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CHICAGO FIRE BRICK COMPANY Accountants' Report Financial Statements - September 30, 1966 PEAT, MARWICK, MITCHELL & CO. CERTIFIED PUBLIC ACCOUNTANTS Chicago Fire Brick Annual Reports and Insurance 000017 Peat, Marwick, Mitch eel & Co. CERTIFIED PUBLIC ACCOUNTANTS 111 WEST MONROE STREET CHICAGO, ILLINOIS 00603 The Board of Directors Chicago Fire Brick Company: We have examined the balance sheet of Chicago Fire Brick Company as of September 30, 1966 and the related statements of earnings and re tained earnings for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying balance sheet and statements of earnings and retained earnings present fairly the financial position of Chicago Fire Brick Company at September 30, 1966 and the results of its operations for the year then ended, in conformity with generally ac cepted accounting principles applied on a basis consistent with that of the preceding year. December 2, 1966 Chicago Fire Brick Annual Reports and pa o -< o CO Sf no <n n on NNiflN ps o co sr s m Mfl aAr N rl ^ M1HN cn m N0 pa O CNMO to sf cm on Ors. cNsi <r. r*T vf cn in ^ o m co n i<nn c-s in o csT co n CinM CM no en o oo in ND ON CHICAGO F IR E B R ICK COMPANY *1965 fig u re s re s ta te d - see note 1. 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Cs I JJ Chicago Fire Brick Annual Reports and Tnniirnrtna f\f\f\f\ 1 O CHICAGO FIRE BRICK COMPANY Statement of Earnings Year ended September 30, 1966 with comparative figures for 1965 Net sales Cost of sales Gross profit Engineering, warehousing, and delivery; selling; and administrative and general expenses Operating profit Other income, less other deductions Earnings before federal income tax and extraordinary gain Federal income tax Net earnings before equity in earnings , of wholly-owned subsidiaries and extraordinary gain 1966 1965 $ 3,422,345 2,938,345 2.260.138 2.048.426 1,162,207 889,919 809.301 352,906 1.864 720,604 169,315 5.485 354,770 154,000 174,800 77,000 200.770 97,800 Equity in earnings of wholly-owned subsidiaries: The Wellsville Fire Brick Company New Florence Fire Brick Company Decrease (increase) in reserve for unrealized profit in inventories 49,799 1,852 140,297* 3,463* 29,856 .....(22,90.7) 81,507 120,853 Net earnings before extraordinary gain Extraordinary gain on sale of property, less $71,000 applicable federal income tax Net earnings 282,277 218,653 209,003 $ 491,280 218,653 Depreciation and amortization of plant and equipment included in costs and expenses amounted to $68,308 for the year ended September 30, 1966 and $58,442 for the year ended September 30, 1965. *1965 figures restated - see note 1. See accompanying notes to financial statements. Chicago Fire Brick Annual Reports and r , . AAAAOA CHICAGO FIRE BRICK COMPANY Statement of Retained Earnings Year ended September 30, 1966 with comparative figures for 1965 Balance at beginning of year Net earnings for year Less cash dividends paid - $4.00 a share in 1966; $1.50 a share in 1965 Balance at end of year See accompanying notes to financial statements. *1965 figure restated - see note 1. 1966 1965 $ 2,174,063 1,969,213 491,280 218,653* 2,665,343 2,187,866 36,808 13,803 $ 2,628,535 2,174,063 Chicago Fire Brick Annual Reports and Insurance 000021 CHICAGO FIRE BRICK COMPANY Notes to Financial Statements September 30, 1966 (1) During the year, the company's two wholly-owned subsidiaries received proceeds under a condemnation award in addition to those received in 1965, and re corded substantially all proceeds (net of applicable litigation expenses) as a reduction in bases of mineral rights purchased to conform to the federal income tax treatment. Consequently, equity in earnings of the subsidiaries for 1965 has been retroactively decreased $19,335. (2) Under the terms of the 5-1/2% long-term note agreement, the company has agreed, among other things, to maintain an excess of current assets over current liabilities of at least $250,000. At September 30, 1966, current assets exceeded current liabilities by approximately $730,000. (3) Contributions under a pension plan adopted during the year totalled $16,706 for the year ended September 30, 1966. The unfunded past service liability as of September 30, 1966 is estimated by independent actuaries at approxi mately $70,000. Chicago Fire Brick Annual Reports and