Document pBJgJpNEpk2DkL2vbVg634NBd

u h w u h m isrrst or riii9ss Prior to 195*t our report* sisgOy shoved total operations for sack plant. Ebeae were not self analytical as to aajor product group*, tf* oould only look at com plete divisions and could not readily **ortala bov an over-all product group, such as Margarine, refinery product*, etc., vu doing. During 195*1 the Pood and level Uteres Supplemental operating Statements ware Instituted. With the regular Consolidated statements reporting the total for each division the Supplemental then permits shoving operation* by jrodusrt geoap, both for each individual division and in total for that product gros^. .v With 1955 reports certain ehttgsa hear* been made In Chant nats and Cbsaurgy Which permit better snalyrstlon by product groep. In Chenurgy the reports now are broken dovn between (l) Proeaaalag - ft*ph, Boys Products (flour, protein, lecithin,) and Pin* Chemical*; ()Mdglag; nd (3) Oraln Merchandising. In addition to ahoviag.operaddaa by .plant, gaaratjowa are alao abovn in anno fan* by the Horn* Major eparattlhal, ghwpingait Studies are now being and* ns to the practical**as ofbreaking down thm ptadtMlng cyrtion* into their najer component parts Mklcfe would allow dearer analyttntlott of profit' alienssa as to basic product operation*. la Chemicals-Pignart*-Metals each plant reflects all saias of product* msawfactyred at that plant, regardless of vbara sold, lh* llns-fjp la: Bt. Balena - Zopegus, Oadadum Odors ColllnavlU* - lithopoms, Tltaaolltfa, Slack Ash Bsaaond - Povdsred Metals Scrsntcn - Mbit* lead Regular sales are not intermixed; thus, 8t> Bslaaa's regular aales reflect all sales of Zopaque and Csdalua Colors mads outside tbs Oagwf* this change also eliminates lnterdivisioa sales between Chanleal Division* no S la 1995 laterdivision profits represent profits by products on sales to Paint Divisions. Xt should be noted that Bt. Helena salaamsn solicit order* far tithopom* (but sales arc credited to Collinsville,) sail* Collinsville'aalesmmn solicit orders for fcopaque and Csdalua Colors (but sales are credited to At. Bslena.} glace tht manufacturing division reflects these salsa, Mr. ftuth bas aotharlxed a cmmlssion transfer between divisions. %u oesasission transfer la reflected In e separate column in order to permit elimination of vbat vould Mount to a duplica tion il inflation of operating expanse* on consolidation of total Chemicals. N 2159 aareoLmmc o r a t i*o k x p u b s s February!*,. 1995 For example, at January 31 CoUlnarlU* above total casvdsalon transferred tram St. Helena of $ 66,k6o (representing eampensstion for their efforts In selling Zcpaque end Cmdnltm Colors which sales are vaflected by 8t. Helena.) 8t. Belena has reflected this seam amcwct as a selling expense. On consolidation of total Chemical! it is neoessary to net this -^aek against consolidated, operating expense. This nev Une-up for Chemical* gives a such dearer picture of regular operations for each product group, as well as allowing interdlvlsloo profit to appear as a pure Paint Division figure. You will also note on Maval Stores the sane duplication of canalsslop expense exists, with Division Ho. 71 paying a conslsslon to Oolledge. In consolidating It Is again necessary to eliminate this duplication so as not to erroneously In flate consolidated selling expenses. With the present eet-up In the Consolidated Operating Statement, pins the Supple mental Bepcrt for Poods and Rscval Stares, It Is felt that Directors, as well ns operating heads of each major group, can better evaluate operations of tbs Com pany In terms of our basic product groups. CS&f:Jts GL0023783