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. Njr, I NX1776 1 m't% K* For Corporations . 'SECURITIES ':iUffi^EXCHA:iGKVGOIJLIfSSXOli-.. :v <a s :iiic g t o i;, 'D-. c.. : t ", <: ANNUAL REPORT' For Fiscal Year Ended October 31, 1937 The GllAden Company . ; (Naime ; of Registrant)' _________ Cleveland, Ohio_________________ (Addre so" of Principal Executive Offices)- .Ohio - December 11, 1917 (The State or Other Sovereign Power under which 7 Incorporated and Date of Incorporation) ^ Perpetual (Date of Termination of Charter)" - -V . cff * ' o o u m rhird Thursday in January at Cleveland, Ohio , RECL'w ,t ma il " (Date and Place of Annual. Meetings) : P.j 3j B38 i TABLE OF SECURITIES REGISTERED D0C'.Kmi".,L S. RLES Li-ASecurities -Registered" 7:'" 'fi. ' c Title of Issue '| Amount as of close of Fiscal'Pear Amount as to Amount to be which regis- : ^ registered oration is upon notice effective . of issuance Common Stock '7 without par value - 800,801 shares Convertible Preferred Stock, Cumula- ' 'tive,:'' *50.00 par value 199,9^0 shares 179*946.shares None Names of Exchanges on which Registered New York Stock Exchange:{ JFeW Pork`Stock Exchange : Name and address of person authorized to receive notices and communications . from the Securities'ahdiExchange Commissions Clifton II. Kolb, Secretary, Nadison:Avehue: A Berea Road,: \ Cleveland, Ohio..','- - L 0, vQ' 0^. , '7::e inforrn.-ition: required to be/>;ivr. unior `.ho iV/ns herein set f orth is more'; r.oi-cifically defined. in/toe . "Inst^iotion';B6oK for Form 1 X for Corporations." .'h / 7. - ' { ; -: ;Zoe Ins'tniet'ion Book also gets forth requirements as. to exhibits ' which/are to; aoconpany the' annual report. ' A??iLiArio:;s ;, 1. :/List the- following'.and indicate the respective peraentas'esi.i of voting power, or other basis of control, as required by the Inctrac tions: /'h-- . v ' V / . h /(a) - /All subsidiaries of ;the: registrant. Afterthought Zinc Mining Company-*-. The . Calif ornia; Zinc Company^- . Sacramento Valleyv& Eastern Railway! The Bipolin Company^ Troco Company of Illinois2 .. Wisconsin 7ood: Products' Ohio /Company2 . /The C-lidler. Company, Limited^ State of . Stock Incorporation . Owned California All Ohio All California All Ohio; ' ' All. Illinois All Ohio All Ontario, Canada All Afterthought .Zinc Mining Company, The: California g- :yyi: Zinc Company and. Sacramento Valley & Eastern Railway . yyy are! carried as investments because they have not . '.. -//'-// been audited and aggregate investments are insigni- l/h/;// ficant. Sales and operating revenues of such cor- / . novations are also unimportant, as they are inactive. Inactive subsidiaries included in all statements. .'/Vj/ The Glidden Company, Limited, is a Canadian ./; yyyj}y corporation and is therefore . carried as. an investment. It is active, however, arid, is included fin consolidated /; ,5|fffd statements. h-'/hhSjf > .;/ ., up%y. hhSh'Jc (b) All parents of the registrant. . .lione.:/vf/hh.!'V/''.\ ' - MAl&GEMESTC ASD CONTROL / //. '" - 2. List the names and addresses of all directors and offi the registrant. Indicate the office or offices held. If any pers both an officer and director, so state. . 00 Name Address Adrian D. Joyce ^E.Kh .\Horsburgh ; ii. W. Levehhageu tV. J. O'Brien . ^Dwight VP. Joyce F.j E. Sprague Clifton M. Kolb J. A. Peters Howard Beatty W. W Conant - ` 1396 Union Trust Building Cleveland, Ohio 1396 Union Trust Building . Cleveland, Ohio 1396, Union ,Trrdst Building Cleveland, Ohio ., : A - 13SS Union TruethBuild!ng..\ Cleveland, Chio 110C1 Madison Avenue Cleveland, Chio 1396 Union lrust Building Cleveland, Ohio 11001 Madison Avenue Cleveland, Ohio 11001 Madison Avenue Clevelar.d, Chic Sis t on; Avehue &. Logan Blyd. Chi c a go, Illinois 1.1001 Madi son Avenue . : V Cleveland, Ohio Off.ica President and Director Senior Vice President and Director Vice, Presi dent and Director Vice President and Director Vice President and Director Vice President and Director. Secretary aha Eirector : Treasurer ' Director and Appointed Vice President : Assistant Secretary 3. Give the information required belovr for all persons ovaiing of record indre than 10 per cent, of any class of equity securities of the registrant. As of December 30, 1937 (`Insert date within 93 days) Name and address' A Title of Issue : Amount Owned Per cent ., of the class, Of record., none. Beneficially, none to the knowledge of the registrant. Give the following information as to the registrant.1s securities, other than eauity securities, owned by.each director and each officer of the registrant. > The statements are to be made both as to. tho securities owned of record and those owned beneficially. , : As of October 31, 1957 Name Office ; :i : None , , ." Title of Issue ... Securities Owned A Amount of Amount Record A. Beneficially 301 -3- c. State briefly the general effect of: '-.".'..."(aX-J chariger,, f^ade within the fiscal yeaf and not pre-vioiicly reported,:JinjcbhtraGts,;ah!i arrxuogo.'nentr; of the categories 'enumerated below which have been previously reported; (b) such contracts and arraagements, made or, ixiJ 'eff ect fwithin jtheyfa::scai yearand-, ho fc previously reported, including the - ^dates'thereof aod^nfimes; of':;,part led^thereto h; 1.,,;.. ''-1:.' i ) material mxaiagement or general supervisory contracts providing for manxv.emexxt of, or services to,:;".'the .registrant' of1.,. any of its subsidiaries; .5;'..v> '`;'- There 'nave been no aiatci-ial'Changes "in contracts previously reported and no contracts made or in effect V 'V-y'h- y',,` .h:Vl,'l,not;_;previou,sly','.;reryortcd.\,-; y'/' . '.p y., v hp.p *y (ii) material'advisory, 'construction of service contracts Vv.: v.i th rl'i iii-'tes providing for management -of, or services to, ! l>:ilh:hthe::;regl.Ktrai\t' oriony of its subsidiaries; p'yhh. : There have been no material changes in contracts y x. previously reported and no: contracts -made or in effect- h not previously reported. v (iii) material contracts, except as provided by the instructions, between the registrant or any affiliate.of the registrant on the one' hand, and, on, the other hand, any director or officer of the registrant, i'any principal underwriter of any securities of the, registrant sold by . the registrant within the past three fi seal years, or any security holder named in answer to Item 3; There have been no material changes in contracts previously reported and no contracts made or in effect not previously reported. (iv) material bonus and profit-sharing arrangements. There have, been no material changes in contracts previously reported-and no contracts made or in effect h-p hrfl':i:.f 'l-,not'previously-iffepcfftedg-':'-' if ffipMpp-.y .yp|,; 6. As to any options outstanding, at the close of the fiscal year to purchase securities of the registrant from the registrant: (a)state the amount, with the title of the issue, called.for by such options; (b) outline briefly the prices, expiration dates, and other material conditions on which such options may be exercised; (c) give the name and address of each person holding such options calling for more than five per cent of the total amount subject^ to option, and give the amount called for by the options of each such person; and (d) for each class of such options not previously reported state . the consideration for the granting thereof. . There were no options outstanding on October 31, 1937 to purchase 1 securities of the registrant from the registrant. voi nu of. -4~ BUSIITSSS- . yiv; 7. Describe briefly the material : changes'twhi ch may have occurred blithili thefiscal 'year:in .the:.gener.ils\diiiK.ac^ey;-.'6f:' the business- dope:by -ijlie registrant and its subsidiaries. . ' t 'V. '.here have beer, no material changes within the' fiscal' year ending October oi, 1937 in the general character of 'the business cone by the registrant and its .subsidiaries. . f'lilAlTCIAl STATSlTxWS S.' - Submit financiEl 'statement s in accordance, "with the Instructions and the Rules .and Regulations of the Commission supplementary thereto. Iho following Jinoncial Statements and Schedules: ,f/' :,TH3 .GLIDfSK COMPANY > ' ` . ' Balance Sheet October 31, 1937 - . >.;.v a- . Schedule I - ,Investments in. securities of affiliates ' Schedule II - Property, plant and equipment Schedule : IIA - Special reserves for revaluation ._ .Schedule ;> III - ^.Reserves for depreciation, depletion, and amortization : ; .-a.;-:-. i Schedule IV - Intangible assets Schedule VII Reserves Schedule VIII - Capital stock Schedule IX - Surplus f THX C-LIDD2X COIrAKY Ala) COICSOIIBAIZD SUBSIDIARY Consolidated Balance Sheet - October 31, 1937 .; Consolidated Profit and Loss Statement for the:year ended - October 31, 1937 .': > ' .v- ; Schedule 7 Vl';~ Investments in securities of7,affiliates if -iltSchaduLe.' ' " II,;,- Property, plant and -:aquipment tSchedule ' IIA - Special reserves foriivaluatlqn Schedule III - Reserves for depreciation, depletion, end amortization of property, plant and equipment Schedule IV - Schedule ' VII - Schedule VIII - Capital stock .' Schedule if IX,- Surplus Schedule X - Supp1ementary profit and loss inf6rmation: Schedule XI - Income from dividends Accountants''- Certif: ;ti The following financial statements and schedules have been omitted for:''the'.reasons'stated: THE GLIDD3X COdPAirY v:':\ Profit and Loss Statement, Schedules X and XI I 303 V.'vTne : cahdi.t-io'n;s:: out 1.1:; A under:' the ir. si ruction e fcr i t cm 8 (!S) (a) are met. . Scheduler IA. V sr.d VI h . The subject ratter ir r.ct present. IKh GLIDJ321 CO.S?AhX--j u ID . GOi.'SOiir'AUD XUA SillX : ; Schedules IA, V and VI > The .subject matter is not present. 304 BALANCE SHRF.T THE GLIDDEN COMPANY SSSeSSeSB'SUBSSSSS October 31, 1937 ASSETS CQBRMT ASSETS Cash on hand Cash on deposit-demand .Trad notes and acceptances receivable 11,?$2.17 1.200.673.27 # 1,212,42 162,060.33 Stead accounts receivable 4.159.546.18 4,321,696.51 reserve.,,,......Schedule VII ...... Inventoried-at lover of coat or market 121,8*3.00 : 4,199,65 except as stated in Mote A: B&w materials and supplies In-process and finished merchandise # 4,737p630.52 _ 6.777.47S.46 11,515,09 Othercurrent accounts receivable and ___advances on purchase commitments SBMEMTS. IH SUBSIDIARY AMD AFFILIATED COMPANIES* 546.10! California mining companies-at less than cost: Capital stock-vholly owned - Schedule I # 159C0O.OO *, + "*& * -Bnd3-principal amount #500,000.00 - Schedule I 187,5j)0.00 : J , Afivriidwii , __ 857..481. 46 $ 1,059,98! Th Glidden Coirpany, ltd. - Schedule I: -- Capital stock-wholly owned Affiliated company-at cost-Schedule I: 50,00< Capital stock OTTO ASSETS A3TO INVESTMENTS 600.00( U'Ph surrender valueaf life insurance Claims against closed banks # 399,625 # 125,7 37.65 less reserve - Schedule VII Sundry investments - Note B Less reserrs - Schedule VII Porcellaneous notes and accounts, advances 75,0 12.50 # 175,3 34 * 40 9.8 32.76 50,725 165,551 t<? salesmensand sundry deposits 59.813 .gggF-SBTY. BLAST AMD EQUIPMENT - Note C l"ad, buildings! machinery, equipment, etc.-at cost or appraisal value - Schedule II #22,591,8j54.03 lesc reserves ifor revaluation as determined by Soars? of Directors - Schedule 11-A iV'hp depreciation and ^3,.B6A18o^,y^ #18,973,384 v depletion - Schedule III 6.161,252 j^ANGIBLES (at cost, less amortization) - Schedule IV -,j?tent3 and trade-marks # 80,545 JUphta to manufacture 14.667. CHAKGESl; Af.vent.ory of advertising stock, stationery, tftaerrpired insurance premiums and prepaid , esjenses i,,;,?;,, 403,951. flp*Qial new products development 115.916. stments in subsidiary and affiliated companies consist of the following Investments in California mining companies, whose assets consist aim of .properties not being operated, are stated he: ein at less than c which carrying value, on the basis of unaudited balance sheets, wa #28*980.09 less than the book value of the net assets "of those com; Unaudited statements of those companies show accumulated losses of :fi:,138,281.83 from date of acquisition to October 31, 1937, exclus: depreciation on appreciation and unpaid interest on bonds held by i parent Company, which interest has not been taken into income by tl latter. Against these accumulated losses, the parent Company has i vided*' in prior years, the. sum. of"#581,671.7.6 .out. of surplus' l'*' , 0JJ3J.W ' TS ad' po Bit-demand . . I and acceptances receivable . # 11,7^2.17 1.200.6f5.27 S 162,0^0.33 .1,212,425.44 "anta receivable re - Schedule VII i-at lower of cost or market i stated In Rote A: lerials and supplies ;3s and finished merchandise 4.159.546.18 $ 4,321,696.51 121,953.00 4,199,653.51 $ 4,737,620.52 6,777,479.46 11,515,099.98 at accounts receivable and on purchase commitments H SUBSIDIARY AHD AFFILIATED COMPANIES* mining companies-at less than cost: tock-wholly owned - Schedule I ; acipal amount #500,000.00 - Schedule I Company, ltd. - Schedule I: tock-wholly owned lompany-at cost-Schedule I: iock UP) IBVSSTMEBTS 546.106.65 #17,473,285.58 15,000.00 i87,5b0.00 857.481.46 $ 1,059,981.46 50,000.00 600.000.00 1,709,281.46 Ler value of life insurance 1st closed hanks i - Schedule VII itments - Bote B i - Schedule VII is notes and accounts, advances * # 125,7 57.65 _ 75,0 12.50 $ 175,3 54.40 9.8 b2.76 399,629.25 50,725.15 165,551.64 m and sundry deposits T ABD EflUIEUBBT - Bote C 59.813.73 675,710.77 nge, machinery, equipment, etc.-at praisal value - Schedule XI #22,591,8^4.03 for revaluation as determined by irectors - Schedule II-A 3.618 9.57 #18,973,384.46 s for depreciation and - Schedule III 6.161.252.15 t cost, leas amortization) - Schedule IV trade-marks # 80,545.98 hufacture 14.667.89 ss advertising stock, stationery, insurance premiums and prepaid 12,812,152.-31 95,21 = 87 products development # 403,951.86 115.916.91 519.8SS.77 #33,286,201.76 in subsidiary and affiliated companies consie t of the following: stments in California mining companies, whose assets consist almost entirely properties not being operated, are stated hei ein at less than cost, ich carrying value, on the basiB of unaudited balance sheets, was 8,980.09 less than the book value of the net sissets of those companies, audited statements of those companies show accumulated losses of *138,281.83 from date af acquisition to October 31, 1937, exclusive of preciation on appreciation and unpaid interest) on bonds held by the rent Company, which interest has not been takdn into income by the tter. Against these accumulated losses, the parent Company has pro-- led, in prior years, the sum of #581,671.76 out of surplua and conagency reserve and has a credit of #312,500.00 arising from its reaeLsitlon of #450,000.00 face value of bonds ofIThe California Zinc apany at a cost of #137,500.00. The operation of the mining properties thS in 1927, and. th. value : raww JV. . -- K'-\ 7'81'Jl7 i vi '!i *V -V-- ' j: THE GLIDUEF COMPAIY October 31, 1937 SSETS s.-.':-:. d # 11,742.17 3sit-demand and acceptances receivable 1,200,673.27 $ 1.212.425.44 $--i6"t, oio :a its receivable 4,159,516.18 $ 4,321,606.51 * -Schedule VII 121,953.00 4,199,653.51 >at: lower of cost or market stated in Rote A: trials and supplies $ 4,737,620.52 >ss and finished .merchandise _ 6.777,479.46 11,515,099.98 it accounts receivable and ~ n purchase commitments 546,106.65 $17,473,285.53 ' SUBSIDIARY AND AFFILIATED COMPANIES* Ining companies-at less than cost: ock-wholly owned - Schedule I $ 15,000.00 cipal amount 500,000.00 - Schedule I 187,500.00 Company, Ltd. - Schedule I: 3ck-wholly owned ompany-at cost-Schedule I: ock STD IUVESTMEIfTS sr value of life insurance t closed banks 857.431.46 $ 1,059,981.46 50,000.00 600.000.00 399,629.25 1,709,CCL.46 - Schedule VII tments - Hot B - Schedule VII i notes and accounts, advances l and sundry deposits F AM) EQUIPMENT - Hote C 50,725.15 165,551.64 59.815.73 675,719.77 lge, machinery, equipment, etc.-at >raisal value - Schedule II for revaluation as determined by irectors - Schedule II-A 3.618,4169.57 $18,973,384.46 (for depreciation and * Schedule III ; cost, less amortization) - Schedule IV 6.161.252.15 `.rade-marks lufacture IS 80,545.98 14,667.89 advertising stock, stationery, nsurance premiums and prepaid 12,812,132.81 95,213.87 iroducts development $ 403,951.86 115.916.91 519,868.77 $33,286,201.76 SSSSSSSSSS3SSS. in subsidiary and affiliated companies consist of the following: itments in California mining companies, whose assets consist almost entirely properties not being operated, are stated herein at less than cost, ch carrying value, on the basis of unaudited balance sheets, was 1,980.09 less than the book value of the net sssets of those companies. udited statements of those companies show .accumulated losses of .138,281.83 from date of acquisition to October 31, 1937, exclusive of ireciation on appreciation and unpaid interest on bonds held by the ent Company, which interest has not been taken into income by the iter. Against these accumulated losses, the parent Company has pro- led, in prior years, the sum of $581,671.76 out of surplus and con- igency reserve and has a credit of $312,500.00 arising from its repo sition of #450,000.00 face value of bonds of(The California Zinc ipany at a coat of $137,500.00. The nt tto . CUPffR'rJ-T' JSotes ; Accoun Wages .}, Proces: Accrue' Prov. on Taxa. Hoya.' , Insu:. ACCOUHT ; The G-l: RESERVE Eor c o j CAPITAL i Capital Convi $5< nil beJ sp 1 c 3 Comms Ant Out Res Sta Surplus Ca^it Eame Less tr 1,100 (t>) Inves of the sid aid sol (o) Inves pre: $60< . for unai of-1 Glic LIABILITIES, CAPITAL STOCK AMD SUBPLUS CUBKSKT LIABILITIES Motes payable to tanka and through, broker Accounts payable-trade # 3,750,000.00 #1,000,023.11 Wages and commissions 184,213.97 Processing taxes-federal 171,537.01 1,355,774.00 Accrued liabilities: Provision for federal and state taxes on income-estimated Taxes-other 454,533.07 264,225.45 Royalties, water rejnt, etc. ' Insurance , , ;' '' 100,806.27 24.262.14 843.826.C2 0 ACCOUNT PAYABLE-SUBSIDLAHT COMPAMY The Glidden Company, Ltd. RESERVE - Schedule VII j For contingencies | CAPITAL STOCK A3EP SURPLUS Capital stock - Schedule VIII: Convertible preferred .cumulative-par value #50.00 a share (each share convertible into nine-tenths share of common stock on or before March 1, 1939, and thereafter at rates specified in the Articles): Authorized I 200,000 shares Converted 60 shares Issued and outstanding 199,940 shares #9,997,000.00 Common-without par value - Mote D: Authorized 1,200,000 shares Outstanding 800,801 shares Reserved for conversion 179,946 shares Stated capital Surplus - Schedule IX - Mote E: 4.006.705.00 #14,003,705.0 Capital surplus #7,520,063.39 Earned surplus 5.348.132.36 12.868.195.75 Less treasury stock-at cost: #26,871,900.75 1,100 shares common 36.403.37 ,681.02 C5'C,23.7.9 f?-\T35.55 V. **pr.3a - 1 J-L v. . y "As\. i. & "tea Osatr* *' '"WHET [*) Investment in The Glidden Company, Ltd., is carried at value recorded at * '}-Vi . * of acquisition; the difference of #971,336.85 between investment as 0he|^/^A-; the parent Company'a books and the equity in net assets as shown by ..tb''"' " sidiary's books represents undistributed accumulated net earnings of sidiary since dateFof acquisition and is reflected in earned surplus' solidation of the accounts. :) Investment in affiliated company represents one hundred per cent "inter preferred stock of1 the American Zirconium Corporation, having a par vs #600,000.00, the dividends cn which have been paid to October 1, 1937, forty-five per cent interest in the common stock of the same company, ? unaudited statement of the company shows accumulated undistributed ear:. . of #24,454.50 at October 31, 1937, of which #12,928.77 is applicable Glidden Company^ investment therein. ' HOTSSr ;|TQ BALANCE SHEET Note A - Inventory of oleo resin (raw material from which, nelio resin is produced by a patented process) is included on the basis of average cost, which cost aggregated approximately #95,000.00 more than market value computed on the basis of quotations for small quantities at October 31, 1937. No ad justment has been made in respect of this raw material inven tory as, in the judgment of the management, the cost represents a fair valuation of the quantity which is being carried and which is required for continuous operation. The Company was committed to purchase certain raw materials at prices, which in the aggregate, exceeded quoted market prices at the date of this balance sheet by approximately $101,000.00. No reserve was provided for the excess of such commitments over market. Note B - Sundry investments are included at cost or less. Securities carried at a cost of $42,000.00 had a quoted market value of i #35,246 *88 at October 31, 1937:. U. S. Government se curities included therein, at a.cost of #15,000.00, were de posited with a bank in connection with workmen's compensation insurance requirements. The market value of the remaining se curities is unknown. Note C - Property, plant and equipment are stated on the basis of cost or appraisal value less reserves provided for revaluation, depreciation and depletion. The remaining portion of unrealized appreciation included in the gross value of these assets is: offset by a portion of the revaluation reserve and that reserve was also provided to reduce the cost of certain assets to estimated basis of values prevailing during the year 1932 as determined by the Board of Directors. Cost of property, plant suid equipment represents, principally, cash expenditures, although certain properties were acquired partly for stock. The net book value is not intended to represent the present value of the properties. Note D - Warrants evidencing the rights to subscribe for 64,004-4/5 shares of common stock at $30.00 a share were issued to common shareholders of record October 4, 1937. As of Octo ber 31, 1937, holders of warrants for 741 shares had exercised such rights; the remainder of the warrants outstanding, entitling holders thereof to subscribe to 63,263-4/5 shares of common stock expire December 15, 1937. Note E - In prior years certain items of discount and ex pense, provision for contingencies and losses on dismantlement have been charged to capital surplus. If such items: together with additional depreciation claimed for federal income tax purposes for the years 1932 to 1936, inclusive; had been charged against earned surplus instead of capital surplus, the respective amounts of such surplus accounts would be $4,631,151.96 and $8,2iS7,043.7\* as at October 31, 1937. The Company's federal income tax return for the year 1937 was not completed at the date of thjis statement but depreciation to be claimed therein will ex ceed provision charged to profit and loss for the year ended October 31, 1937. NOTES TO BALANCE SHEET (COM1,HWHPW1 Note .3? t Officers of the Companies 'nave expressed the opinion that pending lawsuits are of minor importance and that no Material losses will result therefrom.. Note G - The Company was reported as haring letters of crodi outstanding in the amount of $990,996.82 and it was contingently liable in the maximum amount of $11,799.20 as guarantor of trade notes issued by or for account of customers# Note H - The Company has entered into an agreement, dated December 27, 1937, and effect!re as at the close of business Ca tcher 31, 1937, with Southern Pine Chemical Company, an Ohio corporation, providing for the exchange of 34,697 shares of the Company's common stock without par value for all of the assets and property of the Southern Pine Chemical Company, including its entire good will and business as a .going concern free, and clear of all liabilities and encumbrances# Note I -- General reference is made to consolidated balsmo sheet submitted herewith. SCHEDULE I-IH7BSTMBNTS IN SECURITIES OF AFFILIATES THE GLIDDEN COMPANY For the fisaal year ended October 31, 1937 NAME OF .ISSUER TITLE OF ISSUE iggMgwgggaftggg^Bggggy'ga* BALANCE AT BEGINNING OF FISCAL YEAR NUMBER OF SHARES. PRINCIPAL AMOUNT OF BONDS AMOUNT OR NOTES IN DOLLARS ,,_______ ADDITION NUMBER OF SHARES... PRINCIPAL AMOUNT , OF BONDS A OR NOTES IN i AFFILIATE OR SUBSIDIARY CONSOLIDATED Glidden Company, Ltd. AFFILIATES NOT CONSOLIDATED Wholly owned: California Zinc Company California Zinc Company Afterthought Zinc Mining Company Other: American Zirconium Corporation American Zirconium . Corporation Common capital stock \ '~ 500 $ 50,000.00 Common capital stock 1,000 $ 5,000.00 Bonds $500,000.00 187,500.00 Common capital stock 100 V: Common capital stock 5,000 10,000.00 v. j -Of. . Preferred capital stock. 6,000 600.000.00 02,500.00 ll 4f. Note A - Interest on these bonds is in default. I , ' -v. . *" SLsii-O. --r ___ ___________ ' .*% > ':--w - v- '> * , ^ ,/v ------ - -- - r 1 - --" ............................. "/.t ' ' - '-- JuXa-.>_. . . Jij'-.MS- . .1, t . . . , . | li ;Ci5 AT' BEGINNING BISCAL YEAR. S-CS' . .- ! .'AL : t.vT , \M DS" | -.V-^ : > ' AMOUNT ID DOLLARS ADDITIONS DUMBER OB SHARES. PRINCIPAL AMOUNT QB BONDS AMOUNT OR DOTES IN DOLLARS REDUCTION DUMBER OB SHARES. PRINCIPAL AMOUNT OB BONDS AMOUNT OR DOTES ID DOLLARS BALANCE AT CLOSE OB BISCAL YEAR DUMBER OB .SHARES. PRINCIPAL AMOUNT OB BONDS AMOUNT OR DOTES IN DOLLARS ) $ 50,000.00 $ 5,000.00 . 00 187,500.00 10,000.00 -o- i600.000.00 1802,500.00 *o*~ :sss 500 r? 50,000.00 1,000 S 5,000.00 $500,000.00 1S7,500.00A 100 LO,QOQ.OO 5,000 -o- 6,000 wO 0.000.00 $ -0- $802,500.00 f CKM CLASSIFICATIONS Ore lands and leases Land and irtproTements Railroad sidings Buildings Machinery and equipment Furniture and fixtures Automotive equipment Construction in process Deduction SCHEDULE 11-PROPERTY. PLAHT AED EQUIPMENT THE GLXDEEE COM2J-JZI For th.e fiscal year ended. October 31, 1937 BALANCE AT BEGINNING OF THE FISCAL -..YBAR:AS.V EER ACCQUIDS ADDITIONS HET1 AT COST OR $ 54,022.89 2,337,504.74 65,243.57 7,805,764.88 9,125,807.04 597,871.76 68,568.51 1.098.833.01 i 571.98 $ 67,553.31 484.87 554,804.75 1,065,678.47 75,854.89 28,478.74 204.048.11* 2( 1< 8< 2i t $21,153,616.40 $1,589,378.90 $ 15] SCHEDULE II-PROPERTY. PLANT ADD EQUIPMENT THE GLIDLEN COMPANY Por the fiscal year ended October 31, 1937 BALANCE AT BEGINNING OP THE FISCAL YEAR AS PER ACCOUNTS AUDITIONS AT COST OTHER CHANGES DEBIT AND/OR RETIREMENTS , CREDIT*OR SALES ' BESCRIBE BALANCE AT CLOSE OP THE PISCA1 YEAR $ 54,022.89 | 571.98 $ 2,337,504.74 67,553.31 65,243.57 484.87 7,805,764.88 554,804.75 9,125,807.04 1.,065,678.47 597,871.76 75,854.89 68,568.51 28,478.74 1,098.833.01 204.048.11* -0- $ 20,026.19 474.00 10,124.63 89,863.02 23,734.58 6,918.85 -0- $21,153,616.40 $1,589,378.90 $ 151,141.27 $ -0.-o-0-o-o-0--o-- -o- -o- $ 54,594.87 2,385,031.86 65,254.44 8,350,445.00 10,101,622.49 649,992.07 90,128.40 894.784.90 $22,591,854.03 FTnr,. V`, ,*. 309 -ii- SCHEPULE! ILA-SPECIAL RESERVES FOR REVALUATION ms g l id d e n c o mp a c t ' V For the fiscal year ended October 31, 1937 BALANCE AT ' BEGINNING OF THE FISCAL TEAR AS CLASSIFICATIONS PER ACCOUNTS RETIRE MENTS, ADDITIONS RENEWALS TO AID MAJOR ' v RESERVE ' REPAIRS BALANCE AT CLOSE OF THE FISCAL TEAR Land $ 478,767.77 # Buildings 1,655,195.04 Machinery and equipment 1,459,873.94 Furniture and fixtures 31,598.86 Railroad sidings 6,339.77 $3,631,775.38 $ -o- $ -o- $ 478,767.77 -0- 1,655,195.04 -0- ' 13,305.81 1,445,568.13 -0-0- ' -0' .-0- 31,598.86 6.339.77 . ; -0- $13,305.81 $3,618,469.57 Note A - These reserves were provided by charges to capital surplus and reserve for depreciation to eliminate appreciation of fixed assets and to reduce fixed assets to estimated basis of values during 1932 as determined by Board of Directors. CLASS .IPICATIOES Ore lands and leases Land improvements Railroad siding Buildings Machinery and equipment Purniture and fixtures Automotive equipment Hf.WRmiTT.Tg TTT-KK!SERVES POE SUgBBCIATIOH. BSE AMT) AMORTIZATION OP PROBITY, BLAST AMD EQK THE GLIDBE?! COMPANY Por the;'fiscal year ended October 31, 1$ BALANCE AT BEGINNING OP THE PISCA1 YEAR AS PER ACCOUNTS ADDITIONS CHi\RGED CHARGED TO OTHER TO PROPIT ACCOUSTS- ADD LOSS INSCRIBE TQTJ $ 16,972.56 $ 6,238.27 ' -O- 1,777.54 7,519.79 1,151.98 1,476,676.88 124,155.74 3,690,995.39 421,330.57 385,762.19 30,048.60 41.609.83 14.392.06 $5,619,536.64 $ 599,094.76 $ 23,: 1*' 8, < 1,600,< 4,112,: 415,! 56. ( $6,218,1 Mote A- The policy of the Company with respect to depreciation is to provide fair and. reasonable to cover wear, tear and deterioration of the property on a baa: is not certain to what extent obsolescence is covered in these provisions as changi the useful life of the property. The Company*s federal income tax return for the ; of this statement, but depreciation to be claimed therein will exceed provision in claimed on costs written off or credited to revaluation reserve during 1932. -rr-v-r rr--r";r^T * i3j #^ -*rrf * * ,, ^ + 'S'. - > k jneran-.TF. TTT-HfB5=geRTnga FOR EEPESCIATIOH. DBBIETIOH n AMORTIZATION OF PROPERTY. PLAHT AHD EQBIPHBHT THE GL2DDEN GOMPAHY For the fiscal year ended October 31, 1937 co o LARGE AT SIKH MG 3E FISCAL SAR AS ACCOUNTS ADDITIONS CHARGED CHARGED TO OTHER TO PROFIT ACCOUNTS- AHD LOSS DESCRIBE TOTAL CHARGES TO RESERVES RETIREMENTS, RENEWALS AKD OTHERHEPLACEMEKl'S DESCRIBE BALANCE AT THE CLOSE OF THE , FISCAL YEAR $****! 72.56 6,238.27 -o- 1,777.54 19.79 1,151.98 76.88 124,155.74 95.39 421,330.57 62.19 30,048.60 09.83 14.392.06 $ 599,094.76 23,210.83 $ 1,777.54 8,671.77 1,600,832.62 4,112,325.96 415,810.79 56.001.89 $6,218,631.40 $ -o- -o- ... -0 - 540.47 40,918.89 11,038.10 4^81.79 57,379.25 $ 23,210.83 1,777.54 8,671.77 1,600,292.15 4,071,407.07 404,772.69 51.120.10 #6,161,252.15 th respect to depreciation is to provide amounts considered by the management as & deterioration of the property on a basis of specific rates as determined. It is covered in these provisions as changes in the ext may result in shortening any's federal income tax return for the year 1937 sas not completed at the date claimed therein will exceed provision in this statement due to depreciation o revaluation reserve during 1932. *,V -s'V.f'V K*- ', aBHWHMBMIW' BM... H.B *'.B BwHH-- -- . >.Tl ,, ........., .. ............. , ............................. .......... t-M*iiwy;"rirJr* * "TO* * f. ' .' .rlA. J*" rr* V V* ..*w >llf f, ^ jj+j'* `` "v '!.' V-V.'^ * T ` " ` 311 ,mm^ cltOo- tH0o4 IIIIII O rf in IiIt CO H o> II ii ' # iill it 0I1 oII 01i iitt n it !! titt iHt it *9* iIIi 01 oI I 01 IIIIItII IIII II in ta n g ib le s ii Oin CM h oicM to t* M' e-cM JC0M IIII II II 10 II tO II o> II HIt II 9* II II ii 01 o> 01 IIIIII 1 II II II II II II II l| 3 I00 Hi ^fO orc*o<Ho# m rt oo H ii C0 II co ii it "J1 n H ii 4 am ortize the. iCompany to of y c i epso.l t lhiev g is in in at mi A- re r tHho teei orrer o to o to o lO io 0 D - to m 01 OJ m 00 1--1 o o> CO o# 00 0k r-J C- lO OJ !> II SCHEDULE! VIII-CAPITAL STOCK THE GL3DDEH COMPANY October 31, 1937 HAMS OP ISSUER AND TITIE OE ISSUE INCLUDING PAR OR, IE HO PAR, STATED OR ASSIGEED VALUE, IE ANY HUMBER OE SHARES AUTHORIZED BY CHARTER HUMBER OE SHARES OUTSTANDING e x c l u s iv e ! or HUMBER HELD IH TREASURY AMOUNT 321 DOLLARS THE GLLPDEN COMPAHY Convertible preferred stock 4-^S cumulative-par value $50.00 a share Common-without par value 200,000 1,200,000 199,94cj 799,7011 ft 9,997,000.00 4.006.705.00 014,003,705.00 NUMBEB 5P SHAREjS JTSTANDlNG c c l u s iv e os IMBER HELD J TREASURY AL.OUNT IN DOLLARS NUMBER OP SHARES IN TREASURY NUMBER NUMBER OP SHARES OP SHARES ' RESERVED HELD BY NUMBER POR OPTIONS, PERSONS WHOSE OP SHARES WARRANTS, STATEMENTS NUMBER OP RESERVED BCE CONVERSIONS 1 H ARE PILED SHARES HELD AND HEREWITH BY PARENTS EMPLOYEES OTHER RIGHTS 199,940 799,70lj $ 9,997,000.00 4.006.705.00 $14,003,705.00 None 1,100 None None. None None Nona None None 243,209-4/5 -16- 314 SCHEDULE IX-SURPLUS 'THE GLIDDEN COMPANY For the fiscal year ended October 31, 1937 CAPITAL SURPLUS Balance October 31, 1936 ',524,343.82 DEDUCTION Registration and other expenses in connection with offer to common shareholders for sub scriptions to common stock Less excess of selling price of #30.00 a share over stated value of 741 shares sold $ 22,805.43 18.525.00 4,280.45 BALANCE OCTOBER 31, 1937 EARNED 3 URPLUS Balance October 31, 1S'36 #7,520,063.39 " s s x zs 's s s s s s s s zs s s s s ze'- #5,403,974.98 DEDUCTION Dividends paid: Convertible preferred-$2.25 a share # 449,920.08 Common-#2.60 a share 2,080,126.00 $2,530,046.08 Less net profit for the fiscal year ended October 31, 1937 2,469,203.46 60,842.62 BALANCE OCTOBER 31, 1937 5,348,132.36 Note A - In prior years certain items of discount and expense, provision for contingencies and losses on dismantlement have been Charged to capital surplus. If such items together with, additional depreciation claimed for federal inoome tax purposes for the years 1932 to 1936, inclusive, had been charged against earned .surplus instead of capital surplus, the respective amounts of such surplus accounts would be $4,631,151.96 and $8,237,043.79 as at October 31, 1937. The Company's federal income tax return for the year 1937 ms not completed at the date of this statement, but depreciation to b claimed therein will exceed provision charged to profit and loss for the year ended October 31, 1937. Note B - General reference is made to statement of consolidated surplus (Schedule IX consolidated) submitted herewith. COJfSOXtXBATBD BALANCE FrmeriiT fLXDDEN OQSAlY AND CONSOLIDATED SUBSIDIARY October 31, 1937 Asmas ! ASSETS""""' on hAnd . on/dposi.t-<laiiand,f:.. -v;^S; ./;/$ 12,461.87 : /' i 1.222,556.05 $ 1,234,817.92 da not*:ai,;acceptances receivable. `v/://A/A$li 163,822.^0 - i` * account'/receivable .; / // ' :f4. 339,060 .66 $ 4,502,883.96 -II'/'/IffISl reserves - Schedule VII. 127.540.56 4,375,543.40 toriea-at',flower' of cost. or market except as stat'ed in Note A: Bav materials and supplies $ 4,855,186: .58 In-process and finished merchandise 6.925.476.85 11,7.78,663.43 ither currant accounts receivable and advances : on purchase/commitments 549.502.55 $17,938 : 38STMBBIS IN SUBSIDIARY AND AFFILIATED COMPANIES - Sallformia mining companies-at less than cost : Capital stcck-whoXly owned - Schedule I $ 15,000.00 I Bonds-principal amount $500,000.00 - Schedule I 187,500.00 > Advances 857.481.46 $ 1,059,931.46 Affiliated ccmpany-at cost - Schedule Is Capital stock C5C,000.00 1,659 "lER ASSETS AND INVESTMENTS ash surrender value of life insurance $ .399,529.25 laims against closed banks 125,737.65 S/ess reserve - Schedule VII 75.012.50 50,725.15 ' foundry investments - Note B vHoss reserve - Schedule VII 175,354.40 ___9.802.76 1dL 5,551.64 ! Tiscellanebu@ notes and accounts, advances . to salesaieii and sundry deposits io. 183.69 676, 1 AgEBTY. PLANT AND EQUIPMENT - Note C -./.'and, buildings, machinery, equipment, etc., -'.v' at cost or appraisal value - Schedule II $22,939,113.79 ' -Sejwipjeosesve, for revaluation as determined &j Board of Directors - Schedule II-A __3.701.580.27 $19, S-ijj?,53.52 SVas reserves for depreciation ana depletion Schedule III 6.2'5.i58 .,33 12,944, ... "ANGIBLES-at cost, less amortization (Schedule IV) ,;j-?atents and trade-marks Lightsto manufacture 80,545.98 M. 667.89 95, SD CHARGES entory of advertising stock, stationery, unexpired insurance premiums and prepaid expenses pedal new products development 4-28,203.48 1115.916.91 544. $33,857, This balance sheet includes the assets and liabilities of The dden Company and Its wholly owned subsidiary, The Glidden Company, 2 td. sssssssss nciplea of consolidation: The inventories include no inter-company profits. The assets and liabilities of the Canadian subsidiary are inclucled herein on a dollar for dollar basis. V Investment in The Glidden Company, Ltd., is carried at value recorded at date of acquisition; the difference of $971,336,655 between investment as shown by parent Company's books and the equity in net assets c!s shown by the subs 3 deary's 'books represents undistributed accumulated net carninga ' ' V't';' H' `K-v* 315 ' :At -17- CQ.FS0LI5ATBD BALANCE STTTgET. fdXtXXSGDQSST GOTPJSY AID CONSOLIDATED .SUBSIDIARY vOctober 31, 1937 ' !3ffiflgtgaii2!BgaagBgSS5Sa5gg=ggnggggggagaa!...^i-rT.wjg.>-.?-.g?->?gggg3Si5S;5agSSgag3=S=ggSt ' ASSESS \> ASSETS' "~ on land bit 12,461.87 on deposit-demand 1.222,356.05 $ 1,234,317.92 .e notes and acceptances, receivable 163,323.3# da accounts receivable 4.339.060.66 a.-reserves - Schedule VII f 4,502,883.96 127_j_340.56 4,375,543.40 antoriea-at lower of coat or market except as stated in Note A: - Raw materials and supplies <1 , | 4,855,186.58 ''''-"In-processand finished merchandise __ 6.925.476.85 11,77=3,663.43 her current accounts receivable and advances iUTc 1m.es commitments '540.302.55 $17,938 TBjSBTS Iff -SUBSIDIARY AND AFFILIATED COMPANIES ifonala sitting companies-at less than cost: Capital stock-wholly owned - Schedule I $ 15,000.00 I Bonds-principal amount $500,000.00 - Schedule I 187,500.00 j V, Adavaani ces.. -- ikCSriliaftflad; coapany-at cost - Schedule I: '-f: %'U 'Capital stock .. *; ; !7?b r a s s e t s a n d in v e s t me n t s 857.481.46 $ 1,059,981.46 4- ................ 6tQ.OQ0.00 1,659 :1' ;; \:^shi surrender value, .of. life insurance :'-*laims against closed banks 1. l* ,r4ss reserve - schedule VII accounts, advances 125,737.65 75,012.50 175,354.40 9.802.76 .$0,629.25 50,725.15 165,551.64 - V - : ` ..salesmen and sundry deposits '* ' jf.: -4BEHTY. PLANT AND EQUIPMENT - Note C 00.183.69 676 ; .jff-and, buildings, machinery, equipment, etc., iv/ `V at cost or appraisal value - Schedule II $22,939,113.79 reserve for revaluation as determined by Board of Directors - Schedule II-A 5.701.580.27 $19,2^7,533.52 fC ;-fv; "a reserves for depreciation.ana. -.depletion- Schedule III :/-:V;..^T^AISIBESS-at cost, less amortization (Schedule IV) - Patents and trade-marks "4- 1 1 r ; ..Tights to manufacture 6,2^5,458.33 12,944 60,545.98 14,667.89 95 advertising stock, stationery, unexpired insurance premiums and prepaid expenses 28,203.48 .Special new products development 35,916.91 544, ,, A r ft* S' ' ; ' 1 * 4- * .* *> $33,857, This balance sheet includes the assets sind liabilities of The f[Vv*. -r'?S.* ir.^Vy/ lidden Company and its wholly owned subsidiary, The Glidden Company,- Btd, sassssssr.rrssa .CSfjeinciples'iOf - consolidation:" (a) The inventories include no inter-company profits. ,, f'b) The assets and liabilities of the Canadian subsidiary are included herein bV`::V'U) on a dollar for dollar basis. Investment in The Glidden Company, Ltd., is carried at value recorded at date of acquisition; the difference of $971,336.85 between investment as . shown by parent Company's books and the equity in net assets a|s shown by 'Sf'"' the subsidiary's books represents undistributed accumulated net earnings X-Hyf , of the subsidiary since date of acquisition and is reflected ip earned { *.?:1 surplus in consolidation of the accounts. ' '<-v>:(4) It has no* been the practice to consolidate the California mining companies in ` r" annual reports to stockholders, and no separate-statements ara1 included herein ^7^ n cv >rs r: its0- as it is believed that the aggregate investments are; not Si assst s ASSETS On,:h&M:--43/ on. deposit-demand 12,461.87 1,222.356.05 $ 1,234,817.92 e notes and acceptances receivable accounts-i-receivable 163,823.30 4,359,060.66 w Ilss resejryos .- 'Schedule VII 4,502,883.36 127.540.56 4,375,543.40 - : gprentoxies-at'lower of cost or market *f except as stated In Bote A: - J/J'-' 'v Earn materials and supplies $ 4,855,186.58 %4KS& 'VS %, D- In-preas, and finished merchandise . * ftther current accounts receivable and advances _ 6,923.476.85 1von purchase ^commitments ,t :s XB -SUBSIDIARY AHP AFFILIATED COMPANIES 11,7,78,663.43 543,302.55 $17,93 oraia mining companies-at less than cost: 5. Capi|H| stock-mholly owned - Schedule I # 15,000.00 Bsrncla-principal amount #500,000.00 - Schedule I 187,500.00 Advances _ 857.481.46 $ 1,059,981.46 Hated company-at cost - Schedule I: Capital stock , ;600.000.00 1 6 ASSETS ABD INVESTMENTS surrender value of life insurance against closed banks $ 125,737.65 * ,629.25 b reserve - Schedule 711 75,012.50 50,725,15 innstments - Bote reserve-: - Schedule VII | 175,354.40 9.802.76 { 135,551.64 cellaneous notes and accounts, advances toi saiLesmen and sundry deposits W-,183.69 61 IBLABT ABD EQUIPMENT - Bote C ,buildings, machinery, equipment, etc., at cat ! or appraisal value - Schedule II #22,939,113.79 reserve for revaluation as determined Board of Directors - Schedule II-A 5,701.580.27 #19,2^7,533.52 ^reserves for depreciation and depletion - Schedule III 6,295.458.33 12,94 IBLBS-at coat, less amortization (Schedule IV) 1 its l and trade-marks 80,545.98 ,twito tmanufac ture 14.667.89 9 CHARGES itoieyi of advertising stock, stationery, unexpired insurance premiums and prepaid expenses 133,203.48 `.al new products development lj5.916.91 54 #33,85 This bal^ce sheet includes the assets and liabilities of The dden Company and its wholly owned subsidiary, The Glidden Company, Hid. ciples of consolidation: (a) - The inventories include no inter-company profits. h (b) ^ The assets and liabilities of the Canadian subsidiary are included herein on a dollar for dollar basis *, Investment in The Glidden Company, Ltd., is carried at value recorded at dateiof acquisition; the difference of #971,336.85 between investment as ahoWiSby parent Company's books and the equity in net assets s|s.ishown- by theisubsidiary's books represehts undistributed accumulated net earnings of the subsidiary since date of acquisition and is reflected ija earned surplus in consolidation of the accounts. It haB'not been the practice to consolidate the California mining companies in annual* reports to stockholders, and no separate statements are?included hereii for those companies as it is believed that the aggregate investments are1 not 3 significant in respect of (l) the assets they represent and (2-) the sale's or operating revenues of such companies. Investments in California mining companies, whose assets consist almost entirely of properties jaot being oper ated, are stated herein at less than cost, which carrying valu, on the ASSJTS ASSETS, h on hand :h on .deposit-demand , .lad, H0t88;::hnd acceptances receivable 12,461.87 1,222,356.05 IF" 163,823.30 1,234,817.92 pad 'kccorat'S^re,Ce|.yal3le,;::^>\''\':''i;',`v':' 4,339,060.66 |os reserves - Schedule VII inrentorlea-at lower of cost or market $ 4,502,883.96 127.340.56 4,375,543.40 Fxeept as stated In Note A: * Bair materials and supplies , 4,855,186.58 \ \ In-process, and finished merchandise 6,923.476.85 11,778,663.43 ther current, accounts receivable and advances 'on purchase'commitments 1 H, 549.502.55 017,938,327.30 i ESTME1TS I3f SUBSIDIARY AND AggILlATBD COMPANIES iliforaia-ffllning companiea-at less than cost: Capital atoek-wholly owned - Schedule I $ Bonds-principal amount $500,000.00 - Schedule I Advances ,`filiated company-at cost - Schedule I: 15,000.00 187,500.00 857.481.46 1,069,981. Capital stock 6fe0.000.00 1,659,981.46 SR ASSETS - ASP INVESTMENTS ish surrender value of life insurance 3^9,629.25 Aims against closed banks 125,737.65 is reserve - Schedule VII 75.012.50 725.15 indry investments - Note 175,354.40 tss reserve - Schedule VII 9.802.76 165,551.64 .scellaneous notes and accounts, advances to salesmen and sundry deposits >SBTY. PLAIT AND EQUIPMENT - Note C 60.183.60 676,089.73 ind, buildings, machinery, equipment, etc., at cost or appraisal value -Schedule II $22,939,113.79 iss reserve for revaluation as determined by Board of Directors - Schedule II-A 3.701.580.27 $19,2^7,533.52 is b"reserves for depreciation and depletion - Schedule III 6,2^3.458.53 cost, less amortization (Schedule IV) 1,944,075.19 itants and trade-marks 80,545.98 ;ghts to manufacture IRHgfr CHARGES 4,667.89 95,213.87 iventory of advertising stock, stationery, unexpired insurance premiums and prepaid expenses iecial new products development $ 42 8,203.48 13 5.916.91 544.120.39 $33,857,807.94 This balance sheet includes the assets and liabilities of The Idea Company and its wholly owned subsidiary, The Glidden Company, ltd. iciples of consolidation: i) The Inventories include no inter-company profits. A >)' The assets and liabilities of the Canadian subsidiary are included herein on a dollar for dollar basis. *, s) Investment in The Glidden Company, ltd., is carried at value recorded at date of acquisition; the difference of $971,336.85 between investment as shown by parent Company's books and the equity in net assets als shown by the subsidiary's books represents undistributed accumulated net earnings of the subsidiary' since date of acquisition and is reflected in earned surplus in eonsoJidation of the accounts. 4 i) It has not been the practice to consolidate the California mining companies in reports to stockholders, and no separate statements are? included herein for those companies as it is believed that the aggregate investments are not significant in respect of (1) the assets they represent and (2p the sales or operating revenues of such companies. Investments in California mining cesqjanies, whose assets consist almost entirely of properties jnot being oper ated, are stated herein at less than cost, which carrying valufc, on the LIABILITIES. CAPITAL STOCK AMD SURPLUS CURRENT LIABILITIES Notes payable to banks and through, broker $ 3,750,000.00 Accounts payable-trade Wages and commissions $1,015,754.72 186,612.71 Processing taxes-federal 171.537.01 1,373,904.44 Accrued liabilities: Provision for federal, dominion and state taxes on'Income-estimated $ 467,533.07 Taxes-other Royalties, water rent, etc. 266,582.23 100,806.27 Insurance . 24.262.14 859.183.71 RESERVE - Schedule VII Ear contingencies CAPITAL STOCK ASP SURPLUS Capital stock - Schedule VIII: Convertible preferred, 4# Cumulative-par value $50.00 a share (each share convertible into nine-tenths share of common stock on or before March 1, 1939, and thereafter at rates specified m the articles): Authorized 200,000 shares Converted 60 shares Issued and outstanding 199,940 shares $9,997,000.00 Common-without par value - Bote D: Authorized 1,200,000 shares Outstanding 800,801 shares Reserved for conversion 179,946 sli&r68 Stated capital 4.006.705.00 $14,003,705.00 Surplus - Schedule IX -Note E: Capital surplus $7,520,063.39 Earned surplus 6.319.469.21 13.839.532.60 $27,843,237.50 Less treasury stock-at cost: 1,100 shares common basis of unaudited^balance sheets, was $28,980.09 less than the book value of the net assets of those companies. Unaudited statements of those companies show accumulated losses of $1,138,281^83 from date of acquisition to October 31, 1937, exclusive of depreciation on ap preciation and unpaid interest on bonds held by the parent Company, which interest has not been taken into income by the latter. Against these accumulated losses; the parent Company has-provided, in prior years, the sum of $581,671.76 out of surplus and contingency reserve and has a credit of $312,500.00 arising from its reacquisi tion of $450,000.00 face value of bonds of The California Zinc Company at a cost of$137,500.00. The operation of the mining properties of the California mining companies was discontinued in 1927 and the vain of the investments is indeterminable at this time. j (e) Investment in affiliated company represents one hundred per cent interes in 7^ preferred stdck of the American Zirconium Corporation, having a par value of $600,000.00, the dividends on which have been paid to Oct; her 1, 1937, and a forty-five per cent interest in the common stock of the same company, the unaudited statement of the Company shows aecmmls undistributed earnings of $24,454.50 at October 31, 1937, of which $12,928.77 is applicable to The Glidden Company*s investment therein. See notes on following pages. NOTES TO CONSOLIDATED ^BALANCE SHEET Note A - Inventory of oleo resin (raw .material from -which s. nelio resin is pro'duced by a patented process) is included on the basis of average cost, which oost aggregated approximately 1$95,000.00 more than market value computed on the basis of ^'quotations'for small quantities at October 31, 1937. No ad justment has been made in respect of this raw material inven tory as, in the judgment of the management, the cost represents a fair valuation of the quantity which i3 being carried and which is required for continuous operation. The Company was committed to purchase certain raw materials at prices, which in the aggregate, exceeded quoted market prices at the date of this balance sheet by approximately $101,000.00. No reserve was provided for the excess of such commitments over market. Note B - Sundry investments are included at cost car less* Securities carried at a cost of $42,000.00 had a quoted market value of $35,246.88 at October 31, 1937. TJ. 3. Government se curities included therein, at a cost of $15,000.00, were de posited with a bank in connection with workmen's compensation insurance requirements. The market value of the remaining se curities is unknown. Note C - Property, plant and equipment are stated on the basis of cost or appraisal value less reserves provided'for revaluation, depreciation and depletion. The remaining portion of unrealized appreciation included in the gross value of these assets is offset by a portion of the revaluation reserve and that reserve was also provided to reduce ttte cost of certain assets to estimated basis of values prevailing during the year 1932 as determined by the Board of Directors. Cost of property, plant and equipment represents, principally, cash expenditures, although certain properties were acquired partly for stock. The net book value is not intended to represent the present value -of the properties. Note D. - Warrants evidencing the rights to subscribe for 64,004-4/5 shares of common stock at $30.00 a share were issued to common shareholders of record October 4, 1937. As'of Octo ber 31, 1937, holders of warrants for 741 shares had exercised such rights; the remainder of the warrants outstanding, entitling holders thereof to subscribe to 63,263-4/5 shares of common stock, expire December 15, 1937. / V /' Note E - In prior years-certain items of discount*and ex pense, provision for- contingencies and losses on dismantlement have been charged to capital surplus. If such items together with additional depreciation claimed for federal income?tax purposes for the years 1932 to 1936, inclusive, had been charged against earned surplus instead of capital surplus, the respective amounts of such surplus accounts would be $5,602,488.81 and $8,237,043.79 as at October 31, 1937. The Company's federal income tax return for the year 1937 was not completed at the date of this statement but depreciation to be Claimed therein will exceejl provision charged to profit and loss for the year ended October 31, 1937. .l^i.yQTSS:^Q-vg0lJS0LIIBlTED miANCE SHEET (CONTINUED) Note F - Officers of the Companies have expressed the opinion that pending lawsuits are of minor importance and that no material losses will result therefrom. Note G- - The Company was reported as having letters of ere dit outstanding in the amount of $990,996.82 and it was contingently liable in the maximum amount of $11,799.20 as gua rantor of trade notes issued by or for account of customer3 . Note H - The Company has entered into an agreement, dated December 27, 1937, and effective as at the close of'ibusiness October 31, 1937, with Southern Pine Chemical Company, an Ohio corporation, providing for the exchange of 34,697 shares of the Company's common stock without par value for all of theiassets and property of the Southern Pine Chemical Company, including it3 entire good will and business as a going concern free and*, clear of all liabilities and encumbrances. 318 CONSOLIDATED PROFIT AMD LOSS' STATEMENT: THE GLIBDEN COliPAlTY .AND; CONSOLIDATED SUBSIDIARY For the fiscal year ended October 31, 1937 GROSS SALES-LESS . DISCOUNTS , RETURNS AND #54,052,233.07 COST OF GOODS SOLD-Notes A and B a A . AN, . SELLING, . (xBNSRAL ADD MANUFACTURING- PROFIT ` , '.ADMINISTRATIVE EXPENSES OPERATING PROFIT OTHER11 INCOME1 , '* ' ; Miscellaneous commissions and profits on merchandise purchased and sold #404,934.04 Dividends received- schedule XI 125,718.57 Recovery on accounts previously charged off 29,892.67 Rental income 10,162.20 Interest earned 9,031.49 Profit on disposal of capital assets-Note C 6,091.86 Miscellaneous 23,800.75 $609,631.58 45,805.366.07 10,246,867.00 7.675,176.27 2,573,690r?3 OTHER DEDUCTIONS Provision for doubtful accounts 61.639.57 . Interest expense 48,971.29 Idle plant expense 43.462.57 Life Insurance expense 20,138.67 'State franchise taxes 17,136.64 Miscellaneous 19^976.54 211,325.28 598,306.30 PROFIT BEFORE PROVISION FOR FEDERAL, DOMINION AND STATE TAXES ON INCOME $ 2,971,997.03 PROVISION FOR FEDERAL. DOMINION AND STATE TAXES ON INCOME-ESTIMATED AFederal normal income tax (no provision for surtax on undistributed profits considered necessary) #387,000.00 Dominion tax on income 13,000.00 State taxes on income 29.203.73 429.203.73 NET PROFIT-NOTES D AND E $ 2,542,793.30 P Principles of consolidation: (a) Inventories include no inter-company profit. (b) No inter-company sales are included. (c) The operating accounts of the Canadian Subsidiary are included herein on a dollar for dollar basis. This consolidated profit and loss statement is subject to the notes on the following page. 313 NOTES;T0 COH3(3Llmi^D I&OEIT AND 1033 3TA1WHINT Note A - Inventories at the beginning and end of the fiscal year in the respective amounts of #10,106,826.76 and #11,778,663.43 were valued at the lower of cost or market except as stated in irot A to the consolidated balance sheet at October 31, 1937. Note B - The Company's federal income tax return for the year 1937 was not completed at date of this statement but de preciation to be claimed therein will exceed provision in thin statement due to depreciation claimed on costs written off or credited to revaluation reserve during 1932. Note C - It is the practice of the Companies to reflect minor profits or losses on disposals of capital assets in the profit and loss statement rather than in surplus. Note D - No provision has been made in'the foregoing statement for loss of wholly owned non-operating California Mining Companies for the year, amounting to #44,792.84 including provision for depreciation in the amount of #27,908.64. Note E - Reference is made to Schedule X submitted here with for information as to charges for maintenance and repairs, depreciation, depletion and amortization, taxes (other than taxes on income), management and service contract fees, rents and royalties. - SCHHIlbUI^'',T-l'iTVB,sj2M'T3:",'Ilit:',!SBQURiTrB&"0F AFFILIATES THE GLIDEDEN COMPANY AND CONSOLIDATED SUBSIDIARY For the fiscal year ended. October 31, 1937 NAME OF ISSUER BALANCE AT BEGINNING OF FISCAL YEAR NUMBER OF SHARES. PRINCIPAL AMOUNT OF BONDS OR AMOUNT TITLE OF ISSUE NOTES IN DOLLARS ADDITION; NUMBER OF SHARES. PRINCIPAL AMOUNT OF BONDS ` ^AJ OR NOTES \IN ] STOCKS AND BONDS OF AFFILIATES NOT CONSOLIDATED-WHOLLY OWNED The California Lino Company Common stock The California Zinc Campary Bonds After thought Zinc Mining Company Common stock 1,000 $. 5,000.00 $500,000.00 187,500.00 100 10,000.00 STOCKS OF OTHER AFFILIATE American Zirconium Corporation American Zirconium Corporation Common stock 5.000 Preferred stock 6.000 -o- 600.000.00 $802,500.00 Note A - Interest on these bonds is in default. I 3EGINNING Li YEAR AMOUNT T DOLLARS ADDITIONS NUMBER OF SHARES- PRINCIPAL AMOUNT ON BONDS AMOUNT OR NOTES IN DOLLARS BALANCE AT CLOSE OP REDUCTIONS _______ FISCAL YEAR ^NUMBER OE;>i: NUMBER OF SHARES. ; SHARES. PRINCIPAL- PRINCIPAL AMOUNT AMOUNT OP BONDS AMOUNT OF BONDS , AMOUNT OR NOTES- IN DOLLARS OR NOTES IN DOLLARS i * - . 5,000.00 .87,500.00 10,000.00 1,000 $ 5,000.00 $500,000.00 187,500.00A % ' 100 10=000.00 V :;~0" 500.000.00 302,500.00 $ 5.000 6.000 Lsoo^eooiaa $802,500.00 mm v CLASSIFICATIONS Ore lands and. leases Land: Land improvements Railroad siding Buildings Machinery and. equipment Furniture and fixtures Automotive equipment Construction in process Seduction Note A - Net deductions Note B - Transfer SCHEDULE II-PROPERTY, PLANT AND "q(IXgKsrwr THE GLIDDEN COMPANY AND CONSOLIDATED SUBSIDIARY For the fiscal year ended October 31, 1937 BALANCE AT BEGINNING- OF THE FISCAL YEAR AS PER ACCOUNTS ADDITIONS RETIREHEE AT COST OR SALE $ 54,022.89 2,376,249.74 - -o- 65,243.57 7,935,512.06 9,262,863.33 610,083.97 69,704.51 1,099,175.57 t 571.98 $ 82,002.96 20,021 3,230.31 4.84.87 474 555,283.61 10,282 1,073,481.05 90,06] 78,351.62 23,932 28,478.74 6.91E 204, 27727*A_______ - $21,472,855.64 $1,617,957.87 $ 151,695 S3s sax sxss saassss as s iSSSSHSSBS '? t f * ^ .1 t SCHEDULE II-PROBEF.TY, PLANT AM) EQUIPMENT ' THE GLIDDEN COMPANY AND CONSOLIDATED SUBSIDIARY ,f' > i / GO IV) For the fiscal year ended Ootober 5.1, 1937 :as3SSS33SS8S3S33SS BALANCE AT BEGINNING OF THE FISCAL YEAR AS PER ACCOUNTS ADDITIONS AT COST RETIREMENTS OR SALES OTHER CHANGES DEBIT AND/OR CREDIT*- : BALANCE AT , DESCRLBE CLOSE OF THE NOTE B FISCAL YEAR 54,022.89 2,376,249.74 -o- 65,243.57 7,935,512.06 9,262,863.33 610,083.97 69,704.51 1,099,175.57 \ 571.98 82,302.96 3,280.31 484.87 555,283.61 1,073,481.05 78,351.62 28,478.74 204,277.27*A -o- $ 20,026.19 -o- 474.00 10,285.40 90,061.70 23,933.58 6,918.85 - o- $21,472,855.64 $1,617,957.87 $ 151,699.72 $ - ns3ataasmaaae"s398ssss8ss3s3ss3sas3sa8ssss3s3 -o- : , 54,594.87 35,548.26* 2,402,978.25 35,548.26 38,828.57 -o- 65,254.44 -o- 8,480,510.27 -o- 10,246,282.68 -o- 664,502.01 -0- 91,264.40 -0- 894,898.30 -o- $22,939,113.79 SCHEDULE IIA-SPECIAL RESERVES FOR REVALUATION THE GLIDDEN COMPANY AMD-CONSOLIDATED SUBSIDIARY For the fiscal year ended October 31, 1937. CLASSIFICATIONS BALANCE AT BEGINNING OF THE FISCAL ADDITIONS YEAR AS TO PER ACCOUNTS RESERVES RETIEEMENTS, RENETSALS AND MAJOR REPAIRS BALANCE AT CLOSE OF THE FISCAL YEAR f 500,937.77 1,693,630.00 1,484,945.86 29,032.68 6.359.77 i,714,886.08 $ o- -o- $ 500,537.77 -o- -o- 1*693,630.00 -o- 13,305.81 lj471.640.05 -o- -o- 29,032.68 -o- -o-_________6,559.77 -o- $13,505.81 $3,701,580.27 Note A - These reserves were provided by charges to capital surplus and reserve for depreciation to eliminate appreciation of fixed assets and to reduce fixed assets to estimated basis of " values during 1932 as determined by Board of Directors. t FEB 231938 J DOCKET MAIL & F5LE3 iPHii ______ ;-, - _ - M/a/rrotriiy^t.rrvrrWa ,tf-t1t t_TTMeP^aTV3r3mJBTn3a TwOroR S^?HErgTIaAtirindrHr .;tDuEt oPtlii m.AM)RTI2tATIQfl OF PROPlRfY .TpLM^ AND SftllB ji H i in ii ii ii ii ii h'S 4 , 13=3==S=3=3S=333=3S33BS33S=S CLASSIFICATIONS asSS3333S3S3331I333B3S33: Ore lands and leases Land improvements Railroad siding Buildings Machinery and equipment Furniture and fixtures Automo tiwe equipment THE GLH2DEN COMPANY AND CONSOLIDATED''S-UBSID For the fiscal year ended October 31, 193 Sata=!aa=aa'ort3a'=33s====!===aE3!srsss s s s bs s s s s === =*== BALANCE AT ADDITIONS BEGINNING CHARGED OF THE FISCAL CHARGED TO OTHER YEAR AS TO PROFIT ACCOUNTS- PER ACCOUNTS AND LOSS DESCRIBE 3S3S33 *3335:SSS83SE332aS3SS3S:S3S 3 Ss3S ss: TOTA $ 16,972.56$ 6,238.27 . -o- . 1,777.54 7,519.79 1,151.98 1,511,137.09 125,980.10 3,769,031.74 427,078.58 396,817.00 30,662-89 42,109.03 14,845.66 $5,743,587.21 $ 607,735.02 3SS333333333333333S333=3:S $ 23,2 1,7 8,6 1,637,1 4,196,1 427,4 56,9 $6,351,3 Note A - The policy of the Companies with respect to depreciation is to provid as fair and reasonable to cower wear, tear and deterioration of the property on a t It is not certain to what extent obsolescence is cowered in these provisions as cha the useful life of the property. The Company's federal income tax return for the y of this statement but depreciation to be claimed therein will exceed provision in t on costs written off or credited to revaluation reserve during 1932# 'Z* *'l --T-i -' \ ,, - ^ftm.Ta JTTT -'R'ffigHTRTO!3 gQR DEPRECIATION DEPLETION ^hwsT7.ATioH os*' p r o pe r t y j w j j &t mx s d * m\Jismm--f4 :if } 'T-l%5'5ir ?7&;*= ! ,J'rV"fcS" i GLU3D1H COMPANY AND COHSOLIDASm SUBSIDIARY ,, for the fiscal year ended October 31, 1937 LAM*At "***______ADDITIONS______ SINNING HE EISCAL EAR AS ACCOUNTS CHARGED TO PROP11 AND LOSS CHARGED TO OTHER ACCOUNTS- DESCRIBE TOTAL CHARGES TO RESERVES RETIREMENTS, RENEWALS AND OTHERREPLACEMENTS DESCRIBE & BALTICS AT * THE CLOSE ," 03* THE EISCAL YEAR 16,972.56 . .-o- 7,519.79 11,137.09 69,031.74 96,817.00 42.109.03 6,238.27 1,777.54 1,151.98 125,980.10 427,078.58 30,662.89 14.845.66 43,587.21 | 607,735.02 $ 23,210.83 $ 1,777.54 8,671.77 1,637,117.19 4,196,110.32 427,479.89 56.954.69 f6,351,322.23 $ -o- -o- 701.24 41,060.77 11,220.10 4.881.79 57,863.90 $ 23,210.83 1,777.54| 8,571.77 1,636,415.951 4,155,049.551 416,359.79! 52.072.90i $6,293,453 * 33 with, respect to depreciation ia to provide amounts considered by the management. 1 and deterioration of the property on a basis of specific rates as determined, nee is covered in these provisions as changes in the art may result in shortening any's federal income tax return for the year 1937 was not completed at the date ilaimed therein will exceed provision in this statement due to depreciation claimed ation reserve during 1932. iSM ite: DESCRIPTION Patents and trade-marks Rights to manufacture lltlfl ilpiiil llBlIIllill SCHEDULE IV-INTANGIBLE ASSETS THE GLIDDEN COMPANY AND CONSOLIDATED SUBSIDIARY For the fiscal year ended Octojcr 31, 1937 BALANCE AT BEGINNING OF THE FISCAL YEAR AS PER ACCOUNTS ADDITIONS AT COST deduc t : CHARGED TO < PROFIT OT] AND LOSS $ 87,708.48 $ 17,140.01 $ 104,848.49 $ -o- o- $ 7,162.50 2.472.12 9,634.62 4 Note A - It is the policy of the Companies to amortize intangibles over their remaining lives. '; -- SCHEDULE IV-INTANGIBLE ASSETS DDES" COMPANY AND CONSOLIDATED SUBSIDIARY V "`"Tr .Ij,''''^..1 -P'p -y^^. the fiscal year ended October 31, 1937 co rw V BALANCE AT BEGINNING OP THE FISCAL YEAR AS PER ACCOUNTS ADDITIONS .AT COST DEDUCTIONS OTHER CHANGES- BALANCE AT CHARGED TO ~ CHARGED TO DEBIT AND/OR THE CLOSE PROFIT OTHER ACCOUNTS- CREDIT*- OF THE AND LOSS DESCRIBE DESCRIBE FISCAL YEAR # 87,708.48 # 17.140.01 $ 104,848.49 $ *o-- \ | o- -o- # 7,162.30 $ 2.472.12 9,634.62 $ -o- $ -o-______ o- $ -o- $ -o- - | 80,545.98 14.667.89 95,213.87 .daMpahieB t8 anna r-Has SCHEDULE VII-RESERVES THE GLIDDEN COMPANY AND ' CONSOLIDATED SUBSIDIARY For th.e fiscal year ended October 31, 1937 DESCRIPTIVE NAMES OF RESERVES BALANCE AT BEGINNING OF THE FISCAL YEAR AS PER ACCOUNTS ADDITIONS CHARGED TO CHARGED TO PROFIT OTHER ACCOUNTS- AND LOSS DESCRIBE CHARGES TO RESERVE For doubtful accounts, discounts, etc. $ 177,472.08 $ 61,639.57 $ 90,338.25 Ac 21,432.84 Nc For taxes, contingencies, etc. For claims against closed banks For investments 67,885.56 75,012.50 -o- 9,802.76 anas i i SCHEDULE VTI-HESERVES rHE GLIDDEN COMPANY AND CONSOLIDATED SUBSIDIARY For th fiscal, year ended October 31, 1937 BALANCE AT BEGINNING OF THE FISCAL YEAR AS PER ACCOUNTS ADDITIONS CHARGED TO CHARGED TO PROFIT OTHER ACCOUNTS- AND LOSS DESCRIBE CHARGES TO RESERVE DESCRIPTION BALANCE AT CLOSE OF THE FISCAL YEAR 177,472.08 $ 61,639.57 67,885.56 75,012.50 -o- 9,802.76 $ 90,338.25 Accounts charged of 21,432.84 Net charge to special discounts L27,340.56 67,885.56 75,012.50 9,802.76 SCHEDULE YIII-CAPITAL STOCK' THE GLIDDEN COMPANY ADD CONSOLIDATED SUBSIDIARY October 31, 1937 NAME OP ISSUER AND TITLE OP ISSUE, INCLUDING PAR OR, IE NO PAR, STATED OR ASSIGNED VALUE, IE ANY NUMBER OE SHARES AUTHORIZED BY CHARTER NUMBER OE SHARES OUTSTANDING EXCLUSIVE OE NUMBER HELD IN TREASURY AMOUNT IN DOLLARS N OE IN THE GLIPDEN COMPANY Convertible preferred stock, cumulative-par value #50.00 a share Common-without par value 200,000 1,200,000 199,940 799,701 $ 9,537,000.00 4.535,705.00 $14,003,705.00 ] ] SUBSIDIARY CONSOLIDATED The Glidden Company, Ltd.- common-par value #100.00 a share 500 50C ,ono !R RES DING VE OF HELD AMOUNT SURY IN DOLLARS aBSEsarsssssi NUMBER OF SHARES IN TREASURY v < .. . NUMBER OF SHARES HELD BY NUMBER;, PERSONS WHOSE OF SHARES STATEMENTS NUMBER RESERVED FOR ARE FILED SHARES HELD OFFICERS AND HEREWITH BY PARENTS EMPLOYEES :ass*s:s33S3s:ass 83 a ss ss sr asss ss ss : II il ll il ll il ll ll ll ll ll ll il!1. ?3 NUMBER OF SHARES' RESERVED FOR OPTIONS, . WARRANTS, CONVERSIONS AND OTHER RIGHTS S3S!S;3!SS3333S3 40 # 9,997,000.00 01 4.006.705.00 #14,003,705.00 None 1,100 None None None None None None None 243,209-4/5 00 None None 530 None None IJdfea 327 SCHEDULE IX-SURPLUS : THEw GLOBED COMPANY AKD\ CONSOLIDATED SUBSIDIARY Per the fiscal year ended October 31,il937 jg8igis afISIPHIBa!|l Blfij gCjj^ITAE^^UKPLUS Balance October 31, 1936 $7,524,343.82 DEDUCT IPIT Registration and other expenses in connection with offer to common shareholders for sub scriptions to common stock Less excess of selling price of $30.00 a share over stated value of 741 shares sold $ 22,805.43 18,525.00 4,280.43 BALANCE OCTOBER 31, 1937 7,520,063.39 lliil EARNED SURPLUS Balance October 31, 1936 >,303,721.99 ADDITION Ret profit for the fiscal year ended October 31, 1937 $2,542,793.30 Less dividends paid: Convertible preferred-$2.25 a share $ 449,920.08 Common-$2.60 a share 2,080,126.00 2,530,046.08 12,747.22 BALANCE OCTOBER 31, 1937 6,319,469.21 Note - In prior years certain items of discount and expense, provision for contingencies and losses on dismantlement have been h charged to capital surplus. If such items together with, additional depreciation claimed for federal income tax purposes for the years 1932 to 1936, inclusive, had been charged against earned surplus instead of capital surplus, the respective amounts of such surplus accounts would be $5,602,488.81 and $8,237,043*79 as at October 31, t.. 1937. The Company*s federal income tax return for the year 1937 was not completed at the date of this statement but depreciation to be claimed therein will exceed provision charged to profit and loss for the year ended October 31, 1937. SCHEDULE X-SUPPLEMENTARY PROFIT MTS LOSS IHffOKMATIOU THE -GULDEN' COMPAUY AFD CONSOLIDATED SUBSIDIARY For the fiscal year ended October 31, 1937 ITEM CHARGED DIRECTLY TO PROFIT AND LOSS . COSTS OTHER Maintenance and repairs Depreciation and depletion - Note A ^ Taxes (other than taxes on income) Management a,nd service contract fees Rents-office and warehouse Royalties' . Amortisation of patents, trade-marks and rights to manufacture $ 509,512.05 # 34,208.73 607,735.02 -o- 266,800.77 234,053.70 -o- -o- . -0- 142,178.08 83,100.72 . -o- 9,634.62 . . -o- Note A - The Company*s federal income tax return for the year 1937 was not completer hut depreciation to he claimed therein will exceed provision charged-to- profit and loss 3 ... .s>vr. v;-;. , i If K IDULE X-SUPPLEMENTARY PROFIT AND LOSS INFORMATION 'HE GLIDDEN COMPANY AND CONSOLIDATED SUBSIDIARY Nor the fiscal year ended October 31, 1937 CO ro 1 CO A CHARGED DIRECTLY TO PROFIT AND LOSS . COSTS OTHER ;333333: CHARGED TO OTHER ACCOUNTS ACCOUNT AMOUNT TOTAL & S'. i 509,512.05 34,208.73 607,735.02 -o- 266,800.77 234,053.70 -o- . -o- -o- 142,178.08 83,100.72 -o- nd 9,634.62 ' : -O- $ 543,720.78 607,735.02 500,854.47 rD* 142,178.08 83,100.72 9,634.62 f i come tax return for the year 1937 was not completed at the date of this statement will exceed provision charged to profit and loss for the year ended October 31, 1937. I SCHEDULE XI - INCOME PBOM DIVIDENDS HE GLIDDEN COMPANY AMD CONSOLIDATED SUBSIDIARY Por the fiscal year ended October 31, 1937 jsa'amssssaacBsaaassaaaa TITAL OP ISSUE Common stock Preferred stock Common stock AMOUNT OP DIVIDENDS CASH TOTAL 61,968.67 37,500.00 26.249.90 C*s tV) co- AMOUNT OP EQUITY IN NET PROPIT AND LOSS* POR THE STS CAL YEAR $ 44,792.84* 94,767.27 it io--i rn-1 e- p"q*i il , H pH ll e-t tn oc, p It II 5HK <q II QK.pl* O II 03 03 II II P3 Esha 0o3 Wpq II P p II ii n ii it it ii ii ii ii ii ii a '.0 c- " 0% tC Tjt o . THE GLIDDEN COMPANY AND CONSOLIDATED SUBSIDIARY IpSi ..iii It II "'iSlIsaj IHI II oKJ- IIIIII H II o>. H n N INI rH II to II ft <0 po op o II IHt IMI It II II 0 II II c0) II II II ft d il IIHII > 3 o aH Vl V P+> oft f<.o oo oo> - .tiro CO o o> 00 w ,3 o lOO^ o> in o j m H C- lO tO IO CM 01 HU H CHO IIII II O IIIIII 38 HM IIII E-t n nn nii it ii it nn Co fol ii ii +> +> ,u o dft fdt .4n* gooc o8o oo^ oo_ +o s'3!! COO t*> aH Oft Oft +-h> -H ft dH NN OC ?:SS MO -ofHt -ofHt f<,t0 P MU The Glidden Company, Cleveland, Ohio. We have made an examination of the "balance eheet of THE GLIDDEE COMPAHY as at October 31, 1937, and of the con solidated balance sheet of THE GLIDDEE COMPANY and its, whollyowned subsidiary, THE GLIDDEE COMEAHY, LTD., (California mining companies excluded) as at October 31, 1937, and of the consoli dated profit and loss statement for the year ended at that date-. In connection therewith we examined or tested accounting records of the Companies and other supporting evidence, and obtained in formation and explanations from officers and employees of the Companies; we also made a general review of the accounting methods and of the operating and income accounts for the year, but we did not make a detailed audit of the transactions. The balance sheets and profit and Iocs statement referred to, together with supporting schedules which have also been examined by us, have been prepared for inclusion in Form 10-K for annual reports of corporations pursuant to Section 13 of the Securities Exchange Act of 1934. The supporting schedules referred to are enumerated as follows: The Glidden Company: Schedule I - Investments in securities of affiliates Schedule II - Property, plant and equipment Schedule IIA - Reserve for revaluation of property, plant and equipment Schedule III - Reserves for depreciation, depletion and. amortization Schedule IV- Intangible assets Schedule VII - Reserves Schedule VIII - Capital stock Schedule IX - Surplus ^ The Glidden Company and Consolidated Subsidiary: Schedule I -Investments in securities of affiliates Schedule II - Property, plant and equipment Schedule IIA - Reserve for revaluation of property, plant and equipment Schedule III - Reserves for depreciation, depletion and amortization Schedule IV - Intangible assets Schedule VII -Reserves Schedule VIII - Capital stock Schedule IX - Surplus Schedule X -Supplementary profit and loss Information Schedule - Income from dividends In our opinion, based upon our examination, the accompanying balance sheets and profit and loss statement, to gether with the supporting schedules above referred to, and the related footnotes, fairly present the position of the Companies (The .Glidden Company and The Glidden Company, Ltd.) at October 31, 1937, and the results of their operations for the year ended at that date, purther, it is our opinion that except for the inclu sion of certain raw materials in inventories at cost which ex ceeded market prices at October 31, 1937, as stated in Hot A to the balance sheets, the statements have been prepared in accordance with accepted principles of accounting consistently maintained by the Companies during the year. Cleveland, Ohio February ll,-1938 ERBST & BREST Certified Public'Accountant* -33- 0 Oi uOX B3IUiaaATI0I'J OP DIEECIOES, 0FFIC3ES A1ID 0TH3ES 9. Give the information required below in tabular form concern ing the aggregate remuneration paid by the registrant and its subsidiaries, directly or indirectly, to the following persons In all -of their capacities. (a) The name and aggregate remuneration of each person among", the officers, directors and employees of the registrant receiving one of the three highest aggregate amounts of remuneration. .Adrian D. Joyce ?E. H. Horsburgh. $96,050.00 30,050.00 W. J. O'Brien 28,196.66 - (b) The aggregate remuneration of all directors of the * registrant? indicate the number of such directors without * naming them. ,i 7 Directors $226,759.95 (c) The aggregate remuneration of all officers, other than those who a>e directors, of the registrant; indicate the number of such .'officers without naming them. ; ,' ,, > . -1 . -.I Officer $ 8,750.00 . ; , (d) The aggregate remuneration of all employees of the registrant who, respectively, received remuneration from the registrant in excess of $20,000.00 within the fiscal, year; indicate the number of such employees ----------------i----------------------- 1 Hame, or "numb er -of persons not 1 n>amed *** ' Capacities in which * remuneration was received Aggregate remunera tion within regis trant's fiscal year, ,,h V* ' /'V "?l*' Salesmen $58,232.40 " S^*6*M' 'ii':i,- 4 ?* , . _ . j- ) 1e,%(' 10. State the name of, and amount received by,- each person who ..received, as-bonuses or shares in profits $30,000. or more, from the registrant . brs-i'ts wholly-owned subsidiaries, during the fiscal year. rrj^pS ` : '':Hon0` `--"'`.Vf1 '] 1 . 11. Give the information required below in t abular form concerning ' .thefaggregate remuneration paid by the registrant, directly or indirectly, - to'ahy person, other than a director, officer, or employee, whose aggregate :!;renumeration from the registrant, in all capacities, exceeded-$30',000. -during "`"seal year. \ ... - / - ' i 11 *' s'-t' < .,V .. .. ">.,.,vr ....V " Capacities in which Aggregate remunera- * remuneration was tion during regis- received from the , trant's fiscal year ' registrant ; . -- i,.`Sanders & Dempsey ErdoafTrust Building ,! .Clev/e' land., Ohio Hi Eonheberg, Inc. . 10 `South; La Salle St. Chi-cago^Illinoi s j-* " 1 -> wy General Counsel ` > ,.n, < $31,999.95 ' .a - ,~ Engineering,Joes" _______________________h. ^ $43,730.00 -34-- 12. Purnish the fallowing information as to all securities' of the .registrant sold by. the registrant within the fiscal .years."'. 1. COMMON SIOCZ VTITHGTPJ PAR JALU2 ' -;T (a) Title of i ssue; and, if stock, the nar value, or, if no par, stated value,-,.If any. ^ i BP Common Stock Without Par Value; stated value $5.00. (b) Amount sold. 741 shares, (c) D aVte,ro~f isale. , i A-.,: 1 s' > Common Shareholders of record October 4, 1937 were .offered the right to subscribe to Common Stock between October.4, 1937 and the close of business December 15, 1937 at $30.00 per share on the basis of one share for each 12i- shares owned. - (d) Aggregate net cash proceeds, or the nature and aggregate amount of any consideration other than cash, received by the registrant. . tffyi}*''' . The 741 shares of Common Stock were sold for cash and the Company received therefor $22,230. The registrant paid out for registration and other expenses in connection with the offering of said Common Stock to its shareholders up to ; October 31, 1937 the sum of $22,805.43 '_ (e) Names of principal underwriters, if any, indicating any such underwriters as were affiliates of the registrant. No contract was made with underwriterswrelativesto1 the. ; sale of the 741 shares of Common Stock of the registrant. (f) A statement that such securities were registered.under the Securities Act of 1933, or a brief statement of the facts'necessary'to establish that such registration was not required. The Common Stock without par value was:ragisteredsunder the Securities Act of 1933 under registration No^ `3-3322;^which became effective Octot^r.5, 1937. 13. As tc any securities for which application:;for registration under the Securities Exchange Act of 1934 had been filed and which remained' unissued at the close of the fiscal year; furnish the^following information: (a) Title of issue. .P . Common Stock without *nar value. ^''ii- .iMs& , 1 fh ti (b) The total amount unissued at the closefof the fiscal year. 257,605 !shares. KK' (c) A brief description of the proposed trahsactions;|f6r the issuance of such securities. .`S-f; 179,946 shares of Common Stock reserved for the Conversion of 199,940 shares of the Convertible Preferred Stock, - t. 333 -35- curaulative, $50.00 par value, of the registrant. 77,653 shares .of Common Stock uinsubscribcd as of October 31, 1937. .Subscription,., right s extended to December 15, 1S37. Of the total, 7*3,400 .shares registered prior to October 31, 1937, 741 shares were subscribed for before October 31, 1937. / DESCRIPTION- OF- /SECURITIES ' 14. (a) If.' any 'material modifications,mot previously reported, ' ^vhavelbeen, -aiadfcewin- any 'security a description ,of which .has- previously been hreported, or in the indenture, charter or other constituent instrument 'defining ,rights of the holders of such security, give the title of the , issue and state briefly the general effect of such modifications. v k ' ? .1 ''None. ;,, , * t' ' . > ' (b) For each class ' of capital stock of the registrant a . ,,description of which has not previously been, reported, and which, either l';ss jto' dividends or on liquidation, ranks equal or prior to any stock . -,-jrQgi;stered,',on-.a:.;-ftational securities: exchange, outline briefly: (l) , , . dividend rights; (2) limitations in any indentures or other agreements: on the payment of dividends; (3) voting rights; (4) liquidation rights; (5) preemptive rights; (6) subscription rights; (7) conversion rights; seg*4'8(J:r,ri?edemption provisions-applicable thereto; and (9) liability to further. calls. V' l- . ,,. |V . The registrant does not have ar.y class of capital stock : , which,has.not-, been, previously described and. which either as .. 5 to dividends or on liquidation ranks equal or prior to any stock registered.on a national securities exchange. 15. State briefly the general effect of: (a) Any material modifications, made within the fiscal year and not previously reported, in contracts of guarantee by the registrant mmomf the securities of other issuers, which have been previously resorted. -'\v1l* (' ;,f,: - "-Hone.'1'' ': . / (b) Any such contracts made within the fiscal year and not: - pr eviously/reported. '."Hone. : .'This annual report comprises: (1) Fages-numbered 1 to 36 consecutively, and insert pages numbered none, including the following financial statements and ' schedules: None.- m . !i (2) The following exhibits; None. ^isiw This annual report is filed subject to the instructions contained in the Instruction Book for Form 1C-K for Corporations, and amendments numbered: None.