tiles and sheet vinyl `loomg by the U S Depanment of Housing and Urban Development (HUD) Asaresuit GAF is able to sell both directly to hud anc to many regional and local housing auth orities under HUD s auspices in 1976, the Washington office con ducted several seminars at U S government installations on the use 0' GAF products Mowogomont in January 1977 John A Brennan was elected a vice president, and will se've as director of marketing for GAF s Photc &Repro group Mr Brennan, whose most recent post was that of director c` marketing for the company s repro graphic. micrograpnic and business forms products joined GAF in 1971 as assistant general credit manage' Otner assignments smee then included creou manager and corporate assistant treasurer ( Board of Director* Sam Hams, partner in me law firm of Fried Frank. Harris. ShnverS Jacobson was elected to the board ot airectors m January ot 1977 He is a member of tne bar n New York Califor nia and the District of Columbia Mr Harrs fills a vacancy created bv me death of Wm Peyton Vam wnoservec with great distinction on G A F s ocaro and the Doarc s executive committee since 1961 Mr Marin was vice chair man and secretary o` me ooard 'rpm 1961-65 He played a xey role rGAF becoming a oubtc corporation .n 1965 ^he breadtn of his mind hiscommo" sense judgment ara ms nunanitv am oe deep'y missed oy me compar\ am nis CO'leagues <L GAF 12047 QAFCORPORATION Board of Directors OAF CORPORATION Officers Jesse Werner* Cnairman Philip 1. Dalton executive Vice President GAF Corporation Kenneth C. Poster* Former President The Prudential Insurance Company of America Rainer E. Out* '* General Manager Creel Suisse Sam Harris Partner Free- Frank Harris Shriver & JacoOson Juliette M. Moran Executive Vice President GAF Corporation William S. Ogden* Executive Vice President Cnase Manhattan Bank. N.A Jamas J- O'Leary** V ce Chapman of 'he Board Un'ieo Stales Trust Company 0< New Vorx Jamas T. Sharwin Executive Vice President 3 A-Corporation William Sword** V" Sword & Co. Inc Howards. Tumor** C~a.r~a-otthe Board -J"er Construction Company "-1e~oe' Executive Committee "`e'"cer Audit Committee Jssse Werner Cnairman of the Board and President Philips. Dolton Executive Vice Pres.oent Juliette M. Moran . Executive Vice President Jamas T. Sharwin Executive Vice President Jamas M. Oonay Senior Vice President Josaph Q. Hall Senior Vice President Frank T. Campagna Group Vice President R. Powar Fraser, Jr. Group Vice President Jack F. Oow Group Vice President Audit Committee T~e Boa-a of Directors Audit Committee. -st^g o'ouis.ce directors meets ircarai&v witn the ndeDenoent ; '--F c,,ci'c accountants and : management at least twice a - - ^cuss me scope ana results ^ =r"ua examination internal r3 controls ana significant - ' "3 -natters 4 John A. Brannan VicePresoent John J. Butler Vice P'esiden! Oeorge F. Dapport Vce President Thomas A. Dent Vice Presicent Lee J.Faneuf Vice President AHred Qeduidig Vice President Simon W. Kantor Vice President Frederick WL McNabh, Jr. Vice President General Counsel and Secretary Richard C. Mullen Vice President Jay R. Olson Vice President anc Treasurer Alfred P. Rlmlinger Vice President Jack Scheckowiti VicePresident Raymond W. Smith Vice President Richard F. Smith Vce Presicent A. Eugene Stillman VicePresioenta-.c Controller Frank E. Wetherlll Vice President J ~0'D7;5' GAF 12048 I Review of Consolidated Financial Information Lines ol Business Year E nded Decemoer 3i 1976 Ne: Sales by Grouc Chemical Photo & Repro Bunding Materials S 267.7 371.1 421.7 Total 61,060.9 Direct Operating Profit (Loss! by Group Chemical 6 Photo & Repro Bunding Materials 36.6 (2.8) 4S.4 Total 6 78.2 1975 $235 1 357 0 372 3 $964 4 $ 36 2 48 48 8 S 898 Summery of Operations Year Eroed December 31 1876 Net Sales Cost of Products Sold Direct Operating Expenses 81,060.5 779.5 202.8 Direct Operating Profit Discontinued Operations Operating Loss Unallocated Corporate Expenses interest Other income before income Taxes ana Extraordinary Items income Taxes 78.2 -- (16.1} 02.1) 30.0 (10.3) 'ncome De'ore Extraordmary Items Extraordinary Items 10.7 -- Net income 6 10.7 Data por Common Sliaro Pnmary Earnings Before Extraordinary items Ext'aordmary Items S 1.21 -- Ne: income 6 1.21 1975 $964 4 691 1 183 5 89.8 -- (166) (26 7) 46 5 (156) 30 9 -- $ 30 9 $ 2 06 -- $ 206 1974 $237 1 351 i 360 6 $948 8 $45 7 100 43.5 $ 99 2 1974 $948.8 672 9 176 7 99 2 -- (168) (32 8) 49 6 (21 1) 28 5 -- $ 28.5 S i 84 -- S 1 84 Dollars m Millions 1973 1972 197! $215.3 330 2 303 4 $848 9 Si93 6 296 3 278 6 $768.5 $177 3 260 4 246 1 S683 8 $ 29 8 18.3 388 $ 86.9 $ 24 4 11.5 48 1 $ 84 0 S 24 3 73 44 4 $76 0 Dollars in Millions 1973 1972 1971 $848.9 593 0 169.0 $768 5 535 4 149 1 $683 8 477 2 130 6 86.9 -- 84 0 -- 76.0 (4 3) (12 1, (192: (102) (23 5) (10 4) (23 7) 55 6 (23 8) 31 8 -- $ 31 8 50.3 (22 6) 27 7 -- $ 27 7 Dollars 37 6 (15 7) 21 9 (8 4) S 135 $ 206 -- $ 206 S 1 75 -- S 1 75 S i 33 ( 62) $ 71 1970 965 Sr 72 7 223 3 875 $583 5 S-8'c 22' ; 183? S592? $ 24 8 2i 22 8 S 49 7 S 26 4 1. c* 9 S 62; 1970 $583 5 4193 114 0 49 7 (2 6) 1969 $592 C 417? 127 620 " 0; til 6) (199) HO' ,206' 156 (7 2) 84 63 $ 14 7 29' 114 5 152 (4 s S 34 46 S 80 5 a; S Fjliy Druteo Earnings Be'ore Extraordinary Items Extraordinary Items Ne: Income S 1.14 -- $ 1.14 $ 1 79 -- S i 79 $ 1 62 -- $ 1 62 $ 1 74 -- S 1 74 $ 1 49 -- S 1 49 S 1 19 S 38 4' S 7n $ 53 Common Shares Outstanding m Thousands (Weigntea Average) 13,303 13.237 '3518 13631 13 687 13 609 13 594 , - ^99 Div.cends on Common Snares Snarenoioers Equity 20cigure omitted Decause nc: o iutive S .68 $23.01 S 52 $22 35 $ 46 S20 87 S 42 $18 83 $ 4C $17 19 S 40 SI5 77 S 40 $1545 : S'4 961 GAF 12049 3 1 - c r r"" - ~ ^MMsion and Analysis of Summary of Operations 1 ST#Comporadwith 1S7S r -9?6 consolidated saies mc*easea $96 i million .'iO}ioafmosr on Record saies were achievedina/i wonawioeD'oducr s3.es aro-cs pnn"af'iy as a 'esuft o' higner unir volumesm ^ost Taor c'oouctsana toa'esse'extent, prce increases Gamsmroofmgand 5~ee wny products m ne U S fenovat>on market were me major coo cc:or to me S49 & m.iiton t -13%) no-ease m Bu/famg Ma rer13's sa.es Chemical sales ioc'ease0 532 5 million /-i4%; reflecting ,,ars -o an major product tnes except agncu<tura< cnemcais wncr ^ec-oeosoarp'y Pnoto&Rep'osaies increased$u i mrit.ont-4%) afoeyasaresunofmaustraicnorc pnotofmisning ano business `:'^s gams yrec,OPBraung pro*it' declined Si 1 6 million n 3%) principally as a es-i' o< me continued maoiiftv to pass on nigner manufacturing costs 3"C oce'atmg expenses The Photo & Pepro group was most ceve'e y affected losing S2 8 million a$7 6 million aecime from me I, ~t vear The Chemical group, although operationally aneac of iast ~ea' te" oenino as a result ol a 1976 nonrecurring S3 5miiion pre-tax c'ov-scr lor a silver shortage Chemical earnings were aiso untavorac v affected by a change r proauct mix resulting *'om aecreasec 53'es o' agneu'tjra1 cnemcais partially offset Dv increases ,n saies of semewhariower-marg.n proaucts Bunding Materials profit ;ec: nec S3 4 miHion f 7%| primarily as a resuu of general higner ;cs*soi raw materials energy lador ano distribution Consoi'Oated `976 was further -educed Cy severance costs resulting from s ce'sonne1 reoucr on program aimec at improving future Ofof'taDwty -e^atisna1 operations were aaverseiy impacted Dy pre-tax foreign :_"5rC'. 'ranstation losses in 1976 of $2 4 mill/on (S2 2 million afterv ccmpareowitr.aSO 7milliont$05rni;iionafter-tax;gamip 7975 - f-~^3votne after-fax effects of ai^oTegr.c'j'TertyituCioafions>s - r'-'a*1 1976 1975 Change r: Gams(Losses) !-c-ange Losses (Noie 2) =p':',eo,r international i-t'a-ge uosses e: ** ^na-ocatea ;.e-oencestNote2) Dolia.'S ,n Miltiors SH 4; S 1 7 $13 n 0 8l '1 2) 04 :2Z) 05 (2 7) 108) Sl3 Cm S 05 (0 8) $13 5! : ye c-a*e merest exoense cont<njea to tape' off as a - -ates ano management s etiens to minimize ; .vos cj'.ng me year Ome' unallocated co'poraie -2secS.5 4m,iuom20V. 'n^'Sme-e was3S4 C . r cntresaieoitecnnoiogytctneGAP Hu'spmt : C','SO0mlt!onarte'-;ax)swingintore'gr :'ice'c'97 aisoconinoutedtomeinc-easem ;:,ocr3'.eexDenses Generally corporatesia^ - -- -es -e1 ecteo normal cost increases consistent wm '-'`sm -egaiexpehsesre'ateototne'awsu't * za- "C'easeosnarpiy as me resuu o' intens.t.ed t-'v * 975wereS5 3 m iiion (3Ab 1 be'Ow ;sst ' - r oec^ne p^e-tax .ncorre Tne annua*. > .as,~gr-efnar :ast year s rateprmccai'y e "aveoi me above menvenee $4 0 with IS?* ?s>0S'5 6 'V11Q- :2^:<r* 1975 .v.'pre f"-': i^ec; croouci sa,es g'Otcs jC 33 "z-ease'eso tec*'om n.gner or-ces ~ ' =" 2 . cse* 0. ge^eranv 'owef GAF 12050 HigherBuifCingMatet'a'ssa'eso^S11 Tmiii.onA-e'ecr.ncroai. Cue :o strong gains m me U S re-roofingmarxer mcrease-cP''c;o& 3ec' sa^es of S5 9 miikyi were largely tne result o' seeing or ce mcreases ChemicaJsaiesaeciineGSiignriy/S^Omniion - *3cref'ecrmg oepressea economic activity wor/ow>oe Decreasec vo<jme o' domestic fe't. acetylene ano specialty cnemica1 imes more ma-. offset sigoifcant sales gams r, agr cu'ru'a1 cnemicai procucts Cost reduction programs succeeded m notamg oirec: ODerat ng expenses at leveis only sughnyhrgner man n *974 Se-'mg expenses 'ncreasec n nne with planned personnel increases anc p'ogra^s deeper market penetration Aammistrative ano genera' expenses increased primarily due to nigner costs of services Direct operating profit* declined m Doth tne Cnemtcai a^c p^c-:: 4 flepm groups as a result of lower saies volume ano coeranng leveis at manufacturing plants and tne mapiiity to pass cm a" cos: rcreases Building Materials profit was significants aoove1974 cue t r; selling price increases and n(gher volume n me latter na<i o* t^e vear Unallocated corporate interest exoense faoered off from 1974 s r>*gleveis as a result of reduced prime rates ana reaucto"' or snort-ierm debt through internal financing Other unallocated corporate office expenses fo' 1975 were $6 * million f 19%) lower than 1974 primarily as a result of a S4 fn ion favorable change Derween years m foreign exenange ana 3 1975 nontaxaoiegamofSA 0million reaped on tne saiecftecrnoiogv anc know-now to theGAF HvjisChemieG m d h jcniventu'e Tnese were offset >n part by the nonrecurrence dl three items n 197d representing a net pre-tax Si 9miii,onga'n rea.'2eafromaS5 5 million profit on repurchase Of 5% converge suOcra<natea notes ana a Si 4 million c'C ton saieCm^ee properties cama' > offset Dv a charge of S5 0 mm-c assoc'ateo with rne move of aomir.istrat ve activities tc Wayne \ j Cost increases resjftec*rom increased s*aff operaiogexpenses egai costs anc intiatonaryaGministrat-ve costs Provision for 1975 rc;metaxes aecreasec So Srr.iiio^e'oiCueto a pre-tax ncome ae: neofS3 1 mii).crt60-o)ahaar-8 9oe,cen`age oomi decrease n ine e'fect ve tax rate due to me accve notec S4 0 mu, lonnorraxabie gain 'arger investment tax c'eo.'s andgrea'er oenefit from exporting activu es During 1974 me Company aCODteC L.PO acccuhtir.g *0' d;.es!uffs anc pigrrenis inventories at Pen.sse aer N v wnc^ 'esJtec increased costs of S3 9^ hen; with a favO'acie reeme iax anacas" fiow effect of Si flmijiioni 1973 and Prior m 1973 aS6 4 rruihon prev .\as 'eauzeo on reourcnase c 5:e con vert DtesuDoroinaiecnctes ,\nicn .vas cass ?o as cme* -'a iccateo corporate expense >eextraordinary items tor T9 .ears 99"`'c^z~ *9'* were as 'chows During ^971 the ccmcanydiscorf,'''uec manufacture o' vanous cnemica's resulting - a net 59 ' m 'jo^ o'Cv s.cn `or c soesa-1 o'assets Accordingly 1969 ar-d*970 resets Ae'eres'ated part.ai, oftsertingmecnargewasaS* Om-1 onne:ga~ ntransia'ono* 'ore^gncurrencies Thecomoa^v cnangac -ts inves'men:?a* creon accounting to me curreni 'eccg'*'* 0^ ^e'^ccrr<e ce'e^a' metrod mereoy mcreasmg ^co^e Ov 3" average or aoorc* ^a'e > St 4 million per /ear m tone me e^'aorc rar. ga n 56 3 m,n cr consistedof 3netS2 4<T.',i.cngaircnmesaje o'^eoo^ca-. s r9x3S prOG^CtiOn facit't`es'Or Am(oen aDar'Ocn'^eni z> 'seg^at ae":-, in New Jersey anc 'enegC'ai'on o' tne 4^:oe'* s-oc cc*t'act maddition tnecompany s S.ngi.s'* SuOsoa'.* 'eai'Zec a "e* ga nef S3 9 million 'rp-- mesa'ec* tsio^co'' r'eaoG-.a,,e'$ ^ `969 a "eTS4 mihone*traofc'"ary'Osswasorc^'Ceo*nec.soosa :* certain pia^r facilities a^c re'atec cos's 'D'feci coerat ng pref'* `0* eacn o* me company-nree ny dwice oroojctsa'esgrouos rec` -esccnso- `rcass ^cot'O'g', corporate staff anc inie-es: expenses ='e "C anoca'ec 21 Financing Activities i- ig/6 GAF mcreased the average He of its :ong-'ermaeo' wine'educ no nteresi-rate-seistfiveoeor <nApnt me Com paq completed a 565-miiiior private placement with fouf -^aior insurance companies Tne 9'-2% senior notes areoue March 199" Asc domestic short-term cankered1! lines were restroctjred and expanded to a total of S100 mill on Trese bank lines wo-mras of whicn are m the form of threeyear contractual agreements are usea primarily as Oack-uc `or issuing commerc al paper In "eoruary GAF borrowed S10 mi.lion 'rom three banks to finance a wastewater treatment facility at the Linden N J cnemicai p art The interest rate on this four-yea' loan is set a: 75% ot prime, ana as the money is being used tor poilut.on control tne interest stax-exemot Financial Condition Negotiations were suostam.aiiy completes - Gece~ce't a 540-mniicn private oiaceme^t ot 8' 2% senior nc:es Cue 1997 with three of the insurance companies mat oa-: c ca'e m the April f nancmg This Placement wn.cr. cioseo m February t977 further lengthens me average 'ife O' me company s dept Tne proceeds of mis f.nar'C"g were use; to reduce our snort-tem-. oebt Cash recui'ements to meet matunng oebt obrga; cns c. etne next five years are 1977 S4 038 000 1978 S6 813 000 1979 S6 819.000 1980 S5 292.000 1981 S5 768.000 December 31 Current Assets Current Liabilities Working Capital 1S7S 8451.3 145.4 305.S 1975 $ 4266 158 8 267 8 1974 $ 435.2 130.9 304 3 Dollars in Millions 1973 1972 1971 $ 364.0 $ 340 3 S 319.0 1126 132 0 113.8 251 4 208 3 205 2 1970 S 289 8 84 5 205 3 1969 S 297 5 996 196C Pioperty, Plant anc Eauipment-Net Total Assets sm 769.5 243 6 720 5 231 6 709 4 221 2 628 4 225 9 6108 222 6 588 3 231 2 561 2 2356 574 ; Long-term Debt (Including Current Portion) Shareholders Equity 188.9 387.9 1669 379 0 186 4 357 6 136 6 342 9 136 7 321 3 1556 301 8 152 5 297 1 156 6 2902 Quarterly Stock Date Dividends per Snare Common Preferred Price Range of Securities on tne New York Stock Exchange Common (Low-High) Preferred (Low-High) First 1976 By Quarter Second Third Denars Fourth First 1975 By Quarter Second Thirc 13 15 15 15 13 13 13 .30 30 30 30 30 30 30 Four-r. -3 30 CD 1094-17% 13V2-16V* 11-14'j 71 -q - 1 1% 9N-12-2 9''2-l3'-* 157 e-22 19-22% 19%-22% 16' e-20% 13-16% '5' s-'7'2 i4''2-l8'-4 14 j 'c'i Employment Summary Year Ended December 31 Net Sales Number of Employees Wages. Saianes and Fringes Net Sales per Employee Wages Salaries and Fringes. as a % of Sales Average Wages Saianes and Fnnges per Employee 22 1876 81,060.5 20,489 8 301.9 8 51,734 1975 $ 9644 20.231 S 274 3 1974 $ 948 8 22213 S 257 9 $47,669 S42 714 Dollars m Millions 1973 *972 1971 3 848 9 22 544 S 246 4 S 768 5 22.627 $ 224 7 S 683 8 2* 955 S 204 9 Dollars S37 55 S33 666 S31 146 1970 $ 583 5 *9 773 S 183 3 S29 510 25.5% 28 4% 27 2% 29 0% 29 2% 3C 0% 31 4% 8 14,728 $13,558 $11 6*0 $10 930 S 9 845 S 9 334 S 9 273 GAF 12051 1*; ; - 2 2 7 2 5 OAF Corporation and Consolidated Subsidiaries Summary of Significant Accounting Poiic ies principles ofConsolidation The accounts of an significant supsioiaries of trie company ^ are mciuoed in me consolidated financial statements Cer tain 1975 amounts have deen reclassified to conform with the oass.fications followed m 1976 Translation of Foreign Currencies Cash, accounts receivaoie and liadilities of foreign sub sidiaries are translated into U S dollars at current exchange 'ates. all other assets deferred income taxes and deoreciation are translated at historical rates Operating accounts except for depreciation, are translated using average exchange rates to approximate the rates m effect when transactions were consummated Foreign exchange gams or losses are included m net income o* the period m which the exchange rate changed Inventarioo inventories other than dyestuffs and pigments, are valued at the owe' of cost (principally average) or market Dyestuff ana pigment inventories are valued at cost, determined by the last-m. first-out (UFO) method Property, Plant and Equipment, and Related Depreciation Expenditures for maintenance and repairs are charged directly tc expense maior replacements and Betterments ^ are capitalized ano depreciated over the remaining esti mated economic lives of the related assets The cost and related accumulated depreciation of property sold, retired or `jiiv deprecated are removed from the accounts and any -esLiian; gam or loss is included m current income Decree ation is computed principally on the straight-line metnoc Daseo on the estimated economic lives of the assets Tnese lives are suDject to annual review and revision 'o assure tnat the cost ol the related assets is written off over 'ner economic lives Coat in Excm* ofNat Auota Acquired Test - excess ot net assets acquired in connection with acdu.sdons prior to November 1.1970. is not being amor' cec oecause mere nas been no diminution in value, such :dsi -e ating to acauisitions made subsequent to October - '970 ail of which has continuing value is being amor2eo cn me straight-nne method over a penoo ot forty years Doforrod Incoma Ttiu Deterred income taxes arise from reporting cenam. income ano expense items m the tinancia1 statements m pertocs o ' terent from those m which suen amounts are reported 'or United States income tax purposes tnvMtmqnt Tax Credit The comoany accounts for investment tax cred.ls arising since January i 1971 as a 'eoucuon of the provision for United States income tax (the fiow-mroug.h method! invest ment tax credits which arose poor to mat aate nave peer deferred and are being amortized over the estimated service lives of me related assets Research and Davaiopmant Coats Expenditures for researen ana development are charged to income as incurred Ratiramant Plans The company and its subsidiaries have retirement plans cov ering suPstantialiy all employees The company s policy ,s to fund amounts equal to pension costs accruec and for plans witn prior service costs to amortize such costs over oeriocs not to exceed forty years Earnings Par thara Primary eamincs per common share are computed oy dividing net income, less preferred stock dividend require ments. Dy me weigntea average numper of snares of com mon stock outstanding during me yea- The computation assumes the e -erase ot outstanamg stock ootions to the extent they are dilutive Fully diluted earnings per common share arecomputeo on the assumption (where the effect thereof would be dilutive) that convertible securities outstanding nao been converted into snares ot common stock Appropriate adjustments for dividends on preferred stock ano interest on convertible notes (net of income tax effect; are maoe to earnings applicable to common stock tor assumed conve-sions The computation also assumes me exercise oi ai dilutive stock options 4 Ol 04; j? GAF 12052 23 Consolidated Balance Shoot Decernoer 31 AimU___ _________ __ _____ Currant Aaaota Casn Accounts receivabie-traae. less allowance for doubtful accounts-1976 $6 444 000.1975. $4,908,000 Accounts receivable--other inventories (Note 3) Finisned goods WorK in process Raw materials and suppi.es Total Inventories Prepaid expenses Total Current Assets Property, Plant and Equipment, a: cos: Land and land improvements Buildings and building equipment Machinery and equipment Construction m progress Total Property. Plant ana Equipment Less accumulated depreciation Property Plant and Equipment-Net Coat in Excaaa of Not Asaots Acquired of which $2,422,000 at December 31 1976. is be>nq amortized Other Aaaota Total Aaaota See Summary of Significant Accounting Policies ana Notes to Consolidated Financial Statements 24 1976 S 18,744,000 196,128,000 10,667,000 123.240.000 31.168.000 84.082.000 296.490.000 7,264,000 461,317,000 '975 $ 27 738 00C 151.233.000 10 159 OCC 106 18C000 46 329 000 78.432 300 230.941,000 6.523 00C 426.594.00C 18.676.000 109.048.000 277.708.000 29.093.000 431.929.000 168.282.000 263,243,000 34,874,000 16,339,000 9763,473,000 15.083.00C 104.585 000 270 639 000 17.076.00C j 407,383.000 ' 163.815 000 243.568 000 34 790 000 15.596 000 5720.548 000 Q -OCO7 Ct.t GAF 12053 December 31 Liabilities and Shareholders' Equity Currant Liabilities Notes payable (Note 5) Current ponion ot long-term aeot (Note 5) Accounts DayaDle Accrued liabilities united States and foreign income taxes Total Current Liabilities * Lane-term Debt Less Currant Portion (Note 5) ' Deterred Credits income taxes investment taxcrecut Total Deterred Credits Other Liabilities Cenvnfoments and Contingent Liabilities (Meta 11) 1S7S S 23,884,000 4.038.000 87.855.000 45.572.000 4.278.000 148^27,000 184423,000 38485.000 3,153,000 42.538.000 4,738,000 M Shsrsholders* Equity (Notes S, 7 8 8) ='e'erred stoex. $1 par value, authorized 6 000.000 shares. $1 20 ccnvenioie senes issued-1976. 3.106 002shares, 1975 3 105 706 shares at assigned value of $1 25 per share (liquidation value 1976. $83,314,000) on stock $1 par value, authorized 25.000,000 shares. ssueo-1976.13.770,347 shares, 1975.13.764,090shares 1 cc'cna1 paid-in capital d roc earnings 'otat --it rx- *e<3mtreasury, atcost 1976 531 599 shares. 1975.534,949 snares "S'e-ea-1976 76.400shares. 1975, 76.400snares *ca Snarehoiaers Eauny 3,883,000 13,770,000 83,829,000 321,838,000 303,217,000 4,338,000 932,000 387,947,000 __ Total Liabilities and Shareholders' Kqulty ~ar of Signit'cant Accounting Policies ana - :"so!iaated Financial Statements 8765^73,000 '9*5 S 2' 754 OOC 27 633 000 61 173 000 42 035 000 6 C*i 000 153 766 000 39 168 OOC 35 231.000 3.726 000 38.957 000 4.626 000 3 882 000 13.764 000 53 151,000 313 546 OOC 384 343 0C) 4 38C 300 932.000 379 03i 000 $720.548 000 0,'0:j7:5, GAF 12054 25 Consolidated Statement of Income Yea- Ended Decemoer 31 Net Sales 1978 81,080,807,000 Costs and Sxpenses Cost of products soio<Note3) Distribution ana selling Advertising Research and development Administrative and gene'al interest (Note 5) Total Costs and Expenses 779,811,000 147,738,000 19,788,000 17,983,000 47,848,000 18,040,000 1,028,872,000 Other Income (Charges) Provision for siiver loss (Note 10) Gain on sale of tecnnology and know-how (Note 1) Other-net Total Other income (Charges)-Net (3,500,000) -- 1,898,000 (1,902,000) Income Before Income Taxes Income Taxes (Note 6) 30,033,000 10,333,000 Net Income S 19,700,000 Less Preferred stock dividend requirements 3,638,000 Net Income Applicable to Common Stocfc S 18,068,000$27311.00c Weighted Average Number ofCommon Shares Outstanding 13,303,000 Earnings per Common Share Primary Fully diluted Consolldatad Statamant of Retained Earnings Year Ended December 31 Balance January 1 Net income Less cash dividends Preferred stock ($1 20 per snare) Common stock (1976-$ 58persnare. 1975--$. 52 per snare) Balance Decemper3i See Summary of Significant Accounting Policies ana Notes 10 ConsoiiaaieO Financial Statements 81.21 $1.14 1976 8313,848,000 19,700,000 3,835,000 7,878,000 8321,936,000 1 975 $964 42i 000 69l.t04.000 134 255 00C 18.409 000 15.272 000 45 623.CC0 16 555 000 921 216 000 -- 4.000.000 (694.000! 3.306 000 46 509 000 15.563.000 $ 30.946.000 3.635 000 13 237.00C $2 36 $1 79 19:5 $293 108.C0C 30 946 COC 3.635.X0 6 873 00C $313 546 300 t 26 0;-3:n^Sfc3 GAF 12055 Consolidated Statamant of Changes in Financial Position Year Ended December 31 Funds Providad From operations Mel income Charges (credits) not affecting working capital Depreciation Deferred income taxes Translation (gams) losses-noncurrent portion Other Funds provided from operations increases in long-term deDi Total Funds Applied Additions to property, plant and equipment Cash dividends Reductions in long-term debt investment in joint venture company Acquisition of common stock for treasury P'operty. plant and equipment of businesses acquired Other assets of businesses acquired Other Total Increase (Decrease) In Working Capital worKiPg capital. January i Vrorwng capital, December 31 Analysis of Changes in Working Capital 'Tcrease(decrease) m current assets Casn Accounts receivable inventories P'eoaid expenses Total crease i decrease m current liabilities Notes oayable Current portion of long-term debt Accounts payable Accrued liabilities 'Jrneo Stales and foreign income taxer Totai (Daeroaso) in Working Capital -.e Sum-ary 0f Significant Accounting Policies and - s to Consolidated Financial Statements 1976 6 19,700,000 27,640,000 4,154,000 (361,000) 2,661,000 53,804,000 116^68,000 172,266,000 46,361,000 11,311,000 72,414,000 -- 27,000 2,155,000 1,621,000 366,000 134,207,000 36,062,000 267,828,000 1306,890,000 $ (8,990,000) 5,423,000 27,549,000 741,000 24,723,000 (1,930,000) 23,645,000 (6,682,000) (3,467,000) 1,763,000 13,339,000 6 38,062,000 i9'5 S 30 946 300 25 C26 000 3 347 000 640 000 828 000 60 787 000 1 072,000 61 859 0C0 37.995.000 10.506 000 42.505.000 6 549 000 120 000 -- -- 647 000 98.324 000 (36 465 000) 304.293 000 $267 828 000 3 12 503 000 (556 000) n8.519.000i 12.014.000; (8.586 000) 10.677 000 (22 440 OOC) '18 857 000) : i 632 000) 4 373 000 (27 879 000) S(36 465 OOC) 0 1 -0207051 GAF 12056 27 Notes to Consolidated Financial Statements 1 Qein on Sale of Technology and Knewtww During i975fhe company and Chemische WerkeHuls A G ; Huis ) a Wes! German company, formed a pint venture tGAF HufsChemieG m d H ) to construct and operate a outaned'oi manufacturing plant m West Germany The pint venture is owned equally by the company and Huls The investment is mciuded m Oner Assets ana nas been accounted for oy the equity method in tne second quarter of 1975 the company solo certain tecnnoiogy ana know-how to tne pint venture resulting in a gam of $4 000 000 after elimination entries This gain is not subiecnoU.S income tax 2 Foreign Operations Foreign exchange losses of $1.569.000 and Si .257.000 (after taxes) are included m net income for the years 1976 and 1975. respectively. The company's foreign supsidianes are located principally in Western Europe. Canada and Australia. The consolidated financial statements include the following amounts with respect to foreign subsidiaries (all of which are wholly owned): Batanet lht Decemoer 31 Curre^i asseis Oner assets Tcia assets Current liaDml.eS Ctne'1 iaDiMies Tcia itaO'"f es Net assets Donars n Thousands 1976 1975 S75.S48 26.561 572814 2691 102JOS 85.505 35488 28 137 11433 8645 47,721 554.488 36 782 548 723 4 Retirement Plans The cost of employee retirement oenefits amounted :c $12 223.000m 1976and $li 797 000m 1975 A:Dece^oe- 31.1976. me actuanaiiy computed value of vested oenefits exceeded tne total of pension tunds ana accrued nao mes for oension costs by $4 7 800 000 Tne esnmatec unfu ncec prior service cost at Decemoer 31 1976 was $53 500 000 ^ 8 Debt end Dividend Restrictions Long-term debt at Decemoer 31 1976. and 1975 was as follows Do 5r ~ 1976 9';0ose^lO'|^tesaueM^rc3, 1991 ec^a'amua DrincioairepaymentsoegmningMarcnS1 '962 $ 65.000 seniornoiesoue January 15 T9937 *w* r* eouai annual o^ncioaf recaymens oeginn.ng January 15 1903 40.000 5V smking funo aeoeniures due Decemoe' 1 1991 w r annual sinking fund Daymens 0* S2 500 00C on each Decemoer 1 less S1 3 73 000 and S2 869 000 inrreasuryin '976ano 1975 resoect've'v 36.127 Tax-anemoi indusinaf revenue oonos w^icn oeanieres: at rates of to 6 /% ana mat jre at vanous dares to 2001 21,104 5% convene suocronatec notes due *sr- 1994 win annual reoayments oeginning Aor(` 1990 5'7%conver!iD>esjDordinated notes due-cm ' 1983 witr.annualfees ~entsof$200 000oreacn Ac- * tnrougn 1962 2' "'eoaiance cf$i 800 OOCoa-ao'e Aorti * *983 8.200 3.000 6'2% Swiss franc eoa'cOctODe' 1 * 97 -- Promissory notes svacietcoar.Ks cue r i960 ana198* -- Otner notes wnic'-cearmte'estatSVc'; '2 :s anc matjre at va- ous aaiesto '997 15.430 Tola* 188.661 Less DOHion Oue w?rvi one vear 4.038 Lcng-ie'^aeoi less cur'erv oc^'Zr- S184423 *1 69^ 3 20C 12c: { 90s; *: xc Ititmwnt of Ircoiw vea' Enoec Decemoer 31 Ne' saes Net ncome Dollars <n Thousanas 1976 1975 S142.3Q2 $'35 526 5 650 $ 5 248 The proceeds from ihe sale of the 9'- 2 % senior notes obtained April 7 1976 were applied toward tne renremem ci promissory notes due in 1980 anc 1981 rhe retired promissory noies bore interest al rates ranging irorn 115=-0 to 128% of tne prime commercial 'ending rate 3 Inventories The company accounts for dyestuff and pigment inventories on'he'ast-m first-out (LIFO) method Tne current cost for these inventories exceeded tneir LIFO valuation by $4 918 000 and $4 712.000 at December 31 1976 and 1975. respectively 28 The proceeds from tnesaieof'he 8'-2% senior notes obtained February 1977 were used to reduce snon-tei"'' debt outstanding at Decemoer 3' '976 The (mane.ai state ments reflect the issuance of trese ncies ana an ecu va.eri reduction of the related shert-te'" dec: cutstaramg at December 31 1976 The 5% convertible subordinated notes are convehicle nto sna'es of common stock at any time, at a conversion pr ee o1 $2 7 50 per sharefsuD|ect to antidnution adiustme^ts m * specified circumstances) " i GAF 12057 0 : 01 j : i g I The 5' z% convertible subordinates notes are presently 1 convertible into shares of common siock at a conversion once of S28 72 oer share (subject to antidilution adjustments m specified circumstances) oniy m connection with certain prepayments All other conversion rights lapsed on Aonl 1 1976 At December 3t 1976 GAF had domestic fines ot credit aggregating $100 000.000 Sixty-eight million dollars is in tne torm o' three year agreements with a grouo ot banks. Bor rowings agams; this (me of credit bear interest generally at 120% ot the bnme commercial lending rate The company must Day an annual fee of Vi of 1 % of the unused portion of the S68.QOC 000 commitment no compensating balances are required and. with proper notice, the agreements may be cancelled without penalty The remaining lines ot credit bear interest generally at the prime commercial lending rate Compensating balances are generally required on these lines of credit to equal 20% of the outstanding borrowings and i o% of the unused portion At December 31,1976. compen sating balances amounted to approximately $3,200 000 None ol tnese lines ot credit were utilized at December 31. 1976 Dividends are restricted under provisions of certain loan agreements Under the most restrictive of fnese provisions, retained earnings cannot be reduced below $299 228.000 Retained earnngs a! December 3l. 1976 were $321 935 000 Snon-te'm debt at December 31.1976 was $23,684,000 as compared with an ave-age ot S52.988 000 for the year 1976. me maximum amount of sucn borrowings which were out standing a! any month-end during 1976 was $79,698,000 fno average interest rate on the year-end balance was 8 2% as cdticarea with an average ol 7 2% tor tne full year 6 Income Taxes Prevision has net been made for the United States ,rcome taxes cn unremitrea earnings of foreign suOsidiar'es ot S34 667 000 since any withholding taxes anq United Stages income taxes payable on dividends oasea on undistributed earnings would be substantially offset bv foreign tax creO'ts or because the remittance oi such eam-ngs nas been indefi nitely postponed United States -ncome taxes have not Deen provided on the unremmeo earnings o* the Domestic international Sales Corporation subsidiary aggregating $9 103.000 through Decemoer 31 1976 since me company mienos to postpone indefinitely the remittance of such earnings The provision for income taxes consists of the following Do"ars Tnccsa'-3s 1976 i9?5 Unuea Slates-cadent United States-oe'e'rea United Slates investment tax aeon Amortization of deferred unites Slates rwesimen? rax erect arsing onor ;c Foreign State Total income taxes t S 8J23 3,952 (2.602) St055a 2 923 (2 925' (573) 1.421 1.312 510.333 .5:3i 36JT 5'5 563 The effective tax -ates were 34 4% anc 33 5% in 1976 anc 1975 respective . The reasons for tne diflerences from the statutory rate of 43 0% are as follows o c? p,e-ra* income 1976 ,g>c Statutory 'ate increases (dec-eases) *n ta*' res resu ting *'0^ oam on saie of iecnnaog anc * no* -no* Unea States investment :axc'ea 48.0% -- -16C0 `6 6' 5. State ana local income :a*es ~e'c' United Slates income ia oeneM Domestic Internationa Saes Co'ccxa' on-2 SC Other-net Elective ta rate 2.3 (2-2) (3.1) 34.4% 22 29' 23 3_ ; .- The principal sources of United Slates petered taxes were Doiars TnouSanos 1976 975 Excess of tax deprecation over a^ow-i 'eooneo m Conso'-aateo Statemen' o' mco^e Foreign e*cnange tra-saco^s Orne'-re'. Toia'oe,e,vec'axet S2J77 413 1.162 $3,952 S2e-^ [?3C: ' 339 r-J 4 3 1 -02D72 67 GAF 12058 29 Notes to Consolidated Financial Statements (continued) 7 Stock Option and Stock Purchase Flans The 1975 stock oDtion plan authorizes the granting of non qualified stock oDtions for 800.000 shares to key employees during a ten-year period ending Feoruary 11.1985 The prices at wnicn options may Oe granted may not oe less than 100% of tne fair market value of the shares on the dates the ootions are granted No ODtions have been granted under the 1975 stock option pian Authority to grant options under the company s 1965 quali fied stock option plan expired on March 31. 1975 Underthe provisions of the plan, options to purchase shares of com mon stock were granted to key employees during a ten-year period The onces at which options were granted were not less than 100% of the fair market value of the shares on the dates the options were granted The options are exercisable after a one-year waiting period and terminate five years from date of grant. A summary of the transactions affecting options under the 1965 plan is as follows -of me Year Ootstaroing January 1 Grantee *efcisea 7e"nmatea Dutstanairg Decemoer 3i rxer:saDie Decemoef 31 Numoe' of Shares im 1975 312.500 -- (14,410) (4.400) 2M.6S0 293.690 178 050 163 000 -- 128 550) 312500 152 000 Average Owen Price 1978 1975 $11.66 -- 11.03 S13 52 9 69 -- 12.50 11.66 11.66 1200 11 66 i3 74 Under the Drovisions of the company's 1969 restricted and unrestricted stock purchase plan. 650.000 shares of com mon stock were authorized for sale to key employees The plan currently provides that restricted and unrestricted shares may be solo at prices which are not less than 50% ar.o80%, respectively of the closing market price preced ing tne date on which an employee is designated as one to wnom shares may be offered Under certain conditions, the company has tne right to repurchase restricted shares of common stock at the original selling once The excess of Quoted market value at the date ot grant over tne aggregate sales price for restricted shares sold is amor tized by charges to income over the restriction period As a result of these charges, additional paid-in capital has been increased by $385,000 and $532,000 in 1976 and 1975 respectively The balance to be amortized through 1984 amounted to $702.000and $1 150.000 at December 31 1976and 1975 respectively 30 rj i -P 2G72>U 8 Capitol Stock The$i 20 convertible preferred stock dividends on which are cumulative, is convertible at any time into common stoc at the rate of 1V* shares of common stock for eacn snare o* preferred The company may redeem the preferred siock a; $28 00 per share through May 31 1977 ana $27 50 oer share thereafter Transactions in common stock held in treasury were as follows Dona's - '-Cusa- 1976 r; Balance Januav' Purchase ol 5 000 snares r 1976 and 22 000 m 1975 via siock purchase pans issuance irom treasury ol 8.350 snares r 1976 and 106.000 in 1975 tin connecron with sales unoer steer option oiar in 1976and tne restricted stock purchase oanm1975) Balance, Decemoer3i *4.380 27 55 52; *2; (89) W.338 >3lT As a result of the above issuance ol treasury shares dunng 1976 and 1975 additional Daid-m capital has oeen mcreasec by $84,000 and decreased by $ 185.000. respectively The shares of common stock reserved tor issuance a; December 3i "976 and 1975 were as follows Peservea for 197$ '9': Conversion of $ i 2C renveh c*e weferreo siock Convenor of convenoie suDoramatea notes 3.787.567 3 :a: 40239 409 5C3 Exercise under stoc* optor ana Duresse oians 1.409,690 * 42; '3C Total 5.600,116 b oc ` * 3c 9 Supplementary Financial Information The following expenses nave Deen inciuoeo in tne Consolidated Statement of rncome Dollars r Th^xsa**;: For tne year 197$ 9': Maintenance ana repairs Taxes otne'tnan raxes on income Socal Security ana unemployment O^er Rent $42,491 18,235 8,767 17,106 S4- '6 55C *9" i4 6C' Approximately 40% ot rent expense is applicable tc noncapitalized financing leases (as defmeo by the Secuwes and Exchange Commission) If the assets associated w tri such leases had been capitalized, the effect on net income would not nave been significant in either i976or 1975 how ever, in such event the expense presently recorded as 'eni would be comprised ot two different elements 0 e anon ca tion ot leaseholos ano imputed interest) Amortization wouic represent the maior portion of this expense GAF 12059 to Provision for Silver Loss c0r Decemoer 1976. trecompany estaoiisned a $3 5 million 4 reserve lor a silver snortage An intensive investigation ^ to determine me cause of tne snortage is unoer way with tne assistance of GAF's outside auditors and attorneys if the snortage is due to theft it may oe recovered through insurance If Commitments and Contingent Liabilities Tne company is obligated under various long-term noncance:iadie'eases a; December 3'. 1976. as follows Vinmu- Re-ia 8y Penoa Dollars in TnoLsaras Lana &lana r-orovements Buildings & Bmiomg Eaujpmen: Machinery 4 Eouipmeni Total .97: :97s \<r9 -.980 19aI96Z-I9B6 '9fl7-'99i 992 '996 Begone '996 S 33 33 33 38 38 188 128 10 10 $ 4 786 4306 3 914 3 587 3 523 17 102 It 78C 7 729 2.396 S 5179 876 205 75 57 55 9 -- -- S 9996 5217 4 152 3 700 3616 17345 11 91' 7 739 2.406 Note 11 (continued) These amounts are tor existing leases ana oo noi repre sent a forecast ol future expenses Approximately 55% of all rental commitments are aooi cace to noncapitalized financing leases The company had commitments of approximately $20,505,000 at DecemPer 31 1976. for toe acquisition' c* property, plant and equipment At December 31,1976. there were cenam lawsuits anc claims pending against tne company in tne opinion of management, the ultimate disposition of these matters vw have no material, adverse affect on the company s conscii dated financial position ^ 12 Quarterly Financial Data (Unaudited) ne following is a summary of financial oata by quarter for the years 1976 and 1975 'et Saies Ccs' of Prooucts Soto S-:ss P'ofit `c ;-;orre -ass R-eferred Stock Dividend requirements -:ome ApoiicaDie to Common Slock -a"' 95s cer Common Share ?' -ary |V-y Diiuteo Dollars in Thousands 1976 By Quarter First Second Third Fourth 1975 By Quarte' First Second Thi'd Fouhh $258,475 $271 662 $282,163 $248,207 $209,860 $235 779 $265 669 S253.H3 190.574 194 869 208.795 185.273 151.542 170.038 187.601 181.923 67.901 4 780 76.793 8 176 73 368 5.911 62.934 833(a) 58 318 3 650 65.741 78 068 10.204 (bt 12 i'8 71 190 4 974 909 909 909 908 909 909 908 909 3.871 7 267 5.002 (75) 2 741 9 295 11 2'0 4,065 Dollars 29 55 37 _ 21 70 85 30 28 47 34 (c) 21 60 70 28 $3 5 million ($i 7 million after-tax) silver ioss provision 1 S* 0 million nontaxaole gam on sale of technology and Know-now j-'e o-"ttea because not dilutive * Oi-nzo75c5 GAF -12060 31 Notes to Consolidated Financial Statements (continued) 13 Impact of Inflation iUnaudHod) Xnnougn a portion ot me dollar increase m consolidated net ja.es is attnDuiaoie to nigher selling prices competitive fac tors nave resmctec suen once increases to amounts which are less man tnose reauired to recover escalating product costs Asaresu't tne company nas not been able to mamla n gross margin percentages at .eveis generally experi enced in pr,or years Consideration o! current replacement costs tor all inventories and nigher depreciation cnarges relative tc current replacement costs ot the company's present productive capacity would appear to have the effect of furtner decreas ing such margins Estimates of rep.acement costs as required by tne SEC m form iO-K ter 1976 include mnerent significant imprecisions ano mere are serious limitations as to the usefulness of such information Many currently indeterminable factors (techno logy. competitive conditions economic developments governmental ano environmental cnanges anc corporate strategy) will materially affect future replacement costs and margins in the normal course of business over an extended period of time, the company may or may not replace all ot its produciive capacity and wilt m tne light of tnese many variable fac tors examine a number of available alternatives m order to maintain margins Reference is made to tne company s Annual Report Form iO-K (a cooy of which is available on request) for additional Quantitative information with respect to the estimated reoiacement cos; of inventories and piant ana equipment at Decemoer3i. 1976 ana tne related estimated effect of such costs on cost of saies ana depreciation expense for me year men ended Auditors' Opinion Haskins A Soils Cen tied Public Accountants Two B'oadwa-, New vor. N y iGOO-t A To the Shareholders and Board of Director of GAP Corporation We nave examined tne consolidated oaiance sneet o' G AF Corooration and its consolidated sudsidiaries as o< Decemoer 31 1976 ano 1975 ana tne related conscuoatec statements of income retained eammgs ana changes in financial position for the years men ended Our exam nat.cn was made m accordance with generally accepted auditing standards ana. accordingly included such, tests o' tne accounting records ana such other auditing procedures as we considered necessary in the circumstances m our opinion, such financial statements present (airly the financial position of the companies at December 31 197E and 1975 and the results of their operations and me cnanges in tneir financial position for tne years then ended m conformity with generally accepted accounting principles applied on a consistent basis February 7, 1977 I I 32 GAF 12061 ; l -1> r.tf pRQPUCTS ANP SERVICES GA^!etw^deacer'nS anC ,nSU'a' P mfOCudS 0Af' ^i!toTesoential ano com*s^!l^^e-Si*-adhesive-backed 'e'c a'uf^;aoai-youfse market Galstar* 1 oa"'envS>flocyit'gs,or tes'dek't'ai and '' urefhane-'^Tfnwmg flooring lelr. adhesives 5u'?J,ITvkxx Cleaners and finishes ?^f^f^gles and other roofing t. ,0es roll roofing: roohng tens asphalt L-i-Tve coatings and cements mineral r-Vooa'd sidings canal bulkhead cor- and Hal sheets building ano root 7 a,,ors Stratakte* match-look siding b'" ... _.j ^.w.rvh anr! decorative CHEMICAL PRODUCTS 0 AF` ChemlcaU DyesandPigmenU - - - c agents lor synthetic and natural . -. a"-c oie-xts tor ine carpet and textile J-. asetorpaper leather lacouers " os p'-ngriks plastics lubbei is a-'c detergents disperse acid a c oas.c eyes, fluorescent brrgnt.-. sjait- arc water-soluble dyes rases High-Prouure Acetyfeno Derivative* -'S oovnets copolymers so1--:a-c r.termeaates anasoeciaity a = :e' vedtromacer/iene lorjse : oei'bieum pnarmaceuiicai - e aonesve anaavanetyol .C--DC industrial Organic Chemical* :.c^c ano ai'pnatic compounds "'greaienis ana as mterpnarmaceu-'cai ago;~encai process'ng Iron Powders c je sor-eres oi iron us,en in -c-'Cj'*f> 'rans'-niners re ' ''OOv.r!e,,-np`nlijqv Latex Polymorx and Compounds SBR lalices andGafcote" coaimg com pounds produced from a wide range of monomers and polymers lor use as binders and coalings on floor coverings uphol stery lexnieiabncs. paper and paper board nonwovens. and adhesives SMvor Salts Silvernitraie siivercyanide monovaieni and divalent silver oxides for phoiograpny eieciropiafing. battery and other applica tions Specialty Chemicals Processing and lormulating agents includ ing Gaftex* textile auxiliaries Biopaf bio cides Gafstat" antisiats llame-retardants lor piasucs. coating and finishing agents. adhesive additives Cheetox sequestrants Antara metal lubricants, corrosion inhibitors, flocculants and solvents (or use in various indusines and in recycling opera tions and pollufion control Surfactanta Ndneonc. anionic cationic and amphoteric surlace-active agents for use as deter gents emulsiliers dispersants ano wetting agents Thermoplastic Molding Rosins Galite" engineering resins lor automobile mechanicaland eleciricafpans eiecincai electronic components appliance hous ings and business machines Ultraviolet Absorbers Uvmul ullravioiei-screening agents lor cosmeiics plastics lexiiies pigments rub ber and adneswes GAP* Felt and FilterProduct* Natural anc syrmeuc iioer fens ano hi;er devices fo1 liquid ano gas iiiialien Gaiio* pressure vessel Mie' systems also lens lor seals lubncaiiOn pairing pianos apparel ana inierny aes<gn papermaK'ng anootner mausinaiana aerospaceappications noise- ano viD'aton-CCnirot rnaier<ats a^ia nonwovens GAF* Mmral Granules Mineral granges lor rooting ana oir>er uses men liners anasiatetiour PHOTO A REPRO PRODUCTS GAF* Photo Products Consumer Photo Si.iicameras sue*; ano sou~orreviecam eras anc prOfC'Drs siceproieciors color suae movie ana prmt tiims. oiacK-ancwhite sm! films che-n ca's a^ci accesso^es Graphic Arts Gaimaie* f insa>vicnen.cais ter o^sei pr.nnnq ohoioi.irxxgrapnv o^oioengra-fno ro:aoravure anos-ii.-scree,',c'',v'nq a,sos'aoii.a,,on capers a"c G o`ono:c:.i;eser:ing paper `J _-. ..caMRMmMMMgagRMMRRbRaaMx Photoimaging High resolution see-through Microkne' glass plates and Mm photoresists printers and devetooers for the electronics industry Pictorial Photo View-Master" talking and silent stereo viewers picture fee's and projectors Pana-Vue" side viewers and color sides tor eoucanonal entertainment and com mercial uses Professional Photo Color and black-and-white films. color and black-and-white papers and chemicals tor portrait, school, aerial, commercial and industrial photograph/and photofinishing, specialized materials lor seismic record ing, inslrumentation. surveillance, and oscillography X-ray Gatmed'1'medical x-ray lilms. chemicals intensifying screens cassettes illumina tors and accessories industrial x-ray films and chemicals radiologic leaching ads OAF1 Busmoss Systems Products Audio-Visual Sldeprojeciors overhead projection iransparency senes tor preschool inrough col lege instruction, ano materials and supplies Business Forms Custom designed and punted Oataprocessmg forms, sales dooks. manilolo order books single cooy forms, unitset orms voucher anc receipt books. CardSet forms forms tor autograohic register ano similar items and optical scanning 'orms Micrographic Diazo microfilm micro'iimcameras fudine of readers reace'-onn:ers ano mi Mm anc r-nicroliche duplicators ajtomatic docu ment retrieval units to' use in various Dusiness ano microMm systems Reproduction Diazopfi^!ers accessones anosens^ea maie'-ais for enQK'eef'ng ana business Svsie^s Gaton; * leirenng machine oral.;ng maienais a^d supples eiecwosiai'C coD'6r papers ronp's ancsupoi.es SERVICES Contract Manufacturing Service pfec so1- cams ana eau'O^e'') con-raci manuiactunng serves Photo Service Naro'\Moeprocess "c sew.ee Jor maoana v\nre ana co'o' s'1" <- ^ rr>, e ' ' ''s Transparency Service Cu.S'0Ma . a nco:'.' s if!?-r'oauC'Cr so'. GAF 12062 Oj. 33 OAF Locations Domestic Operations GAF Corporations plants 'esea'cniaooratores sa;es offices, os- T'Di.iC'- centers cnoiOT'^isnng 0<ant$ ana pnotoeauipment reoaircenie'sare locatec inrougnoui tne USA Corporals Offices JO .Vest51 Stree' New tor. NV 1002C 212 582 7600 International Manufacturing and Marketing Subsidiaries I Alabama Bir'riingnarr Huntsville MoDne Arizona r-oenix CalHomia La Haora Long Beacn LOS Angees Sa^ Diego South San Francisco Su'nyva'e van Nuys Colorado Denver Connecticut Greenwicn RocKvilie Staffo'cv lie District ot Cohanbta Florida Hiaiean Onanao Tampa Georgia Atlanta Savan.nan Illinois Cnicagc Franm.n Park jonet -inconwooc Meirose Parv ceona Indiana mpianaoons Mount Vernon SoL'n Bene Iowa Des Momes Mason City Kansas Kansas C'ty Kentucky Ca vert Cry Louisiana Kenner Maryland Bainmore Cheve^y nager-stowr Massachusetts Frankln MilliS Newion Somerville Michigan Delro't Lansing Souinfieia Troy Warren Minnesota Minneapolis Mteaetei Annapolis Joplin Kansas City Maryiana Heignts St LOUIS Nsw Jersey Bouna Brook Gloucester City Lnaen Morristown Newark South 8oun0 Brook Wayne NowYork Bngnamton BroOkyn Deimar Dewitt EimsIorO Glens Fans Johnson City Newburgn New York Rensselaer vans Gate Vernon Vesrai Wooasiae North Carolina Chanotte Ohio Cincinnati Coiumpus Elyria Norn oimstea Sneipy Toieoo Youngstown Oregon Eugene Portiana Progress Pennsylvania AuentOwn Blue flfoge Summi; Ere Maivem Philadelphia Pittspjrgh Whitehall Rhode Island Wester / South Carolina Greenvnie Tormaooao Chattanooga Jonnson City Knoxville Nasnviile Tasaa Arlington Dallas Houslcn San Antonio Texas City Washington Seattle Spokane Wisconsin Appleton Milwaukee Pempire Wauwatosa Domestic Subsidiaries GAFBroaacasling Company Inc New York N Y GAFExpon Corporation New York N Y Carolina Puerto Rice GAFHawaii Inc Honolulu Hawau GAF International Corporation New Yon.. N Y OAF (Australasia) Pty. Ltd. Aiexanona Australia GAF (did.) Pty. Ltd. Brispane Australia OAF(SJL.)Pty. Ltd. Aoe'aioe Australia OAF (Vic.) Pty. Ltd. Meipourne Australia OAF(WJL)Pty. Ltd. Penn Australia OAF(GaigJum)N.V. Smt-Nikiaas. Belgium OAFdoGrasH industries ComoroloLtdo. SSo Paulo. Brazil OAF (Canada) Limited Mississauga. Ontario Canaoa Toronto Ontario. Canaoa Vancouver. Bntisn Columbia. Canada QA F (Danmark) A/S Banerup Oenm- OAF (Dsutsch1and) GunJ.M. Frechen Gerrra OAF (Franco) S.A. Louvres France aAF (Orest Britain) Limitsd Colnorook. Englanc Hounslow Engianc Manchester England OAF Hellas SJL. Atnens Greece OAF (Ireland) Limited DuDkn. Ireland OAF (Israel) Ltd. Tel Aviv Israel OAF (ItaHalS^J. Milano Italy OAF (Japan) Limited Tokyo Jaoan OAF Corporation do Mesioo SJL. do C.V. Mexico City Mexico OAF (Nederland) B.V. Oeiff Horana OAF (Now Zealand) Pty. Lu. Wellington New Zeaianc OAF (Norga) A/S Oslo Norway OAF (Ostarraich) QjTLb.M. Vienna Austria OAF South Africa (Fty.) Ltd. JonannesDurg Repupiic o? South A*nca OAFCorp. Sucursal enSspeila Barcelona Spam OAF (Suomi) Oy Helsinki Fmlana QAFSvonskaAS Stockhcxm Sweaen OAF (fwftaaHandJ A.O. Zjg Swizenana Afflliatas: Chemical Davalopmante ofCanada UmJtad Pom:eCa're Queoec Canaoa QA F/Hida Chamia O. m.6.H. Mar vVes: Germans Sawyer** Asia Fty. Ltd. -roia International Film Frocaaaina Laboratories: S '`-Nif aas Beiei-m L2ncor 3-Faj:rcr zea^imc'ocess',gaccra:ories a^c ecwiomeni reoa.r s:a: o^s are ocafec '^'Cug''Owtrhewo''C GAF 12063