Document pm4BNrM6E5r7DoOdxGXk25nMB

MAJOR PRODUCT PROFITABILITY Monsanto CONFI0NTI;l fC^MAi-:ON This document z-zr.r- ~ r; > 'i:ai''fcrm- ton vv^-.ch -5 *y : Co"V pjny .v^.l ' '; ' .. it than duty i:\ b'y sort c.'.a . .\.ii at m> ., ; -a -muC-'.i a'.'prc.^i J>; ic-.z.:-.\ * cac;-ita':lJ 'o. ts SJfs-k-^^ri <\r.z ';.*s'CST. Tits c'ocLnii^l n, :hv oroo.'rty of Monsanto Company, and must tj. return ;d uoon demand. Issued April IS, 1970 Controller's Office - O.K.O 0633531 4JL. WATER_PCB-00039969 MAJOR PRODUCT PROFITABILITY Contents GENERAL COMMENTS PAGE 1- 2 PRODUCT OR PRODUCT GROUP SUMMARIES ........................................ .................................. 3-10 AGRICULTURAL DIVISION ......................................................................................................... Page ANIMAL NUTRITION............................. Farmers' Hybrid .......................... MHA ...................................................... Santoquin Liquid ........................ BLASTING AGENTS............................... ANFO ................................... ............... PESTICIDES ........................................... Avadex ................................... Avadex BW................................... Lasso EC ........................................... Lasso 10G......................................... 12-15 13 14 15 16-1? 17 18-20 19 20 21 22 FESTICIDES (cont'd) Parathion ................................. Ramrod 20G ............................... Ramrod 65WP ............. Roque .......................................... 2,4-D Acid ........................... 2,4, 5-T Acid .......................... PLANT FOODS ................................. Ammonium Nitrate ................. Anhydrous Ammonia.............. Concentrated Nitric Acid DAP 10-46-0............................. 11-33 23 24 25 26 27 20 29-33 30 31 32 33 ELECTRONIC PRODUCTS AND CONTROLS DIVISION .......................................................... 34-42 ADVANCED TECHNOLOGY...................... COMPONENTS ........................................... INSTRUMENTS......................................... MATERIALS.......... .. ................................ Silicon............................................. 35 36 37 38-39 39 PROCESS CONTROLS ..................... Control Valves ..................... Regulators ............................... 40-42 41 42 HYDROCARBONS AND POLYMERS DIVISION .... 43-65 ETHYLENE AND CO-PRODUCTS.......... MINERAL RESOURCES.................. MONOMERS ................................................ Acetic Acid.................................... Acrylonitrile.................... Butadiene................................ Methanol................................... Styrene Monomer .......................... Vinyl Acetate............................... Vinyl Chloride ............................ POLYMERS ............................................... HDPE .................................................... 44 45 46-53 47 48 49 50 51 52 53 54-61 55 POLYMERS (cont'd) LDPE....................... Lustran ...................................... Lustrex ...................................... Nylon Resina............ Opalon ........................................ Ultron ........................................ PRODUCTION AND EXPLORATION. REFINERY AND MARKETING____ Marketing ................................. Refinery ................................... 56 57 56 59 60 61 62 63-65 64 65 0633532 I WATER PCB-00039970 MAJOR PRODUCT- PROFITABILITY Contents PAGE INORGANIC CHEMICALS DIVISION .......... CHEMICAL BUSINESS .............................. DETERGENTS ............................................... Alkylates............................................. All............................................... .......... DCP - Anhy. & Dihydrate ...... NTA ........................................................ .. Phos. Acid - Food .......................... Phos. Acid - Other ......................Potassium Phosphates ................... KCP - All Grades ............................. SMP ...____ ............................................ STP - All Grades ............................. Sterox - Phenol Alcohol .... Pagft 66-88 67-80 68 69 70 71 72 73 74 75 76 77 78 DETERGENTS (cont'd) TSP Crystal TSPP ........................................ INDUSTRIAL CHEMICALS____ Caustic Potash ................. Chlorosulfonic Acid ... Phosphorus Pentasulfide ............................ Sulfuric Acid................ SPECIAL CHEMICAL SYSTEMS. ACL's ..._____ silicas......................... ENVIRO-CHEM SYSTEMS, INC. Chemical Proceas ............ Environmental Systems . 66-91 79 60 81-05 82 63 84 85 86-88 07 88 89-91 90 91 ORGANIC CHEMICALS DIVISION ............... ......................................................... 92-143 "2LLU-CHEM............................................... Mersize RM, TFL, and Rosin Size KIP ........................................... Pentachlorophenol .......................... Santobrite............ .............................. 'CD & FINE CHEMICALS...................... Aspirin ....................................... Ethavan ................................. ................ Fumaric Acid................................... .. Lactic Acid ......................................... Phenacetin ........................................ .. Saccharin................................ .. santophen #1 ..................................... 3,4,4, Trlchlorocarbanilide Vanillin ............................................... UNCTIONAL fluids.......... ............... .. Aviational & Aeroapace ............... Dielectrics ......................................... Heat Transfer Fluids ................... Industrial Fluids .......................... GENERAL CHEMICALS ............................... Adipic Acid ......................................... Blsphenol A ........................................ Maleic Anhydride ............................. Orthonitroaniline.......... ................ Paranitroaniline ............................. Phenol ............................................... .. Phthalic Anhydride ........................ 93-96 94 95 96 97-106 98 99 100 101 102 103 104 105 106 107-111 108 109 110 111 112-119 113 Ild us 116 117 118 119 PLASTICIZERS .......................... 120-132 Adipates - Plasticizers 121 Aroclors - Plasticizers 122 Butyl, Ethyl, Methyl Phthalates ..................... 123 Benzyl Phthalates .......... 124 Dacyl Phthalates ............ 125 General Purpose Plasticizers ................. 126 Octyl Phthalates............ 127 other Phthalates............ 12B Phosphate Eaters ............ 129 Phthalyl Glycollates .. 130 Polymeries .......................... 131 Sulfonamides ..................... 132 RUBBER CHEMICALS ................. 133-142 Flectol H & ODP .............. 134 Santocure and Cyclex .. 135 Santocure MOR & MOR 90. 136 Santocure NS & Cyclex B 137 Santoflex aw & Ajone E. 138 Santoflex DD & Ajone DD 139 Santoflex 13 & Ajone HP 140 Santoflex 77 & Ajone H. 141 Santowhite Crystal and Santonox ........ 142 0633533 WATER PCB-00039971 flAJOR PRODUCT pROfflTABILI TY PACKAGING DIVISION .......... .......................V...................... 1 I' '' , BLOWNWARE ,., . ,............ .. r. ...V ; 144 THERMOFORMING PACKAOINO MATERIALS............ ,. -; 145 PLASTIC PRODUCES AND RESINS piVISION . PLASTfC PRODUCTS RESINS ................... Aminoplaate .. Formalin.......... Phenoplaata .. Styrene* ..... 148 149-153 150 r 151 152 153 SAFLEX ...... VINXL ACBTATES' - Butvar ............ - Formvar ....'. Oelva ....... Oelvatol .... TEXTILES DIVISION................... ........................................ .................... .. '' *. i < *t . .1 * LPftTr.ftN ................... *-**.*.... t , * , UliT.W MANTIIt'AC'IMIlTNa CO. ___ . ' um.nu HAimicn .............. . 161-164 ' 162 163 164 1 165 166 nylon.......................... . Carpet .......... Textile .......a. Tire ................... POLYESTER................... 'Carpet. ..................... Textile ................... Tire 1.......................... MPW RWTORPItTfiK MVTfilM'. /____ .ATWAlOOfEn MATRRTALfi........... . ENGINEERED COMPOSITES .......... . RECREATION'................ 177 S* PAGE 143-146 146 147-159 154 155-159 156 157 158 159 160-174 0633534 WATER PCB-00039972 PRODUCT PROFITABILITY This report bee been prepared to serve as a basic reference for volume, price, cost, profitability and potential of Monsanto's major products. Such products are listed alphabetically by division and product group. The products covered herein account for B9K of the total 1969 domestic investment. The report will be issued annually or otherwise updated for major product additions, etc. All return figures are calculated on the Investment and profit on product sales made to outside customers. Quantities of product indicated for "Internal Use" are transferred as intermediate materials to end pro ducts, Investment and cost of intermediates are rolled forward to the end product and included in the profitability of the sale of end products to customers. World-wide data has been included on the divisional and product group reports, but individual major pro duct sheets contain only sales of U.S. produced mater ials, including export sales to foreign customers, foreign subsidiaries and sales through Europe. Data is not precisely comparative for all years be cause of the changes in handling excess SYD depreci ation, central office expense, interest expense, bonus expense and the formation of the Electronic Products a Controls and Hew Enterprise Divisions. While these inconsistencies should be recognised, it is felt that they do not seriously distort the results and trends of the major products set forth in this report. 0633535 Results are shown for the years 1966-69 and budget 1970. As a yardstick for reviewing product profitability, return on gross investment of the Company and each division is as fol lows i Based on U.S, Domestic and Export Net Incomei Company Agricultural Electronics Hydrocarbons Inorganici Chemical Business Enviro-Chem. Systems Organic Packaging Plastics Textiles New Enterprise % Return on Investment Actual_________ Budget 1966 1967 1960 1969 1970 5.0 4.1 4.2 3.4 3.5 7.7 8.4 2.2 3.4 4.5 .6 Lose 2.2 1.0 2.7 2.3 2.8 2.4 3.0 4.2 4.5 6.1 6.4 LOSS 7.1 6.3 5.6 4.2 3.3 7.0 4.0 4.5 4.5 5.2 6.2 4.5 7.1 5.0 4.6 0613516 -2- WATER PCB-00039974 product or product gboup summaries On page* 4 through 10 are summaries prepared from the maj product data Included in thie report as followsi Pages 4 & 5 - A compilation of division returns for actual 1969 and budget 1970 grouped to show the amount of investment in major products or product groups having a rate of return which is (a) a loss, (b) 0 to 4%, (c) 4 to 6, and (d) over 6*. Page 6 - A matrix which groups major product or product group by size of investment and * R0X for 1969. Page 7 - A matrix which groups major produot or product group by sice of investment and % 901 for budget 1970. Page 8 - A compilation of the change in invest ment and income between 1970 and 1966 for major products or produot groups. Pages 9 & 10 - Matrixes Which group major product or product group by change in investment and income between 1970 and 1966. 0633637 domestic operations MAJOR PRODUCT OR PRODUCT GROUP IHVBS1MBHT BY BOI ($ In Millions) # Return ati Total Loss 0 to 4# 4 to 6# Over 6# Electronics Division # Return ati Loss 4 to 6# Over 6# Total tivdrocarbcns Division # Return att Lose 0 to 4# 4 to 6# Over 6# Total Inorganic Division Chemical Businessi # Return att Loss 0 to 4# 4 to 6# Over 6# Total Enviro-Chem Systems. Xnc.t # Return att Loss Over 6# Total Actual 1969 # of lOYSAt- -Js&al 9 85 11 30 _sg $ 184 46.2# 6.0 16,3 -3JU1. 100.0# Jtoflgs 1970 # of Invest. -Total $ 78 15 43.654 6.4 85 $ 178 47.8 100.0# $ 14 17 _5S $ . 90 15.6# IB. 9 65.5 100.0# 9 20 32 61 9 113 17.7# 28.3 . #54.0 100 0 $ 71 299 36 __a 9 494 14.5# 60.5 7.2 _1LlSL 100.0# 9 59 371 68 9 506 11.7# 73.3 13.4 10M0.0.# 9 10 23 121 $8 9 222 4.5# 10.4 54.5 ?Qx6 , 100.0# $* 24 129 77 $ 230 10.4 56.1 . #-33. S 100 0 - - 4 40.2# .- 5 59.8 - - $ 9 100.0# 0633536 WATER PCB-00039976 DOMESTIC OPERATIONS MAJOR PRODUCT OR PRODUCT GROUP INVESTMENT BY BOI <$ in Millions) Organic Divltion % Return ata Loss 0 to 4% 4 to 6% Over 6% Total Packaging Division % Return ata Loss 0 to 4% Total Plastics Division % Return ata Loss 0 to 4% 4 to 6% Over 6% Total Textllfts. Division % Return att Loss 0 to 4% 4 to 6% Over 6% Total Hew Enterprise Division % Return att Lose Actual 1969 % of Invest. Total $ 74 44 55 102 $ 275 26.9% 16.0 20.0 37.1 100.0% Budget 1970 * of -Total $ 97 72 55 85 $ 309 31.4% 23.3 17.8 27.5 100.0% $ 67 19 $ 106 81.6% 18.4 100.0% $ 27 _ 85 $ 112 24.3% 75.7 100.0% $ 43 38 20 75 $ 176 24.6% 21.5 11.1 42,8 100.0% $ 46 44 - 102 $ 192 24.0% 23.2 _ 52.8 100.0% $ 59 349 89 ____ 22 $ 736 8.0% 47.4 12.1 _*! ,, 100.0% $ 77 377 7 -2A2 $ 778 9.9% 48.5 .9 40.7 100.0% $ 40 100.0% $ 70 100.0% Combined % Return ata Total Loss 0 to 4% 4 to 6% Over 6% $ 483 783 368 689 $2,323 20.8% 33.7 15.8 . .29.7.. 100.0% $ 478 988 291 740 $2,497 19.1% 39.6 11.7 29.6 100.0% % of Total Domestic Investment 09.0% 68.7% 0693539 -5- WATER PCB-00039977 'To* " Loss o* Sales Poss < R0 159 (*H3) 3.8* -.s o*e* * Loss re *1 OCMCTO cwwr - tXVCSTK 0RERRTKK5 taajor "wooer at pbcpbct cpoop bw - actum. t969 (1 l Miuim) ^-- ------ ------ ------ ------- ------ ------- ------- ------ ------------------------- ----------- R o I ------ ------------------------------------------------------------------------- --------- ------ ------- O to 2# 2 TO * -- MtcOh Tex. *268 3.6* SIR 4 TO 6* 1100 5.1* 6 to * 8 to TO* Ptlow T iac 1121 Otca IO* 10.6* SiomvArt *62 * .6 Lvstaaa *59 (*60) 75? Acaylo - *59(1113)3.8* Acailam Tex.189 Mtlom Cap. 81 .1* Lustwcx 70 ( 82)3.0* Rer. & Mkt. 54 2.4* 5.6* P & E 182 Acailaw Caa. 92 7.1* 7.0* Saclcx 151 11.1* 5=-------- 125----- JT^W fc.TAATt Paoo. cxtilc 31 3$ 40 1.1 Ethyicnc 3.2 12.0 *il(iK7gJ 39(i<X>) .1 1 Coat. Valycs JH Stya. Hkm. 36 (169) 5.0* 6.5* fM *10 tuts 11 12.7 AW0 1.5 Awwr. A--(. In * .2 Su'AO'CwC *11 (*13) O*`all m 21(159) 1.0 Malcic Amit. 11 ( 19) 1.4) Pro. Hat'l. 20 OAR 17 .e MOPE Oaaloa 12( 31) .S 10( 19) .7 Pki Prw. Ahht. 15( 51) .4 18( 32) .6 Get Pww. Plast 16 1.0 GCLVATOL 12 .1 3.6* 2.6* RtCUlATOAS Tl7 07" SlLICOH fT O? Asaiaia 14 (115) 4.3* Acrylates 20 (121)7.9* ACAILAA Samo 0.13 Aocpic Acio 15 ( 19) 4.7* ACL'S 14 6.8* GCIVA 12 4.5* Benzyl Pwtws. 21 7.1* S'cowc NS 11 (12) 7.2* Amihoalasts 13 7.7* KTA JlO Saccaaaia 5 Pot.r. Camct 8 FTi- 01.TAOA Tg .1 Tumaaic Acio 7 ($8) .1 Avia-& Aco Floios 8 BlSRHtNOL A 9 0? 1.4* Otwca 15 Soltohawiocs 8 1.4) Eowwalia 9 (113) .8) Pot. Pnos. 1 6 3.3% Sole. Acio 9 (1<4> 3.7* Silicas 5 3.5* Pwos. Estcas 6 Polticmics 6 fOAWTAA 7 4.9* n5F 4.3* Mcasim 4.8* Lactic Acio 4.8* 4.3* 4,5* r5 7 7 677? AvAOCx BW 7.7* Sttachcs 6.4* FT 6 T^Tn--T5----- ITT ">,4.0 Acio * 5(1 8)1 .2 ba n .7 Roewe 5 M*. Rcsonaccs 2 .3 2,4,5-T Acio 2(1 3) Acctic Acio 2 PCP 5 .1 kkTMMOA 1 (12) PJIlTWMIll 3( 4) .1 VlMTL ACCTATC 1 (IS) SawtooaitC 2 ETHATAW 3 9.E.M. Pwtws. 3 Occtl Pwtws. 2 o? 1 4 0* Cawstic Pot. 4 0* O* 0* OJ 0) 0) .3% 01 3.0*; S'rwt- /I 1 3 3.8* AOIAATCS 1 Pwm Qltco. 2 5.9* Tama's Rre.t 2 6.7* OCP 4.4* Cowc. Nitaic 3 (1 4)7.7* Stcwox 5.7* PCP 3 6.7* Ptchacctiw S'vhitt Cat. fi 5 3 2 Rmwoo 2CG 535 8.3* MalC MTC. 14 21.9* 12.4* 975? 0.5* Lasso EC Lasso 10G Ntlow Res. Pwos. Acid Too Vaailliw DieiccTAics fno. Tlvios AWOCLOWS IO 6 6 8 6 8 6 8 22.1* 20.0* 10.3* 10.8* 12.9* 12.6* 10.6* 11.2* 575? Ataock 3 16.7* 8.9) Rmmoo 6V 2 43.8* 8.8) TSP ClTTSTAL 3 10.7* 9.2* Cwlowosolt. 1 (12) 18.5* Pwos. PCATA. 4 ( 5) 13.2* 3,,4.TCC 4 29.1* Mbat Taaws. Tl 1 11.5* OJIitwoamil. 1 38.9* S'cwwc&Cv. 1 10.0* S'rte* M S'rccx 00 Bwtyaa Si (16) 2 S( 20) 21.7* 16.9* 12.5* lisa 1313 1264 1541 ruem. m*cop z S'CMWC MCR 1 SVucx 77 2 o* 0* 0* 1356 13*1 153 1298 06335^0 .- WATER PCB-00039978 wun> wmucT a> pmcuci aw >01 awn uro (I <- M.u.m.) I.-- o... |. o< 3100 i.. .* 31 0 .a 2* 2 .* 4* Hum Tib. gSi Of 4 .. 65 ........... Man.* Cm. flc5 Of 4 ia 105 MriM !.< 3120 0.1 a 105 10.95 -o *100 &a**.7a JfcT TTJ tT{64) l.lf ~3fP {9* *74? Inn C.a, 91 .4] Cattail 76 j 90) 2.5f pit *4 j.m Her. 4 Mil. 54 2.45 3." 3"*1 fua. Pua. P.... fan. Ti-i W.'WTT.;,* w 311 12. II 4.C TMiaMUfOBM 21 Pl..iic fade.11 .3 .A liaMnim |3I JTT^ TO------P?----------- Of (u.i.i-i OB Of Mtv*.a 11 (37 1) 5.75 Toai. It 44 7.11 '.> n. 17(376)1.03 5..u. roi -- *>' '0 6". imnii m 3U 32-0 I. 2i (3)9) |.3 OAP Pm4**l 320 (|*)3 .7 wro 17 .4 Bui.o.ia* 17 | 5j| .9 Unao. 311 o) *u 311 J.*5 Blau, Pal.|24 12 (314) 1.71 At,m Act 16 (320) 2,25 S'cau NS 15 II 01 P*. Nil', 21 1.15 5.95 Itria la Til i.H ii tunioa* 5.25 Sutianl. 11 13(314)7.41 ICl'l toiaaPk.tia 15 6.51 Suva 11 6.71 fl7 15 snr L.ua CC J10 8.65 m**o 20C 20 49.55 22.41 ll.t I.M I4HM MMSIMJfl CauPaaiau 3 6 |1 .0 Mint Ac iu 8 (310) .4 PCP D .1 PJliiao.a.i. 5(8) .2 HU f nil at OlllMMl A Pmi Ini.* raaa.na 310 .7) A Of PoiiMia.it 10 .61 (wot 10 1.6I 9 (314) 1.41 6 4 5'*' 1 ? *}* >M4 3 8 3 2 ViMik Cmoa. 3 1 19W 4 *i-aa. Via*. Mil.ll 2 { 141 .1 2 ( 20) .1 Mm Palal. On*. Pala*. fun*, mew 5'(vac 4 (1 5'cmk tOI 1 1 2 1 1 0) ^ n I.*) Olata Pa*a. > Hium Haapfa 6 0) 0) 01 . 7| 0| Paoa. Mia . 1.65 foi. Paai. 6 l.S< 54 1 Sllll.l 6 lltl.I Ml* A 7 rr, he? 34 2.4) 0J4i*aai*ii 1 2.21 4aiP.ll4 1 IIJ 3262 3 |Af 329* Saif. ana 5.55 V.utlV6* Aulv.a 6.25 5.25 9(312)7.95 l-o. f.u.ua 7 7.15 fc( 9)7.95 b( 23)7.41 |b 8.95 Saaiaauia 3 4> (3 7) 11 ,f L.tta IOC 6 26.21 1*.ea 8n. 6 15.41 Paat. tio . faaa 9 10.95 CM*a. Paacita 6 20 l>5 ................ 9 12 5 5.45 *, **aai 7 10.71 5.75 T5P Caiti.v 3 3 *.Tf ;uint Pai. 3 5.95 Pataaidia 3 SaatOPata /I 3 7.05 'awn' H.a. | 5 9.05 * 4.71 KP 4 9.55 ** 7.25 Siiaa. 5 1.75 laMiaa iw 7.55 ala. On.a. 2 l.7f C*M. Mi.a,( 5-*aU. 77 2 (3l) 9. 35 [aiaiaL.i. 14.?| 4 10.51 2 50.05 1 (3 4)16.05 1 j 2)25.65 3.4.4.IU 4 22.45 4i41 laaat fi. 1 14.05 l`*U. 4W 1 ( *120 45 t l.li 00 7 17.15 lift 3332 0633541 WATER PCB-00039979 IONSANTO COMPANY - DOMESTIC OPERATIONS MAJOR PROEKJCT OR PRODUCT GROUP CHANGE IN INVESTMENT AMD INCOME 1970 versus 1966 (S in Millions) Where Investment Increased: 49 Products 5 Products 44 Products Where Investment Decreased: 18 Products 6 Products 6 Products Net Change - 128 Products/Groups Investment Income $+264.0 + 6.3 +336.9 $-51.1 No Change +50.1 -112.3 - 16.0 - 36.4 $+440.5 -18.5 No Change + 3.3 $-16.2 NOTE: Secludes New Enterprise Division Q&335-.2 -8- WATER PCB-00039980 MMMtfM CO*MfT cOCStlC OKIUI KaO WATER PCB-00039981 kkiwro camn - uu**mk ottHii<b PHOouiT (jkxip cnwu. iw mytsraMi 4 imccx. . mo <. i9t* ------ ) u Nucwl <----------------------- ----------------------------- > (T - 1 - ` 'I" * I I_L_ 0633544 WATER PCB-00039982 AGRICULTURAL DIVISION Dlvialon Profitability (5 in Millions) World-Wide Sales Oper. Income-Div. Income After Tax 1966 167.0 32.6 16.2 Actual____________ 1967 1968 1969 182.6 157.9 171.7 38.5 15.7 22.2 20.1 5.0 7.8 Budget 1970 186.4 27.6 11.8 Gross Investment % ROI 227.4 253.3 260.6 244.0 265.5 7.1 7.9 1.9 3.2 4.4 U.S. Dorn. & Export Sales Oper. Income-Div. Income After Tax 159.4 33.4 17.0 174.1 39.0 20.4 150.3 16.5 5.6 163.2 22.0 7.9 166.8 26.5 11.1 Inc. A.T. as % of Sales $ Sales/? Investment Gross Investment 10.7 .72 221.9 11.7 .72 242.9 3.7 .60 250.4 4.8 .70 232.4 6.7 .68 246.7 % ROI Division Product Group: Animal Nutrition Blasting Agents Pesticides Plant Poods 7.7 8.4 2.2 3.4 4.5 18.9 15.1 4.9 4.2 7.6 4.4 4.7 .6 11.1 15.8 8.2 8.9 10.6 4.8 2.0 NOTE: Product group data for all years and major product data for 1968, 1969 and budget 1970, as shown in this report, fully includes activity of the retail stations, t&jor product data for the years 1966 and 1967 does not include the increments of income, expense and investment at the station level but does include sales at Wholesale value for materials moved through the MAC'S, Investment in the division's major products earned the following rates of return for actual 1969 and budget 1970: Loss 0 to 4% 4 to 6% Over 6% % of Investment 1969 1970 46.2 43.8 6.0 8.4 16.3 31.5 47.8 Product groups are reported on the following pages: Animal Nutrition Blasting Agents Pace 12 16 Pesticides Plant Poods Pace 19 29 Major products reported comprise 79% of the division's invest ment in 1969 and 72% in 1970. 0633545 "11" WATER PCB-00039983 ANIMAL NUTRITION - PRODUCT GROUP (5 in Millions) World-Wide Sales Oper. Income-Div. Income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 12.0 4.0 2.2 11.6 3.2 1.7 10.7 1.8 .7 14.0 1.5 .6 15.1 2.8 1.3 Gross Investment 11.6 12.2 15.0 15.1 17.8 % ROI 19.0 13.9 4.7 4-0 7.3 U.S. 0oml & Export Sales Gross Profit SAHE-Oiv. Oper. Income-Div. Income After Tax 11.6 5.8 1.9 3.9 2.1 10.9 5.3 2.0 3.3 1.8 9.9 13.5 3.9 4.6 2.1 3.1 1.8 1.5 .7 .6 14.8 5.8 3.0 2.8 1.3 K of Sales: Gross Profit SARE-Div. Income After Tax $ Salas/S Investment SO.O 16.4 18.1 1.05 48.6 18.3 16.5 .92 39.4 21.2 7.1 .69 34.1 23.0 4.4 .95 39.2 20.3 8.8 .87 Gross Investment 11.1 11.9 14.4 14.2 17.0 % KOI 18.9 15.1 4.9 4.2 7.6 NOTEi 1969 and 1970 include Farmers' Hybrid Company acquired June 30. 1969. Major products reported for the Animal Nutrition product group are as follows: Page Farmers' Hybrid 13 MHA 14 Santoquin Liquid 15 -12- Q633546 WATER PCB-00039984 FAHMEM- HYBRID ($ in Millions) TJ.S. DOR. & Exoort Sales Gross Profit SARJ-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1966 Actual 1967 1968 Budget 1969 1970 3.9 5.6 1.6 2.5 1.3 1.6 .3 .9 .1 .4 % of sales: Gross Profit SARE-Div. Met Income $ Sales/$ Investment 40.2 33.3 2.6 44.1 28.6 7.1 Gross Investment: Fixed Capital Working capital Total 1.6 3.6 .7 .9 2.3 4.5 For Sales 2.3 4.S % ROI - For Sales 6.7 9.0 Farmer*1 Hybrid waa acquired July 1969. a major expansion of swine and seed com activities is projected for 1970. Farmers' Hybrid will be a major growth area for the future. 06335<,7 WATER PCB-00039985 (J in Killians) u.9. Don- 4 Export Sales Grose Profit SARH-Div. Oper. incoma-Div. Income After Tax Selling Price/lb. Coat of sales/lb. % of Salesi Groan profit SARS-SiV. Set Inaoma Actual____________ Budget 1966 .1967 1968 1969 1970 4.9 4.1 2.9 3.7 2.3 1.9 .4 .5 .8 .8 .7 .4 1.4 1.0 (.3) .1 .8 .6 (.2) 3.5 .7 .5 .2 .1 .84 .73 .56 .47 .45 .39 .48 .41 .45 .36 47.0 16.4 16.3 46.3 19.1 14.6 13.8 24.1 14.3 11.4 20.3 13.7 3.6 $ Sales/8 Investment 1.32 1.05 .61 .95 .91 Gross investmanti Fixed Qapital working capital Total 2.2 2.6 3.8 3.5 1.5 1.3 .9 .4 3.7 3.9 4.7 3.9 3.5 .6 4.1 For Sales 3.7 3.9 4.7 3.9 4.1 % ROI - ft>r Salas 21.6 15.4 2.1 Total Opacity - Mt lbe. 5.9 7.6 8.5 8.3 10.0 For Salas Internal Use access 5.8 5.6 5.2 7.9 .1 2.0 3.3 .4 7.8 2.2 The downward profit trend of 1946-68 was reversed in 1949 dus to higher volume, lowar raw materiel costa and reduced SARA expense. An announced price Increase in June 1969 did not hold due to competition. At 1970 budget time there was no reason for higher price optimism, but a 23% increase announced in December held and the near-term outlook is greatly improved. -14 063354a WATER PCB-00039986 SAETOQUIH LIQUID <9 In Millions) u.s. Dorn. & Exuort Sales Gross Profit SARI-Div. Oper. Income-Div. Income After Tax 1966 3.7 2.3 .6 1.6 .9 Actual____________ Budget 1967 1968 1969 1970 4.0 S.O 5.8 2.4 2.7 2.6 .6 1.0 .7 1.5 1.7 1.9 .a .9 1.0 4.7 2.1 .7 1.4 .7 Sailing Price/lb. Oost of Sales/lb. 1.03 .39 1.03 .41 1.05 .42 .79 .42 .73 .40 % of Salasi Gross Profit SAKS-Div. Net Income 64.1 16.4 24.3 60.0 19.1 20.0 54.0 20.0 18.0 44.8 12.1 17.2 44.7 14.9 14.9 $ Salea/$ Investment S4 .89 .86 .95 .76 Gross investment: fixed capital Mbrking Capital Total 4.1 4.1 4.7 4.9 1.2 1.3 1.6 1.7 5.3 5.4 6.3 6.6 5.0 1.7 6.7 For Sales 4.4 4.5 5.8 6.1 6.2 % ROI - For Sales 20.5 17.8 15.5 16.4 11.3 Total Capacity - MM lbs. 6.2 6.3 6.3 9.6 10.3 For Salas Internal us* Excess 3.6 3.9 5.4 6.1 1.2 1.2 .8 .8 1.4 1.2 .1 2.7 6.4 .9 3.0 Saver* price deterioration caused by Japanese competition was offset by volume gains and SARI reduction in 1969. Price deterioration will oontlnus during 1970 as Japanese become more active and a new U.S. producer comes on stream. 0633549 -15- WATER PCB-00039987 BLASTIHO AGENTS - PBODUCT GROUP ($ in Millions) World-Wide Sales Oper. InCome-Div. Income After Tax Actual____________ Budget 1966 -1262. 1968 1969 1970 12.3 1.5 .8 12.6 1.3 .7 10.3 .4 .1 10.1 (.2) (.1) 9.0 .1 areas Investment % ROI ir.a. Don. & export Sales Gross Profit SARB-Div. Opar. inoome-Div. Income After Tax 18.0 4.4 14.8 4.7 15.7 .6 13.4 11.7 12.3 2.7 1.0 1.5 .8 12.6 2.3 1.0 1.3 .7 10.3 1.6 1.1 .4 .1 10.1 .9 1.1 (.2) (.1) 9.0 1.0 .9 .1 % of Salas> Gross Profit SARX-Div. Income After Tax 22.0 8.1 6.5 18.3 7.9 5.6 15.5 10.7 1.0 8.9 10.9 11.1 10.0 $ Sales/? Investment .68 .85 .66 .75 .77 Gross investment 18.0 14.8 15.7 13.4 11.7 % KOI 4.4 4.7 .6 HOTIt 1969 groaa investment drop reflects tha retirement of El Dorado ammonia plant. Major product! reported for tha Bleating Agenta product group are aa follows AH/FO pfisa. 17 -16- 0633550 WATER PCB-00039988 an/fo ($ in Millions) V.S. Don. ft Export Bales dross Profit SARB-Div. Oper. Income-Div. income After Tax 1966 8.6 2.1 .7 1.3 .7 Actual____________ Budget 1967 1968 1969 1970 9.3 7.7 8.1 1.7 .7 .8 .7 .9 .8 .9 {.2) .5 (.2) (-2) 7.0 .7 .7 Selling Price/Ton Cost of Sales/TOn 102 93 91 76 77 76 83 69 84 75 % of Sales: Gross Profit SARE-Div. Nat income 24.4 18.3 9.1 9.6 10.0 B.l 7.9 11.7 9.9 10.0 8.1 5.4 $ Sales/$ Investment .96 .93 .79 .74 .64 Gross Investment: Fixed Capital Working Capital Total 7.6 8.5 1.3 1.5 8.9 10.0 8.5 10.6 1.2 .3 9.7 10.9 10.6 .3 10.9 For Sales 0.9 10.0 9.7 10.9 10.9 % BOI - For Sales 7.9 5.0 Total Capacity - M Tons 104.9 128.7 130.0 130.0 120.0 For Sales internal Use Excess 83.9 100.0 21.0 28.7 84.4 106.6 45.6 23.4 84.6 35.4 1969 actual volume increase was result of agressive bidding in the coal market* however price was depressed resulting from oversupply of Ammonium Nitrate. 1970 budget anticipates loss of volume due to extreme low price which we have chosen not to meet* however selling price and margin will increase resulting from selling a more profitable mix and improved operating cost. 0633551 -17- WATER PCB-00039989 PESTICIDES - PRODUCT GROUP ($ in Millions) world-wide Sales Oper. Income-Div. Income After Tax 1966. 66.3 15.6 7.7 Actual 1967 1968 84.2 28.2 15.3 74.3 16.7 7.7 Budget 1969 1970 90.7 106.5 23.1 28.0 9.5 13.1 Gross Investment % ROI 81.7 108.0 111.4 119.0 136.0 9.4 14.2 6.9 8.0 9.6 W.S. Doa. A Export Sales Gross Profit Station Distribution SARB-Div. Oper. Income-Div. Inoone After Tax 59.3 26.7 1.3 8.9 16.5 8.5 76.6 40.5 1.4 10.4 28.6 15.5 67.5 32.0 1.5 13.0 17.6 8.3 82.7 42.5 .9 18.8 22.8 9.5 87.2 46.9 1.0 19.0 26.9 12.4 W of Salest Gross Profit SARB-Div. Income After Tax $ Sales/$ investment 45.0 15.0 14.3 .77 52.9 13.6 20.2 .78 47.4 19.3 12.3 .66 51.4 22.7 11.5 .77 53.8 21.8 14.2 .74 Gross Investment 76.7 98.3 101.8 107.0 117.3 * ROI 11.1 15.8 8.2 8.9 10.6 DOTSi Product group data for all yearn and major product data for. 1968, 1969 and budgat 1970, as shown in this report, fully includes activity of the retail stations. Major product data for the years 1966 and 1967 does not include the increments of income, expense and investment at the station level but does include sales at Wholesale value for materials moved through the MAC'S. Major products reported for the Pesticides product group are as followsi Avadex Avadex BW Lasso EC Lasso 10G Parathions Pace 19 20 21 22 23 Ramrod 200 Ramrod 65 wp Rogue 2,4-D Acid 2.4,5-T Acid Pens 24 25 26 27 28 0633552 -18 WATER PCB-00039990 AVADEX ($ in Millions) U.S. Dorn. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual 1967 1968 2.2 1.2 .6 .6 .3 Budget 1969 1970 3.4 .6 2.2 .4 1.1 .2 1.1 .2 .5 .1 Selling Price/gal. Cost of Sales/gal. 11.00 11.85 12.00 5.00 4.24 4.14 % of Sales i Gross Profit SARE-Div. Net Income 54.5 27.3 13.6 64.7 32.4 14.7 66.7 33.3 16.7 $ Sales/$ Investment .92 1.13 .20 Gross Investment) Fixed Capital working Capital Total 1.2 1.4 1.2 1.6 2.4 3.0 .3 .3 .6 For Sales 2.4 3.0 .6 % ROI - For Sales 12.5 16.7 16.7 Total capacities - MM gal. .3 .4 .4 For Sales internal Use Excess .2 .3 .2 .1 .1 .2 U.S. and domestic export profits on Avadex diminish as emphasis switches to the Ex U.S.A, segment of the business, in prior years Avadex was formulated in the U.S., 1970 results present the effect of the raw material (DDTC) shipped to Ex U.S. markets for upgrade. On a world-wide basis, profits on the formulated end product show a slight increase. 0633553 -19- WATER PCB-00039991 AVADKX SW ($ in Millions) y.S. Don, t. Export Sales Gross Profit SARE-Div. Oper. Income-Div. income After Tax 196S Actual 1967 1968 Budget 1969 1970 5.3 4.5 2.4 2.9 2.6 1.4 1.4 1.2 .7 1.5 1.4 ,7 .7 .7 .4 Selling Price/gal. Cost of Sales/gal. 10.60 12.17 12.63 4.80 5.18 5.14 % of Salesi Gross Profit SARE-Div. Net income 54.7 26.4 13.2 57.8 26.7 15.6 58.3 29.2 16.7 $ Sales/$ Investment .90 .59 .71 Gross investment! Fixed capital Harking Capital Total 3.0 3.4 1.8 2.9 4.2 2.0 5.9 7.6 3.8 For Sales 5.9 7.6 3.8 X ROI - For Sales 11.9 9.2 10.5 Total capacity - MM gal. .9 1.0 .6 For Sales Internal Use Excess .5 .4 .2 .4 .6 .4 U.S. and domestic export profit* on Avmdex BW diminish ss emphasis switches to the Ex U.S.A. segment of the business, in prior years Avadex BW was formulated in the U.S., 1970 results present the effect of the raw material (TDTC) shipped to Ex u.S. markets for upgrade. On a world-wide basis, profits on the formulated end product show a slight increase. 0633554 -20 WATER PCB-00039992 LASSO EC ($ in Millions) U.S. Don. & ExDort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 1967 Actual Budget 1968 1969 1970 11.3 7.2 2.7 4.5 2.1 18.0 12.9 2.7 10.2 5.0 Selling price/gal. Cost of Sales/gal. 10.72 10.65 3.92 3.02 % of Salest Gross Profit SARX-Div. Net income 63.7 23.9 18.6 71.7 15.0 27.8 $ Sales/? investment 1.19 1.78 Gross investment: Fixed capital Working Capital Total 3.4 3.4 6.1 6.7 9.5 10.1 For Sales 9.5 10.1 % ROI - For Salas 22.1 49.5 Total Capacity - MM gal. 2.8 4.9 For Salas Internal Dee Excess 1.1 1.7 1.7 3.2 1969 mi the introductory year for this herbicide Which is a close relative of Ramrod. First year sales were the largest ever achieved for any herbicide in its introductory year, it is the bright star of the future. 0633555 -21- WATER PCB-00039993 LASSO 10Q (S in Million*) U.S. Ppm. & export Sales Sross Profit SARB-Div. Oper. Inoome-Div. Income After Tax 1966 1967 1968 1969 5.4 3.B 1.2 2.6 1.2 1970 6.6 4.5 1.2 3.3 1.6 Selling Prioe/lb. Dost of Sales/lb. .44 .40 .13 .13 % of Salesi Gross Profit SARB-Div. tret Income 70.4 22.2 22.2 68.1 18.2 24.2 $ Sales/5 investment .90 1.08 Gross Investmenti Fixed Capital Working Capital Total 4.6 1.4 6.0 4.6 1.5 6.1 For Sales 6.0 6.1 % R0I - For Sales 20.0 26.2 Total capacity - MM lb. 100.0 144.0 For Sales Internal Use Excess 12.4 16.5 67.6 127.5 Lasso loo is the granular fora of Lasso and is' used mainly in the midwest. It is used by farmers Who prsfer to handle a granular herbicide. -22- 0633556 WATER PCB-00039994 PARATHION3 <$ In Millions) U.S. Dorn. Export Sales Gross Profit Station Distribution SARB-Div. Oper. Income-Div. Income After Tax Actual____________ Budget 1966. 1967 1968 1969 1970 14.1 6.8 2.2 4.6 2.4 13.3 4.1 1.8 2.3 1.3 17.3 6.4 .1 2.7 3.6 1.7 17.4 6.1 .1 2.0 4.0 1.8 16.3 6.1 .1 2.1 3.9 1.9 Selling Price/lb. Cost of Salea/lb. .57 .46 .43 .48 .29 .32 .27 .31 .44 .28 % of Salest Gross Profit SARE-Div. Net Income 48.2 15.0 17.0 30.8 13.6 9.8 37.0 15.6 9.8 35.1 11.5 10.3 37.4 12.9 11.7 $ Sales/$ Investment .56 .55 .57 .58 .54 Gross Investmenti Fixed Capital Working Capital Total 18.2 7.6 25.8 18.3 7.1 25.4 21.2 9.3 30.5 21.2 8.9 30.1 21.2 9.1 30.3 For Sales 25.0 24.2 30.5 30.1 30.3 % ROI - For Sales 9.6 5.4 5.6 6.0 6.3 Total Capacity - MM lbs. 42.0 46.5 46.5 46.0 46.0 For Sales Internal Use Excess 24.7 1.2 16.1 28.7 1.9 15.9 39.9 6.6 36.2 9.8 36.9 9.1 Parathion volume was stable in line with the amount of cotton acreage. We have budgeted stable volume and some reduction in price for 1970 even though we are attempting to increase pricing. The current controversy over persistent pesticides, e.g., DDT, could have favorable impact on parathion demand, although para thion is also subject to attack because of its high toxicity. 0633557 -23- WATER PCB-00039995 RAMROD 200 ($ in Million*) n.S. Don. & Broort Sales Gross Profit Station Distribution SARI-Div. oper. incoms-Div. Income After Tax Actual____________ Budget 196* .1967 1968 1969 1970 3.3 15.4 15.0 18.3 1.3 9.9 8.7 12.7 .8 .3 .5 2.1 2.8 3.0 .8 7.8 5.1 9.4 .5 4.3 2.5 4.3 17.6 12.1 .3 2.8 9.0 4.4 Selling Priae/lb. Cost of Sales/lb. .38 .41 .43 .39 .23 .15 .18 .12 .38 .12 % of Salaet Gross Profit SARB-Div. Net Income 39.4 15.0 15.1 64.3 13.6 27.9 58.0 18.7 16.7 69.4 16.4 23.5 68.8 15.9 25.0 $ Sales/S Investment .59 1.41 .88 .93 .90 Gross Investment) Kixed Capital (forking Capital Total 3.8 4.2 8.9 9.5 1.8 6.7 8.1 10.1 5.6 10.9 17.0 19.6 9.5 10.1 19.6 For Sales 5.6 10.9 17.0 19.6 19.6 % ROI - For Sales 8.9 3.9 14.7 21.9 22.4 Total Capacity - MM lbs. 11.0 37.3 100.0 57.6 57.6 For Sales Internal Use Excess - 8.8 37.3 35.0 46.6 2.2 65.0 11.0 46.7 10.9 Ramrod 20s ia a leading economic gras* killer in com and eoybean*. It ia expected to continue a* a major profit source for the next several years. 0633556 -24 I WATER PCB-00039996 RAMROD 65 WP (5 in Millions) p.S. Pom. & Export Sales Gross Profit Station Distribution SARB-Div. oper. inoome-Div. Inoooe After Tax 1966 1.1 .5 .2 .3 .2 1967 6.1 3.8 .8 3.0 1.7 1968 3.0 1.8 .1 .5 1.2 .5 Budget 1969 1970 4.0 3.6 2.5 2.3 1.0 .8 1.5 1.5 .7 .8 Selling Price/lb. Cost of Salse/lb. 1.11 1.39 1.30 1.13 .67 .52 .52 .42 1.13 .42 % of Salesi Gross Profit SARE-Div. Net Income 45.5 15.0 18.2 62.3 13.6 27.9 60.0 16.6 16.7 62.5 25.0 17.5 63.9 22.2 22.2 $ Salos/$ Investment .73 1.91 1.07 2.50 2.25 Gross Investmentt Fixed capital working Capital Total .9 1.0 1.2 .7 .6 2.2 1.6 .9 1.5 3.2 2.8 1.6 .7 .9 1.6 For Sales 1.5 3.2 2.8 1.6 1.6 % ROI - For Sales 13.3 53.1 17.9 43.8 50.0 Total capacity - MM lbs. 1.1 4.4 2.3 3.5 3.2 For Sales Internal Use Excess .9 4.4 2.3 3.5 .2 3.2 Salas of this product are primarily to those customers Who tank mix it with atrazine.> Soma of this will continue tout our own pre-mix of Ramrod/Atrazina will fill the growth in demand. 0633559 -25- WATER PCB-00039997 ROGUB ($ in Milliona) p.S. Dorn. 6 Export Salaa Qroaa Profit Station Distribution SAKS-Div. Opar. Incoma-oiv. Income After Tax 1966 5.1 3.6 .8 2.8 1.5 1967 1968 5.1 3.6 3.5 1.6 .1 .7 1.2 2.8 .3 1.5 .1 1969 2.9 1.3 .9 .4 1970 3.6 .8 .7 .1 (.2) Sailing Price/gal. Coat of Salea/gal. 10.20 10.20 3.00 3.20 4.50 2.50 5.01 2.73 5.01 3.95 X of Salaai Qroaa Profit SARE-Div. Nat income 70.5 1S.0 29.4 68.6 13.6 29.4 44.4 33.3 2.8 44.8 31.0 22.2 19.4 $ Salea/f Invaatmant .94 .94 .62 .60 .84 Qroaa Inveatmenti fixed Capital Working Capital Total 2.7 2.8 3.9 3.9 3.9 2.7 2.6 1.9 .9 .4 5.4 5.4 5.8 4.8 4.3 for Salaa 5.4 5.4 5.8 4.8 4.3 X ROI - For Salaa 27.8 27.8 1.7 Total Capacity - MM gal. 1.9 1.9 2.2 2.2 2.2 For Salaa Internal Uae Excess .5 .5 .8 .6 .7 1.4 1.4 1.4 1.6 1.5 At the preaent tin* thare ia no claar outlook 'for Monaanto to achieve a aala patent for thia product. Until the matter ia decided competition will continue to force pricea down. Higher coat in 1970 raflacta the atart-up of a naw DCA facility at Luling. 0633560 -26 WATER PCB-00039998 2, 4-D ACID ($ in Millions) g.s. pom. & Export Sales Gross Profit SARE-Div. Oper. income-Div. Income After Tax 1966 3.7 1.1 .6 .5 .3 Actual____________ Budget 1967 1968 1969 1970 3.7 2.5 1.8 1.6 1.1 .8 .1 (.1) .5 .5 .4 .4 .6 .3 (.3) (.5) .3 .1 t.2> (.3) Selling Price/lb. Cost of Salee/lb. .28 .29 .30 .27 .20 .20 .20 .25 .22 .24 % of Sales i Gross Profit SARE-Div. Net income 29.7 15.0 8.1 29.7 13.6 8.1 32.0 20.0 4.0 5.6 22.2 25.0 $ 9ales/$ Investment .55 .69 .56 .39 .33 Gross investment! Fixed Capital Working Capital Total 6.9 6.9 7.9 6.7 2.1 2.1 1.4 1.6 9.0 9.0 9.3 8.3 6.7 2.0 8.7 For Sales . 6.7 5.4 4.5 4.6 4.8 % ROI - For Sales 4.5 5.6 2.2 Total Capacity - mm lbs. 23.1 23.1 25.2 26.4 26.8 For Sales. Internal Use Excess 13.0 7.0 3.1 12.8 9.6 .7 8.2 15.0 2.0 6.5 4.7 15.2 7.3 5.4 14.1 The market wae depressed in 1969 due to cancellation of govern ment contracts which caused severe Industry over capacity. Profit margin is inadequate and we are evaluating our future in this business. 0633561 -27- WATER PCB-00039999 a. 4. 5-T ACID ($ in Million*) p.9. Pom, a Export Sale* Qro* Profit SARE-Div. Opar. Incoma-oiv. Income After Tax Sailing Prica/lb. Coat of Sala*/lh. 1966 l.S .5 .2 .3 .2 .83 .56 Actual Sudgat 1967 1968 1969 .3 1.0 1.2 .1 .5 .1 .4 .1 .1 .1 .85 .91 .81 .65 .45 .74 1970 1.3 (.2) .1 (.3) (.2) .69 .78 % of Sale*) Gross Profit SARE-Div. Hat Income 33.3 15.0 13.3 24.5 13.6 50.0 40.0 8.3 8.3 7.7 rin* $ Salea/$ investment .44 .60 .83 .52 Grose Investment! Fixed Capital Hocking Capital Total 3.9 3.1 2.8 2.5 .9 .1 .6 .5 4.8 3.2 3.4 3.0 2.5 .5 3.0 For Sales 3.4 .5 1.2 2.3 2.3 % KOI - For Sales 5.9 Total Capacity - MM lbs. 4.9 5.7 7.1 7.4 7.4 For Sale* internal Use Excess 1.8 .3 1.1 1.4 1.8 5.4 6.0 2.1 1.3 3.9 1.7 1.9 3.8 Due to termination of government contracts industry capacity far axcaads danand. Thi* ha* caused dapraaaad pries* Which will continua into tha naar future. Tha futura of this product will also ha affactad by pending government regulation of it* use. -28- 0633562 WATER PCB-00040000 PLANT FOODS - PRODUCT GROUP ($ in Millions) World-Wide Salas Oper. Income-Div. Income After Tax 1966 Actual____________ Budget 1967 1968 1969 1970 76.4 11.4 5.5 74.1 5.8 2.4 62.7 (3.3) (3.6) 56.9 (2.0) (2.2) 55.8 (3.3) (2.6) Gross Investment 116.1 118.1 118.5 105.7 100.0 % nor 4.7 2.0 IT.S. Dom. s, Exnort Sales Gross Profit Station Distribution SARE-Div. Oper. Income-Div. income After Tax 76.2 26.0 10.2 4.B 11.5 5.6 74.0 21.9 11.4 4.7 5.8 2.4 62.7 12.2 11.5 4.0 (3.3) (3.5) 56.9 13.5 11,0 4.5 (2.0) (2.2) 55.8 11.3 10,6 4.0 (3.3) (2.6) % of Salest Gross Profit SARE-Div. income After Tax 34.1 6.3 7.3 29.6 6.4 3.2 19.5 6.4 23.7 7.9 20.3 7.2 $ Sales/S Investment .66 .63 .53 .59 .56 Gross Investment 116.1 117.9 118.5 96.5 100.0 % SOI 4.8 2.0 NOTEi Groan investment drop in 1969 reflects retirement of El Dorado aimonia plant. NOTBt Product group data for all years and major product data for 1968. 1969 and budget 1970, as shown in this report, fully includes activity of the retail stations. Major product data for the years 1966 and 1967 do not include the increments of income, expense and investment at the station level but do include sales at wholesale value for materials moved through the mac's. Major products reported for the Plant Foods product group are as follows i Ammonium Nitrate Anhydrous Ammonia Concentrated Nitric Acid DAP (18-46-0) Pace 30 31 32 33 0633563 29- AMMDHIOM HITBATB (? in Millions) U.B. DOW. 6 Export Sales Gross Profit Station Distribution SARB-Div, Oper. Income-Div. income After Tax Selling Prioe/ton Cost of Sales/ton Actual____________ Budget 1966 1967 1968 1969 1970 15.7 5.3 .9 4.4 2.2 14.3 3.8 .9 2.9 1.2 15.0 3.4 2.4 1.0 (.2) 12.8 2.8 1.5 1.1 .2 (.2) 13.5 2.5 1.5 1.0 (.2) 52 46 44 38 35 34 34 31 41 32 % of Salesi Gross Profit SARE-Div. Net Income 33.8 6.3 14.0 26.6 6.5 8.4 22.7 6.7 21.9 8.6 18.5 7.4 $ Sales/$ investment .45 .41 .43 .41 .45 Gross Investmenti Fixed capital working Capital Total 40.2 5.5 45.7 40.8 5.0 45.8 41.0 5.3 46.3 34,6 4.4 39.0 33.1 4.2 37.3 For Sales 35.0 35.0 35.2 31.4 29.7 % R0I - For Sales 6.3 3.4 Total Capacity - M tons 481 511 630 655 655 For Sales Internal Use Excess 298 309 339 334 113 116 93 113 70 86 198 208 330 100 225 This produet will continue to grow in use on snail grain and pastures while its use on corn will decline. Small grain (for grain) is basically the only portion of the aarket affected by government programs. The 1964-70 fertilizer year experienced a 12% reduction in Wheat acres. With these trends 75% of the 2.4MM tons of the agriculturally consumed nitrate lies within a $10 freight zone of El Dorado and Luling Plants. This product has the potential to grow at the rate of 6 to 10% a year. -30- 0633564 WATER PCB-00040002 AMHYDROUS AMtPMIA ($ in Millions) U.8. Dost, & Export Sales Gross Profit Station Distribution SARE-Div. Opor. Income-Div. Income After Tax Actual____________ Budget 1966 1967 1968 1969 1970 16.3 e.2 1.0 7.2 3.6 13.4 4.3 .9 3.4 1.4 10.5 2.5 2.5 1.0 (1.0) ( .7) 9.4 1.8 2.4 1.1 (1.7) (1.0) 8.2 2.3 2.4 1.0 (1.1) ( .7) Selling Price/ton Cost of Sales/ton 61 53 52 42 30 36 39 34 50 36 5t of Sales i Gross Profit SARE-Div. Met Income 50.3 6.3 22.1 32.1 6.5 10.4 23.8 9.5 19.1 11.7 26.0 12.2 $ Salee/$ Investment .62 .54 .44 .45 .41 Gross Investment: Fixed Capital Working capital Total 62.6 5,7 66.3 63.0 4.7 67.7 65.9 3.7 69.6 55.6 3.1 58.7 53.2 3.0 56.2 For Sales 26.1 24.8 23.7 21.1 20.0 % ROI - For Sales 13.8 5.6 Total Capacity - M tons 674 874 874 644 565 For Sales Internal Use Excess & Resale 267 254 203 225 164 540 595 569 543 569 67 25 102 (124) (168) industry capacity continual to exceed demand. Monsanto must purchase amnonia since its total requirements exceed production capacity. Drop in 1969 selling price came about by the decision to eell at low contract prices to oo-producers. These co producer contracts were not renewed for 1970 and prices on regular customer sales will be at 1969 levels. 0633565 -31- WATER PCB-00040003 OOSCBMTHATED HITRIC ACID (5 In Millioft*) U.a. DOW. * KKDOrt Salas Gross Profit SARS-DiV. Opar. income-Div. Income After Tax 1466 2.5 1.0 .2 .8 .4 1967 2.1 .9 .1 .8 .4 1968 1.9 .8 .1 .7 .3 1969 1.5 .6 .1 .5 .2 1970 1.9 .8 .1 .7 .4 Sailing Prica/ton Cost of salas/ton 61 57 65 59 36 33 38 34 54 33 % of Salast gross Profit SAM-Div. Mat Inooma 40.0 8.0 16.0 42.8 4.8 19.0 42.1 5.3 15.8 40.0 6.7 13.3 42.1 5.3 21.1 $ Sales/? investment .78 .62 .63 .58 .76 gross Investment] Fixed Capital Working Capital Total 4.0 4.7 4.2 3.6 .8 .7 .7 .6 4.8 5.4 4.9 4.2 3.5 .5 4.0 For Salas 3.2 3.4 3.0 2.6 2.5 % HOI - For Sales 12.5 11.8 10.0 7.7 16.0 Total Capacity - M tons 65 71 75 75 75 For Salas Internal Ose Excess 41 37 29 25 21 21 29 22 3 13 17 28 36 29 10 Tha inaadiate outlook for this product depanda upon government uaa for dafanaa purpoaaa and Monsanto'a success at bidding for tbia buslnaas. -32- 0633566 WATER PCB-00040004 DAP (18-46-01 ($ in millions) p.9. Pom. & Export Sales Gross Profit Station Distribution SARX-Div. Oper. Income-Div. Income After Tax Selling Price/ton Cost of Sales/ton 1966 Actual____________ Budget 1967 1968 1969 1970 14.8 3.9 .9 3.0 1.5 12.1 1.7 .8 .9 .4 12.5 .5 2.7 1.0 (3.2) (1.9) 10.5 1.9 1.9 1.1 (1.1) ( .8) 12.6 2.5 1.9 1.0 (.4) (.4) 75 71 72 78 55 61 69 64 76 61 % of Salem Gross Profit SARE-Div. Net Income 26.4 6.3 10.1 14.0 6.5 3.3 4.0 18.1 8.0 10.5 19.8 7.9 $ Sales/$ Investment 1.44 1.25 .65 .61 .77 Gross Investment* Fixed capital Working capital Total 5.1 5.2 10.3 5.4 14.9 13.3 4.3 4.4 3.9 9.7 19.3 17.2 12.8 3.7 16.5 For Sales 10.3 9.7 19.3 17.2 16.5 % roi - JOr sales 14.6 4.1 Total Capacity - M tons 231 350 350 350 350 For Sales Internal Use Excess 197 171 175 135 34 179 175 215 165 185 Excess inventories were brought under control and prices increased in 1969, especially at the retail level. The lower price for 1970 is due to greater percentage of wholesale business. Monsanto is in an uncompetitive situation since it must purchase wet process acid, the basic raw material for this product. 0633567 -33- WATER PCB-00040005 ELECTRONIC PRODUCTS AND CONTROLS DIVISION Di.vllon Profitability ($ in Millions) World-Wide Sales Oper. Incame-Div. Income After Tax Actual Budget 1968 1969 1970 90.8 2.0 1.1 104.7 3.9 .7 137.9 9.9 3.8 Gross Investment 92.6 102.9 135.3 % SOI 1.2 .7 2.8 P.S. Dorn. & Export Sales Oper, Income-Div. Income After Tax Income A.T. as % of Sales $ Sales/? Investment 83.6 .7 .5 .6 .99 95.6 1.7 (.3) 126. B 7.2 2.6 (.3) 1.02 2.1 1.05 Gross Investment 84.8 93.6 120.9 % SOI Division .6 2.2 Business Group1 Advanced Technology Components Instruments Process controls 4.8 4.0 6.5 Materials 4.2 7.4 4.7 1968 does not include Investment Charge. Investment in the division's major products earned the following rates of return for actual 1969 and budget 1970> boss 4 to 6% Over 6* % of Investment 1969- 1970 15.6 17.7 18.9 28.3 65.5 54.0 Business groups are reported on the following pagesi Advanced Technology Components Instruments Page 35 36 37 ' Materials Process Controls Page 38 40 Major products reported comprise 96% of the division's invest ment in 1969 and 93% in 1970. 0633568 WATER PCB-00040006 ADVANCED TECHNOLOGY - BUSINESS GROUP ($ in Millions) World-Wide Salas Opar. Income-Div. Income After Tax Gross Investment % ROI Actual Budget I960 1969 1970 .1 (1.1) ( .5) (.6) (.4) (.8) (.4) 3.7 1.4 .6 This is ths Research and Development arm of the division. 0633569 -35- WATER PCB-00040007 COWKMmiM - BUSINESS GROUP {$ in Millions) World-Wide Sales Oper. Income-Oiv. Income After Tax 1966 Actual____________ Budget 1967 196B 1969 1970 .2 (1.5) ( .7} .8 (1.9) (1.0) 2.8 (2.0) (1.0) Cross Investment 1.0 2.2 6.3 % ROX U.S. Dom. & Bxoort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax % of Salesi Gross Profit SARE-Div. Income After Tax .2 ( .7) .8 (1.5) ( .7) .B < .4) 1.5 (1.9) (1.0) 2.8 .2 2.2 (2.0) (1.0) 400.0 187.5 7.1 78.6 05.7) ft* * $ Sales/? Investment .20 .36 Gross Investment 1.0 2.2 6.3 % ROX In 1970 the key to growth In special product* sales will be Monsanto's ability to build devices at a price competitive with other light sources. Sales are projected to grow 203K annually to 1972. in 1971-79 growth will probably occur in matrix displays. Which could out-perform misting cathode ray tuba displays. Advanced concepts visualise semiconductor light generating and detecting devioea as essential building blocks in the electronic industry. Success of this venture will depend upon an extremely fast and flexible response to rapidly developing markets. 0633570 36- WATER PCB-00040008 INSTRUMENTS - BUSINESS GROUP ($ In Millions) World-Wide Sales Oper. Income-Div. Income After Tax Gross Investment % ROI 1966 1967 Actual Budget 1968 1969 1970 2.7 (3.6) (1.3) 5.8 (5.0) (2.7) 9.4 (3.6) (1.9) 5.4 10.8 13.3 u.s. Dorn. & Bxsort Sales Gross Profit SARB-DiV. Oper. Income-Div. Income After Tax % of Sales Gross Profit SARK-Div. Income After Tax 2.6 ( .7) 2.9 (3.6) (1.8) 5.5 .2 5.3 (5.1) (2.7) 9.2 1.8 5.5 (3.7) (2.0) 111.5 3.6 96.4 19.6 60.0 (21.7) $ Salas/$ Investment .55 .53 .72 Cross investment 4.7 10.3 12.8 % HOI In 1970 a major in-house marketing effort will be completed which will more adequately define the major industry and company markets. This effort, coupled with cost controls, should enable this business to grow in a more orderly and profit-oriented fashion. In 1971-79 progress will concentrate on smaller tolerances, finer measurements and more discriminating teats. The demand for pre cision and higher reliability in components and end products will be a major trend. ET&M instrument design will be in the direction of increased accuracy and sensitivity, ease of operation and faster response times. 0633571 WATER PCB-00040009 MATERIALS - BUBIHESS GROUP ($ in Millions) World-Wide Salas Opar. Incoma-Div. Incoma Aftar Tax 1966 Actual 1967 1968 Budget 1969 1970 14.9 1.4 .7 21.0 3.7 1.5 32.8 5.3 1.8 Gross Investment 16.1 21.3 40.9 % noi 3.9 7.0 4.4 U.S. Dom. & Exoort Salas Grosa Profit SARE-Dlv. Opar. Incame-Div. income After Tax 13.4 3.3 1.6 1.5 .7 ia.e 5.6 2.2 3.4 1.4 29.6 7.7 2.9 4.6 1.6 % of Salasi Gross Profit SARE-Div. Income After Tax 24.6 13.4 5.2 30.1 li.a 7.5 26.0 9.8 5.4 $ Salas/$ Investment .ao .98 .87 Gross Investment 16.7 19.0 33.9 % ROI 4.2 7.4 4.7 Major product reported for the Materials business group is Silicon on page 39 . 0633572 WATER PCB-00040010 SILICON (5 in Millions) II.S. Dora. & Bxnort Sales Gross Profit SARE-Div, Oper. Ineome-Div. income After Tax % of Sales Gross Profit SARE-Div, Net Income After Tax 1966 Actual 1967 196S Budget 1969 1970 12.3 3.1 1.4 1.7 .9 17.6 5.3 2.1 3.2 1.3 23.3 5.5 2.6 4.9 1.7 25.2 11.4 6.5 30.1 11.9 7.4 26.5 7.2 6.0 $ Sales/$ investment .90 .99 .88 Gross Investment! Fixed Capital Working capital Total 11.1 2.6 13.7 13.0 4.7 17.7 28.5 3.6 32.1 % ROI 5.9 7.3 5.3 1970 Salas will increase 60% as facilities made available in the latter part of the year will run at capacity levels. Heavy startup costs effect 1970 margins and ROI. Additional expan sion is planned for 1971 as efforts continue on selling products with further value added to silicon. Hie semiconductor device market is expected to more than double in value by 1979. Hie dependence upon silicon in this market should not diminish since there is no equivalent competitive product for transistors, diodes or microcircuits. Silicon is the only semiconductor material used in integrated circuital this market is increasing 100% per year on e volume basis, 30% per year on a dollar basis. 0633$ 73 -39- WATER PCB-00040011 PROCESS CONTROLS - BUSINESS GROUP ($ in Millions) World-Wide Sales Oper. Jncoms-Div. Income After Tax Actual Budget 1968 1969 1970 72.9 6.B 3.4 77.1 7.7 3.3 92.9 11.0 5.3 Gross Investment 64.4 67.2 74.2 % KOI 5.3 4.9 7.2 U.S. Don, & Export Sales Gross Profit SARS-Div. Oper. Income-Div. income After Tax 67.3 27.4 22.0 5.4 2.9 70.7 28. B 22.9 5.9 2.4 95.2 35.3 26.4 8.9 4.4 % of Salest Gross Profit SARI-Div. Income After Tax 40.7 32.7 4.2 40.7 32.4 3.4 41.4 31.0 S.2 $ Sales/$ Investment 1.15 1.16 1.27 Gross Investment 59.7 60.7 67.3 % BOI 4.9 4.0 6.5 Major products reported for the Process Controls business group are as followsi Pace Control Valves Regulators 41 42 i I 0633574 40- WATER PCB-00040012 CONTROL VALVES ($ in Million*) World-Wide Sales Gross Profit SARX-Div. Oper. Inoome-Div. Income After Tax 1968 1969 37.1 16,4 11.1 5.3 2.6 39.6 17.3 11.8 5.5 2.7 1970 47.4 19.4 13.1 6.3 3.1 % of Salest Gross Profit SARS-Div. Net Income 44.2 29.9 7.0 43.7 29.8 6.8 40.9 27.6 6.5 $ Sales/S Investment .97 .96 1.08 Gross Investment) Fixed Capital working Capital Total 22.3 16.0 38.3 23.5 17.8 41.3 24.1 19.6 43.7 For Sales 38.3 41.3 43.7 % KOI - For Sales 6.8 6.5 7.1 1970i Introduce the Type 5815 Boot Valve. Establish expartisa in noise abatement. Hlrket large and powerful spring and diaphragm operator for power plant use. Introduce Teflon lined butterfly valves. Major problem is capacity for machining com ponents in butterfly bodies. 1971-79) Further improvement on "fishtail" principle. Intro duce an integrated line of ball valve* for throttling. Complete research on "super valves" for low noise. Develop machining and assenbly capabilities for broadened product lines. 0633575 -41- WATER PCB-00040013 REGUIATORS ($ in Millions) (forld-Wlde Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1968 1969 18.1 7.1 4.5 2.6 1.3 18.4 6.6 4.6 2.0 1.0 1970 19.7 7.6 4.7 2.9 1.4 % of Salesi Gross Profit SARE-Div. Not Income 39.2 24.9 7.2 35.9 25.0 5.4 38.6 23.9 7.1 $ Sales/S investment 1.12 1.08 1.17 Gross Investment) Fixed Capital (forking Capital Total 9.4 6.7 16.1 9.8 7.3 17.1 9.3 7.5 16.8 For Sales 16.1 17.1 16.8 % ROI - For Sales 8.1 5.8 8.3 1970i Establish a marketing base in Europe, improve market position by making regulators available off the shelf nation wide. 1971-79> Investigate potential of fluidics for pilot and main valves. Developaient of manufacturing in the ex-U.S.A. area is essential to the growth plan. 0633576 WATER PCB-00040014 mmaoquacws mid polymers division Division Profitability (f in Millions) World-Wide Sales Opar. Incotne-Div. Income After Tax Actual___________ Budget 1966 1967 1968 1969 1970 314.0 29.0 14.6 313.6 24.3 12.3 333.4 23.0 10.4 364.3 31.5 16.5 391.9 31.6 15.5 Gross Investment 526.3 533.8 549.7 585.8 616.7 % ROI 2.9 2.3 1.9 2.9 2.5 0.8. DOW. & Export Sales Opar. mcome-Oiv. Income After Tax 260.2 25B.2 272.2 294.2 27.0 23.5 23.6 27.8 14.0 12.4 10.8 13.8 302.8 25.8 11.9 me. A.T. as % of Sales $ Sales/$ investment 5.4 4.8 4.0 4.7 .56 .56 .58 .60 3.9 .60 Gross Investment 466.0 458.8 467.2 493.7 505.8 % ROI Division 3.0 2.7 2.3 2.8 Product Groupi ethylene & Oo-Products 5.3 1.8 Mineral Resources Monomers 2.7 2.8 3.7 3.4 Polymers 2.9 .6 1.6 Production & Rxplor. 5.6 6.7 6.9 7.1 Refinery & Marketing 2.4 3.0 2.3 2.4 2.4 1.0 4.1 1.5 3.9 2.4 Investment in the division'a major products sarnsd tbs following rates of return for actual 1969 and budget 1970t Loss 0 to 4% 4 to 6% Over 6X % of investment 1969 1970 14.5 11.7 60.5 73.3 7.2 13.4 17.8 1.6 Product groups are reported on the following pageat Ethylene & Co-Prod. Mineral Resources Monomers Pace 44 45 46 Polymers Production a Explor. Refinery & Marketing Page 54 62 63 Major products reported comprise lOOJt of the division's invest ment in 1969 and 1970. 0633577 -43- WATER PCB-00040015 gTHYLEHB & OP -PRODUCTS - PRODUCT GROUP ($ in Millions) World-Wide Sales Oper. mcome-Div. Income After Tax Gross Investment % HOI Actual Budget 1966 1967 i960 1969 1970 20.5 ( .4) ( .3) 25.8 26.8 3.2 1.6 30.4 5.3 24.6 1.6 .5 27.4 1.8 30.8 ( .1) 39.2 32.5 .8 .4 38.3 1.0 0.8. Dorn. 6 Export Sales Gross Profit SAM--Div. Oper. mcome-Div. Income After Tax 20.5 .7 1.1 ( .4) ( .3) 26.8 4.3 1.1 3.2 1.6 24.6 2.8 1.2 1.6 .5 30.8 1.2 1.2 ( .1) 32.5 2.1 1.3 .8 .4 Ethylene Sell. Price/lb. .039 Ethylene Cost of Sales/lb . .034 .039 .029 .031 .024 .030 .027 .029 .026 % of Salesi Gross Profit SAM-DiV. Income After Tax 3.4 16.0 11.4 3.9 6.5 5.4 4.1 4.9 3.9 4.0 6.0 2.0 1.2 $ Sales/5 investment .79 .88 .90 .79 .85 Grose inveetmenti Fixed Capital Working Capital Total 86.2 89.1 4.7 93.8 92.6 3.3 95.9 97.5 2.3 99.6 96.3 2.5 98.8 For Sales 25.8 30.4 27.4 39.2 38.3 % ROI - For Sales 5.3 1.8 1.0 Total Capacity Sthylane- MM lba. 610.0 707.0 690.0 762.0 741.0 For sales - Sthylane internal Use Excess 125.7 123.0 57.0 224.6 290.0 549.9 564.0 633.0 587.0 511.0 (65.6) 20.0 (49.6) (60.0) The major depressant on 1969 profits was a 204/bbl. increase in raw materials. Product prices were generally steady to firming. A major effect on future profits could result from actions on oil import rules with the outlook presently en couraging. ways to improve pattern through greater co-produc tion of fuels are also receiving emphasis. 0633578 fOHOinaS - PRODUCT GBOPP ($ in Millions) World-Wide Sales Oper. Income-Div. Income After Tax Actual____________ Budget 1966 1967 1968 1969 1970 59.4 7.1 3.6 54.0 6.2 3.1 57.1 9.1 3.9 61.0 10.2 3.9 64.7 9.9 4.4 Gross Investment 126.0 102.2 101.5 118.1 112.4 % ROI 2.9 3.0 3.8 3.3 3.9 p.S. Dow. & Export Sales Gross Profit SARB-Div. Oper. Income-Div. income After Tax 57.0 10.1 3.5 6.6 3.3 51.0 9.0 3.4 5.6 2.7 53.8 11.4 2.9 8.5 3.6 57.2 13.0 3.5 9.5 3.7 53.5 12.6 3.9 8.7 3.7 It of Salest Gross Profit SARB-Div. Inaome After Tax 17.7 6.1 5.8 17.6 6.7 5.3 21.2 5.4 6.7 22.7 6.1 6.5 23.6 7.3 6.9 $ Salea/$ Investment .47 .53 .56 .53 .59 Gross Investment 121.1 97.0 96.7 107.5 90.9 % ROI 2.7 2.8 3.7 3.4 4.1 Major products reported for Monomers product group are as followsi Pace Acetic Acid Acrylonitrile Butadiene Methanol Styrene Monomer Vinyl Acetate Vinyl Chloride 47 48 49 50 51 52 S3 0633580 WATER PCB-00040017 ACETIC ACID (5 In Hilliona) u.9. Dob. & Export Salea Grose Profit SARS-Div. Oper. Income-Div. Income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 1.3 ( .1) .4 ( .5) ( .4) Selling Price/lb. Coat of Salea/lb. .053 .057 % of Salesi Gross Profit SARE-Div. Net Income 30.8 $ Sales/$ Investment .17 Gross Investment] Fixed capital Working Capital Total 2.2 8.8 .8 2.2 9.6 For sales 7.5 % ROI - For Sales Total Capacity - MM lbs. 125.0 For Sales Internal Use Excess 24.0 71.9 29.1 1970 will mark the entry into acetic acid manufacture by Monsanto. A new Monsanto-developed process will be used Which is expected to be the low cost method of making acetic acid. 1970 budget reflects the startup expenses and low volume of production. Profitability is projected in 1971 with higher volume and lower coats after the 1970 startup period. 0633581 -47- WATER PCB-00040018 ACHKXOBITRILB ($ In Millions) P.S. Pom. A Export Sales Gross Profit SARK-Div. Oper. Income-Div. Income After Tax Actual____________ Budget 1966 1967 1968 1969 1970 16.8 1.0 1.4 ( .4) ( .5) 11.6 .6 1.2 C .6) ( .5) 21.6 4.5 1.1 3.4 1.3 25.8 6.a 1.1 5.7 2.2 17.4 5.6 1.3 4.3 1.8 Selling Prica/lb. Cost of Sales/lb. .122 .116 .121 .110 .115 .091 .120 .086 .10B .076 % of Salesi Gross Profit SARK-Div. Net Income 6.0 5.2 20.8 26.4 8.3 10.3 5.1 4.3 6.0 8.5 32.2 7.5 10.3 $ Sales/$ Investment .31 .32 .47 .44 .55 Gross Investment: Fixed Capital Working capital Total 99.4 83.1 8.5 91.6 91.6 100.6 6.5 12.4 98.1 113.0 60.5 12.3 72.8 For Sales 55.0 36.5 45.7 58.5 31.4 % KOI - For Sales 2.8 3.8 5.7 Total Capacity - MM lba. 357.5 429.6 429.6 509.6 445.9 For Sales Internal Use Excess 135.0 95.5 185.8 217.1 131.1 195.3 248.7 249.9 91.4 138.8 (4.9) 42.6 161.4 272.8 11.7 The 1970 shutdown of tha high coat high capital Texas City plant and startup of tha new Seal Sands. England, plant will increase the rate of profit improvement in AH. 1971 will sea further profit improvement with all AN facilities at capacity operation. Programs are underway to improve onstream time and reduce cost at the Chocolate Bayou plant by reduction in the fouling of equipment caused by polymer. Additional capa city is needed and planned for 1972. Monsanto will be short of acrylonitrile until this new capacity is available. 0633582 BUTA.DIKNB (9 in Millions) u.s. DOm. & Exoort Sales Cross Profit SARB-Div. Oper. Income-Div. Income After Tax 1966 8.3 1.4 .5 .9 .4 1967 1968 9.0 8.3 1.2 .8 .5 .5 .7 .3 .3 1969 7.3 .6 .5 .1 1970 8.3 .8 .4 .4 .2 Selling Price/lb. Cost of Sales/lb. .086 .072 .082 .071 .078 .070 .076 .070 .075 .068 % of Selesi Gross Profit SARE-Div. Ret income 16.9 13.3 9.6 8.2 6.0 5.6 6.0 6.a 4.8 3.3 9.6 4.8 2.4 $ Sales/9 Investment .62 .73 .67 .65 .70 Gross Investment> Fixed Capital working Capital Total 13.9 11.3 1.5 12.8 11.8 1.8 13.6 11.5 1.5 13.0 11.8 1.9 13.7 For Sales 13.3 12.3 12.4 11.2 11.8 % roi - For Sales 3.0 2.4 1.7 Total Capacity - MM lbs. 95.3 104.4 112.5 126.7 131.5 For Sales internal Uaa Excess 95.6 6.2 (6.5) 111.8 108.3 6.6 13.4 (14.0) (9.2) 96.2 22.3 8.2 111.0 20.4 .1 Butadiene will oontinua to ba marginally profitable dua to tba total economic situation in our Primary Petrochemical inter mediates. Improved recovery of butadiene from the 04 feedstock at Chocolate Bayou is required to achieve better profitability. Continued erosion of price is probable due to imports from Japan and Burope, but at a slightly slower rats than in the past, under foreseeable circumstances wo do not expect butadiene to achieve an acceptable level of profitability. 06335B3 -49- WATER PCB-00040020 MOTHAHOL (9 in Millions) U.3. DO*. & BXDOrt Salas Gross Profit SARX-Div, Oper. Income-Div. income After Tax Selling Price/lb. Cost of Sales/lb. Aetna! Budget 1966 1967 1968 1969 1970 .8 .2 .2 .1 .034 .025 .1 .040 .022 .2 .027 .024 .1 .5 .1 ( .1) ( .1) .028 .018 .018 .019 % of Salesi Gross Profit SARX-Div. Sat income 25.0 12.5 20.0 $ Sales/$ investment .89 .08 1.00 .17 .31 Gross investment: Pixed Capital working Capital Total 8.3 7.4 11.0 13.6 1.0 .6 .5 .7 5.9 9.3 8.0 11.5 14.3 For Sales .9 1.3 .2 .6 1.6 % ROI - For Sales 11.1 Total Capacity - MM lbs. 86.4 151.2 183.0 183.0 338.9 For Sales Internal Use Excess 22.6 1.4 3.4 2.3 30.0 192.3 187.1 220.0 245.5 324.4 (128.5) (37.3) (40.4) (64.8) (is. s: 1970 will see the shutdown of our old small methanol plant and the startup of our new large one. We should than be one of the low cost producers of methanol with a 100M4 gallon plant based on now technology. 1970 budget reflects the startup expenses and low production output from the new unit. 1971 will show considerable improvement. Because of the major plans of the Inorganic Division in NTA, we are projecting that they will continue to be a large net buyer of methanol after startup of the new plant. 0633504 STYRENE MOHOMER ($ in Millions) U.S. Dorn. & EXDort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1966 Actual 1967 1968 Budget 1969 1970 26.6 7.3 1.4 5.9 3.3 26.1 7.1 1.5 5.6 3.0 22.4 6.3 1.2 5.1 2.4 22.5 5.6 1.2 4.4 1.8 23.4 6.2 1.6 4.6 2.2 .076 .055 .074 .053 .064 .048 .063 .048 .064 .047 % of Sales: Gross Profit SARE-Div. Net Income 27.4 5.3 12.4 27.2 5.7 11.5 28.1 5.4 10.7 24.9 5.3 8.0 26.5 6.a 9.4 $ Sales/? investment .65 .70 .63 .63 .64 Gross Investment: Fixed Capital Working Capital Total For Sales 70.9 41.1 59.2 10.0 69.2 37.5 60.1 10.2 70.3 35.8 59.5 9.8 69.3 35.7 64.7 11.5 76.2 36.5 % ROI - For Sales 8.0 8.0 6.7 5.0 6.0 Total Capacity - mm lbs. 650.0 675,0 750.0 750.0 750.0 For Sales Internal Use Excess 316.0 323.3 364,1 395.0 377.5 348.1 380.4 421.5 460.6 526.0 (14.1) (28.7) (35.6)(105.6) (153.5) Profitability declined in 1969 primarily due to price erosion even though the price decline was smallest in years. 1970 will be an improvement due to higher volume and better costs. Profitability of styrene will fluctuate until 1972 when a major capacity plant utilizing improved technology will be onstream. These facilities should produce styrene at the lowest cost of any facilities in the world. 1971 profits will suffer due to startup and writeoff expenses associated with shutdown of old facilities and startup of new facilities. We will maintain a position in the European market (to our captive outlets) via an exchange with BASF. With the increased capacity in 1972 plans are already being imple mented to achieve a bigger share of the U.S. market, 0633585 -51- WATER PCB-00040022 VIMVL ACETATE ($ in Millions) IJ-s. Dorn. & Exoort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 1.4 .1 .1 Actual____________ Budget 1967 1968 1969 1970 .5 .1 .1 .1 *4 ( .i) Selling Price/lb. Cost of Sales/lb. .102 .093 .111 .092 .105 .092 .092 .136 .088 .086 % Salest Gross Profit SARE-Div. Net Income 7.1 20.0 20.0 $ Sales/? investment .47 .71 .50 .25 Gross Investmenti Fixed Capital working capital Total 12.2 11.8 .8 12.6 12.5 1.0 13.5 13.9 1.1 15.0 18.5 1.7 20.2 For Sales 3.0 .7 .2 1.1 1.6 % ROI - For Sales Total Capacity - MM lbs. 57.6 65.0 70.0 85.0 35.4 For Sales Internal Use Excess 14.0 4.1 .8 .1 55.4 100.7 105.1 105.6 (11.8) (39.8) (35.9) (20.7) 4.0 116.0 (84.6) we will shut down our VAN manufacturing facilities in mid-1970. Our requirements will be obtained by purchase and by having our acetic acid converted to vinyl acetate. A modest position in the market place will be reestablished after having withdrawn due to lack of capacity. 1970 budget reflects the cost of shut down of existing facilities plus a share of the acetic acid startup costs. 1971 results will show improvement due to lower acid costa. 0633586 WATER PCB-00040023 VINYL CHLORIDE {$ in Millions) U.S. Dom. & Sxoort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1966 Actual 1967 1968 1969 1970 3.1 .1 .2 ( .1) 3.7 .1 ( .1) ( .1) 1.2 (.2) .1 (.3) (.1) 1.5 .7 ( .7) ( .3) 2.2 .1 .1 .065 .064 .036 .056 .052 .058 .042 .043 .041 .039 % of Sales: Gross Profit SARE-Div. Net income 3.2 4.5 6.5 2.7 8.3 46.7 $ Sales/? Investment .40 .43 .50 3.75 4.40 Gross Investment: Fixed Capital Working capital Total 22.8 11.0 .1 .1 3.2 1.1 .3 .4 25.4 26.0 12.1 .4 .5 For Sales 7.8 8.7 2.4 .4 .5 % ROI - For Sales Total Capacity - MM lbs. 138.0 145.0 159.6 For Sales Internal Use Excess 35.8 48.8 23.6 130.5 111.0 129.0 (28.3) (14.8) 7.0 36.5 52.6 (36.5) (52.6) we remain in the merchant market to sell VCM in excess of captive requirements to assure our captive use of VCM in PVC being obtained at the lowest possible cost. Because of high technical costs associated with our work on the oxidative chlorination process, our profitability has been negative. A decline in technical expenses is expected this year. Royalty income is expected in 1971 from the sale of technology which will recoup much of these technical expenses. Further licensing of our process will result in some profit accruing from this activity. 0633567 -53- WATER PCB-00040024 POLYMERS ~ PRODUCT GROUP ($ In Millions) World-Wide Sales Oper. Income-Div. Income After Tax 1966 Actual 1967 1968 Budget 1969 1970 159.6 12.2 5.7 149.6 2.4 .7 162.8 182.6 .7 9.1 (.7) 5.9 199.1 13.0 6.3 Gross Investment 242.1 268.1 285.1 290.8 322.2 % ROI U.S. Dora. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 2.4 .3 2.0 2.0 106.4 22.0 11.3 10.7 5.4 95.2 14.8 12.5 2.3 1.2 103.1 14.9 13.0 1.9 114.3 19.7 13.6 6.1 3.4 118.7 22.8 14.4 8.4 3.4 % of Salest Gross Profit SARE-Div. Income After Tax 20.7 10.6 5.1 15.5 13.1 1.3 14.5 12.6 17.2 11.9 3.0 19.2 12.1 2.9 C**D $ Sales/$ Investment .57 .50 .55 .51 Gross Investment 186.3 198.3 207.4 209.3 232.8 % ROI 2.9 .6 1.6 1.5 Major products reported for Polymers product group are as followsi Pace H.D.P.E. L.D.P.E. Lustran Lustrex Nylon Resina Opalon Ultron 55' 56 57 58 59 60 61 -54- 0633588 WATER PCB-00040025 H.D.P.E. ($ in Millions) U.S. Dorn. & Extort Soles Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 3.9 .7 .5 .2 .1 Actual____________ Budget 1967 1968 1969 1970 2.9 4.0 4.1 .6 1.0 (.1) .5 .6 .8 9.2 .2 1.9 .1 .4 (.9) (1.7) (.5) (1.3) Selling Price/lb. Cost of Sales/lb. .139 .113 .151 .120 .137 .102 .125 .129 .113 .111 % of Sales: Gross Profit SARE-Div. Net Income 17.9 12.8 2.6 20.7 17.2 25.0 15.0 19.5 2.2 20.7 $ Salea/$ investment .54 .44 .48 .35 .44 Gross Investment: Fixed Capital Working Capital Total 17.5 17.2 2.2 19.4 19.5 1.6 21.1 28.6 2.4 31.0 34.9 3.1 38.0 CD For Sales 7.2 6.6 11.7 21.0 % ROI - For Sales 1.4 Total Capacity - MM lbs. 53.4 70.0 82.5 89.1 163.0 For Sales Internal Use Excess 28.1 36.0 (10.7) 19.5 42.0 8.5 29.3 48.5 4.7 31.8 43.3 14.0 81.8 54.5 26.7 Operating income was $Q.5MM lower than budget in 1969. Sales were only $4.1MM vs. a budget of $7.6MM. Plant output was limited to 74.8mm lbs. by late completion of a 10MM lbs. debottlenecking project, interferences from bine 3 installation, mechanical problems in densification equipment, and product development work in the plant. Packaging Division was partially supplied in 1969 by use of purchased resin in order to develop new products in the plant and build markets prior to bine 3 startup. Line 3 was mechanically complete in Dec., 1969, and 87DM lbs, of resin were produced. In 1970, sales budget sharply increases to $9.2MM vs. $4.1MM actual sales in 1969 but startup charges and volume variance will result in a loss in operating income of $1.7MM. 0633689 WATER PCB-00040026 L.P.P.E. ($ in Millions) U.S. Dora. & Exoort Sales Gross Profit SARE-Div. Oper. income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. % of Salesi Gross Profit SARE-Div. Net Income $ Sales/? Investment 1966 Actual____________ Budget 1967 1968 1969 1970 20.5 6.1 2.0 4.1 2.3 15.4 2.6 1.9 .7 .4 13.9 .4 1.7 (1.3) ( .7) 14.5 1.3 1.0 ,3 1.6 (.3) .2 (.5) .2 .165 .116 .135 .112 .105 .102 .110 .100 29.8 9.8 11.2 .55 16.9 12.3 2.6 .42 2.9 12.2 .37 9.0 6.9 11.0 .41 Gross Investment: Fixed Capital Working Capital Total 38.6 33.7 4.6 38.3 33.1 6.1 39.2 32.4 5.1 37.5 For Sales 37.1 36.6 37.7 35.8 % ROi - For Soles 6.2 1.1 .8 Total Capacity - MM lbs. 120.4 134.6 140.3 139.5 26.5 .8 27.3 27.3 .1 For Sales Internal Use Excess 124.0 114.2 5.6 5.1 (9.2) 15.3 132.2 5.8 2.3 132.9 5.1 1.5 Slightly higher than budget sales prices were partially offset by over-budget COGS. Supply-demand balance tightened during 1969 and resulted in inventory reduction of 9MM lbs. Sals of our ldpe business to Northern Petrochemical Co. was completed in August. 1969. The LOPE plant will be operated by Monsanto for Northern Petrochemical Co. for 2 - 2-1/2 years under a conversion agree ment beginning January 1, 1970. Sales price for the business was 54.75MM. Operating income (Div.) in 1969 was $.2MM over budget prior to income from sale of the business. 1970 operating income is budgeted at $.5MM loss due primarily to accelerated depreciation of the LDPE facilities. 0633590 LUSTKAN <$ in Millions) U.S. Dom, & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Coat of Sales/lb. 1966 Actual_____________ Budget 1967 1968 1969 1970 18.2 4.9 2.8 2.1 .9 16.3 2.8 3.5 (.7) (.4) 22.1 5.5 4.0 1.5 .2 28.6 6.7 4.4 2.3 .3 34.6 9.2 4.2 5.0 1.9 .286 .209 .269 ,222 .252 .189 .233 .178 .231 .169 % of Salesj Gross Profit SARE-Div. Net Income $ Sales/? Investment 26.9 15.4 4.9 .46 17.2 21.5 .39 24.9 18.1 .9 .43 23.4 15.4 1.0 .49 26.6 12.1 5.5 .57 Gross Investment: Fixed Capital Working Capital Total 39.8 36.2 7.2 43.4 42.0 10.0 52.0 47.9 12.1 60.0 51.9 12.3 64.2 Fbr Sales 39.4 42.3 50.5 58.6 60.7 % ROI - For Sales 2.3 Total Capacity - MM lbs. (incl. Technical Grade) 66.3 90.7 .4 .5 93.4 137.4 3.1 168.6 Fbr Sales Internal Ose Excess 63.5 2.8 60.7 4.5 25.5 87.8 122.6 6.7 5.7 (1.1) 9.1 150.0 10.5 8.1 The major Lustran sales growth which began in 1968 is expected to continue through 1970, as the newer mstrans are qualifying broadly across major molding markets. Although the newer markets require more expensive formulations, cost improvements beyond those forecasted are expected as major technical resources are devoted to these problems. The industry supply-demand balance indicates overcapacity Which will keep pressure on ABS prices throughout the year. However, the growth rate continues at a 20-25% increase per year. Developing Monsanto expansions with low cost facilities in 1971-73 indicate a continuing improvement in Lustran returns over the next five years. 0633591 WATER PCB-00040028 LPSTREX ($ in Millions) U.S. Dorn. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 39.4 8.0 3.1 4.9 2.6 39.0 7.2 3.2 4.0 1.9 40.2 6.3 3.2 3.1 1.3 43.4 8.8 3.9 4.9 2.1 46.3 8.6 4.3 4.3 1.9 Selling Price/lb. Cost of Sales/lb. .144 .115 .145 .119 .137 .116 .141 .113 .137 .111 % of Salesi Gross Profit SARE-DiV. Net income 20.3 7.9 6.6 18.5 8.2 4,9 15.7 8.0 3.2 20.3 9.0 4,8 18.6 9.3 4.1 $ Sales/$ Investment Gross Investments Fixed capital Working Capital Total For Sales .69 .59 .57 .62 .61 61.6 57.1 60.2 13.0 73.3 66.4 64.7 15.3 80.0 70.5 66.2 16.0 82.2 69.5 73.6 16.0 89.6 76.0 % ROI - For Sales Total Capacity - MM lbs. 4.6 2.9 1.8 3.0 345.4 348.0 377.9 397,6 2.5 424.7 For Sales internal Use Excess 273.7 31.7 40.0 268.0 40.5 39.5 293.2 47.9 36.8 307.5 54.9 35.2 338.6 66.0 20.1 Developing Monsanto expansions with the lowest cost facilities in 1972-74 continues to look very promising and indicates a-bright future. The 10% growth of the polystyrene market in the U.S. is expected to continue into the 1970's. Hew markets in furniture, foam packaging, disposable food packing items, and bathroom fixtures are expanding rapidly and, barring a recession, could cause the growth rate to exceed 10%. The present balanced demand-supply situation should create an atmosphere for stable prices. Announced expansions will keep the supply-demand in balance. 0633592 WATER PCB-00040029 NYLON RESINS ($ in Millions) U.S. Don. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 1.2 .5 .3 .2 .1 Actual 1967 1968 1.6 3.1 .8 1.3 .5 .4 .3 .9 .2 .4 Budget 1969 1970 4.1 6.5 1.8 3.1 .4 .8 1.4 2.3 .6 1.2 Selling Price/lb. Cost of Sales/lb. .705 .409 .693 .389 .717 .375 % of Sales: Gross Profit SARE-Div. Net Income 41.7 25.0 8.3 50.0 31.3 12.5 41.9 12.9 12.9 43.9 9.8 14.6 47.7 12.3 18.5 $ Sales/$ Investment .67 .47 .65 .71 .83 Gross Investment: Fixed Capital Working capital Total 2.8 4.1 4.8 .6 .7 1.0 1.8 3.4 4.8 5.8 6.1 1.7 7.8 For Sales l.a 3.4 4.8 5.8 7.8 % ROI - For Sales 5.6 5.9 8.3 10.3 15.4 Total Capacity - MM lbs. *** * For Sales Internal Use Excess 2.1 4.4 5.9 9.0 Material produced in mu se equipment. Nylon Resins continued its rapid growth pattern in both sales and income in 1969. Nylon molding resin owes its good profitability due to its specialty position in the market. Monsanto's position is built on the Textile Division's large nylon fiber divisor, we anticipate con tinued steady growth in both sales and profit. However, leverage on the division's total performance is currently limited. Growth rate of the nylon resin market is relatively low and DuPont's long entrenched position makes Bales penetration difficult. We have initiated technical efforts to develop improved products in order to increase our participation. 0633593 -59- WATER PCB-00040030 OPALON ($ in Millions) o.l. Dorn. & Exnort Salas Gross Profit SARX-Div. Opsr. Incoma-Div, Income After Tex Selling Price/lb. Cost of Sales/lb. Actual____________ Budget 1966, 1967 1968 1969 1970 18.8 1.6 2.2 (.6) (.A) 15.9 .7 2.5 U.8) ( .7) 15.9 .3 2.7 {2.4) (1.0) 14.8 .8 2.8 (2.0) ( .7) 17.0 1.4 2.6 (1.2) ( .5) .165 .151 .158 .151 .158 .155 .151 .142 .155 .142 % of Salesi Gross Profit SXRB-Div. Nat Inooma 8.5 11.7 4.4 15.7 1.9 17.0 5.4 18.9 8.2 15.3 $ Sales/$ Investment .53 .47 .64 .80 .59 Gross Investmenti Fixed Capital Working Capital Total 35.5 27.3 7.0 34.3 20.3 5.9 26.2 12.6 6.7 19.3' 23.8 6.4 30.2 For Sales 35.3 33.6 25.0 18.5 20.7 * ROI - For Sales Total Capacity - MM lbs. 121.1 106.0 106.0 113.5 115.4 For Sales Internal Use Excess 113.7 1.8 5.6 100.7 2.4 2.9 100.5 3.1 2.4 98.3 3.1 12.1 109.8 6.6 (1.0) Homopolymer raain supply-demand balance tightened significantly and prices finned. Neither rigid compounds for bottles nor paste sales materialized aa expected due to extended qualifi cation testing for bottles and automotive turndown for paste. SARK was over budget due to high CEP and excess development charges from our new project activity. Longer term plans include complete renovation of the PVC manufac turing facilities utilizing very large scale, low cost procssses and equipment. 60I 0633594 WATER PCB-00040031 ULTRON (5 in Millions} tt.S. Dom. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. % of Sales) Gross Profit SARE-Div. Net Income 1966 Actual____________ Budget . 1967 1968 1969 1970 6.2 .2 .4 (.2) (.2) 6.5 .1 .4 (.3) (.2) 6.9 .1 .4 ( .3) ( .2) 7.7 .4 .3 .1 8.2 .6 .4 .2 .281 .271 .285 .281 .285 .281 .283 .267 .288 .267 3.2 1.5 1.4 5.2 6.6 6.2 5.8 3.9 1.3 7.3 4.9 2.4 $ Sales/? Investment .70 .69 .65 .82 .73 Gross investment) Fixed Capital Working Capital Total For Sales 7.7 8.5 7.0 9.0 1.7 2.1 2.4 2.3 8.9 9.4 10.6 9.4 11.3 8.9 9.4 10.6 9.4 11.3 % ROI - For Sales Total Capacity - MM lbs. 22.0 23.5 21.6 24.0 26.5 For Sales Internal Use Excess 22.0 22.8 .7 24.2 27.2 <2.6) (3.2) 28.3 (1.8) The film arid sheeting market continued firm throughout 1969. Pricing was relatively firm except for one major downward re negotiation. Continued softness in the automotive and housing areas will hurt film-sheet volume in 1970. Longer term plans include upgrading this operation with very large, low cost facilities. 0633595 -61- WATER PCB-00040032 PRODUCTION & EXPLORATION - PRODUCT GROUP ($ in Millions) World-Wide Sales Oper. Incoue-Div. Income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 26.1 6.8 4.4 30.1 8.5 5.3 30.0 8.9 5.7 29.1 9.3 5.8 30.0 5.2 3.3 Cross Investment % RQI U.B. Dos, & Export Sales Cross Profit SARE-Div. Depletion Credit Oper. Income-Div. Income After Tax 78.3 5.6 79.2 6.7 82.7 6.9 82.0 7.1 85.7 3.9 26.1 5.0 .7 2.5 6.8 4.4 30.1 6.6 .3 2.2 8.5 5.3 30.0 5.6 .2 3.3 8.9 5.7 29.1 6.9 .2 2.6 9.3 5.8 30.0 3.5 .2 2.0 5.3 3.3 % of Sales) Gross Profit SARE-Div. Income After Tax 19.2 2.7 16.1 21.9 1.0 7.6 19.3 .7 19.0 23.7 .7 19.9 11.7 .7 11.0 $ Sales/? Investment .33 .38 .36 .35 .35 Gross Investment) Fixed capital Working Capital Total 78.3 77.4 1.6 79.2 81.0 1.7 82.7 78.4 3.6 82.0 83.4 2.3 85.7 % ROI - For Sales 5.6 6.7 6.9 7.1 3.9 Sales-Crude Oil - MM Bbls . 6.6 Natural Gaa - MM MCF L.P.G. - MM Bbla. 44.7 .8 7.1 53.4 .8 7.1 55.2 .8 6.5 57.6 .9 6.6 60.6 .9 1969 sales were substantially under 1969 but net income was substantially over budget in spite of the sales short-fall. Crude price increase and gas volume increase were insufficient to offset crude volume variance, resulting in the overall sales decrease. The reversal of a planned $1.5MM foreign exploration accrual had the most significant effect on income causing a reduction of cost of goods sold. Net income for 1970 will be down substantially (43%). as a result of an expansion of foreign exploration activities and the 1969 roll forward ($1.5MM mentioned above) and the reduc tion in the percentage depletion area of 27-1/2% to 22%. WATER PCB-00040033 REFINERY & MARKETING - PRODUCT GROUP ($ in Millions) World-Wide Sales Oper. Inoome-Div. Income After Tax 1966 Actual 1967 1968 Budget 1969 1970 60.0 3.3 1.3 64.7 3.9 1.6 69.2 3.2 1.2 72.6 3.4 1.3 73.2 3.2 1.4 Gross Investment 54.0 53.9 53.0 54.1 57.6 % ROI 2.4 3.0 2.3 2.4 2.4 U.S. Dom. & Export Sales Gross Profit Station Distribution SARE-Div. Oper. Income-Div. Income After Tax 60.0 10.9 3.5 4.1 3.3 1.3 64.7 12.6 4.6 4.1 3.9 1.6 69.2 12.2 5.3 3.7 3.2 1.2 72.6 13.7 6.5 3.8 3.4 1.3 73.2 13.6 6.7 3.7 3.2 1.4 % of Salesi Gross Profit SARE-Div. Income After Tax 13.2 6.8 2.2 19.5 6.3 2.5 17.6 5.3 1.7 13.9 5.2 1.8 18.5 5.1 1.9 $ Sales/$ Investment 1.11 1.20 1.31 1.34 1.27 Gross Investment 54.0 53.9 53.0 54.1 57,6 % ROI 2.4 3.0 2.3 2.4 2.4 Major products reported for Refinery & Marketing product group are as follows> Marketing Refinery Isas. 64 65 0633597 -63- WATER PCB-00040034 MARKETING <$ in Millions) U.S. Dom. & Exoort Sales Gross Profit Station Distribution SARE-Div. Oper. income-Div. Income After Tax 1966 1967 1968 1969 1970 28.7 4.2 3.5 2.6 (1.9) (1.3) 26.1 5.4 4.6 2.7 (1.9) (1.2) 30.4 6.8 5.3 2.3 (.8) (.5) 35.4 6.3 6.5 2.4 (.6) (.3) 37.6 9.2 6.7 2.4 .1 (.1) Selling Price/Gal. Cost of Sales/Gal. .145 .124 .157 .127 .159 .124 .166 .127 .170 .126 * of Salesi Gross Profit SARE-Div. Net Income 14.6 9.1 19.2 9.6 22.4 7.6 23.4 6.8 24.5 6.3 .3 $ Salea/5 Investment 1.72 1.69 1.90 2.22 2.08 Gross Investmenti Fixed Capital Working Capital Total 16.7 12.9 3.7 16.6 12.4 3.6 16.0 12.7 3.2 15.9 14.0 4.1 18.1 For Sales 16.7 16.6 16.0 15.9 18.1 * ROI - For Sales Sales - MM Gal. 197.3 178.4 190.8 212.9 220.7 The 1969 improvement was entirely attributable to a 12* increase in sales volume per dollar of investment! as selling prices rose almost enough to offset increased transfer prices from the refinery. Total volume increase occurred at company-operated stations with a substantial portion resulting from meeting retail prices posted by independents in many areas. volume gains should level off to industry average in 1970, but improved prices are expected to bring about a slight increase in net income. Ho significant improvement is forecasted for the future. 0633596 REFINERY ($ in Millions) tl.S. Dorn. & Exoort Sales Gross Profit SARB-Div. Oper. Income-Div. Income After Tax 1966 Actual 1967 1968 1969 54.2 6.7 1.5 5.2 2.6 57.6 7.2 1.4 5.S 2.8 60.7 5.4 1.3 4.1 1.7 62.5 5.4 1.4 4.0 1.6 1970 61.7 4.4 1.3 3.1 1.5 Selling Priee/Bbl. cost of Sales/Bbl. 4.27 3.76 4.39 3.86 4.34 3.98 4.42 4.06 4.48 4.18 % of Saless Gross Profit SARE-Dlv. Net income 12.4 12.5 8.9 8.6 2.8 2.4 2.1 2.2 4.8 4.9 2.8 2.6 7.1 2.1 2.4 $ Sales/$ Investment 1.45 1.54 1.64 1.64 1.56 Gross Investment! Fixed Capital Working Capital Total 37.3 31.4 5.9 37.3 31.4 5.6 37.0 31.2 7.0 38.2 32.1 7.4 39.5 For Sales 37.3 37.3 37.0 38.2 39.5 % ROI - For Sales 7.0 7.5 4.6 4.2 3.8 Sales - Refined oil MM Bbls. 12.6 13.1 14.0 14.1 13.8 After eliminating a non'-recurring charge ($640,,000) to sales revenue in 1968 and a non-recurring credit ($125,000) to sales in 1969, net income from operations actually declined by $500,000. This was due to increased crude costs which were only partially offset by a gain of 4.0$ per barrel in average selling price. Although some improvement (6.04/bbl.) in average selling price is forecasted for 1970, rising crude and manufacturing costB are estimated to be 12.00 higher. Current market conditions suggest price estimates are on high side, with future projections being clouded by possibility of eliminating use of tetraethyl lead. 0633599 -65- WATER PCB-00040036 INORGANIC CHEMICALS DIVISION Division Profitability - chemical Business ($ in Millions) World-Wide Sales Opar. Income-Div. Income After Tax Actual_____________ Budget 1966 1967 1968 1969 1970 170.6 17.0 7.8 182.2 22.4 11.0 193.0 26.0 12.1 206.7 35.5 17.5 224.1 38.3 19.0 Gross Investment % ROI 258.4 269.2 275.4 293.7 3.0 4.1 4.4 6.0 303.6 6.3 U.S. Dorn, & Export Sales Opar. Income-Div. Income After Tax 160,9 169.4 183.7 198.3 16.3 22.2 26.0 35.3 7.5 10.9 12.1 17.4 216.0 37.9 18.8 Inc. A.T. as % of Sales $ Sales/S Investment 4.6 6.4 6.6 8.8 .64 .65 .69 .69 8.7 .73 Gross Investment 252.4 261.1 267.4 285.6 295.0 % ROI Division (Chem, Business) 3.0 4.2 4.5 6.1 Business Groups* Detergents 1.8 3.7 3.9 6.0 industrial Chemicals 6.2 7.5 8.2 5.8 Special Cham. Systems 9.5 4.4 6.7 7.7 6.4 5.8 9.6 8.2 investment in the division's Chemical Business major products earned the following rates of return for actual 1969 and budget 1970* Loss 0 to 4% 4 to 6* Over 6% % of Investment 1969 1970 4.5 ' - 10.4 10.4 54.5 56.1 30.6 33.5 Business groups are reported on the following pages* Detergents industrial Chemicals Special Chemical Systems Pace 67 81 86 Major products reported comprise 7SH of the division's Chemical Business investment in 1969 and 1970, 0633600 DETERGENT - BUSINESS GROUP (5 in Millions) World-Wide Sales Oper. Income-Div. Income After Tax Gross Investment % ROI 1966 Actual______________ Budget 1967 1968 1969 1970 130.7 9.7 3.9 140.7 16.0 7.8 150.9 17.8 8.4 164.1 27.5 13.8 175.6 27.9 13.9 207.7 214.9 222.1 236.2 243.7 1.9 3.6 3.8 5.8 5.7 u.s. Pom. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax % of Sales i Gross Profit SARE-Div. Income After Tax $ Sales/$ Investment 124.7 17.1 8.9 9.3 3.8 133.6 23.4 9.1 16.1 7.9 144.4 25.3 9.5 18.0 8.5 158.3 32.8 9.8 27.6 13.9 170.9 34.5 9.9 28.1 14.0 13.7 7.1 3.0 .61 17.5 6.8 5.9 .63 17.5 6.6 5,9 .66 20.7 6.2 8.8 .68 20.2 5.8 8.2 .71 Gross Investment 205.0 211.2 218.5 233.0 240.2 * ROI 1.8 3.7 3.9 6.0 5.8 Major products reported for the Detergent business group are as followsi . Alkylates ALL-Condensed, Fluffy & Cold water DCF-Anhydrous & Dihydrate ' NTA Fhos. Acid - Food Phos. Acid - Other Potassium Phosphates MCP - All Grades SMP STP - All Grades Sterox - Phenol & Alcohol tsp Crystal TSPP 32. 68 69 70 71 72 73 74 75 76 77 78 79 80 0633601 -67- WATER PCB-00040038 ($ in Millions) u.S. pom. 4, Export Sales Gross Profit SARS-Div. By-Prod. Gross Profit Oper. incoms-Div. Income After Tax 1966 1967 1968 1969 13.9 3.0 1.1 .4 2.3 .8 13.7 3.0 1.0 .1 2.0 .9 14.5 3.5 1.0 .1 2.6 1.1 17.0 4.2 .8 .1 3.5 1.6 1970 19.7 6.6 .9 .5 6.2 3.0 Selling Price/lb. Cost of Sales/lb. .100 .078 .098 .077 .097 .073 .103 .078 .100 .067 % of Salest Gross Profit SAKE-Div. Net income 21.6 7.9 5.8 21.8 7.3 6.6 24.1 6.9 7.6 24.7 4.7 9.4 33.5 4.5 15.2 $ Sales/$ Investment .74 .70 .72 .81 .88 Gross Investment! Fixed Capital working Capital Total 19.6 16.5 4.2 20.7 15.3 4.8 20.1 15.6 5.3 20.9 17.0 6.0 23.0 For Sales 18.7 19.7 19.2 20.2 22.3 % KOI - ftar Sales 4.3 4.6 5.7 7.9 13.5 Total Capacity - MM lbs. 150.0 165.0 185.0 197.0 250.0 For Sales internal Use Excess 137.1 139.1 16.9 15.2 (4.0) 10.7 150.0 13.8 21.2 164.7 9.0 23.3 196.0 12.0 42.0 A price increase in April 1969 and increased volumes more than offset the effect of increased alkylate costs pushing this pro duct's 1969 KOI to 7.9X. Significant cost reductions. resulting from consolidation of alkylate production at Alvin, Texae are budgeted 1970. In combination, the increased volumes and margins will raise the 1970 KOI to 13.5*. 0633602 WATER PCB-00040039 ALL - gniTOBUSED. FLUFFY AND COLD WATER ($ in Millions) U.S. Don. & Extort Salsa Gross Profit SARE-Div. Depletion Tax Credit Oper. income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1966 Actual______________ Budget 1967 1968 1969 1970 6.8 8.0 7.9 9.2 8.4 .1 .B .5 1.0 1.2 .1 .2 .2 .3 .3 .1 .1 .1 .1 .7 .4 .8 1.0 (.2) .3 .1 .4 .4 .065 .064 .072 .065 .073 .069 .078 .070 .080 .069 % of Salesi Gross Profit SARE-Div. Set income $ Sales/? investment Gross Investmenti Fixed Capital working Capital Total Par Sales 1.5 10.0 1.5 2.5 3.8 .74 .89 5.7 10.9 14.3 2.5 3.3 3.6 1.7 4.3 4.8 .89 .87 .80 6.8 7.4 8.5 8.3 2.2 1.5 2.0 2.2 9.2 9.0 8.9 10.5 10.5 9.2 9.0 8.9 10.5 10.5 % roi - For Sales 3.3 1.5 3.6 3.8 Total Capacity - MM lbs. 164.2 164.7 157.2 163.4 166.0 For Sales internal Use Excess 105.5 110.8 109.1 117.4 105.0 58.7 53.9 48.1 46.0 61.0 All is produced by Monsanto for Lever Brothers on a cost-plus basis. 0633603 -69- WATER PCB-00040040 DCP - ANHYDROUS AND DIHYDHATB ($ in Millions) P.S. Dow. & Export Sales Gross Profit SARE-Div. Oper. Inoome-Div. Incoma After Tax 1966 2.8 .8 .2 .6 .3 1967 3.3 1.1 .3 .8 .5 1968 2.9 .9 .2 .7 .4 Budget 1969 1970 3.0 2.8 .9 .8 .2 .2 .8 .6 .4 .4 Selling Price/lb. coat of sales/lb. .076 .054 .078 .051 .078 .054 .070 .055 .079 .056 % of Salesi Gross Profit SAHB-Div. Net income $ Sales/$ Investment 28.6 7.1 10.7 .55 33.3 9.1 15.2 .79 31.6 6.9 12.9 .76 30.0 6.7 13.3 .72 28.6 7.1 14.3 .65 Gross Investment) fixed Capital Working Capital Total 3.2 3.1 3.3 3.5 1.0 .7 .7 .7 5.1 4.2 3.8 4.2 4.2 for Sales 5.1 4.2 3.8 4.2 4.2 % ROX - Ft>r Sales Total Capacity - MM lbs. 5.9 81.4 11.9 79.8 9.9 78,7 9.5 89.2 9.5 80.8 For Salea internal Use Excess 37.0 22.6 21.8 42.0 28.8 9.0 37.2 30.4 11.1 38.9 27.7 22.6 34.8 33.6 12.4 These product* have historically boon the hay abrasive* uaad in dentifrice compounds as is reflected in their relatively stable sales volume*. Salas volumes will decrease in 1970 as dentifrice manufacturers increase their use of TCPP and IMP as polishing agents. Nonetheless, income and RDI will remain constant because DCP is a raw material for TCPP. 0633604 70- WATER PCB-00040041 MTA CS in Millions) U.3. Dom. & Export Sales Gross Profit SARE-Div. Oper. Ineome-Div. Income After Tax 1968 .1 (.3) .3 (.6) (.3) 1969 4.4 .4 .4 (.1) 1970 5.6 .9 .5 .4 .1 Selling Price/lb. Cost of Sales/lb. .120 .692 .121 .110 .102 .085 % of Sales> Gross Profit SARE-Div. Ret income 9.1 16.1 8.1 8.9 1.8 $ Sales/$ Investment .01 .46 .59 Gross Investment! Fixed Capital Working Capital Total 6.3 8.7 .1 .8 6.4 9.5 8.8 .7 9.5 Ftor Sales 6.4 9.5 9.5 % ROI - For sales .7 Total Capacity - tM lbs. 75.0 75.0 For Salea Internal Use Excess .5 36.2 38.8 55.0 20.0 NTA, essentially a development product in 1969, is produced in a plant with a 75MM lb. capacity at Alvin. Texas. This product is used in detergent formulations as a non-phosphate substitute for STF. volumes and profits are forecast to grow rapidly upon completion of the 230* expansion planned for 1970-71. 0633605 -71- WATER PCB-00040042 PHDS. ACID - POOD ($ in Millions) U.S. Dom. & assort Sales Gross Profit SARX-Div. Depletion Tax Credit Oper. income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1966 5.1 1.3 .4 .1 1.0 .4 .096 .071 Actual_____________ Budget 1968 1969 1970 5.2 5.7 5.8 6.7 1.7 1.8 2.0 2.0 .4 .6 .4 .4 .1 .1 .3 .2 1.4 1.3 1.9 1.8 .7 .7 .9 1.0 .100 .067 .099 .067 .101 .068 .100 .070 % of Sales* Gross Profit SARB-DiV. Net Income 35.5 7.8 7.8 32 .7 7.6 13.5 31.7 10.5 11.8 34.5 6.9 15.5 29.9 6.0 14.9 $ Sales/S Investment .57 .70 .77 .70 .73 Gross Investment* Fixed Capital Working Capital Total 6.2 6.3 6.8 7.6 1.2 1.1 1.5 1.6 8.9 7.4 7.4 8.3 9.2 For Sales 8.9 7.4 7.4 8.3 9.2 % ROI - For Sales 4.5 9.5 9.1 10.8 10.9 Total Capacity - MM lbs. 820.8 802.3 815.2 824.0 866.5 For Salas internal Use Excess 52.7 609.7 157.8 51.8 733.3 17.2 57.9 743.8 13.5 57.9 749.9 16.2 67.1 787.2 12.2 Higher netback prices pushed Fhos. Acid profits to a 10.8* ROl level in 1969. The raw material cost increases that are anticipated in 1970 will offset increased profit potential on significantly increased volumes. SOI will remain at the high levels of 1969. 0633606 WATER PCB-00040043 PHOB. ACID - OTHER {$ in Millions) U.S. Domt. & Exoort Sales Gross Profit SARE-Div. Depletion Tax Credit oper. Income-Div. Income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 9.0 6.5 5.1 2.9 4.2 .7 .5 .2 .3 .7 .3 .6 .4 .2 .2 .2 .3 .2 .2 .2 .6 .2 .1 .3 .7 .1 .1 .1 .2 .4 Selling Price/lb. Cost of Sales/lb. .069 .064 .070 .064 .068 .065 .073 .065 .077 .064 % of Salesi Gross Profit SARE-Div. Net Income 7.8 7.7 4.1 10.3 16.7 3.3 9.2 7.8 6.9 4.8 1.1 1.5 1.0 6.9 9.5 $ Sales/$ Investment .49 .31 .52 .57 .55 Gross Investment: Fixed Capital Working Capital Total 19.0 B.7 4.4 6.5 1.7 1.2 .7 1.2 18.5 20.7 9.9 5.1 7.7 For Sales 18.5 20.7 9.9 5.1 7.7 % ROI - For Sales .5 .5 1.0 3.3 5.2 Total Capacity - MM lbs. 337.5 348.6 318.1 280.9 256.1 For Sales Internal Use Excess 129.7 93.S 76.5 40.3 54.8 207.8 254.8 241.6 240.6 201.3 Selective selling of this product in 1969 eliminated significant pieces of low-profit business and increased ROI three-fold. Additional volume at higher prices is budgeted for 1970 and will further increase ROI to 5.2%. 0633607 -73- WATER PCB-00040044 POTASSIUM PHOSPHATSS ($ In Millions) U.3. Pom. _& Export Sales Gross Profit SARB-Div. Oper, Incorae-Div. Income After Tax 1966 5.4 1.4 .3 1.1 .5 Aetna1_____________ Budget 1967 1968 1969 1970 5.3 4.9 3.6 1.3 1.2 .8 .3 .2 .2 1.0 1.0 .7 .6 .6 .3 3.8 .9 .3 .6 .4 Selling Price/lb. Cost of Sales/lb. .117 .086 .109 .082 .108 .081 .107 .083 .107 .082 % of Salest Gross Profit SARB-Div. Net Income 25.9 5.6 9.3 24.5 5.7 11.3 25.0 4.1 11.8 22.2 5.6 8.2 23.7 7.9 10.5 $ Sales/0 Investment .79 .69 .76 .62 .58 Gross investment! rixad capital Working Capital Total For sale 6.4 5.5 4.8 1.3 .9 1.0 6.Q 7.7 6.4 5.8 6.8 7.7 6.4 5.8 5.2 1.2 6.4 6.4 % SOI - Jbr Sales 7.4 7.8 9.1 4.9 5.5 Total Capacity - MM lbs. 62.1 70.7 58.3 49.8 47.4 For Sales internal Use Excess 46.0 21.6 (5.5) 48.9 .6 21.2 45.4 8.8 4.1 34.1 15.7 35.2 12.2 Potassium phosphates are made at Carondelst and Kenmyj their basic end-use is in liquid detergents with a large segment of the volume going into two heavy-duty liquids produced by Lever Brothers, i.e., Wish and liquid "All". Profits in 1969 continued an erosion dating bach to 1965. Hat price decreased in 1969 because of Increased freight coats asso ciated with serving a larger number of smaller customers. While unit cost-of-goods increased on lower volume. Despite increased raw material coats, profits in 1970 are budgeted upward on increased volumes and a consequent reduction in unit conversion costs. -74- 0633606 WATER PCB-00040045 MriP - ftT.T, GRADES ($ in Millions) U.s. Dom. & Export Sales Gross Profit SARE-Div. Oper. Incorae-Div. Income After Tax 1966 1.6 .1 .1 .2 .1 Actual 1967 1968 1.7 1.7 .3 .4 .2 .1 .2 .2 .1 .1 1969 1.9 .4 .1 .3 .2 1970 2.0 .4 .1 .3 .2 Selling Price/lb. Cost of Sales/lb. .075 .061 .076 .062 .076 .061 .076 .059 .076 .060 % Of Salest Gross Profit SARE-Div. Net income 18. B 6.3 6.3 17.7 11.8 5.9 20.4 5.9 6.5 21.1 5.3 10.5 20.0 5.0 10.0 $ Sales/$ Investment .73 .68 .63 .64 .56 Gross investments Fixed Capital Working Capital Total 2.1 2.3 2.5 .4 .4 .5 2.2 2.5 2.7 3.0 3.0 .5 3.5 Fbr Sales 2.2 2.5 2.7 3.0 3.5 % ROI - For Sales 4.5 4.0 4.1 6.7 5.7 Total Capacity - MM lbs . 27.0 29.0 29.0 29.0 30.0 For Sales Internal Use Excess 21.1 .3 5.6 22.2 6.8 22.7 1.2 5.1 24.9 .4 3.7 25.6 .4 4.0 This product is an old :line levening agent. Its ROI broke through the 4% level in 1969. 1970 ROI will decline from th 1969 level as cost and capital increases more than offset the effect of increased sales. 0633609 -75- WATER PCB-00040046 SMP ($ in Millions) U.S. pom..Jl.Export Sales Gross Profit SARE-Div. Depletion Tax Credit Oper. Incorae-Div. Income After Tax 1966 4.2 .7 .2 .1 .6 .2 Actual 1967 1968 4.2 4.4 .9 .9 .2 .2 .1 .1 .7 .8 .4 .4 Budget 1969 1970 4.3 4.5 .9 .9 .2 .1 .2 .1 .9 .9 .4 .4 Selling Price/lb. Coat of Salea/lb. .079 .065 .081 .064 .082 .065 .082 .064 .082 .065 % of Salest Gross Profit SARE-Div. Net Income 16.7 4.8 4.8 21.4 4.8 9.5 20.7 4.5 9.6 20.9 4.7 9.3 20.0 2.2 8.9 $ Sales/? investment .66 .67 .76 .64 .63 Gross Investments Fixed Capital working Capital Total 5.3 4.9 5.6 6.0 1.0 .9 1.1 1.2 6.4 6.3 5.8 6.7 7.2 For Sales 6.4 6.3 5.8 6.7 7.2 % ROI - For Sales 3.1 6.6 7.3 6.7 5.6 Total Capacity - MM lbs. 60.2 53.4 62.5 73.3 71.5 For Sales Internal Use Excess 52.9 1.2 6.4 52.1 1.3 53.7 2.1 6.7 52.8 1.1 19.4 55.5 1.4 14.6 SMP's ability to generate income baa remained conatant aince 1967, and will continue at the aama levela through 1970. ROI in 1969 and 1970 are off from 1968 levela becauae of increased investment. Capacity was added in early 1969 to handle the rapidly rising demand of the Miracle White Company. Since then. Miracle White's consumption has dipped sharply. 0633610 WATER PCB-00040047 STP - ALL GRAPHS ($ in Millions) U.S. Dom. & Exnort Sales Gross Profit SARIS-Div, Depletion Tax Credit Oper. Income-Div. incone After Tax Selling Price/lb. Coat of Sales/lb. 1966 Actual 1967 1968 Budget 1969 1970 40.5 3.0 1.7 .4 1.8 (.4) 47.9 4.9 2.5 .7 2.7 1.3 53.1 6.4 2.5 .9 4.6 2.5 5B.9 10.1 2.5 2.1 9.7 5.1 65.1 9*2 2.6 2.0 8.6 4.4 .063 .059 .065 .059 .066 .058 .067 .055 .069 .059 % of sales: Gross Profit SARE-Div. Net Income 7.4 10.2 12.0 17.1 14.1 4.2 5.2 4.7 4.2 4.0 2.7 4.7 8.7 6.8 $ Sales/$ Investment .54 .62 .62 .59 .66 Gross Investment: Fixed Capital Working Capital Total 75.1 65.7 12.1 77.8 74.9 11.1 86.0 84.9 15.2 100.1 83.1 15.3 98.4 For Sales % ROI - For Sales 75.1 77.8 1.7 86.0 100.1 2.9 5.1 98.4 4.4 Total Capacity - MM lbs. 953.5 970.0 1004.0 1035.0 1045.0 For Sales Internal use Excese - 638.2 42.0 273.3 733.0 42.6 194.4 806.0 36,1 161.9 B66.2 47.6 121.2 948. B 43.2 53.0 STP'b 1969 profitability was helped by a raid-year price increase, lower production costs, and an unusually high depletion tax credit. The net price per pound will increase in 1970 aa the effect of last year's price increase will be felt for the full year; raw materials cost increases however will more than off set the price gain and result in lower profits overall, 1970 volumes should equal budgeted levels, provided no anti-phosphate legislation ia pushed through Congress. 0633611 -77- I WATER PCB-00040048 STBBOX - PHENOL & ALCOHOL ($ in Millions) II.a. Dom. & Bxnort Sale* Gross Profit SARK-Div. Oper. income-Div. Income After Tax 1966 5.2 .9 .5 .4 .1 1967 4.1 .8 .5 .3 .1 1968 3.1 .5 .3 .2 .1 1969 4.2 1.1 .2 .9 .4 1970 4.4 1.0 .2 .8 .4 Selling Price/lb. Cost of Salea/lb. .132 .110 .133 .107 .120 .099 .125 .093 .119 .092 % of Salesi Gross Profit SARE-Div. Net income 17.3 9.6 1.9 19.5 12.2 2.4 16.1 9.7 3.2 26.2 4.8 9.5 22.7 4.5 9.1 $ Sale*/$ Investment 1.24 1.34 .78 .94 .96 Gross Investment* Fixed Capital working Capital Total 2.6 3.0 3.2 1.2 1.0 1.3 4.2 3.8 4.0 4.5 3.3 1.3 4.6 For Sale* 4.2 3.8 4.0 4.5 4.6 X ROI - For Sale* 2.4 2.6 2.5 as CD 8.7 Total Capacity - m lb*. 71.5 71.7 67.9 79.9 80.2 For Sale* internal Use Excess 39.3 10.1 22.1 30.7 8.2 32.8 34.7 .4 32.8 33.7 11.1 35.1 36.9 10.0 33.3 Lower cost raw material* and the full benefit* of an October 1968 Alkylphenol price increase nearly quadrupled Stsrox profit* in 1969. increased volume* will push price* and cost* downward in 1970, but profit* and ROT will remain stable at the high 1969 level*. -78- 0633612 WATER PCB-00040049 T3P CRYSTAL ($ in Millions) u.S. Don-. & ffiroort Sales Gross Profit SARE-Div. Depletion Tax Credit Oper. Income-Div. Income After Tax 1966 2.7 .7 .1 .6 .3 Actual 1967 1968 2.6 2.8 .7 .8 .1 .2 .1 .6 .7 .3 .4 Budget 1969 1970 2.2 2.5 .6 .6 .1 .1 .5 .5 .3 .2 Selling Price/lb. Cost of Salee/lb. .044 .033 .043 .031 .044 .032 .044 .031 .044 .035 % of Salesi Gross Profit SARX-Div. Net Income 25.9 3.7 11.1 26.9 3.9 11.5 28.4 7.1 13.1 27.3 4.5 13.6 24.0 4.0 8.0 $ Sales/$ Investment 1.08 .81 .90 .79 .80 Gross Investment) Fixed Capital Working Capital Total 2.5 2.7 2.6 2.3 .5 .5 .5 2.5 3.2 3.1 2.8 2.6 .5 3.1 For Sales 2.5 3.2 3.1 2.8 3.1 % ROI - For Sales 12.0 9.4 11.7 10.7 7.0 Total Capacity - MM lbs. B4.0 84.0 84.0 84.0 84.0 For Sales Internal Ubs Excess 61.1 22.9 61.0 23.0 62.4 7.1 14.5 49.5 34.5 56.5 27.5 TSP Crystal volumes were off substantially in 1969 primarily because of the demand-depressing effect of the poor performance of the product "Cliraalene" in the retail market. During 1969, unit costs and unit prices were held constant, but the reduced turnover resulted in an overall reduction in profits. Higher raw material and production costs in 1970 are expected to further erode profits, even though a volume increase is antici pated. 0633613 -79- WATER PCB-00040050 TSPP ($ in Milliona) U.S. Dom. & Extort Sales Oross Profit SARE-Div. Depletion Tax Credit Oper. Income-Div. Income After Tax 1966 1967 1968 1969 4.1 4.4 4.1 2.5 .3 .4 .4 .3 .2 .2 .2 .1 .1 .1 .1 .1 .2 .2 .3 .3 .1 .2 .1 1970 2.8 .2 .1 .1 .2 .1 Selling Price/lb. Coat of Salea/lb. .058 .053 .061 .055 ,063 .057 .065 .058 .068 .063 % of Sales* Oross Profit SARB-Div. Net Income 7.3 9.1 10.5 12.0 4.9 4.6 4.9 4.0 2.3 4.0 4.0 7.1 3.6 3.6 $ Sales/? Investment .67 .72 .77 .61 .62 Gross Investmenti Fixed Capital Working Capital Total 6.1 5.0 4.5 3.4 1.1 .8 .7 6.1 6.1 5.3 4.1 3.7 .7 4.4 For Sales 6.1 6.1 5.3 4.1 4.4 % ROI - For Sales 1.6 3.1 3.0 1.4 Total Capacity - MM lbs. 100.0 100.0 100.0 100.0 100.0 For Sales Internal Use Excess 71.0 4.8 24.2 72.7 3.3 24.0 64.2 2.8 33.0 38.7 5.1 56.2 40.6 4.1 55.3 The 1969 move by Laver Brothers to reformulate their heavy duty detergents from TSPP to STP reduced our TSPP sales by 40)1. The price increase posted 1/1/69 partially offsets the increased unit manufacturing cost for remaining sales. Unit fixed costs are up because of lower volume and unit variable costs are up because the powdered product formerly sold to Lever Brothers must now be recycled for agglomeration before the material can be sold. -eo- 0633614 WATER PCB-00040051 INDUSTRIAL CHEMICALS - BUSINESS GROUP ($ in Millions) World-Wide Sales Oper. Incorae-Div. Income After Tax 1966 1967 Actual Budget 1968 1969 1970 23.0 3.3 1.7 24.5 4.1 2.0 22.4 4.2 1.9 22.0 3.2 1.5 25.3 5.4 2.8 Gross Investment 27.2 27.6 25.7 29.2 30.4 % ROI 6.2 7.2 7.6 5.2 9.2 U.S. Dom. & Export Salsa Gross Profit SARB-Div. Oper. Income-Div. Income After Tax 20.6 4.6 1.5 3.1 1.6 20.8 4.8 1.0 3.9 1.9 21.6 5.3 1.3 4.2 1.9 21.2 4.1 1.0 3.2 1.5 24.0 6.1 1.3 5.1 2.7 % of Sales: Gross Profit SARE-Div. Income After Tax 22.4 7.5 7.8 23.0 4.7 9.3 24.7 6.0 9.0 19.3 5.0 7.3 25.5 5.5 11.1 $ Sales/$ Investment .80 .81 .91 .79 .86 Gross Investment 25*7 25.6 23.7 26.6 27.9 % ROI 6.2 7.5 8.2 5.8 9.6 Major products reported for the Industrial Chemicals business group are as follows: Caustic Potash Chloro sulfonic Acid Phosphorus Psntasulfide Sulfuric Acid Page 82 83 84 85 0633615 -al- WATER PCB-00040052 CAUSTIC POTASH ($ in Millions) u.s. Dom. A Exoort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1966 Actual______________ Budget 1967 1968 1969 1970 2.5 2.9 2.6 2.6 .5 .7 .8 .5 .1 .1 .1 .1 .4 .6 .7 .4 .1 .3 .3 .1 3.6 .6 .2 .4 .2 .069 .057 .068 .051 .068 .046 .063 .052 .060 .050 % of Salesi Gross Profit SARK-Div. Net income 20.0 4.0 4.0 24.1 3.4 10.3 30,8 3.8 11.5 19.2 3.8 3.8 16.7 5.6 5.6 $ Sales/S investment .61 .97 .81 .75 1.16 Gross Investmenti Fixed Capital Working Capital Total 2.4 2.a 2.9 .6 .3 .6 4.1 3.0 3.1 3.5 2.6 .5 3.1 For Sales 4.1 3.0 3.1 3.5 3.1 % ROI - For Sales 2.4 10.0 9.6 3.8 6.7 Total Capacity - MM lbs. 97.B 108.1 114.2 74.7 75.4 For Sales Internal Use Excess 35,8 26.2 33.8 43.0 19.7 45.4 37.7 31.8 44.7 41.8 28.7 4.2 59.8 16.0 (.4) Caustic potash has been used internally to produce various potassium phosphates, such as TKPP, TKP, and MKP. Outside sales of KDS are to mud drilling companies, soap producers, petroleum refineries and to producers of potassium permanganate and styrene-butadiene rubber. KOH is produced at WGK and on a conversion basis by Diamond Shamrock. During 1969, KOH operations at Anniston were shut down. The KOH price has been raised at the beginning of 1970 in response to market conditions, increased demand and raw material pricing. 0633616 WATER PCB-00040053 CHLOBPSULFONIC ACID ($ in Millions) U.s. Dora, a Exoort Sales Gross Profit SARX-Div. Oper. income-Div. income After Tax Selling Price/lb. Cost of Sales/lb. 1966 1967 1968 1969 .8 1.0 1.3 1.4 .4 .6 .5 .6 .1 .1 .3 .4 .7 .6 .2 .3 .2 .2 .034 .019 .037 .017 .039 .025 .037 .021 1970 1.5 .7 .1 .7 .3 .038 .021 X of Ssless Gross Profit SARE-Dlv. Net Income 50.0 12.5 25.0 60.0 30.0 38.5 7.7 15.4 42.9 14.3 46.7 6.7 20.0 $ Sales/? investment .80 1,25 .72 1.03 1.24 Gross Investment] Fixed Capital Working capital Total l.S 1.5 1.5 .2 .3 .3 1.8 1.7 1.8 1.8 1.7 .2 1.9 For Sales 1.0 .6 1.2 1.3 1.2 % ROI - For sales 20.0 37.5 16.7 18.5 25.6 Total Capacity - MM lbs. 62.0 80.4 80.4 80.4 80.4 For sales Internal Use Excess 24.4 37.3 .3 28.5 30.9 21.0 33.1 38.6 8.7 37.4 36.8 6.2 39.4 42.0 (1.0) A significant portion of C/S Acid is used by the Organic Division in the manufacture of saccharin. The recent ban of cyclamates in food will have an effect on saccharin production, which is now expected to increase over the next several years. Although not a large volume product, Monsanto's market share is expected to be maintained at 50)4 with continued high profitabil ity- 0633617 -83- WATER PCB-00040054 PHOSPHORUS PTOTASTILFIDB ($ in Million*) U.9. Pom. & Export Sales Gross Profit SARE-Div. Oper. income-oiv. Income After Tax 1966 2.4 .7 .2 .5 .2 Actual_____________ Budget 1967 1968 1969 1970 2.6 3.2 3.2 .6 1.0 1.0 .2 .2 .2 .4 .8 .9 .2 .3 .5 3.9 1.5 .2 1.4 .7 Selling Price/lb. Cost of Sales/lb. 10.3 7.2 10.8 8.3 11.2 7.9 11.1 7.7 11.3 7.1 % of Sales> Gross Profit SARE-Div. Net income 29.2 8.3 8.3 23.1 7.7 7.7 31.3 6.3 9.4 31.3 6.3 15.6 38.5 5.1 17.9 $ Sale*/$ Investment .86 .76 .82 .84 .87 Gross Investmentt Fixed Capital working Capital Total For Sales % ROI - For Sales 3.3 4.0 4.4 4.5 .4 .5 .6 .6 3.7 4.5 5.0 5.1 5.0 .7 5.7 2.8 3.4 3.9 3.8 4.5 7.1 5.9 7.7 13.2 15.6 Total Capacity - MM lbs. 60.0 80.0 84.0 84.0 84.0 For Sales Internal Use Excess 23.7 25.9 10.4 24.1 16.9 39.0 28.3 20.7 35.0 28.7 26.0 29.3 34.7 27.2 22.1 Phosphorua pentaaulfide is manufactured at Kruimnrich and Anniston. The Anniston production is used by the AO division to produce insecticides. The Knunmrich plant produces PjSj ^or outside sales to the oil additives and insecticides markets. Facilities have been installed in early 1970 allowing P2S5 to be cast in 16 gallon drums. Ability to supply this lower-reactive material is expected to increase sales 4 million pounds a year. 0633618 -94- WATER PCB-00040055 SULFURIC ACID ($ in Millions) U.S. Dorn. & Ebcoort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual______________ Budget 1967 1968 1969 1970 5.8 6.0 7.3 6.5 7.5 1.9 1.6 2.0 1.3 1.9 .3 .3 .4 .2 .3 1.6 1.3 1.6 1.1 1.6 .8 .7 .7 .5 .7 Selling Price/lb. Cost of Sales/lb. .009 .006 .010 .007 .012 .008 .011 .009 .011 .008 % of Sales) Gross Profit SARE-Div. Nat Incense 32.8 5.2 13.8 26.7 5.0 11.7 27.4 5.5 9.6 20.7 3.4 6.9 25.3 4.0 9.3 $ Sales/$ investment .64 .75 .97 .71 .81 Gross Investment) Fixed capital working Capital Total 12.1 11.5 1.4 12.9 10.2 1.7 11.9 12.6 1.5 14.1 11.0 1.4 12.4 For Salas 9.1 8.0 7.5 9.2 9.3 54 ROI - For Sales 8.8 8.8 9.5 4.3 7.9 Total Capacity - MM lbs. 943.6 1134.0 1150.8 1120.8 1120.8 Ftor Sales Internal Use Excess 609.0 592.2 759.5 583.0 712.1 417.6 559.7 545.4 455.0 431.4 (83.0) (17.9)(154.1) 82.8 (22.7) A now sulfuric acid plant was successfully started-up in 1969 at Everett, Mass., replacing an old inefficient unit. Sulfur prices took sharp declines during 1969 following the steady price escalations of 1967 and 1968. Despite the loosening of the market, acid prices were held relatively firm. 0633619 -85- WATER PCB-00040056 SPECIAL CHEMICAL SYSTEMS - BUSINESS GROUP (S in Millions) World-Wi^e Sales Oper. Income-Div. income After Tax Gross Investment % ROI U.S. Dom*. & Export Sales Gross Profit SARE-Div. Oper. Inoome-Div. Income After Tax % of Salesi Gross Profit SARE-Div. Income After Tax $ Sales/S Investment 1966 Actual 1967 1968 Budget 1969 1970 16.9 4.0 2.2 17.0 2.3 1.2 19.7 4.0 1.8 20.6 4.8 2.2 23.2 5.0 2.3 23.5 26.7 27.6 23.3 29.5 9.3 4.5 6.4 7.8 7.9 15.6 5.1 1.6 3.9 2.1 15.0 3,5 1.4 2.2 1.1 17.7 5.4 1.6 3.8 1.7 1S.8 6.2 1.8 4.5 2.0 21.1 7.3 2.7 4.7 2.1 32.5 9.9 13.3 .72 23.2 9.1 7.1 .62 30.6 9.2 9.6 .70 33.2 9.4 10.7 .72 34.8 12.8 10.4 .79 Gross Investment % ROI 21.7 9.5 24.3 4.4 25.2 6.7 26.0 7.7 26.9 8.2 Major products reported for tha Special Chemical Systems busi ness group are as followsi ' Page ACL's Silicas 87 88 0633620 I WATER PCB-00040057 ACL's (5 in Millions) u.s. Dom. & Bxoort Sales Gross Profit SARE-Div. Oper. Income-Div. income After Tax 1966 6.3 2.4 .5 1.9 .9 Actual 1967 1968 6.7 7.7 1.5 2.5 .5 .5 1.0 2.0 .4 .9 Budget 1969 1970 8.5 10.1 2.8 3.6 .6 .8 2.1 2.8 .9 1.3 Selling Price/lb. Cost of Sales/lb. .498 .307 .507 .395 .506 .340 .516 .338 .510 .325 % of Sales Gross Profit SARE-Div. Net Income 38.1 7.9 14.3 22.4 7.5 6.0 32.5 6.5 11.7 32.9 7.1 10.6 35.6 7.9 12.9 $ Sales/? investment .48 .55 .58 .62 .71 Gross Investmanti Fixed Capital working Capital Total 13.0 10.6 1.6 12.2 10.7 2.6 13.3 10.1 3.7 13.8 11.3 3.8 15.1 For Sales 13.0 12.2 13.3 13.8 15.1 % SOI - For Sales 6.9 3.3 6.8 6.8 8.6 Total Capacity - MM lbs. 17.7 17.7 17.7 17.7 17.7 For Sales Internal Use Excess 12.6 5.1 13.3 4.4 15.2 2-. 5 15.1 2.6 18.3 (.6) ACL aalss product mix has baen shifting away from supplying Colgate for their dry bleach toward the rapidly expanding swimming pool sanitising market. Special promotion program for pool use waa initiated in 1969 and continuea in 1970. This promotional program resulted in an incraase to pool customers of 2500M lbs. in 1969 over 1968. 0633621 -87- WATER PCB-00040058 SILICAS ($ in Million*) P.S.- Jom. & Bcport Sales Oross Profit SARB-Div. Oper. Income-Oiv. Income After Tax Selling Price/lb. Cost of Sales/lb. % of Salesi Gross Profit SARB-Div. Met income $ Salea/9 Investment Gross Investmenti Fixed capital working Capital Total 1966 1967 Actual Budget 1968 1969 1970 3.5 3.1 3.5 3.8 .9 .5 1.0 1.1 .5 .4 .4 .5 .4 .1 .6 .6 .1 .3 .3 4.2 1.3 .6 .7 .3 .323 .238 .566* .622 .476 .449 .626 .434 .607 .419 25.7 14.3 2.9 .64 16.1 12.9 .56 28.6 11.4 8.6 .65 28.9 13.1 7.9 .70 30.9 14.3 7.2 .69 4.5 4.5 4.6 1.0 .8 .8 5.5 5.5 5.3 5.4 4.8 .9 5.7 For Sales % ROI - For Sales 5.5 5.5 5.3 5.4 1.8 4.8 4.8 5.7 5.2 Total Capacity - MM lbs. 19.5 8.5* 8.5 8.2 8.2 For sales internal Dee Excess 10.9 5.6 5.7 5.9 .3 .3 8.3 2.9 2.5 2.3 6.9 1.3 `Capacity on 100% Si02 basis after 1966. In 1969 Santocel operations were good. Manufacture was at standard. Sales were at 88% at capacity. Prices were raised 54/lb. The main deficiency was syton volume Which was at 54% at capacity. Programs are underway for both products to move greater volumes into a wider variety of markets. -8B-- 0633622 WATER PCB-00040059 INORGANIC CHEMICALS DIVISION Division Profitability - Bnvlro-Chem Systems. Inc. ($ in Millions) World-Wide Sales Oper. income-Div. Income After Tax Budget 1970 44.7 (.9) (.5) Gross Investment 9.7 % KOI _ P.S. Pom. & Export Salas Oper. Incarae-Div. Income After Tax 43.8 (.9) (.5) Inc. A.T. as 34 of Sales $ Sales/?Investment 4.76 Gross Investment 9.2 7? ROI Division Business Groupsi Environmental Systems Chemical Process _ _ 13.3 Investment in the division's Enviro-Chem Systems, Inc. major business groups earned the following rates of return.for budget 1970i boss Over 6% * of 1970 investment 40.2 ' 59.8 Business groups are reported on pages 90 and 91. Major business groups reported comprise 10034 of the division's investment in 1970. 0633623 -09- WATER PCB-00040060 CHEMICAL PROCESS - BUSINESS GROUP ($ in Hilliona) World-Wide Sales Oper. income-Div. Income After Tax Cross Investment Budget 1970 36.B 2.2 1.1 6.0 % KOI IB,3 U.S. Dorn. A Export Sales Cross Profit SARJt-Oiv. Oper. Inoome-Div. Income After Tax % of Salesi Gross Profit SARE-Div. Income After Tax 35.9 4.3 2.2 2.1 1.1 12.0 6.1 3.1 $ Sales/S Investment 6.53 Cross Investment 5.5 % KOI 20.0 Business group ia made up of Engineering Sale*, part of Leonard Construction Company and part of Brink Miat Eliminatora. - income will arise chiefly from Sulfuric Acid and Chlorine construction contracts and lower Vanadium catalyst manu facturing costa at the new Avon plant facility. Higher expenses to further expand Brink Hist Eliminator and Chlorine opportunities as well as the development of a technology licensing program will partially reduce profits. -90- 0633624 WATER PCB-00040061 ENVIRONMENTAL SYSTEMS - BUSINESS GROUP ($ in Millions) World-Wide Sales Oper. Income-Div. Income After Tax Budget 1970 7.9 ( 3.0) ( 1.6) Gross Investment 3.7 % ROI U.S. Dom. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax _ 7,9 1.7 4.7 ( 3.0) ( 1.6) % of Sales: Gross Profit SARE-Div. Income After Tax 21.5 59.5 (20.3) $ Sales/$ Investment Gross Investment 2,14 3.7 % ROI _ Business group is made up of Biodize, Air (Cat-Ox), a portion of Brinies and some new venture projects. Biodize sales are projected to increase from $.4MM in 1969 to S7.2MM in 1970. The $1.2MM expense level for solid waste development will be maintained in 1970, but Cat-Ox development expenses will be reduced by $1.0MM, 0633625 -91- WATER PCB-00040062 ORGAMIC CHEMICALS DIVISION Division Profitability {$ in Millions) World-Wide Sales Oper. Income-Div. Income After Tax 1966 304.7 45.5 23.4 Actual_____________ Budget 1967 1968 1969 1970 312,0 342.1 345.1 347.7 45,9 48.2 43.6 45.6 23.8 22.1 22.4 19.7 Gross Investment % HOI 380.0 415.1 428.4 461.7 500.5 6.2 5,7 5,2 4.9 r ,8 U.S. Dom, & Export Sales Oper. Income-Div. Income After Tax Inc. A.T. as % of Sales $ Sales/S Investment 246.8 42.0 21.8 8.8 .81 247.3 40.a 20.9 8.5 .75 2 74.0 42 .2 19.2 7.0 .79 270.6 33.8 16.1 5.9 .71 274,3 3-L.3 13 6 5.0 .67 Gross Investment 306.5 330,9 345.9 % ROI Division Business Group: Cellu-Chem Food St Fine Chem. Functional Fluids General Chem. Petroleum Additives Plasticizers Rubber Chemicals 7.1 6.5 8.5 14.2 5.6 .3 6.6 11.5 6.3 6.2 8.5 14.3 3.4 6.7 11.3 5.6 4.2 7.3 12.9 2.5 5.2 12.2 Petroleum Additive business sold in 1969. 378.8 4.2 4.8 5.3 10.7 2.9 # 3.1 6.7 409.9 3.3 4.1 4.7 6.5 1.8 * 1.5 5.9 Investment in division's major products earned the following rates of return for actual 1969 and budget 1970: LOSS 0 to 4% 4 to 6% Over 6% % of Investment 1969 1970 26.9 31.4 16.0 23.3 20.0 17.8 37.1 27.5 Business groups are reported on the following pages: Cellu-Chem Food s> Fine Chem. Functional Fluids Pane 93 97 107 Page General Chem. 112 Plasticizers 120 Rubber Chemicals 133 Major products reported comprise 73% of the division's invest ment in 1969 and 75% in 1970. -92- 0633626 I WATER PCB-00040063 CELLO-CH18M - BUSINESS GROUP ($ In Millions) World-Wide Sales Oper. Income-Div. Income After Tax Gross Investment % ROI U.S. Dom, & Export Sales Gross Profit SARE-Div. Oper. Income-Div. income After Tax % of Salesi Gross Profit SARE-Div. Income After Tax $ Sales/? investment Gross Investment % ROI 1966 Actual_____________ Budget 1967 1968 1969 1970 23.2 2.2 1.2 23.6 2.4 1.1 25.6 2.4 1.1 27.6 2.7 1.3 29.0 3.1 1.4 22.1 21.0 24.1 23.2 27.9 5.5 5.2 4.6 5.7 5.0 20.6 5.1 2.8 2.3 1.2 21.6 5.2 2.9 2.4 1.2 23.7 5.2 3.1 2.1 .9 25.2 5.6 3.4 2.2 1.0 26.3 6.1 3.6 2.5 1.1 24.6 13.6 6.1 1.07 19.3 6.5 24.3 13.4 5.5 1.13 19.2 6.2 21.8 13.1 3.9 1.08 21.9 4.2 22.2 13.4 4.1 1.17 21.6 4.8 23.1 13.7 4.0 1.02 25.7 4.1 NOTE) Business group includes Hood Treating Chemicals Co. and FRP company. Major products reported for the Cellu-Chem Business Group are as follows) Page Mersize RM, TEL & Resin Size KIP Pentachlorophenol Santobrite 94 95 96 0633627 -93- WATER PCB-00040064 MKMIZB RM. TFL t, RBSIH SIZE KIP tIKCL. CD-2 & CD-2 DRY) ($ in Million*) P.S. DOW, * Export Sales Gross Profit SAXE-Div. Oper. mcome-Div. Income After Tax 1966 Actual Budget 1968 1969 1970 8.0 7.8 6.8 7.9 2.4 2.3 2.2 2.4 1.0 1.0 1.0 1.2 1.3 1.3 1.2 1.2 .7 .7 .6 .5 8.0 2.4 1.3 1.1 .5 Selling Prics/lb. Cost of Salae/lb. .141 .098 .115 .081 .111 .075 .111 .078 .113 .078 X of Salesi Gross Profit SARE-Div. Net Income 30.3 12.5 8.6 30.0 13.4 8.8 32.5 15.1 8.1 30.1 15.6 6.9 30.3 16.0 6.4 $ Sales/$ investment 1.38 1.23 1.12 1.12 1.11 Gross Investment! Fixed Capital Working Capital Total 4.9 5.3 5.6 1.4 .8 1.5 5.8 6.3 6.1 7.1 6.0 1.2 7.2 For Salas 5.8 6.3 6.1 7.1 7.2 X ROI - For Sales 11.8 10.8 9.1 7.7 7.1 Total Capacity - MM lbs. * + * * 115.2 For Sales Internal Use Excess 56.4 67.5 61.5 71.3 70.7 44.5 Multipurpose equipment Which cauaes a fluctuating capacity, There are two major factor* that are causing the profitability on thi* product lin* to declines (1) excess capacity domestically of 4OX is resulting in package offers to major consumers that are less than list prices, and (2) Monsanto's raw material cost position suffered in 1969 and 1970. Our basic strength is the quality and performance of our products plus excellent marketing coverage. Plans for improvement are to install new equipment and thus pro cess more crude tall oil to reduce the resin costs from the Monsanto-Emery Joint Venture. 94- 0633628 WATER PCB-00040065 PENTACHLOROPHENOL ($ in Millions) P.B. Pom. & Export Salsa Gross Profit SARB-Div. Oper. Incorae-Div. Income After Tax Selling Price/lb. Coat of Salea/lb. 2.0 .7 .3 .4 .2 .144 .096 1967 1968 1969 2.1 2.5 2.1 .5 6 .1 * 3 .4 .3 .2 .2 ( .2) .1 .1 ( .1) .146 .113 .141 .108 .133 .123 1970 2.2 .2 .3 ( .1) ( .1) .133 .120 % of Salesi Gross Profit SAKE-Div. Net Income 33.5 12.5 7.8 22.5 13.3 3.1 23.5 14.9 3.6 7.4 15.5 (5.6) 10.1 15.1 (5.9) $ Sales/$ Investment .59 .48 .66 .47 .43 Gross Investment! Fixed Capital Working capital Total 4.0 3.4 3.9 .7 .4 .7 4.2 4.7 3.8 4.6 4.0 1.1 5.1 For sales 3.4 4.5 3.8 4.6 5.1 % ROI - For Sales 4.6 1.5 2.4 Total Capacity - MM lbs. * * * * 27.0 Fbr Sales Internal Use Excess 14.0 4.9 14.6 1.8 17.8 16.2 16.4 4.0 6.6 Multipurpose equipment which causes a fluctuating capacity. Major problem is abnormally high manufacturing cost and the low turnover of sales to gross investment. The manufacturing cost for prilled penta should be 84/lb. The present source of the problem is the transfer cost of phenol and chlorine Which is higher than market plus the allocated and flowed investment in these raw materials. To achieve a 6.5% raturn on gross investment in 1971 we need to sell 20mm lbs. with a netback of 13.54/lb. and a manufacturing coat of 8.24/lb. All three goals are attainable. 0633629 -95- WATER PCB-00040066 SAHTOBRITB (5 in Millions) p.s. nonu. * export Sales arose Profit SAHB-Div. Oper. Income-Div. Income After Tax Selling Pricq/lb. Cost of Sales/lb. % of Salesi Gross Profit SAHB-Div. Net Income $ Salea/$ Investment 1966 Actual______________ Budget 1967 1968 1969 1970 .9 .2 .1 (.1) .8 .1 t.l) (.1) .9 .2 .1 .8 .1 .1 .9 .1 .1 .224 .176 .233 .224 .244 .195 .257 .231 .226 .196 21.1 12.S l.S .37 3.7 13.7 .51 19.8 15.8 1.5 .38 9.8 15.7 (4.4) .37 13.0 16.4 (3.5) .36 Gross Investment! Fixed Capital working Capital Total 1.5 2.0 1.9 .2 .4 .4 2.5 1.7 2.4 2.3 2.1 .5 2.6 FOr Sales 2.5 1.7 2.4 2.3 2.6 % HOI - For Sales .7 .6 Total Capacity - MM lbs. 7.2 7.4 7.6 7.6 7.6 For Sales Internal Use Excess 4.1 3.6 3.7 3.3 3.1 3.8 3.9 4.3 4.1 3.5 The Santobrite expansion project installed in 1965 haa never achieved tha design pramlaaa as to capacity or coats. Tha total market for Santobrita haa daclinad since 1966 as laaa toxic substitutes have been employed. To achieve a 6.5* ROI on Santobrite in 1971 we need to sell 5mm lbs. at 249/lb. netback with a manufacturing cost of 139/lb. These are extremely difficult targets especially the higher volume without a reduction in price. 0633630 WATER PCB-00040067 POOD & PINE CTBnCHLS - BUSINESS GROUP ($ in Millions) World-Wide Sales Oper. Income-Div. income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 45.2 8.8 4.9 46.7 9.7 5.0 50.4 9.9 4.5 52.3 8.4 3.9 55.5 8.6 3.8 Gross Investment % KOI (J.S. Domt & Export Sales Gross Profit SARE-Div. Oper. rncome-Div. Income After Tax 59.1 8.3 65.2 7.7 65.6 6.9 73.1 5.3 82.2 4.6 36.3 10.2 2.7 7.6 4.1 38.9 13.1 4.2 8.8 4.6 42.4 13.3 4.3 9.0 4.0 44.6 12.2 4.9 7.3 3.3 47.2 13.3 5.6 7.7 3.3 % of Sales* Gross Profit SARE-Div. Income After Tax 28.2 7.4 11.3 33.6 10.9 11.8 31.3 10.0 9.5 27.4 28.1 10.9 * 11.8 7.5 7.'0 $ Salea/$ Investment .75 .73 .76 .71 .66 Gross investment % HOI 48.6 8.5 53.6 8.5 55.6 7.3 62.6 5.3 71.4 4.7 MOTS* Business group includes Lueders. Major products reported for the Pood & Fine Chemicals business group are as follows* Aspirin Ethavan Fumaric Acid Lactic Acid Phenacetin Saccharin Santophen #1 3>4,4-TriChlorocarbanilide Vanillin 98 99 100 101 102 103 104 105 106 0633631 -97- WATER PCB-00040068 aspmm {$ In Million*) U.s. Don. & Extort Sales gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 7.6 2.7 .2 2.3 1.3 1967 Actual Budget 1968 1969 1970 6.7 8.2 8.6 8.9 2.2 2.6 2.2 3.0 .4 .7 .8 .8 1.7 1.8 1.4 2.2 .9 .8 .6 1.0 Selling Price/lb. Cost of Sales/lb. .560 .360 .544 .366 .542 .372 .539 .401 .535 .355 % of Sales> Gross Profit SARE-Div. Net Income 35.7 2.5 16.6 32.4 5.8 13.1 31.3 8.7 10.4 25.6 8.8 7.2 33.6 8.8 11.6 $ Sales/? Investment .59 .49 .64 .59 .59 Gross Investment! Fixed Capital Working Capital Total For Sales 12.9 12.9 11.0 2.7 13.7 13.7 10.4 2.3 12.7 12.7 12.3 3.1 15.4 14.5 11.6 3.4 15.0 15,0 % ROr - For sales 9.8 6.4 6.7 4.3 6.9 Total Capacity - MH lbs. 13.2 16.6 20.4 20.0 20.2 For Sales Internal Dae Excess 13.7 ( .5) 12.3 4.3 15.1 5.3 16.7 1.3 2.0 17.5 2.7 Record sale* year In 1969 wa* offset by a 3/lb. Increase In coats due to poor operating performance and tbe need to purchase salicylic acid to sustain aspirin production. Declining selling price trend has been reversed in 1970, though increases are not reflected in these budget figures, increased SARE as percent of sales reflects cost of carrying flavor/fragrance growth program in Food & Fine business group, and not actual increased cost of selling aspirin. 0633632 WATER PCB-00040069 ETHAVAN ($ in Millions) W.3. Pom. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1966 1967 1968 1969 1970 2.3 2.1 1.8 1.6 1.8 .9 .9 .5 .1 .1 .2 .3 .2 .1 .1 .8 .5 .3 .4 .3 .1 ( .1) < .1) 6.340 6.754 6.184 5.136 4.715 3.762 3.994 4.522 4.715 4.481 % of Salest Gross Profit SARE-DiV. Het Income 40.7 9.2 17.7 40.9 13.6 13.6 26.9 8.7 8.0 8.2 a.a (2.3) 5.0 10.1 (5.6) $ Salee/$ Investment .62 .67 .56 .56 .52 Grose Investment) Fixed capital Harking Capital Total 2.5 2.6 2.3 2.9 .7 .7 .7 .6 2.9 3.2 3.3 3.0 3.5 For Sales 2.9 3.2 3.3 2.9 3.4 % ROX - For Sales 14.4 9.1 4.5 Total Capacity - >M lbs. * * * * .4 For Sales Internal Use Exceae .4 .3 .3 .3 .4 *Product is mads in multipurpose equipment' centers which causes fluctuating capacity. Marked reductions in selling price in 1966 and 1969 caused loss of profitability when coupled with greatly increased costs. Tariff reductions have permitted increased importation of Ethavan, and caused decline in sales volume. Technical effort to develop process improvements leading to cost reductions have not been successful, and were terminated early in 1970. A $2.00/lb. price increase was announced in March, 1970 to atteipt to restore short term profitability, it is anticipated that lose of volume will occur and may causa ultimate abandonment of the product. Short term, however, we should exceed the 1970 budget figures easily. 0633633 -99- WATER PCB-00040070 FUMARIC ACID (IHCL. CWS) (9 in Millions) U.S. Dorn. & Exoort Sales Gross Profit SABB-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1966 3.4 .3 .2 .2 ( .1) .182 .165 Actual 1967 1968 2.1 3.0 .4 .1 .3 .2 .1 ( .1) ( .1) .228 .155 .189 .150 1969 3.4 .6 .2 .4 .1 .179 .147 1970 3.9 1.1 .3 .a .3 .193 .139 % of Salesa Gross Profit SARE-Div, Net Income 8.8 17.3 3.4 17.9 27.8 7.1 13.8 7.1 7.4 8.4 4.0 7.8 9 Sales/9 Investment .56 .49 .40 .48 .42 Gross Investment! Fixed capital working Capital Total 7.4 7.2 6.8 9.1 .9 .8 .9 .9 6.5 8.3 8.0 7.7 10.0 For Sales 6.1 a.o 7.5 7.2 9.2 % mi - For sales 1.4 3.3 Total Capacity - MM lbs. 21.8 22.9 22.7 25.7 27.4 For Sales Internal Use Excess 18.9 1.6 1.3 20.a l.i 1.0 19.4 1.7 1.6 19.2 1.8 4.7 20.2 2.0 5.2 Excellent recovery in gross profit in 1969 reflects improved prices and lower costs, with only slight reduction in sales volume. Further price increases are budgeted in 1970 and will be achieved, but sales volume will be severely hurt by ladk of production early in 1970 due to plant problems. The unit cost of .1394 budgeted appears optimistic, as does the sales figure of 20 MM lbs., an all-time high figure. Con tinuing new conversions to cold water soluble fumaric acid (CWSPA) give optimism to the long term prospects for food grades of fumaric acid, at higher netback prices than the low of .1554 in 1968. 0633634 LACTIC ACID ($ in Millions) U.S. Dorn. & amort Sales gross Profit SARli-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. % of Salest Gross Profit SAAE-Div. Net incase $ Sales/? Investment 1966 Actual 1967 1968 Budget 1969 1970 2.8 3.0 3.4 3.6 .9 1.0 1.3 1.3 .3 .4 .3 .3 .6 .6 1.0 1.0 .3 .3 .5 .5 4.2 1.4 .4 1.0 .4 .303 .209 .304 .201 .297 .301 .187 .193 .315 .214 31.1 11.2 11.2 .55 33.7 13.8 9.5 .52 36.9 36.0 8.7 8.8 13.2 13.0 .57 .49 32.2 10.0 9.7 .53 Gross investment! Fixed capital Working Capital Total 4.7 5.1 5.6 6.2 .3 .6 .5 1.1 5.0 5.7 6.1 7.3 7.1 .8 7.9 For Sales 5.0 5.7 6.1 7.3 7.9 % ROI - For Sales 6.1 4.9 7.5 6.4 5.2 Total Capacity - MM lbs. 10.0 10.8 11.6 13.6 13.6 For sales. Internal Use Excess 9.1 9.9 11.5 15.2 13.4 .9 .9 .1 (1.6) .2 1969 was the sixth successive record sales'year, hut showed no growth in gross profit due to startup costs of the Phase I expan sion of the plant to 13,6MM lba./yr. A further expansion to 14.5mm lbs. (Phase II) is due on stream in the first quarter of 1970, and higher selling prices will result from a 3.54/lb. price increase executed When the c. J. Patterson contract was renewed for 3 years. Patterson continues to consume 55# of the plant output, but their historical growth rate now appears to be leveling off. Prospects for 1970 and 1971 will be affected by shutdown of AN-1 at Texas City, eliminating the by-product lactonitrile stream and forcing conversion to synthetic LN from high cost HCN and acetaldehyde. Longer term, however, lactic acid should continue as an acceptable profit producer. 0633635 -101- WATER PCB-00040072 PHENACETIN ($ in Millions) U.S. Dom. & Export Sales Gross Profit SARE-Div. Oper. Incorae-Div. Income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 2.0 1.5 1.8 1.8 2.0 .8 .6 .7 .6 .6 .1 .2 .2 .2 .7 .5 .5 .4 .4 .4 .2 .3 .2 .2 Selling Price/lb. Cost of Sales/lb. .787 .459 .872 .612 .810 .504 .829 .546 .830 .569 % of Sales: Gross Profit SARE-Div. Net Income 41.7 2.6 22.5 38.8 5.9 16.9 37,7 8.7 14.4 34.2 8.9 12.5 31.4 9.1 10.7 $ Sales/? Investment .98 .50 .88 .70 .67 Gross Investment: Fixed Capital working Capital Total 2.2 1.6 1.9 2.1 .7 .4 .6 .3 2.0 2.9 2.0 2.5 2.9 For Sales 2.0 2.9 2.0 2.5 2.9 % ROI - For Sales 22.0 8.5 12.6 8.8 7.2 Total Capacity - MM lbs. 3.5 3.5 3.5 3.5 3.5 For Sales Internal Use Excess 2.5 1.7 2.2 2.1 2.4 1.0 1.8 1.3 1.4 1.1 A slight sales decline with higher costs reduced profitability in 1969. A new price increase of 50/lb. in 1970 will help restore some profitability, but long term prospects for market growth continue to be dim. Phenacetin remains under a cloud on safety at highly Inflated ubc levels, and there is no reason to expect an upward reversal of the sales volume trend in the future. We will continue to maximize profitability as long as possible. 102- 0633636 WATER_PCB-00040073 SACCHARIN ($ in Millions) U.S. Dorn. & Export Sales dross Profit SARE-Div. oper. income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1966 1967 1968 1969 1970 l.S .1 .2 < .1) ( .1) 2.2 .3 ( .3) ( .2) 2.0 .2 ( .2) < .1) 2.7 .2 .2 ( .1) < .1) 2.8 .3 .3 ( .1) 1.492 1.278 1.311 1.262 1.288 1.386 1.278 1.316 1.181 1.162 % of Salesi Gross Profit SARE-Div. Net income 7.1 9.4 13.7 6.8 9.9 8.7 8.8 9.8 (3.5) (2.9) $ Sales/? investment .42 .40 .42 .53 .47 Gross Investmenti Fixed Capital tforlcing Capital Total 4.8 4.1 4.2 5.1 1.0 .8 .9 .8 4.5 5.8 4.9 5.1 5.9 For Sales 4.4 5.5 4.9 5.1 5.9 % ROI - For Salea Total Capacity - MM lba. 2.2 2.2 2.2 2.2 2.2 Par Sales Internal Use Excess 1.3 1.7 1.5 2.1 2.2 .3 .9 .2 .7 .1 With an all-time record aalee year, we succeeded In generating gross profit on Saccharin in 1969, achieving cost reductions largely through added production and sales volumes. The budget for 1970 is overly optimistic, however, with plant problems restricting material availability. longer term, saccharin's future is ao clouded on safety at the FDA, that the technical efforts to develop a Chrome regeneration process for major cost reduction has been shelved. Unless an unexpected reprieve occurs, saccharin production will probably have to be terminated in 2-3 years. We propose to operate as long as it generates a positive cash flow, however, and have raised the price in early 1970. 0633637 -103- WATER PCB-00040074 SANTOPHEN #1 (INCL. SOL.) ($ in Millions) u.S. Pom. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual_______________________ 1967 1966 1969 1970 1.6 1.3 1.6 1.7 1.9 .8 .5 .8 .5 .6 .1 .1 .1 .1 .2 .7 .4 .7 .4 .4 .3 .2 .3 .2 .2 Budget Selling Price/lb. Cost of Sales/lb. .622 .323 .622 .415 .602 .294 .549 .374 .573 .3B9 % of Sales: Gross Profit SARE-Div, Net Income 4S.2 5.5 21.2 38.0 6.0 14.5 51.2 8.7 21.0 31.9 8.8 10.9 32.1 9.0 10.8 $ Sales/$ investment .70 .66 .60 .55 .69 Gross investment: Fixed Capital Working Capital Total 1.7 2.1 2.5 2.2 .3 .5 .6 .6 2.2 2,0 2.6 3.1 2.8 For Sales 2.2 2.0 2.6 3.1 2.8 % ROI - For Sales 14.8 9.6 12.5 5.9 7.5 Total Capacity - MM lbs. 3.0 3.9 4.2 4.3 5.4 For Sales Internal Use Excess 2.5 2.1 2.6 3.9 4.5 .5 l.B 1.6 .4 .9 We experienced a good sales year in 1969 , but a poor cost year due to higher cost intermediates. A sharp price drop occured i all major customers were signed to long term contracts and the Lehn and Fink account was regained from a competitor. Future for Santophen #1 is for continued growth in sales volume with costs coming under control. The 1970 budget should be attainable. -104- 0633636 WATER PCB-00040075 3,4,4--TRICHLOROCARBAHILIDE ($ In Millions) u.S. com. & Exuort Sales Cross Profit SARE-Div. oper. income-oiv. income After Tax Selling Price/lb. Cost of Sales/lb. 1966 Actual_____________ Budget 1967 1968 1969 1970 3.9 3.6 4.5 4.5 4.1 2.2 2.0 2.5 2.4 2.0 .2 .2 .4 .4 .4 2.0 1.8 2.2 2.0 1.6 1.1 1.0 1.1 1.0 .8 1.911 1.885 1.885 1.887 1.748 .848 .848 .825 .880 .880 X of Sales: Cross Profit SARE-Div. Net Income $ Sales/S investment 55.6 5.9 27.1 1.41 55.0 6.4 28.6 1.13 56.3 8.7 24.1 1.49 53.3 8.9 23.0 1.26 49.7 9.2 20.8 1.10 Gross Investment: Fixed Capital working Capital Total 2.2 2.0 2.2 2.1 1.0 1.0 1.4 1.6 2.8 3.2 3.0 3.6 3.7 For Salea 2.8 3.2 3.0 3.6 3.7 X ROX - For Salea Total Capacity - MX lbs. 3B.2 3.1 32.3 3.1 36.0 3.1 29.1 3.3 22.8 3.3 For Sales Internal Use Excess 2.0 1.9 2.4 2.4 2.3 1.1 1.2 .7 .9 1.0 Thors was no salsa growth in TCC in 1969 diio to loss of Borax and Purex business offsetting continued gains in foreign volume, largely in Europe. Sailing price remained stable in 1969, but is threatened in 1970 and 1971 as foreign patents begin to expire. The domestic patent remains in force until Dec, 31, 1974, but with overseas volume reaching nearly 1MM lbs., profit declines are going to occur, if we expect to keep new producers from entering the manufacture of TCC. Japan represents a particular problem for the future, with three prospective producers gearing up for production for exportation. We hope to gain sales volume from TBS as our price becomes competitive, but it is not expected to offset the profit loss in future years from the traditional plateau of $1.0-$1.1MM in net income. 0633639 -105- I WATER PCB-00040076 VANILLIN ($ In Millions) u.s. com. a Extort Sales Gross Profit SARE-Div. Oper. Income-Div, Income After Tax 1966 Actual______________ Budget 1967 1968 1969 1970 3.7 3.1 4.3 4.3 4.B l.B 1.4 2.0 1.8 1.6 .3 .4 .4 .4 .5 1.6 1.0 1.7 1.4 1.1 .9 .6 .8 .7 .5 Selling Price/lb. COat of Sales/lb. 2.188 2.347 2,256 2.184 2.162 1.146 1.238 1.178 1.246 1.456 % of Sales: Gross Profit SARE-Div. Net Income 47.7 9.8 24.2 47.2 14.1 18.9 47.8 8.7 19.1 42.9 8.9 17.2 32.7 10.7 10.1 $ Sales/? Investment 1.45 1.00 1.34 .75 .79 Gross investment: Fixed Capital Working Capital Total 2.2 2.5 4.5 8.0 .9 .7 1.2 1.3 2.6 3.1 3.2 5.7 9.3 For Sales 2.6 3.1 3.2 5.7 6.1 % ROI - FOr Sales 35.1 18.9 25.5 12.9 7.9 Total Capacity - MM lbs. 1.4 1.9 1.9 1.9 1.9 For Sales Internal Use Excess 1.7 1.3 1.9 1.9 2.4 ( -3) .6 ( .5) Gross profit declined in 1969 due to lower.priced export volume, and increasing sales of technical vanillin for pharmaceutical uses. A world-wide shortage in 1970 will permit price increases ex-U.S.A., and with a major plant expansion to 3.SMM lbs. due on stream in August, 1970 Monsanto should benefit markedly in improving our competitive position. Costs, however, will be high in 1970 due to plant startup expenses. A major new use as an intermediate for L-DOPA, used to treat Parkinson's disease makes the 1970-72 period particularly promising. We have a 4yaar contract to produce a vanillin derivative for Roche to make L-DOPA, and will take all steps necessary to keep L-DOPA on a vanillin route for as long a period as possible. Other vanillin derivatives will be explored. 0633640 FUNCTIONAL FLUIDS - BUSINESS GROUP ($ in Millions) World-Wide Sales Oper. Income-Div. Income After Tax Gross Investment % ROI U.S. Dom. & Export Sales Gross Profit SARE-Div. Oper. inoome-Div. Income After Tax % of Sales) Gross Profit SARE-Div. Income After Tax $ Sales/$ Investment Gross Investment % ROI 1966 Actual____________ Budget 1967 1968 1969 1970 19.2 5.3 2.9 20.9 5.4 3.0 23.6 6.5 3.2 21.1 4.8 2.3 20.8 4.4 2.0 21.8 21.9 27.1 27.3 29.3 13.5 13.7 11.7 8.4 6.8 17.7 8.5 3.4 5.1 2.8 19.3 8.8 3.8 S.l 2.8 21.9 10.0 3.6 6.2 3.0 19.1 8.3 3.9 4.3 1.9 18.5 7.9 4.1 3.8 1.7 47.8 19.2 15.6 .91 19.5 14.2 45.7 19.5 14.4 .99 19.6 14.3 45.7 17.5 13.8 .94 23.2 12.9 43.2 20.7 10.2 .78 24.4 10.7 42.4 22.0 9.0 .73 25.4 6.5 Major products reported for the Functional Fluids business group are as follows) Page Aviational and Aerospace Fluids Dielectrics Heat Transfer Fluids Industrial Fluids 108 109 110 111 0633641 -107- WATER PCB-00040078 AVlATIOHAL AND AEROSPACE FLUIDS ($ in Millions) u.s. Dora. & Exnort Sales Gross Profit SARE-Div. Oper. Income-Div. income After Tax 1966 Actual______________ Budget 1967 1968 1969 1970 5,0 4.1 1.9 1.5 1.5 1.4 ,4 .1 .i Selling Price/lb. cost of Sales/lb. 1.275 .782 1.001 .638 % of Sales: Gross Profit SARE-Div. Met Income 38.7 30.6 2.4 36.3 35.2 $ Sales/S investment .61 .52 Gross Investment: Fixed capital Working Capital Total 5.7 5.5 2.5 2.4 8.2 7.9 For Sales 3.2 7.9 % ROI - For Sales 1.4 Approximately 90% of the aviation group's profits are derived from Skydrol. The year 1969 saw the first real onslaught of competition to Skydrol. The results have been a 50)4 reduction in selling price and a loss of 35)4 of the market to competition. Prices have not bottomed, but are approaching it. We have remained the market leader although having to adjust our strategies and expenses to a long-term competitive environment. Technology still remains the dominant factor, even with increasing evidence of far greater pur chasing influence than before. We must 1) successfully introduce our new Skydrols (LD,500C) and maintain .technological effort with advanced products and 2) re-negotiate the agreement with McDonnellDouglas. In the jet lubricant market, we have the highly advanced product (Skylube 600) with no significant market demand. We need to deter mine our technical value, market and profit poaition in the high volume Type I and II lubricant areas. Our efforts will be on proving the merits of Skylube 450 (Type ll) and developing a mar keting and profit strategy. If this can not be achieved, we will attempt to sell our technology to others. 0633642 nTKTJirrrRTffi (? in Millions) u.S. Dom. & Exoort Sales Gross Profit SARE-DiV. Oper. income-Div. Income After Tax 1966 Actual______________ Budget 1967 1966 1969 1970 6.9 7.4 2.8 3.1 .6 .8 2.2 2.3 1.1 1.1 Selling Price/lb. Cost of Sales/lb. .144 .085 .143 .082 % of Salest Gross Profit SARE-Div. Met Income $ Sales/? investment 41.4 9.2 15.4 .82 42.5 11.5 15.2 .82 Gross investment: Fixed Capital working Capital Total 6.3 7.2 2.1 1.7 6.4 8.9 For Sales % KOI - For Sales 6.4 12.6 8.9 12.5 Aroclors are utilized as dielectric fluids for capacitors and transformers. Monsanto holds 60% market share world-wide and is the sole supplier to the U.S.A. and the IT.K. Dielectric aro clors are the key franchise of Functional Fluids and provide approximately 40% of the total gross profits of the Business Group. Our strong market/competitive position arises from several factors - biphenyl raw material cost, manufacturing coats, four producing locations in three countries (U.S., U.K., Japan) and excellent technical and marketing relationships with major customers. In our major markets (U.S., U.K.) we are primarily dependent upon the state of economic health of the electrical industry for growth. Technological advances in the manufacture of capacitors and trans formers have had major effects on our sales. The use of polypropylene film in power capacitors, initiated in 196B, reduced the demand for Aroclor by 6MM lbs./yr. in the D.3. alone. Most of the effects of this were felt in 1969 and 1970 should see a return to normal growth rate. The ecological studies on PCB may have an effect on Dielectric Aroclor, but through containment and pollution and reclamation control, this essential industrial need should continue. 0633643 -109- WATER PCB-00040080 HEAT TRANSFER FLUIDS ($ in Millions) U.S. Dora. & EXDort Sales Gross Profit SARE-Div. Oper. Inoome-Div. Income After Tax 1966 Actual 1967 1968 Budget 1969 1970 1.4 1.7 .9 1.0 .6 ,6 .3 .4 .1 .2 Selling Price/lb. Cost of Sales/lb. .293 .102 .265 .102 % of Salest Gross Profit SARE-Div. Net Income 65.2 42.2 10.2 61.6 35.7 12.1 $ Sales/? investment 1.13 1.16 Gross Investment: Fixed Capital Working Capital Total .9 1.1 .4 .3 1.3 1.4 For Sales 1.3 1.4 % ROI - For Salas 11.5 14.0 Our therminol heat transfer fluids consist of a broad line series with wide functional properties and price options. This fran chise began with fire resistant fluids (presently 50% of our line) and has been recently expanded to include low-cost petroleum oil substitutes (Therminol 55 and fluids with high temperature capabilities - Therminol 66, 77 and 88). The basic opportunity of this product area' is to markedly increase its market, its penetration, its dollar sales and profit contri bution, and to integrate it with an acquired hardware manufacturer to provide a systems business to provide maximum total profitability. -110- 0633644 WATER PCB-00040081 INDUSTRIAL FLUIDS ($ in Millions) U.8. Dorn. & EXDort Sales Cross Profit SARE-Dlv. Oper. Ineorae-Div. Income After Tax 1966 Actual 1967 1968 1969 6.0 2.6 1.2 1.4 .6 1970 5.4 2.3 1.2 1.1 .5 Selling Prica/lb. cost of Sales/lb. % of Salesi Gross Profit SARE-Div. Net Income .278 .145 .259 .149 43.1 19.8 10.7 42.5 22.1 9.6 $ Sales/S Investment .99 .92 Cross Investment) Fixed Capital Working Capital Total 4.0 3.7 2.1 2.1 6.1 5.8 For Sales % ROI - For Sales 6.1 10.6 5.8 8.9 Our industrial fire-resistant hydraulic fluids, "Pydrauls" are used in place of petroleum hydraulic fluids where sources of ignition could cause a fire with resulting loss of life and pro perty. Our major customers are those who process hot or molten metal {diecast, steel, aluminum and foundry industries). Indus trial fluids business will continue to grow faster than the total metal working industry growth since most new and replacement equipment is automated with hydraulic systems. Our fire-resistant fluids have a heavy dependence on the chlorinated biphenyls. Some of these products ars very persistent and not biodegradable. We are developing a high viscosity phosphate ester to reformulate the high visoosity, high chlorine-content biphenyls out of our product line. In addition, we will reformulate with chlorinated terphenyls to achieve the same end. These actions will somewhat reduce our gross profit percentage but enable us to maintain market share and growth. The reformulated all phosphate ester fluids and currently developed water glycol fluids, will be introduced and marketed to maximize rly penetration of unsold synthetic fluids potential, including government bid business. We expect to exceed 1970 budget. 0633645 -111- GENERAL CHEMICALS - BUSINESS GROUP ($ in Millions) World-Wide Sales Oper. Income-Div. Income After Tax Gross Investment % RQI 1966 1967 Actual Budget 1968 1969 1970 69.7 6.6 3.7 69.4 6.4 2.7 75.1 6.9 1.9 79.4 8.4 3.3 83.2 B.l 2.8 107.4 126.2 124.1 124.4 135.7 3.4 2.2 1.5 2.6 2.1 U.S. Dom, & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 58.9 13.4 3.2 10.1 5.0 57.8 10.4 3.3 7.2 3.3 64.4 11.1 3.3 7.8 2.6 66.9 11.7 3.9 7,9 3.1 69.1 10.8 4.3 6.4 2.1 % of Sales: Gross Profit SARE-Div. Income After Tax 22.7 5.5 8.5 18.0 5.6 5.8 17.2 5.1 4.1 17.5 5.8 4.6 15.6 6.3 3.0 $ Sales/? investment .67 .57 .62 .63 .60 Gross Investment 88.4 101.8 104.5 106.9 114.9 % ROI 5.6 3.4 2.5 2.9 1.8 Major products reported for the General Chemicals business group are as follows! Page Adipic Acid Bisphenol A Maleic Anhydride Orthonitroaniline Paranitroaniline Phenol Phthalic Anhydride 113 114 115 116 117 118 119 112- 0633646 WATER PCB-00040083 ADIPIC ACID ($ in Millions) tr.S. Don. h Exoort Sales areaa Profit SARB-Dlv. Oper. Income-Div. income After Tax 1966 9.5 4.7 .5 3.6 2.2 Actual_____________ Budget 1967 1966 1969 1970 7.2 7.0 6.9 2.7 2.2 1.9 .4 .4 .4 2.3 1.7 1.5 1.2 .8 .7 7.9 1.6 .5 1.1 .3 Selling Price/lb. Cost of Sales/lb. % of Sales Gross Profit SARE-Div. Net income .209 .104 162 .113 .165 .114 .158 .114 .152 .120 50.2 5.3 23.0 37.9 6.0 17.0 30.8 5.9 10.9 28.0 5.8 10.4 20.8 6.5 4.4 S Salaa/9 investment .61 .52 .54 .45 .51 Gross Investmenti Fixed capital Working Capital Total 19.0 17.0 2.1 19.1 15.1 1.7 16.8 16.8 2.4 19.2 17.6 2.4 20.0 FUr Sales 15.5 15.4 12.9 15.4 15.5 % ro I - For Sales 14.0 6.9 5.9 4.7 2.2 Total Capacity - MM lbs. 54.0 54.0 56.4 56.4 55.2 FOr Salas Internal Use Excess 45.2 11.5 (2.7) 44.1 12.7 (2.8) 45.5 14.3 ( .4) 43.9 17.6 (5.1) 51.7 8.7 (5.2) An expansion of our Luling facility to 60MM lb./yr. began oper ation in tba firat quarter of 1970. This unit plus new phenol economics which will be available in late 1970 will increase the adipic return on investment to the 1.5*% range for 1971. 0633647 -113- WATER PCB-00040084 BISPHENOL A ($ in Millions) U.S. Dost. & Extort Sales Gross Profit SARE-Div. Oper. Inoome-Div, Income After Tax 1966 3.3 .2 .1 ( .1) ( .1) Actual_____________ Budget 1967 1968 1969 1970 3.B 3.9 4.2 .6 ,5 .5 -2 .2 .2 .4 .2 .3 .1 .1 .1 4.7 .7 .3 .4 .1 Selling Price/lb. Coat of Sales/lb. .205 .192 .200 .167 .181 .172 .158 .151 .165 .140 % of Sales: Gross Profit SARE-Div. Net Income 6.2 16.4 12.6 12.5 14.9 4.6 6.0 5.6 5.8 5.9 3.4 1.8 1.8 1.3 $ Sales/? investment .42 .36 .41 .45 .49 Gross Investment: Fixed Capital working Capital Total 9.5 8.5 8.3 1.3 .9 1.1 8.4 10.8 9.4 9.4 8.5 1.1 9.6 For Sales 8.1 10.3 9.3 9.4 9.6 % ROI - For Sales 1.2 .7 .8 .6 Total Capacity - MM lbs. 21.0 23.0 23.0 24.0 28.1 For Sales internal Use Excess 16.3 .7 4.0 18.8 .9 3.3 21.5 .1 1.4 24.5 ( .5) 28.2 ( .1) Pricing of Bisphenol A is expected to erode to the 144 level over the next few years. Under these conditions and with our best costs including new phenol economics, a maximum ROI of 4% can be expected. Present plans call for the retirement of this facility after 1971 and to have phenol converted to BPA for us by Shell. This conversion arrangement will generate a 7-1% ROI. -114- 063364B WATER PCB-00040085 MALEIC ANHYDRIDE ($ In Millions) P.S. Pom. & Export Salas Cross Profit SARE-Div. oper. Income-Div. income After Tax Selling Price/lb. Cost of Sales/lb. % of Sales: Gross Profit SARE-Div. Net Income $ Salea/$ investment Gross Investment: Fixed Capital ^forking capital Total for sales % RQI - For Sales 1966 4.4 .7 .2 .3 .1 .128 .109 Actual 1967 1968 3.6 .1 .2 ( .1) ( -1) 3.9 .2 ( .2) ( .2) .132 .127 .122 .121 Budget 1969 1970 5.3 5.3 .8 .7 .3 .3 .5 .4 .2 .139 .119 .142 .124 14.9 3.9 .8 14.6 12.7 4.6 6.1 5.6 5.7 6.3 2.5 3.1 .7 .62 .40 .48 .47 .41 11.4 7.1 1.5 15.2 .8 16.0 9.0 13.9 .9 14.8 8.2 16.5 1.2 17.7 11.4 1.4 21.2 1.0 22.2 13.1 .3 Total Capacity - MM lbs. 55.8 50.4 67.9 65.7 68.7 for Salas Internal Use Excess 34.6 23.7 (2.5) 27.3 26.7 (3.6) 32.0 29.7 6.2 38.2 26.6 .9 37.5 31.2 Raaults in 1969 and moat of 1970 raflact the poor economic* of our existing plant coupled with start-up expense* for the new 105MM lb, Scientific Design Institute unit late in 1970. This new, efficient facility and the establishment of more realistic prices for maleic anhydride will show a return on investment of 7-t* in 1971. 0633649 -115- WATER PCB-00040086 orthonitroaniline ($ in Millions) tr.s. Dom. & ExDort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. % of Sales> Gross Profit SARE-Div. Net Income $ Sales/$ Investment Gross Investmenti Fixed Capital working capital Total 1966 Actual 1967 1966 Budget 1969 1970 1.0 1.1 1.1 1.2 1.2 .6 .7 .8 .6 .4 .1 .1 .1 .6 .6 .7 .5 .3 .3 .3 .4 .3 .1 .427 .162 .424 .166 .424 .119 .406 .208 .385 .263 57.5 3.0 30.0 .98 60.5 5.2 31.6 1.26 72.1 4.4 33.4 1.43 49.1 5.4 22.4 1.74 31.7 5.9 12.1 .39 .6 .5 .5 2.8 .3 .3 .2 .2 1.1 .9 .8 .7 3.0 For Sales % ROI - For Sales 1.1 29.5 .9 39.9 .8 47.7 .7 38.9 3.0 4.7 Total Capacity - MM lbs. 2.9 2.9 3.1 3.5 1.5 For Sales Internal Use Excess 2.5 2.6 2.6 2.8 2.3 .3 .4 .3 .5 .4 < .8) Results for 1969 and 1970 show the effect of the ONA department explosion which destroyed the unit. Material during the first half of 1970 is being obtained via a conversion arrangement at a 20$ cost penalty. With the start-up of our new facility in mid-1970, a return of 7% can be expected. -116- 0633650 1 WATER PCB-00040087 PARASITROAKILINS ($ in Millions) U.S. Dorn. & Bxnort Sales dross Profit SARE-Div. Oper. Inoome-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1366. 2.4 .6 .5 .3 .404 .300 1967 1.9 .4 .1 .3 ,2 .415 .321 1968 1969 2.0 2.6 .7 .1 .1 .2 .6 ( .1) .3 { .1) .405 .379 .268 .364 1970 1.3 ( .2) .1 ( .3) ( .2) .388 .445 % of Salesi dross Profit SARJB-Div. Net Income 2S.7 3.0 10.6 22.6 5.2 8.0 33.7 4.4 13.9 3.9 6.2 (3.2) (14.8) 5.9 (13.9) $ Sales/9 investment .65 .49 .58 .79 .26 dross investments Fixed capital Working Capital Total 4.3 4.1 3.0 .7 .9 .6 4.7 5.0 5.0 3.6 5.4 .8 6.2 For Salas 3.8 3.9 3.4 3.2 5.0 % ROI - For sales 6.9 3.9 8.0 Total Capacity - MM lba. 9.9 9.9 9.9 9.9 5.0 For Sales Intemel Use Excess 6.0 4.6 4.9 6.7 1.6 1.5 2.2 1.2 3.8 2.8 2.0 3.3 1.7 Results for 1969 uid 1970 reflect the offset of the PKA department explosion which destroyed the unit. Interim facilities are bain? used during the first half of 1970 and generate a negative profit. Upon completion of the new permanent plant in mid-year, the PNA ROI should return to a T% level. 0633651 -117- I WATER PCB-00040088 PHENOL ($ in Millions) U.S. Dom. & Export Sales Gross Profit SARE-Div. Oper. Inoome-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. % of Salesi Gross Profit SARE-Div. Net Income $ Sales/S Investment Gross Investments Fixed Capital Working Capital Total For Sales 1966 Actual_____________ . Budget 1967 1968 1969 1970 4.6 3.5 5.1 5.1 6.3 1.4 .2 ( .6) < .2) ( .9) .1 .2 .2 .3 .4 1.2 ( .9) ( .5) ( 1.3) .6 ( .1) ( .5) ( .4) ( .9) .096 .066 .079 .074 .064 .071 .071 .075 .065 .075 31.7 3.2 12.9 .46 5.7 12.3 .34 ( 4.4) (14.0) 4.8 5.9 6.1 { 7.5) (13.6) .34 .33 .36 46.5 9.9 4a. 3 4.1 52.4 10.3 47.2 4.3 51.5 15.2 47.2 4.1 51.3 15.3 48.6 4.7 53.3 17.3 % ROI - For Sales 6.0 Total Capacity - MM lbs. 246.3 254.2 258.3 260.1 313.7 For Sales Internal Use Excess 47.6 44.9 206.9 195.6 ( a.2) 13.7 80.4 70.8 96.2 198.1 189.8 217.5 (20.2) ( .5) Results for 1969 and 1970 have been effected by accelerated depreciation for the WGK unit which will be retired by yearend. in addition< start-up expenses for the new 250MM lb. plant at the Chocolate Bayou location depress the financial results during the current year. In 1971, merchant sales of phenol should have manufacturing economics second to no one and should yield a 6 +9C ROI. -118- 0633652 WATER PCB-00040089 PHTHALIC ANHYDRIDE ($ in Millions) U.S. Don. & Exoort Sales Gross Profit SARE-Div. Oper. Ineome-Div. Income After Tax Selling Price/lb. Cost of Salea/lb* % of Saless Gross Profit SARE-Div. Net Income $ Sales/$ Investment actual________ Budget 1966 1967 1968 1969 1970 3.6 .4 .2 .1 ( .1) 7.1 1.8 -5 1.3 .7 9.3 4.0 5.4 .9 ( .8) ( .2) .5 .2 .3 .3 ( 1.0) ( .5) ( .6) ( .3) .092 .083 *116 .088 .120 ,109 .107 .129 .107 .111 10.3 5.2 .40 24.8 64 9.4 .47 9.8 (20.8) ( 3.7) 5.6 5.4 5.B *4 (16.3) ( 6.4) 53 .23 .45 Gross Investment! Fixed Capital Working Capital Total 21.3 29.7 2.6 32.3 31.5 2.0 33.5 28.1 3.9 32.0 29.8 3.3 33.1 For Sales % ROI - For Sales 9.1 15.0 17.5 17.6 11.9 4.4 .2 Total Capacity - MM lba. 108.8 193.3 192.1 109.1 93.0 For Sales Internal Use Excess 39.4 87.5 (18.1) 61.1 76.5 55.7 77.5 76.2 38.4 32.5 50.0 70.8 98.4 ( 7.2) (55.4) Operations and financial results in 1969 raflect the poor perfor mance of the Chooolate Bayou unit which ceases operations in mid-year 1970. Results are depressed by the resale of imported phthalic at a 4C/lb. cost penalty over the Delaware River plants economics. A 130MM lb./year BASF phthalic plant is now under construction at Texas and due to come on-stream during early 1971. A satis factory return on merchant sales can be expected at that time. 0633653 -119- WATER PCB-00040090 PLASTICIZERS - BUSINESS GROUP ($ in Millions) Wtarld-Wide Sales Oper. Xncome-Div. Income After Tax 1966 Actua 1_____________Budget 1967 1968 1969 1970 64.4 8.2 3.8 66.6 9.4 4.7 71.7 8.5 3.6 68.9 6.4 2.9 78.6 6.5 2.0 Gross Investment 76,2 62.9 81.7 89.4 117.1 % ROI 4.9 5.6 4.4 3.2 1.7 D.S. Dom, & Export Sales Grose Profit SARE-Div. Oper. Income-Div. Income After Tax % of Sales: Gross Profit SARE-Div. Income After Tax 57.7 13.0 4.1 8.9 4.4 57.1 13.6 4.0 9.6 4.9 61.3 12.6 4.4 8.2 3.6 58.7 10.2 4.7 5.5 2.4 67.4 10.9 5.3 5.6 1.6 22.5 7.1 7.6 23.9 7.1 8.6 20.5 7.2 5.9 17.4 8.0 4.2 16.2 7.8 2.4 $ Sales/$ Investment .87 .80 .87 .74 .63 Gross Investment 66.6 71.6 70.4 79.7 106.4 % ROI 6.6 6.7 5.2 3.1 1.5 Major products reported for Plasticizers business group are as follows: Page Adipates - Plasticizers 121 Aroclors - Plasticizers 122 Butyl, Ethyl, Methyl Phthalates 123 Benzyl Phthalates . 124 Decyl Phthalates 125 General Purpose Plasticizers 12S Octyl Phthalates 127 Other Phthalates 128 Phosphate Esters 129 Phthalyl Glycollates 130 Polymeries 131 Sulfonamides 132 120- 0633654 WATER PCB-00040091 ADIPATES - PLASTICIZERS ($ in Millions) U.S. Dorn. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual______________Budget 1967 1968 1969 1970 4.9 .7 .7 1.0 .1 .1 .3 .7 .1 .1 .3 *7 ,2 .1 ,1 Selling Price/lb. Cost of Sales/lb. *237 .190 .212 .170 .205 .162 .203 .152 % of Sales: Gross Profit SARE-Div. Met Income $ Sales/5 Investment 19.6 6.5 6.3 .89 19.9 6.S 5.6 .86 20.9 7.6 6.1 .73 25.1 7.3 7.1 .83 Gross Investment: Fixed Capital working Capital Total ror Sales 4.2 .6 *7 1.4 .2 .2 5.6 .8 .9 5.6 .8 .9 .6 .2 .8 .8 % ROI - For Sales 5.6 4.9 4.4 5.9 Due to lower Adipate prices, we will be below our projected price in 1970. 0633655 -121 WATER PCB-00040092 ARPCLORS - PLASTICIZERS (? in Millions) U.S. Dam. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual ________________________ Budget 1967 1968 1969 1970 4.6 5.4 5.9 2.1 2.3 2.3 .3 .4 .5 1.8 1.9 1.8 1.0 .9 .9 6.5 2.5 .6 1.9 1.0 Selling Price/lb. Cost of Sales/lb. .160 .087 .160 .092 .157 .097 .160 .099 % of Sales: Gross Profit SARE-Div. Net Income 45.6 7.3 21.2 42.6 7.3 17.2 38.0 8.2 15.5 38.0 8.0 14.7 $ Sales/? Investment .90 .96 .72 .79 Gross Investment: Fixed Capital working Capital Total 3.9 4.6 6.6 1.2 .9 1.6 5.1 5.5 8.2 6.6 1.6 8.2 For Sales 5,1 5.5 8.2 8.2 % ROI - tor Sales 19.1 16.5 11.2 11.6 The PCB situation on "accused" environmental pollution came to light in 1969. This could affect performance on A-1254 and A-1260 in 1970. The new solid Aroclor plant was added to the investment in 1969 with start-up in early 1970. The start-up costs in 1970 prevent better economics. This plant is timed ideally to meet the growing needs of hot melt adhesives and sales should exceed budget in 1970. -122- 0633656 WATER PCB-00040093 BUTYL, ETHYL. METHYL PHTHALATES {$ in Millions) u.S. Dorn. $. Export Sales Gross Profit SAHE-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1966 Actual 1967 I960 Budget 1969 1970 1.9 1.9 2.0 .4 .3 .2 .1 .1 .2 3 .2 -1 1.8 .3 .1 .2 .184 .147 .190 .158 .193 .172 .185 .157 % of Sales: Gross Profit SARE-Div. Net Income 20.2 6.5 6.6 16.9 6.8 4.1 10.9 7.7 .6 15.2 7.4 1.7 5 Sales/$ investment .72 .77 .59 .57 Gross Investment: Fixed Capital Working capital Total 2.0 2.1 2.6 .7 .4 .7 2.7 2.5 3.3 2.2 .9 3.1 For sales 2.7 2.5 3.3 3.1 % ROI - For Sales 4.5 3.1 .3 1.0 Higher selling prices in 1969 were more than offset by higher costs. Basically the increases were due to start-up variances on Chocolate Bayou phthalic plant and high cost import phthalic being used for production of these BEM`s. For 1970, selling price will decrease because of increasing competitive pressure. The cost of sales at .157 is probably realistic and the gross profit of 15.2% is realistic. 0633657 -123- WATER PCB-00040094 BENZYL PHTHAIATES ($ In Millions) U.S. Dom. & Export Sales Gross Profit SARE-Oiv. Oper. Income-Div. Income After Tax 1966 Actual 1967 196S Budget 1969 1970 14.1 4.4 1.0 3.3 1.7 15.2 4.3 1.1 3.2 1.4 14.5 4.1 1.1 3.0 1.5 15.4 4.3 1.2 3.2 1.4 Selling Price/lb, Cost of Sales/lb. .165 .114 .164 .117 .158 .113 .151 .108 % of Sales: Gross Profit SARE-Div. Net income 30.9 7.4 12.3 28.2 7.0 9.5 28. S 7.7 10.3 28.1 7.5 9.1 $ Sales/$ Investment .76 .80 .69 .64 GrosB investment: Fixed Capital Working Capital Total 15.1 3.5 IS.6 16.0 2.9 18.9 16.3 4.8 21.1 20.1 3.8 23.9 For Sales IS.6 18.9 21.1 23.9 % roi - For Sales 9.3 7.9 7.1 5.9 Due to the slowdown in building and our dependence on the flooring industry (65% of sales). 1970 sales budget will not be met. We ate also under price pressure due to lower Phthalate Ester prices. However, we hope to meet our selling price budget. The Phthalic problems of 1969 will be partially alleviated in 1970. 124- 0633658 WATER PCB-00040095 DECifL PHTHALATES ($ in Millions) U.3. Don. 6 Export Salas Cross Profit SARB-Div. Opar. Incoma-Div. Income After Tax 1966 Actual 1967 1963 5.2 2.9 .6 .4 .3 .2 .3 .2 .1 Budget 1969 1970 2.0 1.5 .2 .1 .1 .1 Selling Prica/lb. Cost of Sales/lb. .163 .149 .162 .139 .147 .135 .135 .123 % of Salesi Gross Profit SARB-Div. Hat income 11.6 6.5 1.9 14.1 6.3 2.7 7.7 7.6 (1.2) 9.2 6.9 (1.7) $ Sales/$ investment 1.02 1.20 1.03 1.02 Gross Investmentt Fixed Capital Working Capital Total 3.7 1.9 1.3 1.4 .5 .6 5.1 2.4 1.9 1.1 .3 1.4 For Salas S.l 2.4 1.9 1.4 % ROI - For Sales 2.0 3.2 Primarily s-215, the market and usage is under strong attack from DOP/chlorinated paraffin blends resulting in reduced selling price. Selling price is quite closely tied to the dOP/didp price level. Conversion of customers to either straight HB-40 or preferably a S-711AtB-40 blend is our goal and should-make this market profitable for us. 0633659 -125- WATER PCB-00040096 GENERAL PURPOSE PLASTICIZERS ($ In Millions) tl.S. Dorn. & Exoort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax Selling Price/lb. cost of Sales/lb. % of Salesi Gross Profit SARE-Div. Net Income $ Sales/? investment 1966 Actual 1967 1968 1969 14.7 .7 1.0 ( .3) ( .3) 13.0 ( .5) 1.0 (1.5) (1.0) .179 .170 .164 .170 1970 17.1 (2.1) 1.3 (3.4) (2.3) . 145 .163 Budget 4.9 6.9 (2.0) (4.1) 7.6 (7.7) (12.2) 7.4 (13.7) .99 .81 .52 Gross Investment: Fixed Capital working Capital Total 11.5 3.3 14.8 11.4 4.5 15.9 28.9 4.1 33.0 For Sales % ROI - For Sales 14.8 15.9 33.0 Price attrition during 1969 versus 1968 accounts substantially for decline in dollar sales and higher loss. In 1970, predicted price weakness in both Phthalate and Adipate Esters along with strategized price reductions in Santicizer 711 swell the losses incurred. These deficits, however, are based on the approved Santicizer 711 plan. A major breakdown of the $2.3MM after tax loss for 1970 is as follows) Negative - S-711 $1,175M: DOP - $541M; DNODP - $176M; DIDP - $1S9M DNODA - $5lM. Positive - DQA (JPQ) +?79M, All Others (Net Negative) -?336M. 1970 gross profit is adversely affected by Texas City Phthalate Ester start-up costa of ?811M. The forecast gross profit for 1971 is $1.7MM and for 1972 is $4.6mm due to greatly increased Santicizer 711 sales. Acceptance of S-711 in the trade to date is wider than forecast, and we have yet to lose a customer, in spite of concerted pressure by competitive alcohol suppliers, on the straight chain phthalate business. 0633660 OCTYL PHTHALATES ($ in Millions) U.S. Don. & Extort Sales Gross Profit SARE-Div. Oper. Income-Div. income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 6.3 .7 .7 .5 .4 .7 Selling Price/lb. Cost of Sales/lb. % Of Sales: Cross Profit SARE-Div. Net Income $ Sales/S Investment .157 .144 .163 .146 .147 .136 .141 .137 8.0 6.5 ( .4) 10.4 6.8 1.0 .88 1.13 7,8 7.6 (1.2) 1.10 2.0 7.4 (5.4) .67 Gross Investment: Fixed Capital Working Capital Total For Sales 5.4 .5 .5 .9 1.8 .1 .1 .1 7.2 .6 .6 1.0 7.2 .6 .6 1.0 % ROI - For Sales 1.1 All budget data appears realistic for 1970. The average selling price might be lower than .141 in 1970. due to lower OOP prices. 0633661 -127- WATER PCB-00040098 OTHER PHTHftLATES ($ in Millions) 0.3. Dom. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual 1967 1968 1.4 .3 .1 .2 .1 1.5 .3 .1 .2 .i 1969 Budget 1970 1.4 .2 .1 .1 1.4 .3 .1 .2 .1 Selling Price/lb. Cost of Sales/lb. % of Sales: Gross Profit SARE-Div. Net income .379 .308 .391 .308 .382 .340 .387 .308 18.6 6.4 5.3 21.3 6.9 6.3 10.9 7.6 .6 20.4 7.4 4.6 $ Sales/$ Investment .59 .50 .53 .52 Gross Investment: Fixed Capital Working Capital Total 1.9 .5 2.4 2.5 .6 3.1 2.1 .6 2.7 2.3 .5 2.8 For Sales 2.4 3.1 2.7 2.8 % ROI - For Sales 3.1 3.1 .3 2.4 For DCHP and DPP, 1969 selling prices decreased slightly due to higher off-take by Nashua Corp. Cost of sales increased significantly which can be traced to problems with Krummrich Phenol, start-up variances on the Chocolate Bayou phthalic plant and high cost import phthalic. Nashua's 1970 DCHP price has been effectively increased, which increases our average selling price. A gross profit of 20% is realistic if manufacturing costs show budgeted decrease. -128' 0633662 WATER PCB-00040099 PHOSPHATE ESTERS ($ in Millions) U.S. Dora. & Export Sales GrosB Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual 1967 1968 4.6 1.4 ,3 i.i .6 4.7 1.4 .3 1.1 .5 1969 Budget 1970 4.8 1.0 .4 .6 .3 7.1 1.2 .6 .6 .2 Selling Price/lb. Cost of Sales/lb, % of Sales; Gross Profit SARE-Div. Net Income .325 .226 .331 .234 ,322 ,256 .285 .237 30.3 7.2 12.2 29.1 7.2 10.3 20.5 8.1 5,9 16.5 8.2 2.5 $ Sales/$ Investment .81 .97 .82 .70 Gross Investment) Fixed Capital Working Capital Total 4.3 1.4 5.7 3.B 1.0 4.8 4.1 1.7 5.8 8.4 1.7 10.1 For Sales % ROI - For sales 5.7 4.8 5.3 10.1 9*a 10.0 4.8 i.e 1969 selling prices dropped late in year as planned to encourage more market interest in 5-140 and S-148, which have much larger profit margins than TCP, the traditional flame retardant. Phenol write-off and inefficient process led to high iCOGS. New efficient plants will start up in mid-1970 with attendant startup charges. Government legislation anticipated for 1970 (autos) may now be delayed, which will make budget sales estimate optimistic. 0633663 -129- WATER PCB-00040100 PHTHALYL nr.vror.TATRg ($ in Millions) IT.S. Dorn. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual______________ Budget 1967 196S 1969 1970 1.3 .5 .1 .4 .2 1.3 .5 .1 .4 .2 1.0 .3 .1 .2 .1 1.2 .4 .1 ,3 .2 Selling Price/lb, Cost of Sales/lb. % of Sales: Gross Profit SARE-Div. Net Income .461 .301 .455 .288 .458 .336 .473 .308 34.7 7.4 14.5 36.8 7.3 14,2 26,7 8.4 9.3 34,9 8.1 12.9 $ Sales/? investment .76 .72 .61 .68 Gross Investment: Fixed Capital Working Capital Total 1.4 .4 1.3 1.5 .3 1.8 1.3 .4 1.7 1.4 .3 1.7 For Sales % ROI - For Sales i.a 11.0 1.8 10.2 1.7 5.7 1.7 8.7 The high cost of sales for 1969 reflects high phthalic costs and high costs of acetate ester raw materials. The 1970 COGS budget assumes solution of these problems. At present, it appears sales for the family may fall short of budget by 10%. -130- 0633664 WATER PCB-00040101 P0LYMERIC5 ($ in Millions) U.S. Dorn. & Export Sales Gross Profit SARE-Div. Oper. income-Div. Income After Tax 1966 Actual Budget 1967 1968 1969 2.5 .5 .2 .3 .1 3.1 .7 .3 .4 .2 4.1 .9 .4 .5 .2 1970 4.4 .9 .4 .5 .2 Selling Price/lb. Cost of Sales/lb. % of Salesi Gross Profit SARE-Div. Net Income .329 .263 .331 .258 .321 .251 .318 .253 20.0 8,3 4.9 21.9 8.0 6.5 22.0 9.1 6.7 20.6 8.6 5.0 $ Sales/$ Investment .59 .73 .65 .72 Gross Investment: Fixed Capital Working Capital Total EOr Sales % ROI - For Sales 3.3 .9 4.2 4.2 2.9 3.5 .7 4.2 4.2 4.8 4.7 1.6 6.3 6.3 4.3 4.4 1.6 6.0 6.0 3.6 New product introduction and intensified marketing effort will continue to result in increasing market participation accom panied by slight selling price decline. Flowed cost variances from phenol thru adipic acid will adversely affect gross profit by about S0.2MM in 1970. Competitive threat from trimellitatea continues to exert pressure although so far trimellitates have had very limited success at replacing polymeries. Strong and increasing competitive pressure from other polymeric producers make mandatory increased effort to reduce manufacturing costs thru improved manufacturing efficiency and/or lower cost raw materials. 0633665 -131- WATER PCB-00040102 SULFONAMIDES ($ in Millions) U.S. Dom. & Exoort Sales Gross Profit SARE-Div. oper. Income-Div. Income After Tax 1966 Actual______________ Budget 1967 1968 1969 1970 4.2 1.2 .3 .9 .5 4.6 1.1 .3 .a .4 4.3 1.0 .4 .6 .3 4.7 1.1 .4 .7 .3 Selling Price/lb. Cost of Sales/lb. .413 .295 .409 .308 .405 .312 .397 .308 % of Sales: Gross Profit SARE-Div. Net Income 28.6 7.4 10.8 24.7 7.3 8.1 22.9 8.2 7.2 22.5 7.8 6.0 $ Sales/$ Investment .72 .69 .52 .76 Gross Investment: Fixed Capital Working capital Total 4.4 1.4 S.S 5.4 1.3 6.7 6.4 1.9 8.3 4.3 l.B 6.1 For Sales % R01 - For Sales 5.8 7.8 6.7 5.6 8.3 3.7 6.1 4.6 It appears we will make 1970 budget, although we are continually feeling the pressure of foreign competition. Budgeted volume for the family in 1970 is putting heavy demands on plant capacity. Balancing the Ortho/Para isomer production into the existing end uae markets remains a continuing challenge Currently, saccharin production requirements are creating an excess inventory of para isomer product, resulting in increased working capital investment. -132- 0633666 WATER PCB-00040103 RUBBER CHEttTCAM - BUSINESS GROUP ((,$ .in -Millions) World-Wide. Sales Oper. Income-Oiv. Income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 53.5 11.3 6.5 56.8 12.4 7.2 68.2 15.6 B.l 74.8 13.1 6.4 80.6 14.8 7.2 Gross Investment 56.1 61.9 69.4 83.4 108.3 % ROI 11.6 11.6 11.6 7.7 6.6 U.S. Dorn, & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax % of Salesi Gross Profit SARE-Div. Income After Tax 32.3 10.1 3.0 7.1 3.9 32.3 10.3 3.1 7.2 4.0 39.4 13.5 3.5 10.0 5.0 42.4 11.1 3.9 7.2 3.4 45.7 13.1 4.9 8.2 3.9 31.3 9.4 12.1 31.8 9.5 12,4 34.2 8.8 12.6 26.1 9.1 8.1 28.6 10.6 8.5 $ Sales/$ investment .95 .91 .97 .82 .69 Gross Investment % ROI 34.0 11.5 35.5 11.3 40.4 12.2 51.6 6.7 66.1 5*9 NOTE! Includes Reliable Mfg. Co. Major products reported for the Rubber Chemicals business group are as follows! Pace Flectol H & ODP Santocure and Cycle* Santocure M3R & M3R 90 Santoaure MS & Cyclex B Santoflex AH & Ajone E Santoflex DO & Ajone dd Santoflex 13 & Ajone HP Santoflex 77 & Ajone H Santowhite Crystals & Santonox 134 135 136 137 138 139 140 141 142 0633667 -133- WATER PCB-00040104 FLECTOL H & ODP ($ in Millions) U.S. Dorn. & Export Salas Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 .9 .3 .1 .2 .1 Actual______________ Budget 1967 1968 1969 1970 .8 .9 .9 1.2 .3 .3 .1 .1 .1 .1 .1 .2 .2 (.1) .1 .1 Selling Price/lb. coat of Sales/lb, .539 .337 .531 .334 .520 .378 .514 .511 .498 .432 % of Salest Gross Profit SARE-Div. Het income $ Sales/? Investment 37.5 B.O 13.9 .72 37.2 9.6 14.3 .68 27.3 9.0 8.5 .53 .6 8.9 (6.6) .44 13.2 9.8 (1.1) .58 Grose Investmenti Fixed Capital Working Capital Total 1.2 .9 .3 1.2 1.5 .3 i.a 1.5 .5 2.0 1.7 .3 2.0 For Salee 1.2 1.2 1.8 2.0 2.0 % ROI - For Sales 10.0 Total Capacity - MM lbe. 1.8 9.7 1.8 4.5 2.8 * 2.7 For Sales Internal Use Excess 1.6 .2 1.6 .2 1.8 1.0 1.7 2.3 .4 `Multipurpose equipment Which causea a fluctuating capacity. A second unsuccessful attempt was made to produce Flectol ODP in lata 1969 and early 1970 which adversely affects profitability in both years. Decision has been reached to discontinue further reports in this area and reserve the total plant for growth in Flectol H sales. Flectol ODP will be purchased for resale on an arrangement more favorable than self production which would require additional capital. 0633666 -134- WATER PCB-00040105 SANTOCURE AMD CYCLEX {$ in Millions) U.S. Dora. & Exoort Salas Gross Profit SARE-Div. Oper. Income-oiv. Income After Tax 1966 1.1 .5 .1 .4 .2 Actual 1967 1968 .9 1.0 .4 .4 .3 .1 .3 .3 .2 .1 1969 Budget 1970 .9 .6 .3 .1 .1 .1 .2 .1 Selling Price/lb. COBt of Sales/lb. % of Salesi Gross Profit SARE-Div. Net Income .636 .342 .608 .336 .570 .358 .560 .376 .540 .449 46.2 8.1 20.4 44.7 9.7 19.0 37.1 9.1 13.3 32.8 8.9 11.1 16.8 9.7 .9 $ Sales/$ Investment 1.15 .87 1.38 .97 .71 Gross Investment! Fixed Capital Working Capital Total 1.0 .7 .4 1.1 .4 .8 .3 .4 .7 1.2 .6 .3 .9 For Sales 1.0 % ROI - For Sales 23.4 Total Capacity - Wt lbs. * 1.1 16.6 * .7 18.3 * 1.0 10.8 # ,9 .7 1.3 Par Sales Internal Use Excess l.B 1.5 1.7 1.7 .6 1.2 .1 Multipurpose equipment Which causes fluctuating capacity. The gradual replacement of this product with the more profitable Santocure NS continues. In spite of borderline profitability, this product will continue to be sold to bold customers until they can be influenced to change to the newer Santocure NS. 0633669 -135- WATER PCB-00040106 SAHTOCtlRB HOR AND MOR 90 ($ in Millions) II.S. Dorn. & Ebmort Sales Gross Profit SARE-Div. Oper. Incoma-Div. Income After Tax 1966 1.4 .1 .1 Actual_____________ Budget 1967 1968 1969 1970 1.4 .3 .1 .1 .1 1.6 .4 .1 .2 .1 .6 .6 .1 .1 Selling Price/lb. Cost of Sales/lb. % of Salest Gross Profit SARE-Div. Net Income .679 .623 .678 .557 .678 .528 .647 .615 .681 .578 8.2 8.0 17.9 9.6 3.5 22.2 9.0 6.0 5.0 9.3 0.7) 15.2 9.6 $ Sales/$ Investment 1.15 .87 1.18 .57 .66 Gross Investment: Fixed Capital Working Capital Total 1.2 1.1 .6 1.7 1.0 .4 1.4 .7 .4 1.1 .6 .3 .9 For Sales 1.2 1.6 1.4 1.1 .9 % ROI - For Sales Total Capacity - tm lba. * 3.1 * 7.1 * 1.6 For Sales Internal Use Excess 2.0 2.1 2.4 1.0 .9 .7 Multipurpose equipment Which causes fluctuating capacity. This product line is being sold in decreasing amounts primarily due to insufficient capacity in the Thiofide (intermediate for MOR) plant. However, sales are not expected to increase and costs will remain high at these low requirement levels. Efforts are being made to switch customers to our more profitable Santooure NS and to our new Santooure NS-50 (pre-vulcanization inhibitor blend). 0633670 -136- WATER PCB-00040107 SAHTOCURE NS AND CTCLEX B ($ in Millions) U.S. Dom. & Export Sales Gross Profit SARE-Div. Oper, Incorae-Div. Income After Tax 1966 S.O 1.8 .4 1.3 .7 1967 5.9 2.2 .6 1.7 .9 Actual Budget 1968 1969 1970 7.8 2.9 .7 2.2 1.1 7.7 2.4 .7 1.7 .8 8.7 2.6 .9 1.7 .8 Selling Price/lb. Cost of Sales/lb. % of Salesi Gross Profit SARE-Div. Net Income .416 .267 .455 .285 .435 .274 .402 .278 .424 .298 35.7 8.1 13.8 37.3 9.4 15.8 36.9 8.8 14.0 30.7 9.3 10.6 29.7 10.8 8.6 $ Sales/$ Investment .92 1.10 1.02 .68 .60 Gross Investment) Fixed capital Marking Capital Total 5.4 For Sales 5.4 % roi - For Sales 12.6 Total capacity - MM lbs. * 3.9 1.5 5.4 5.4 17.3 * 6.3 1.5 7.8 7.7 14.2 * 9.5 2.4 11.9 11.3 7.2 * 12.9 2.3 15.2 14.5 5.2 22.7 For Sales internal Use Excess 12.0 13.0 17.9 19.1 1.9 20,5 1.3 .9 *Multipurpose equipment Which causes fluctuating capacity. Profitability will ba adversely influenced in 1970 by (1) start-up expense on the major expansion project for Santocure NS and its intermediates and (2) increased cost of TBA due to unusual waste treatment expense and higher HCN costs after the AN plant shuts down at Texas City. Profitability will improve in subsequent years as TBA cOBta return to normal and the expanded NS facilities become more fully occupied. 0633671 -137- WATER PCB-00040108 SAUTO FLEX AW AMD AJOHB E ($ in Millions) u.s. Dom. & Exoort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 1.7 .9 .1 .8 .4 1967 1.1 .6 .1 .5 .3 1968 1.0 .5 .1 .4 .2 1969 .8 .5 .1 .4 .2 1970 .8 .5 .1 .4 .2 Selling Price/lb. Cost of Sales/lb. .554 .253 .571 .264 .530 .280 .622 .286 .637 .287 % of Sales: Gross Profit SARE-Div. Met Income 54.3 a.o 24.8 53.8 9.5 24.4 47.1 8.7 19.3 54.0 8.9 23.1 54.8 9.8 22.5 $ Sales/S investment .94 .76 .96 .94 .91 Gross Investmenti Fixed capital working Capital Total For Sales 5.0 1.8 5.7 .8 6.5 1.5 4.3 .5 4.8 1.1 5.6 .7 6.3 .9 5.6 .6 6.2 .9 % ROI - For Sales 23.4 Total Capacity - MM lbs. * For Sales internal Use Excess 3.1 7.0 18.5 2.0 7.7 IB.5 * 2.0 9.0 21.7 * 1.3 11.1 20.4 14.4 10.6 .8 3.0 Multipurpose equipment which causes fluctuating capacity. As previously reported sales will continue to drop due to product obsolescence. Profitability will remain high and thue no reason to discontinue this product from our line. -138- 0633672 WATER_PCB-00040109 SAUTOFLEX DP AND AJONE DP (? in Million9) U.S. Dom. & EXDOrt Sales Gross Profit SARS-Div. Oper. Income-Div. Income After Tax 1966 3.1 l.S .3 1.2 .7 Actual_____________ Budget 1967 196B 1969 1970 2.5 1.1 .2 .9 .5 2.7 1.2 .2 .9 .5 2.0 .8 .2 .6 .3 2.1 .9 .2 .7 .4 Selling Price/lb. Cost of Sales/lb. % of Sales: Gross Profit SARE-Div. net income > 5 Sales/S investment .379 .200 .370 .208 .361 .206 .345 .205 .333 .166 47.2 a.2 21.7 1.54 43.6 9.3 19.9 1.02 42.9 8.6 17.5 1.16 40.8 9.3 16.1 1.05 43.9 10.7 16.7 1.06 Gross Investment: Fixed Capital working Capital Total 2.0 For Sales 2.0 % AOI - For Sales 33.5 Total Capacity - MM lbs. * 1.7 .a 2.5 2.5 20.3 * 1.7 .7 2.4 2.3 20.3 1.2 .7 1.9 1.9 16.9 * l.S .6 2.1 2.1 17.7 5.3 for Sales internal Use Excess 8.2 6.8 .1 7.5 .4 5.8 6.4 .1 (1.2) Multipurpose equipment which causes fluctuating capacity. Sales are expected to decrease substantially over the next several years due to product obsolescence. However, profit ability will remain good. 0633673 -139- WATER PCB-00040110 SANTO FLEX 13 AMD AJONE HP ($ in Millions) U.S. Pom. & Export Sales Gross Profit SARE-Qiv. Oper. Income-Div. Income After Tsx - 1966 7.6 2.3 .6 1.8 .8 Actual 1967 1968 Budget 1969 1970 8.1 2.5 .8 1.7 .9 9.7 4.0 .9 3.1 1.5 10.4 3.1 .9 2.2 1.0 9.3 3.1 .9 2.2 1.0 Selling Price/lb. Cost of Sales/lb. % of Salesi Gross Profit SARB-Div. Net income $ Sales/S investment ,830 .576 .829 .574 .773 .456 .698 .492 .750 .498 30.6 8.2 10.6 .86 30.7 9.4 11.6 .85 41.0 B.9 15.9 1.01 29.6 8.9 9.5 .84 33.6 10.1 10.4 .70 Gross Investments Fixed capital working Capital Total 9.3 7.5 2.2 9.7 7.7 2.3 10.0 9.8 2.8 12.6 12.5 1.6 14.1 For Sales 8.8 9.6 9.6 12.4 13.2 % ROI - For Sales Total Capacity - MM lbs. 9.2 * 9.8 * 16.0 * 8.0 * 7.4 11.8 For Sales Internal Use Excess 9.2 .6 9.8 1.0 12*5 .7 14.7 .4 12.6 1.5 (2.3) Multipurpose equipment which causes fluctuating capacity. The lower than expected profits in 1969 and forecasted for 1970 are due to major process problems affecting rate and quality of the 4NDPA intermediate. Costs are adversely affected by these process difficulties as well as start-up expense on the expan sion and the use of high cost imported 4NDPA and purchased Santoflex 13 to supplement our below capacity operations. A return to normal operations can be expected in the second quarter of 1970 and profitability should be reaching the 10% ROI level before year end. The future for this product remains good. Goodyear's improved capability for fulfilling their own require ments in 1970 accounts for our lower forecasted sales volume. 0633674 SANTO FLEX 77 AMD AJONE H ($ in Millions) U.S. Dom. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 2.4 .7 .2 .5 .3 Actual__________ _ Budget 1967 1968 1969 1970 2.3 2.2 1.8 1.6 .7 .8 .1 .3 .2 .2 .2 > .2 -5 .6 (.1) .1 .3 .3 .2 Selling Price/lb. Cost of Sales/lb. .626 .435 .681 .474 .644 .415 .639 .597 .647 .538 % of Sales i Gross Profit SARE-Div. Net Income 9 Sales/$ Investment 30.6 8.2 10.8 .93 30.4 9.3 11.8 .95 35.5 Be6 13.7 .82 6.6 9.5 (2.6) .98 16.9 10.4 12.7 .73 Gross Investment] Fixed Capital Working capital Total 2.5 1.7 .8 2.5 2.3 1.1 3.4 1.4 .6 2.0 2.6 .5 3.1 For Sales 2.5 2.4 2.7 1.9 2.2 % ROI - For Sales 10.0 Total Capacity - MM lbs. * 11.2 * 11.2 * # 9.3 1.0 For Sales Internal Use Excess 3.8 3.4 3.4 2.8 .4 2.5 1.2 (2.7) *Multipurpose equipment which causes fluctuating capacity. Coats ware substantially increased by the explosion in the department supplying the basic raw material, PNA. The use of off-grade PNA, the lower volume production to conserve product for critical uses and the write off of expenses for facilities to provide interim quantities of PNA were respon sible for the heavy costs experienced. A return to normal profit levels can be expected starting mid-1970. This product is not expected to show major sales growth in the next several years. 06336 75 -141- WATER PCB-00040112 SAHTOWHITE CRYSTALS AMD SAHTOHOX ($ in Millions) 0.3. Dora. & Exoort Sales Gross Profit SARE-Div. Oper. Ineome-Div. Income After Tax 1966 1.9 .5 .1 .1 .2 1967 1.9 .7 .2 .6 .3 Actual Budget 1968 1969 1970 2.1 .6 .2 .5 .2 2.3 .6 .2 .4 .2 2.6 .7 .2 ,5 .2 Selling Price/lb. Cost of Sales/lb. % of Salesi Gross Profit SARE-Div. Net Income 1.533 1.525 1.394 1.419 1.0B7 .933 .976 1.026 1.399 1.015 29.1 7.6 10.7 38.8 9.3 17.7 30.0 8.6 10.8 27.7 9.3 9.6 27.5 9.5 8.7 $ Sales/$ Investment 1.26 .91 1.27 .95 #94 Gross Investmenti Fixed Capital HOrking Capital Total 1.3 1.2 1.4 .8 .6 1.0 1.6 2.1 1.8 2.4 1.5 1.2 2.7 For Sales 1.5 % ROI - For Sales 13.6 Total Capacity - mm lbs. * 2.1 10.4 * 1.7 13.7 * 2.4 9.2 * 2.7 8.2 2.1 For Sales Internal Use Excess 1.2 1.2 1.5 1.7 .1 .1 1.9 .2 ^Multipurpose equipment which causes fluctuating capacity. Higher costs more than offset the increase in the selling prices and volume, however this product will continue to earn a good return at present volumes, A cheaper replacement product through research has not mater ialized and continuation of the program is not resolved at this time. -142- 0633676 WATER PCB-00040113 PACKAGING D1VI3I0K Division Profitability (S in Millions) World-Wide Sales Oper. Income-Div. LOPAC Project Exp. income After Tax 1966 Actual 1967 1968 47.4 55.4 64.0 (1.9) (1.8) 1.0 (2.5) (2.0) (1.0) 1969 Budget 1970 69.0 (.1) 1.5 (2.0) 81.6 5.0 2.5 (.3) Gross Investment 81.1 92.1 97.6 110.0 114.0 % HOI u.s. Dom. & Export Sales Oper. Income-Div. LOPAC Project Exp. Income After Tax 46.9 54.0 62.2 (1.6) (1.7) .7 (2.3) (1.7) (1.0) 67.0 ( .2) 1.5 (2.0) 79.2 4.6 2.5 (.5) Inc. IT ii 5 of Sales $ Sales/S Investment (4.9) .59 (3.1) .60 (1.6) .65 (3.0) .63 (.6) .71 Gross investment 90.1 90.3 95.7 106.4 111.8 % ROI Division Product Group/Buainessi Blownware Packaging Materials Thermo forming .2 .5 2.7 2.6 .7 3.1 Investment in the division's major products earned the following rates of return for actual 1969 and budget 1970> % of Investment 1969 1970 Loss 0 to 4* 91.6 19.4 24.3 75.7 Product groups are reported on the following pages Page Blownwars Packaging Materials Thermo forming 144 145 146 0633677 Major products reported comprise 100K of the division's invest ment in 1969 and 1970. -143 WATER PCB-00040114 144- BLOWKWARg - PRODUCT GROUP ($ in Millions) World-Wide Sales Oper. Xncoma-Div. Income After Tax Gross Investment % KOI U.S. Dorn. & Exoort Salas Gross Profit SARE-Div. oper. Income-Div. Income After Tax Selling Price/M Units cost of Sales/M units 1966 Actual_____________ Budget 1967 1968 1969 1970 31.2 u.o> (1.5) 52.0 37.3 1.3 .1 57.1 .2 39.9 1.9 .3 58.5 .5 43.3 ( .2) ( .6} 61.8 49.1 2.5 ^ .5 62.3 .8 31.2 3.4 4.4 (1.0) (1.5) 52.79 48.04 37.3 5.6 4.3 1.3 .1 53.36 46.21 39.9 6.2 4.3 1.9 .3 55.22 38.70 43.0 4.2 4.4 ( .2) ( .6) 57.75 52.11 48.1 6.4 4.1 2.3 .4 58.15 50.38 % of Sales Gross Profit SARE-Div. Income After Tax S Sales/S investment 10.9 14.1 (4.8) .60 15.0 11.5 .3 .65 15.5 10.8 .8 .68 9.8 10.2 (1.4) .70 13.3 8.5 .8 .78 Gross Investment) Fixed Capital Working Capital Total For Sales 44.2 7.8 52,0 52.0 48.3 8.8 57.1 57.1 46.7 11.8 50.5 . 58.5 51.1 10.5 61.6 61.6 49.8 11.7 61.5 61.5 $ KOI - fbr Sales .2 .5 .7 Total Capacity - Wt Units 650 840 920 950 975 For Sales Internal Uae Excess 591 699 719 743 59 141 201 207 825 150 Blownwara-1969 resulta war* grossly distortad fay tha affect of tha HfiP Division axpanaion of HOPE facilitiss at Taxaa City (SIMM aftar tax), Prieas vara ineraaaed in 1969 for tha sacond consecutive yaar; but wars almost fully offast by poor parfornanca and axcassiva costa at tha Yardvilla and Daap River plants. Achievement of 1970 budget will ba largely dapendsnt on tha transfer cost of HOPE. Blownwars pricaa are budgeted to increase and these increases, oorablned with tight overhead oost control, will ba required to offset tha rising costs of plant labor and other operating coats. Major profit lavaraga points lia in raw material coata, our ability to hold prices, and increased sales volume. We have installed capa city to carry us through tha next two years and its utilization will be a major contributor. Present strengths lia in our leadership position in the market and technical know-how. we are hopeful that our resin coat position will ba improved aftar the completion of H&P'a expansion. 0633*76 WATER PCB-00040115 PACKAQIHG MATERIALS - PRODUCT GROUP (5 in Millions) World-Wide Sales Opar. Income-Oiv. Income After Tax Groes Investment % ROI 1966 11.2 (.2) 14.a Actual_____________ Budget 1967 1968 1969 1970 10.8 13.9 13.5 16.1 .1 1.5 1.3 2.1 (.1) .6 .6 .8 17.2 20.1 21.6 24.5 3.0 2.8 3.3 U.S. Dorn. & Export Sales Gross Profit SARE-Div. Oper. Income-Oiv. Income After Tax Selling Priee/lb. (Polyflex) Cost of Sales/lb. (Polyflex) * of Salest Gross Profit SARB-Div. Income After Tsx 10.6 1.7 1.4 .3 (.1) .37 .31 10.1 1.4 1.4 .36 .29 12.9 2.7 1.5 1.2 .5 .36 .25 12.3 2.7 1.6 1.1 .5 .36 .27 15.7 13.0 (.9) 13.9 13.9 20.9 11.6 3.9 22.0 13.0 4.1 14.9 3.4 1.5 1.9 .7 .36 .27 22.8 10.1 4.7 $ Sales/? Investment Gross Investment] Fixed Capital Working capital Total .76 .62 .69 .63 12.1 2.1 14.2 13.8 2.5 16.3 14.8 3.8 18.6 13.8 5.8 19.6 .65 16.8 6.3 23.1 For Sales % ROI - For Sales Total Cap, - mm lbs. (Polyflex) 14.2 30.4 16.3 30.4 18.6 2.7 32.0 19.6 2.6 36.0 23.1 3.1 44.0 For Sales Internal Use Excess 15.5 3.4 11.5 17.2 5.9 7.3 18.4 10.9 2.7 15.8 15.0 5.2 18.0 21.0 5.0 Packaging Materials-Earnlngs plateaued in 1969 largely due to declining profits in the Vuepak operation combined with s6me price softening in the highly profitable Polyflex sheet and film business. Meat tray prices stabilized during the year, volume continued to increase and the outlook for this product segment was bright at year-end. Vuepak busi ness will be phased out on a no-losa basis unless profits improve in 1970. Achievement of 1970 budget depends largely upon our ability to hold prices in the face of increasing competition in the Polyflex area, and our suc cess in expanding volume in meat trays. Polyflex sheet continues to be the lowest cost transparent plastic available and this advantage is expected to open new markets for such packages as meat trays, produce trays, cookie trays, etc. The meet tray market baa stabilized, consumer preferences for clear trays remains strong and legislation in a number of areas is forcing conversion to clear packaging. 0633679 Our atrengtha lie in our Polyflex technology and costs and leadership position in the clear meat tray industry. -145- THERMO FORMING - PRODUCT GROUP ($ in Millions) world-wide Sales Oper. Income-Div. Income After Tax Gross Investment % ROI U-S. Dorn, % Export Sales Gross Profit SARE-Div. Oper. income - Div. Income After Tax Selling Price/M Units Cost of Sales/M Units % of Saleai Gross Profit SARE-Div. Income After Tax $ Sales/? Investment Gross investment) Fixed Capital Working Capital Total For Sales % ROI - For Sales Total Capacity - MM Units For Sales Internal Use Excess 1966 Actual ________ , Budget 1967 1968 1969 1970 5.0 (.9) (.8) 14.3 7.3 (3.2) (2.0) 17.8 10.2 (2.4) (1.9) 19.0 12.2 (1.2) (1.3) 26.6 16.4 .4 (.3) 27.2 4.9 .3 1.2 <.9> (.7) 8.15 7.46 6.6 (1.2) 1.8 (3.0) (1.8) 7.75 9.54 9.4 ( .2) 2.2 (2.4) (1.8) 7.36 7.55 11.7 .6 1.7 (1.1) U.2) 7.93 7.54 16.2 2.2 1.8 .4 (.3) 9.24 7.97 6.1 24.5 (1.4) .35 (18.2) 27.3 (27.3) .39 ( .2) 23.4 (19.1) .51 5.1 14.5 (10.3) .46 13.6 11.1 (1.9) .60 11.8 2.1 13.9 13.9 14.3 2.6 16.9 16.9 14.9 3.7 18.6 18.6 20.5 4.7 25.2 25.2 21.7 5.5 27.2 27.2 720 598 122 1900 842 1058 2100 1242 858 1810 1463 347 1900 1755 145 Thermoforming-1969 was significantly improved from the previous year hut remained in a loss position. However, a number of key Leverage factors were accomplished during the year with the most significant being the stability of operations and costs at the Bridgeview plant. Also, price increases were announced late in 1969 in practically all product segments. The 1970 budget depends largely upon our ability to sell the budgeted volume which represents a 34% increase over 1969. in addition, the pro cess stability in Bridgeview will m permit a concentrated effort to reduce the overall level of costs through automation, etc. and signifi cant steps in this direction will be achieved this year. Our strengths in vending cups and food containers lie principally in our innovative abilities and thermoforming technology. These strengths will be employed to expand our product line into new packages and improve our volume levels to a point where this product group will achieve returns in the range of 5% to 6%. 0633680 -146- WATER PCB-00040117 PLASTIC PRODUCTS & RESINS DIVISION Division Profitability ($ in Millions) 1966 World-Hide Sales 167.2 Oper. Income-Div, 24.3 Income After Tax ,n^.8 Extra. Expense-Before Tax' Actual_____________ 1967 1968 1969 157.3 16.5 7.3 .8 169.7 20,2 8.2 1.9 170.0 21.0 10.4 2.5 Budget 1970 187.8 27.5 12.8 3.2 Gross Investment % ROI 195.S 209.6 211.7 224.5 246.9 6.5 3*5 3.8(A) 4.6 5.2 U.S. Dom. & Export Sales Oper. Income-Div. Income After Tax Inc. A.T. as 54 of Sales $ Sales/? Investment 124.5 21.2 10.9 109.4 14.9 6.7 121.0 17.8 7.4 117.6 16.3 7.9 131.5 22.0 9.9 8.8 .80 6.1 .66 6.1 .74 6.7 .67 7.5 .68 Gross Investment % ROI Division Product Groupt Plastic Products Resins Safi ex vinyl Acetates 154.8 165.7 161.6 176.0 192.2 7.0 4.0 4.5(A) 4.5 5.2 4.4 19.8 10.4 1.9 15.0 7.1 3.8 15.5 5.3 4.2 11.1 3.7 4.1 11.8 3.5 (A) Reflects investment in Compounds & Colorants retired in 1968 <$3.6MM). (B) Methanol expansion and acetic acid/VAM programs at Texas city. investment in the division's major products earned the following rates of return for Actual 1969 and Budget.1970 Loss 0 to 4% 4 to 6* Over 654 % of Total Investment 1969 1970 24.6 24.0 21.5 23.2 11.1 42.8 S2.9 Product groups are reported on the following pagesi Plastic Products Raeins Pace 148 149 Saflex Vinyl Acatate Pace 154 155 Major products reported comprise 99% of the division's investment in 1969 and 1970. 0639681 _ WATER PCB-00040118 PLASTIC PRODUCTS - PRODUCT GROUP ($ in Millions) World-Wide Sales Oper. Income-Div. Income After Tax 1966 58.4 .1 ( -5) Actual_____________ 1967 1968 1969 53.7 55.8 56.3 (2.2) (1.9) ( .2) (2.4) (2.3) .3 Budget 1970 64.6 3.5 1.0 Gross Investment % ROI 57.4 56.6 55.7 59.5 .5 61.4 1.6 U.S. Domt & Export Sales (Grossed in 1966) Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 33.6 3.6 4.4 ( .0) (1.2) 25.4 .9 3.8 (2.9) (2.5) 28.0 1.0 4.4 (3.4) (3.0) 25.4 2.3 4.9 (2.6) (1.1) 30.6 5.2 5.2 ( .8) % of Sales: Gross Profit SARE-Div. Income After Tax S Sales/? Investment 10.7 13.1 .99 3.5 15.0 3.6 15.7 9.1 19.3 .80(A) i.oof* .82 17.0 17.0 .91 Gross Investment: Fixed Capital Working capital Total 19.9 13.8 33.7 20.4 11.5 31.9 18.5 9.4 27.9 21.2 9.7 30.9 25.2 8.1 33.3 For Sales % ROI - For Sales 33.7 31.9 27.9 30.9 33.3 (A) Four (4) months Kenilworth Plant strike in 1967. (b) Turnover rate includes Compounds & Colorants retirement at year-end 1968. In 1969 Plastic Products had net income for the first time in its four-year history due to Ex U.S.A. income doubling and unanticipated benefits resulting from retirement of Compounds & colorants in 1968. All member companies showed improvement over 1968 in sales and/or manufacturing and this should continue in 1970. Ex U.S.A. net income improvement wae featured by the turn-around position, from loss to gain, at MCL, MOCAN and MMSA. CIPSA's net income decrease was due to a tax credit in 1968 rather than 1969 operations. Domes tic and Export improvement was due to various incomes oecuring from the sale of Compounds & Colorants assets. In 1970 increased sales and a better gross profit position in the Domestic area coupled with Ex U.S.A. will improve World-Wide Income. Domestic sales increases are mainly in Film, Foam and the Building Service Centers, with Gross Profit up because of volume, enriched product mix and improved manufacturing performance. Selling expense is geared to the higher sales in the above three products. Ex U.S.A. contribution reflects increases in Coated Fabrics and Foam at ndcan and Proprietary Extrusions at MMSA, while the other overseas pro ducts are approximating 1969 net income level. 0633662 RES IMS - PRODUCT GROUP ($ in Millions) World-Wide Sales Oper. Income-Div. Income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 49.6 5.1 2.6 46.0 2.5 .7 48.9 3.7 1.2 49.1 5.4 2.6 52.7 6.2 2.8 Gross Investment % ROI 67.5 3.8 73.6 1.0 72.5 1.6 73.3 3.5 75.6 3.8 U.S. Dorn. & Export Sales Gross Profit SARE-Dlv. Oper. Income-Div. Income After Tax 37.3 9.0 4.2 4.8 2.4 32.9 7.3 4.3 3.0 1.1 35.7 9.0 4.1 4.9 2.1 35.0 9.3 4.3 5.0 2.4 39.2 9.9 4.4 5.5 2.4 % of Sales: Gross Profit SARE-Div. Income After Tax 24.1 11.3 6.4 22.2 13.1 3.3 25.2 11.5 5.9 26.0 12.0 6.7 25.3 11.2 6.1 $ Sales/? Investment .68 .56 .63 .63 .67 Gross Investment % ROI 54.4 4.4 58.7 1.9 55.8 3.8 57.0 4.2 58.4 4.1 Major products reported for the Resins product group are as follows> Pace Aminoplasts Formalin Phenoplasts Styrenes 150 151 152 153 0633683 -149- WATER PCB-00040120 AMINO BLASTS ($ in Millions) U.S. Dom. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual______________ Budget 1967 1968 1969 1970 9.5 1.7 1.0 .7 .3 8.7 1.8 1.0 .8 .4 11.3 2.6 1.2 1.4 .7 11.4 3.1 1.2 1.9 1.0 12.4 3.2 1.3 1.9 1.0 Selling Price/lb. Cost of Sales/lb. .136 .111 .117 .095 .122 .094 .122 ,089 .112 .083 % of Salest Gross Profit SARE-Div. Net Income 17.9 10.5 3.2 20.7 11.5 4.6 23.0 10.6 6.2 27.2 10.5 8.8 25.8 10.5 8.1 6 Sales/S Investment .85 .70 .88 .89 .84 Gross investmenti Fixed Capital working Capital Total 8.1 3.1 11.2 9.8 2.6 12.4 9.9 3.0 12.9 10.2 2.5 12.7 11.7 3.0 14.7 For Sales 11.2 12.4 12.9 12.7 14.6 % AOI - For Sales 3.1 2.9 5.2 7.7 6.5 Total Capacity - MM lbs. 82.5 101.9 129.4 129.8 132.3 For Sales Internal Use Excess 69.1 13.4 72.5 29.4 92.9 36.5 94.0 2.8 33.0 110.3 22.0 1969 sales were at the same level as 1968's with Gross Profit much improved due to lower manufacturing costs. This increased Gross Profit resulted in the higher net income as SAKE was held at the same level as 1968. 1970 sales will increase in the Wood Products and Coatings market area. Gross profit does not increase proportionately as half of sales increase will be Wood Products, low sales price and small profit, and the impact of start-up costs at Springfield's 81 Bldg, and Hydro's Texas City Methanol Plant will be felt. However, 1970 net income will hold at the 1969 level. 0633664 -iso- WATER PCB-00040121 FORMALIN (5 In Millions) u.S. Dom. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 3.7 .9 .2 .6 .4 3.5 1.0 .3 .7 .3 4.0 1.2 .3 .9 .4 4.0 1.2 .5 .7 .3 4.6 1.0 .4 .6 .1 Selling Price/lb. Cost of Sales/lb. % of Salest Gross Profit SARE-Div. Net Income .025 .019 .024 .017 .022 .015 .022 .015 .019 .015 24.3 5.4 10.8 28,6 8.6 8.6 30.0 7.5 10.0 30.0 12.5 7.5 21.7 8.7 2.2 $ Sales/S investment .69 .53 .51 .44 .51 Gross Investmenti Fixed Capital Working Capital Total 7.2 1.4 S.6 10. S 2.4 12.9 13.2 2.4 15.6 10.7 2.5 13.2 12.2 1.8 14.0 For Sales S.4 6.4 7.9 8.9 8.9 % ROI - For Sales 7.0 5.3 5.1 3.5 1.4 Total Capacity - MM lbs. 233.5 294.5 371.1 358.3 387.2 For Sales internal Use Excess 146.0 87.5 142.2 113.3 39.0 182.4 188.7 185.0 123.7 49.6 236.0 132.6 18.6 1969 Sales and Gross Profit maintained 1968 levels while higher engineering costs, relating to the new Texas City Methanol Plant, affected the net income, 1970 Sales dollars will increase despite slightly lower sales price. Gross Profit will decrease mostly from start-up costs at Hydrocarbon's Texas City Methanol Plant, excess cost of purchased methanol, and start-up costs from a Springfield expansion. These factors, plus Excess SYD costs, will effect total 1970 Net Income, but dramatic improvement will be noted in the fourth quarter as low-cost methanol becomes available from the new plant. 0633665 -151- WATER PCB-00040122 PHEHOPLASTS {$ in Millions) U.S. Dom. & Exoart Sales Gross Profit SARE-Div. Oper. Ineorae-Div. Income After Tax 1966 Actual______________ Budget 1967 1968 1969 1970 16.9 4.1 2.0 2.1 .9 14.7 3.0 2.0 1.0 .1 14.1 3.2 1.8 1.4 .4 14.2 3.2 1.7 1.5 .6 15.5 3.3 1.7 1.6 .6 Selling Price/lb. Cost of Sales/lb. % of Sales: Gross Profit SARE-Div. Met income .085 .065 .081 .065 .081 .063 .084 .065 .084 .066 24.3 11.8 5.3 20.4 13.6 .7 22.7 12.8 2.8 22.5 12.0 4.2 21.3 11.0 3.9 $ Sales/$ investment .57 .44 .51 .49 .55 Gross Investment: Fixed Capital Working Capital Total 25.6 4.2 29.8 29.0 4.5 33.5 23.5 4.1 27.6 24.2 4.6 28.9 23.2 4.7 27.9 nor Sales % ROI - For sales 29.8 3.0 33.5 .3 27.6 1.6 28.9 2.2 27.9 2.1 Total Capacity - MM lbs. 298.0 351.3 331.0 285.3 268.7 For Sales Internal Use Ibccess 197.8 100.2 180.6 170.7 173.0 1.0 157.0 168.7 .7 115.9 185.4 83.3 1969 Sales, Gross Profit and SAKE were at the same level as 1969 but 1969 net income improved because of tax credit resulting from gift of land at Seattle Plant. (Majority of PP&R production formerly at Seattle has been transferred to Eugene, Oregon.) 1970 Sales are up as the Bonding market area continues on the upward trend. Gross Profit increases slightly despite high Machinery Obsolescence and the last year of write-off at Organic's Krummrich Phenol Plant and start-ups of the new phenol unit at Alvin and methanol unit at Texas City. 0633666 STYRENES ($ in Millions) U.S. Dora. & Exoort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 6.0 2.3 .8 1.5 .9 1967 5.5 1.6 .9 .7 .4 1968 6.1 2.0 .8 1.2 .6 1969 6.1 1.9 .9 1.0 .5 1970 6.6 2.4 1.0 1.4 .7 Selling Price/lb. Cost of Sales/lb, .161 .099 .177 .128 .205 .138 .196 .135 .1B9 .120 X of Saless Gross Profit SARE-Div. Net income 38.3 13.3 15.0 30.9 16.4 7.3 32.8 13.1 9.8 31.1 14.8 8.2 36.4 15.2 10.6 $ Sales/8 Investment .88 .89 .86 .96 .97 Gross investment! fixed capital Working capital Total 4.9 1.9 6.8 4.1 2.1 6.2 5.0 2.1 7.1 4.5 l.B 6.3 4.1 2.7 6.8 For Sales % ROI - For Sales 6.8 12.8 6.2 7.1 7.1 8.9 6.3 8.5 6.8 10.7 Total capacity - MM lbs. 53.9 52.5 48.2 57.1 57.9 For Sales Intsrnal Use Excess 37.3 16.6 29.8 22.7 29.8 18.4 31.1 26.0 35.0 22.9 1969 Sales were approximately at the 1968 level. Higher tech nical costa for HJ-100 and operational difficulties at Everett's maleic anhydride plant detracted from Gross Profit. With 1970 Sales increasing, especially RJ-100, and manufacturing improve ments resulting from 1969 programs, this product group will attain its highest net income since 1966. 0633687 WATER PCB-00040124 -154- SAFLEX - PRODUCT GROUP ($ in Millions) World-Wide Sales Oper. Income-Div. Income After Tax Gross Investment 1966 35.2 14.8 8.5 41.4 Actual_____________ 1967 1968 1969 34.6 40.4 40.2 12.3 15.4 13.4 7.1 8.0 6.6 45.3 50.8 55.0 Budget 1970 44.9 14.9 7.9 70.6 % ROT u.S. Dorn, & Export Sales (Grossed) Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 20.5 15.7 15.8 12.0 11.1 31.6 14.4 1.6 12.9 7.5 29.1 13.1 2.3 10.9 6.2 35.7 16.1 2.7 13.3 7.0 35.0 14.6 3.1 11.5 5.7 39.2 16.6 3.0 13.6 7.2 Selling Price/sg. ft. Cost of Sales/sg. ft. .227 .112 .223 .116 .221 .112 .225 .122 .232 .125 % of Salesi Gross Profit SARE-Div. Income After Tax 45.6 5.1 23,7 45.0 7.9 21.3 45.1 7.6 19.6 41.7 8.9 16.3 42.3 7.7 IB.4 $ Sales/? Investment .84 .71 .79 .68 .64 Gross Investment; Fixed Capital Working Capital Total 25.1 12.4 37.5 27.7 13.3 41.0 32.3 12.9 45.2 39.3 14.1 51.4 48.2 13.0 61.2 For Sales % HOI - For Sales 37.5 19.8 41.0 15.0 45.2 15.5 51.4 11.1 61.2 11.6 Total Capaclty-MM sq. ft. 161.9 214.6 197.2 208.1 234.3 For Sales Internal Use Excess 130.6 121.8 147.9 141.9 155.3 31.3 92.8 49.3 66.2 81.0 1969 W-W Sales were at 1968 levels despite drop in U.S.A. auto production of 600M unitB. Lower domestic sales were offset by higher sales in Europe as that market continued the trend towards laminated safety glass. Domestic Gross Profit was under I960's due to start-up s at Springfield and Trenton and a strike at Trenton. 1970 W-W Sales are budgeted up (12%). Major contributing factors are increasing use of LSG in Europe and a change in the styling of the 1971 domestic automobiles involving use of larger wind shields. Profits will not fully reflect these increased sales due to heavy costs involved in 1) Start-Ups, 2) Expenses connected with the Texas City Plant (Acetic Add/VAM) and 3) Saflex-Butvar expansion at MESA. Despite these heavy costs the W-W income will increase over 1969 (contingent upon U.S. Economy). Future years will benefit from this added capacity at reduced coats. 0633680 WATER PCB-00040125 VINYL ACETATES - PRODUCT GROUP ($ in Millions) World-Wide Sales oper. Income-Div. Income After Tax 1966 Actual 1967 1968 1969 Budget 1970 23. S 5.6 2.9 22.9 4.6 2.3 24.1 3.6 1.6 24.1 3.2 1.3 25.0 3.4 1.4 Gross Investment % HOI 28.3 10.4 32.8 7.1 31.8 5.3 36.2 3.7 39.0 3.5 U.S. Dom, & Export Sales Gross Profit SARE-Div. Oper. Income-Div, Income After Tax % of Saless Gross Profit SARE-Div. Income After Tax 23.8 7.6 2.2 5.6 2.9 22.9 7.7 3.1 4.6 2.3 24.1 6.9 3.3 3.6 1.6 24.1 6.5 3.3 3.2 1.3 25.0 6.4 3.0 3.4 1.4 32.8 9.2 12.2 33,6 13.5 10.0 28.6 13.7 6*6 27.0 13.7 5.4 25.6 12.0 5.6 $ Sales/$ investment .84 .70 .76 .66 .64 Gross Investment % HOI 28.3 10.4 32.8 7.1 31.8 5.3 36.2 3.7 39.0 3.5 Major products reported for the Vinyl Acetates product group are IB follows I Butvar Formvar Gelva Gelvatol Page 156 157 158 159 0633689 -155- WATER PCB-00040126 BUTVAR ($ in Millions) U.S. Dom. & Export Sales Gross Profit SARE-Div, Oper. Income-Div. Income After Tax 1966 4.6 2.4 .4 1.9 1.1 Actual_____________ Budget 1967 1968 1969 1970 4.1 1.9 .5 1.4 .8 4.3 1.9 .5 1.4 .7 3.8 1.8 .5 1.3 .6 3.7 1.5 .6 .9 .4 Selling Price/lb. Cost of Sales/lb. .969 .518 .879 .478 .860 .480 .905 .476 .881 .524 % of Sales: Gross Profit SARE-Div. Net Income 52.2 8.7 23.9 46.3 12.2 19.5 44.2 11.6 16.3 47.4 13.2 15.6 40.5 16.2 10.8 $ Sales/S Investment 1.02 .85 1.02 .77 .66 Gross Investment: Fixed Capital Working Capital Total 16.0 3.6 19.6 18.6 4.1 22.7 19.0 4.2 23.2 16.2 4.2 20.4 18.9 4.0 22.9 For Sales % ROI - For Sales 4.5 24.1 4.8 15.8 4.2 17.7 4.9 12.5 5.6 7.4 Total Capacity - MM lbs. 26.1 27.5 29.4 30.5 36.1 For Sales Internal Use Excess 4.7 15.3 6.1 4.6 16.2 6.7 5.0 20.0 4.4 4.2 24.5 1.8 4.2 25. B 6.1 1969 Domestic sales were at the 1968 level, but export sales were down a* Russia began producing its own PVB requirements. The decrease in export sales accounts for the slight reduction from the 1968 Net Income as other costs, overall, remained the same. The markets for PVB resin are mature and the 1970 sales budget does not anticipate any growth over 1969. Beyond 1970, there are prospects of growth in the new field of "reprographics". -156- 0633690 WATER PCB-00040127 FORMVAR ($ in Millions) U.S* Dora. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. income After Tax Selling Price/lb. Cost of Sales/lb. % of Sales; Gross Profit SARB-Div. Met Income 1966 Actual 1967 1968 Budget 1969 1970 5.0 2.3 .4 1.9 1.1 4.7 2.2 .6 1.6 .9 3.6 1.4 .5 .9 .4 3.3 1.3 .5 .8 .3 3.4 1.2 .5 .7 .3 .756 .409 .743 .403 .750 .458 .733 .444 .708 .458 46.0 8.0 22.0 46.a 12.8 19.1 38.9 13.9 11.1 39.4 15.2 9.1 35.3 14.7 8.8 $ Sales/$ Investment .89 .77 .62 .46 .43 Gross Investment; Fixed Capital Working Capital Total 3.7 1.9 5.6 4.4 1.7 6.1 4.3 1.5 5.8 5.4 1.8 7.2 5.7 2.1 7.8 For Sales 5.6 % ROI - For Sales 19.2 Total Capacity - MM lbs. 6*9 6.1 14.2 6.9 5.8 7.5 7.3 7.2 4.5 5.3 7.8 3.5 6.3 For Sales Internal Use Excess 6.6 .3 6.2 .7 4.8 2.5 4.5 .8 4.8 1.5 Formvar is a high priced specialty whose 1969 sales and net income suffered from the increasing use of new resin systems in electrical insulation. 1970 Domestic Sales are at 1969 level while a small increase is expected in the overseas market. Met income will be at the 1969 level. Beyond 1970. further decline of sales and income appear inevitable, since the newer resin systems exhibit thermal properties which Formvar does not possess. 0633691 -157- WATER PCB-00040128 GELVA ($ in Millions) . .u s Dom. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1966 1967 Actual Budget 1968 1969 1970 7.6 8.4 9.8 9.6 10.7 2.0 2.4 3.0 2.8 3.2 ,8 1.3 1.5 1.5 1.3 1.3 1.2 1.5 1.3 1.9 .6 .5 .7 .5 .9 .205 .152 .216 .157 .219 .152 .230 .163 .250 .175 % of Salesi Gross Profit SARE-Div. Net income 26.3 10.4 7.9 28.6 15.3 6.0 30.6 15.3 7.1 29.2 15.6 5.2 29.9 12,1 6.4 $ Sales/$ Investment .96 .68 .88 .77 .79 Gross Investment: Fixed Capital Working Capital Total 5.2 6.5 9.6 8.4 9.4 2.7 3.1 3.5 4.0 4.0 7.9 9.6 11.1 12.4 13.4 For Sales 7.9 9.6 11.1 12.4 13.4 % ROI - For Sales 7.7 Total Capacity - MM lbs. 47.0 5.7 51.0 6.5 72.7 4.5 68.2 6.7 79.3 For Sales Internal Use Excess 37.5 1.6 7.9 38.2 3.4 9.4 44.7 5.0 23.0 41.7 4.2 22.3 42.8 4.6 31.9 1969 Sales and net income were down from 1969. The sales results reflect a slow year in housing construction,reduced sales to the coatings industry, and price attrition across the product line. Earnings were held down by the cost of the Texas City acetic/VAM program. 1970 Sales are expected to improve with the new Gelva Multipolymer Solutions leading the way. Sales emphasiB will be heavy on the growing specialty markets in photocopy and pressure sensitive adhesives. 0633692 -156- WATER PCB-00040129 OELVATOL <$ in Millions) H-s. Dom. & Exiiort Sales Gross Profit SARE-Div. Oper. Ineome-Div. Income After Tax Selling Price/lb. Cost of Sales/lb, % of Sales: Gross Profit SARE-Div. Net Income 1966 4.4 1.0 .6 .4 .1 .515 .351 Actual______________ Budget 1967 1966 1969 1970 3.a 4.1 5.0 4.4 1.2 .6 .6 .5 .7 .8 .8 .6 .4 (.2) (.2) (.1) .1 (.2) (.1) (.2) .482 .333 .416 .357 .397 .349 .352 .311 22.7 13.6 2.3 31.6 18.4 2.6 14.6 19.5 12.0 16.0 11.4 13.6 $ Sales/$ Investment .43 .31 .38 .42 .36 Gross Investment: Fixed Capital Working capital Total a.5 i.a 10.3 9.0 3.3 12.3 8.1 2.6 10.7 9.4 2.3 11.7 9.7 2.5 12.2 For Sales % ROI - For Sales 10.3 1.0 12.3 1.2 10.7 11.7 12.2 H r-1 Total Capacity - MM lbs. 10.8 EOr Sales Internal UBe Excess 9.7 .6 .5 11.0 7.a .7 2.5 11.9 9.8 1.0 1.1 12.6 .6 .9 17.5 12.5 .6 4.4 1969 Salas ware up from previous years, but the effect on income waB offset by continuing price attrition (due to Japanese imports) and SOX charges from Texas City. 1970 Sales and inoome are budgeted at a lower level than 1969 due to the factors mentioned above. The program is aimed at upgrading profit through a change in sales mix toward the specialty grades, which coupled with the prospect of cheaper VAM will put .this product line in the black in 1971 No further capital investment in this product line is planned. 0633693 -159- WATER PCB-00040130 TEXTILES DIVISION Division Profitability ($ in Millions) World-Wide Sales Oper. Income-Dlv. Income After Tax Actual________ 1966 1967 1968 1969 436.6 439.6 525.3 511.1 97'2(1) 87.8 148.3 117.8 44.0U' 37.5 71.55.4 Budget 1970 547.0 120.3 55.9 Gross Investment % ROI 878.7 895.9 5.0^ 4.2 903.2 976.7 7.3(2) 5.7 1039.2 5.4 U.S. Dom. & Export Sales Oper. Income-Div. Income After Tax Inc. A.t. as % of Sales 5 Sales/5 Investment 374.3 371.7 02*3(1) 71.8 46.0UJ 33.8 uJU 9.1 .50 .49 436.4 412.0 133.1 94.8 59.5l ` 40.2 12.4(2) 9.8 .57 .51 430.3 94.7 41.2 9.6 .50 Gross investment % ROI Division Product Group: Acrilan Hale Mfg. Helen Harper Nylon Polyester 742.4 753.0 762.3 804.2 853.0 6.2 4.5 5.0(1> S.4 12.8 9.2 10.6 6.9 7.1 5.0 7.3<2> 6.7 13.4 12.4 9.3<2) 5.9 4,8 7.8 12.6 2.2 5.3 (1) 1966 income is net of the $6,1MM Polythane goodwill writeoff and the $6.0MM profit on the sale of Vonnel and ACSA. Acrilan SOI and product group data on page 161 excludes profit on sale of Vonnel and ACSA. (2) 1968 income includes COSA tax credit 54.3MM and gain from sale of Fabric Services $1.0MM. SOI excludes this income. investment in the division's major products earned the following rates of return for actual 1968 and budget 1969: % of Investment 1969 1970 Loss 8.0 9.9 0 to 4)5 47.4 48.5 4 to 6)5 12.1 .9 Over 6)6 32.5 40.7 Product groups are reported on the following pages: Acrilan Hale Mfg. Helen Harper Pace 161 165 166 Nylon Polyester Page 167 171 Major products reported comprise 92)5 of the division's investment in 1969 and 91)5 in 1970. 0633694 ACRILAH - PRODUCT GROUP ($ in Millions) World-Wide Sales Oper. income-Div. Income After Tax 1966 Aetna1_______________ Budget 1967 1968 1969 1970 iie,o 123.0 27.4 25.1 13 .O'4' 12.9 141.0 40.1 20.8 148.6 40.6 18.3 158.1 42.8 19.7 Gross investment % ROI U.S. Dora. & Export Sales Gross Profit SARE-Div. Oper. income-Div. Income After Tax % of Sales: Gross Profit SARB-Div. Income After Tax 235.1 232.7 238.5 248.8 5.5 5.5 7.8(2) 7.4 251.1 7.8 86.2 39.1 19.1 20.0 9.1 95.6 42.3 22.6 19.7 10.1 109.5 55.7 22.0 33.7 16.0 111.2 55.2 24.1 31.1 13.4 114.4 54.9 21.8 33.1 15.4 45.4 22.2 10.6 44.2 23.6 10.6 50.9 20.1 14.6 49.6 21.7 12.1 48.0 19.1 13.5 $ Sales/? Investment .47 .51 .57 .55 .58 Gross Investment % ROI 183.1 185.9 191.0 200.5 5.0 5.4 7.3<2> 6.7 195.9 7.8 (1) Excludes S6.0MM profit on sale of Vonnel and ACSA, (2) Met income includes COSA tax credit of $2.1mm. ROI percentages exclude these amounts. Major products reported for Acrilan product group are as follows: Pace Acrilan - Carpet Acrilan - Textile Acrilan - Sand Bags 162 163 164 0633695 -161- WATER PCB-00040132 ACRILAS - CARPET ($ in Millions) U.S. Dorn. & ExDort Sales Gross Profit SARE- OiV. Oper. Income-Div. Income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 54.1 27.1 8.2 18.9 9.2 47.9 21.6 9.3 12.3 6.3 56.8 30.9 10.0 20.9 10.0 51.8 26.5 11.4 15.1 6.4 57.7 26.6 10.5 16.1 7.3 Selling Price/lb. Cost of Sales/lb. .73 .36 .62 .34 .63 .29 .61 .30 .56 .30 % of Salasi Gross Profit SARE-Div. Net income 50.1 15.2 17.0 45.1 19.4 13.2 54.4 17.6 17.6 51.2 22.0 12.4 46.1 18.2 12.7 $ Sales/9 Investment .42 .47 .58 .57 .57 Gross Investment: Fixed Capital Working capital Total 127.3 88.3 13.4 101.7 82.7 15.3 98.0 78.1 13.0 91.1 90.1 11.9 102.0 For Sales % ROI - For Sales 127.3 101.7 7.2 6.2 98.0 10.2 91.1 102.0 7.0 7.2 Total Capacity - MM lbs. 147.1 120.0 112.5 100.6 122.5 For Sales Internal Use Excess 74.4 72.7 76.9 43.1 89.7 22.8 85.4 102.8 15.2 19.7 1969 results showed decreases in both sales 'and net income, the result of decreased shipments, lower selling prices end higher costs. Indoor/outdoor carpet continued to show strength as shipments were up 12% and selling prices increased lC/lb, Natural carpet results, however, were disappointing as shipments were: down 16% and selling prices decreased 4C/lb. 1970 budgeted saleB revenue is up 11% as an increase of 20% in shipments more than offsets an average selling price decrease of 8%, Net income is budgeted to increase 14% because of the higher volume. Budget accomplishment will depend on attaining the optimistic volume increases. 0633696 -162- WATER PCB-00040133 ACRILAN - TEXTILE (5 in Millions) U.S. Dom. & Exoort Sales Gross Profit SARB-Div. Oper. Income-oiv. Income After Tax 1966 Actual______________ Budget 1967 1968 1969 1970 28.9 13.1 10.9 2.2 .4 42.4 18.5 13.3 5.2 2.6 41.5 18.7 10.7 8.0 3.4 50.2 23.2 11.1 12.1 5.0 SO.9 24.5 10.4 14.1 6*6 Selling Price/lb. Cost of Sales/lb. .83 .74 .68 .67 .45 .45 .37 .36 .67 .35 % of Sales t Gross Profit SARE-Div. Net Income 45.3 37.7 1.4 43.6 31.4 6.1 45.1 25.8 8.2 46.2 22.1 10.0 48.1 20.4 13.0 $ Sales/$ Investment .52 .51 .57 .57 .64 Gross Investment! Fixed capital Working Capital Total 55.1 69.3 13.7 83,0 58.8 13.7 72.5 74.2 14.6 88.8 65.4 14.3 79.7 For Sales 55.1 83.0 72.5 88.8 79.7 % ROI - For Sales 7 3.1 4.7 5.6 8.3 Total Capacity - MM lbs. 48.3 80.0 69.9 88.4 90.0 For Sales Internal Use Excess 34.9 13.4 52.2 27.8 60.8 9.1 75.1 13.3 75.5 14.5 1969 sales revenue showed a 21K increase as a result of a 23% increase in shipments. Selling prices dropped lC/lb. making the fourth consecutive year in Which prices decreased. Net income increased 47%, the result of increased volume and lower costs. 1970 budgeted income is up 32%,principally because of lower costs and SAKE expense. Selling prices are to remain at the 1969 level and shipments show only a modest increase. Budget net income appears attainable, particularly if selling prices can be main tained. 0633697 -163- WATER PCB-00040134 ACRILAH - SAND BAGS (5 in Millions) U.S. Dom. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of SaleB/lb. % of Sales: Gross Profit SARE-Div. Met Income 1966 Actual_____________ Budget 1967 1968 1969 1970 7.9 3.7 .6 3.1 1.5 6.5 3.0 .5 2.5 1.1 3.3 1.4 .4 1.0 .4 .61 .32 .51 .28 .44 .25 46.8 7.6 19.0 46.2 7.7 16.9 42.4 12.1 12.1 $ Sales/!? Investment .42 .49 .46 Gross Investment: Fixed Capital Working Capital Total 16.6 2.1 18.7 11.8 1.5 13.3 6.0 1.2 7.2 For Sales % ROI - For Sales Total Capacity - mm lbs. 18.7 8.0 17.6 13.3 8.3 11.0 7.2 5.6 7.5 For Sales Internal Use Excess 13.0 4.6 11.0 7.5 Sales and net income for sand bag fiber did not live up to expec tations in 1969 as increased competition resulted in reduced selling prices and shipments. 1970 budgeted net income is less than 50S4 of the 1969 income as this business will tend to phase out. Based on early 1970 actual results budgeted sales and net income appear to be optimistic. -164- 063369a WATER PCB-00040135 HALE MFG. CO. - PRODUCT GROUP ($ in Millions) U.S. Dorn. & Exoort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 31.1 2.9 1.4 1.5 1.0 30.7 2.5 1.4 1.1 .8 37.3 4.9 1.7 3.2 1.5 46.1 5.3 1.9 3.4 1.7 50.1 6.0 1.8 4.2 2.0 Selling Price/lb. Cost of Sales/lb. Not Applicable % of Sales: Gross profit SARE-Div. Net Income 9.3 4.5 3.2 8.1 4.6 2.6 13.1 4.6 4.0 11.5 4.1 3.7 12.0 3.6 4.0 $ Sales/? Investment 3.99 3.53 3.33 3.39 3.21 Gross Investment: Fixed capital working Capital Total 6.2 1.6 7.8 6.7 2.0 8.7 8.3 2.9 11.2 9.4 4.2 13.6 9.9 5.7 15.6 For Sales 7.8 8.7 11.2 13.6 15.6 % ROI - For Sales 12.8 9.2 13.4 12.4 12.6 1969 sales showed a 24% increase over 1968 as shipments of nylon staple and industrial fabrics increased sharply for the second straight year. Although sales increased 24%, net income increased only 11% mainly because of higher costs. 1970 budgeted sales are to increase 9% While net income increases 18%. Early 1970 results indicate that the budget will be diffi cult to attain. 0633699 -165- WATER PCB-00040136 HELEN HARPER - PRODUCT GROUP ($ in Millions) O.S. ppm. & Export Sales Gross Profit SARE-Div. oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. 1966 Actual_____________ Budget 1967 1968 1969 1970 3. S .5 1.1 ( .6) ( .4) 7.1 1.0 1.4 ( .4) t .2) 7.0 .1 1.2 (1.1) (1.4) 7.3 ( .4) 1.7 (2.1) (1.1) 8.2 1.4 1.2 .2 .1 Not Applicable 34 of Salesi Gross Profit SARE-Div. Net Income 14.3 31.4 <11.4) 14.1 19.7 (2.8) 1.4 17.1 <20.0) (5.5) 23.3 (15.1) 17.1 14.6 1.2 $ Sales/$ Investment 1.59 1.92 1.27 1.49 1.74 Gross Investment: Fixed Capital Harking Capital Total 2.2 .5 3.2 3.7 .8 4.7 5.5 .5 4.4 4.9 .3 4.4 4.7 For Sales 2.2 3.7 5.5 4.9 4.7 34 ROI - For Sales 2.2 1969 sales showed a 434 increase, while the net loss was 2134 less than the 1968 loss. The improvement in income was due to the absence in 1969 of goodwill writeoff of $1.2MM charged against income in 1968. Higher costs to a great extent resulted from adjusting inventories to realistic values. 1970 budgeted sales revenue is to increase 1234. The increased sales coupled with the absence of extraordinary costs and sare expense experienced in 1969 results in a budgeted income of $.1MM as compared with the loss of $1,1MM in 1969. -166- 0633700 WATER PCB-00040137 NYLON - PRODUCT GROUP ($ in Millions) World-Wide Sales Oper. Income-Div. Income After Tax 1966 1967 1968 1969 1970 273.2 107.8 43.2 258.9 71.2 32.2 319.0 114.3 54.3 294,0 82.3 40.5 307.2 77.5 38.4 Gross Investment % HOI U.5. Dorn, & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax % of Sales: Gross Profit SARE-Div. income After Tax $ Sales/$ investment 560.2 560.3 572.1 611.8 650.1 7,7 5.7 9.1(1) 6.6 5.9 260.9 126.9 24.0 102,9 50.0 240.9 97.2 28.0 69.2 34.3 275.3 131.8 24.9 106.9 48.2 246.4 98.1 27.9 70.2 30.9 253.0 90.7 26.8 63.9 29.2 48.6 9.2 19.2 .55 40.3 11.6 14.2 .49 47.9 9.0 17.5 .56 39.8 11.3 12.5 .48 35.8 10.6 11.5 .46 Gross Investment % ROI 470.8 494.3 494.7 517.2 550.9 10.6 6.9 9.3ll) 5.9 5.3 (1) Net income includes C0SA tax credit of $2. 2mm. ROI percentages exclude these amounts. Major products reported for Nylon product group are as follows: Page Nylon - Carpet Nylon - Textile Nylon - Tire 168 169 170 0633701 WATER PCB-00040138 NYLON - CARPET {$ in Millions) U.S. Dom. & Exoort SaleB Gross Profit SARE-Div. Oper. Income-Div, Income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 26. B 13.5 5.2 B.3 3.7 26.5 7.6 6.1 1.5 .3 47.0 21.3 4.8 16.5 7.1 30.3 9.6 7.0 2.6 .1 39.9 10.9 7.0 3.9 .4 Selling Price/lb. Cost of Sales/lb. 1.09 .54 .66 .61 1.02 .56 .91 .62 .85 .62 % of Salesi Gross Profit SARE-Div. Met Income $ Sales/$ Investment 50.4 19.4 13.8 .42 28.7 23.0 1.1 .46 45.3 10.2 15.1 .64 31.7 23.1 .3 .37 27.3 17.5 1.0 .44 Gross Investment) Fixed Capital Marking Capital Total 63.1 52.3 5.5 57.8 63.1 10.5 73.6 70.2 11.1 81.3 7B.9 12.3 91.2 For Sales 63.1 57.8 73.6 81.3 91.2 % ROI - For Sales 5.9 .5 9.6 .1 .4 Total Capacity - MM lbs. 33.9 For Sales Internal Use Excess 24.5 9.4 32.0 31.1 .9 53.2 46.2 7.0 61.3 33.4 27.9 74.8 47.2 27.6 1969 was a disappointing year for nylon carpet as sales revenue dropped 36% and net income was a fraction of the record high set in 196B. Shipments fell 28% and were only slightly higher than the 1967 level. Selling prices dropped 11% while costs increased 11%. In addition SARE expense increased 46% mainly because of increased advertising and selling expenses. It is doubtful if the budgeted 1970 sales and net income levels can be attained as the 41% increase in shipments appears optimistic. 0633702 -168- WATER PCB-00040139 NYLON - TEXTILE (5 in Millions) u.s. Dom. & Exnort Sales Gross Profit SARE-Div. Oper. Inoome-Div. income After Tax 1966 Actual_____________ Budget 1967 1968 1969 1970 133.6 64.5 13.9 50.6 24.1 121.4 47.1 17.3 29.8 14.8 138.2 61.2 15.3 45.9 19.7 119.1 41.4 16.1 25.3 9.5 125.1 36.0 15.3 22.7 9.2 Selling Price/lb. Cost of Sales/lb. 1.33 .69 1.20 .74 1.16 .65 1.11 .72 1.09 .76 % of Salesi Gross Profit SARE-Div. Net Income 49.3 10.4 18.0 38.8 14.3 12.2 44.3 11.1 14.3 34. B 13.5 8.0 30.4 12.2 7.4 $ Sales/$ Investment Gross Investment: Fixed Capital Working Capital Total .49 .45 .48 .45 .45 273.0 239.5 28.7 268.2 254.1 33.7 287.8 231.2 36.4 267.6 240.2 40.6 280.8 For Sales 273.0 268.2 287.8 267.6 280.8 % R0I - For Sales 8.8 5.5 6.8 3.6 3.3 Total Capacity - MM lbs. 114.9 116.0 121.3 122.0 120.3 For Sales internal Use Excess 100.3 100.8 119.3 107.4 115.2 14.6 15.2 2.0 14.6 5.1 1969 net income was less than 50% of that for 1969 as shipments dropped 10%, selling prices decreased 4% and costs increased 11%. debudgeted selling price reductions were made to meet competition, while higher costs resulted from wage increases for production workers. 1970 budgeted net income shows a small decrease although ship ments are to increase 7%. Selling prices are again to be reduced and costs are again to increase. It will be difficult to attain budget based on early 1970 results as shipments to date are not up to expectations. 0633703 -169- WATER PCB-00040140 NYLOW - TIRE (5 in Millions) U.S. Dorn. & Exoort Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual_____________ _ Budget 1967 1968 1969 1970 75.3 37.3 5.3 32.0 15.4 71.5 35.7 4,5 31.2 15.S 70.0 38.1 4.0 34.1 15.3 63.7 32.2 4.1 28.1 12.9 60.0 29.9 4.0 25.9 13.0 Selling Price/lb, Cost of Sales/lb. % of Sales: Gross Profit SARE-Div. Net Income .81 .41 .80 .40 .78 .36 .78 .39 .75 .37 49. S 7.0 20.5 49.9 6.3 21.7 54.4 5.7 21.9 50.5 6.4 20.3 49.8 6.7 21.7 $ Sales/? Investment .48 .51 .55 .S3 .50 Gross Investment: Fixed capital Working Capital Total 156.7 129.6 11.6 141.2 113.2 15.0 128.2 106.7 14,6 121.3 109.6 10.2 119.8 For Sales % ROI - For Sales 156.7 141.2 128.2 121.3 119.8 9.8 11.0 11.9 10.6 10.9 Total Capacity - MM lbs. 95.2 109.0 105.5 101.6 104.0 For Sales Internal Use Excess 93.2 2.0 90.0 19.0 89.2 16.3 81.4 20.2 80.0 24.0 In spite of the 16% drop in net income in 1969,, tire yarn eontinues to be the most consistent performer in the nylon product group. Selling prices have shown only minor decreases during the past four years while shipments have decreased gradually, the result of increased competition from other types of tire yarn. The 1970 budgeted net income shows a modest increase as a result of improved costs. Shipments and selling prices are budgeted to decrease. The budget appears to be realistic. 0633704 POLYESTER - PRODUCT GROUP ($ in Millions) world-wide Sales Oper. Inoome-Div. Income After Tax 1966 Actual 1967 1968 Budget 1969 1970 6.0 ( 8.1) ( 5.0) 10.4 (15.4) ( 9.2) 18.9 ( 8.2) ( 4.8) 25.6 ( 7.2) ( 4.7) 27.7 ( 6.7) ( 5.7) Gross Investment 33.4 43.9 48.1 56.0 80.4 % ROI U.S. Dom. & Export Sales Gross Profit SARE-Oiv. Oper. Income-Div. Income After Tax % of Salesi Gross Profit SARE-Div. Income After Tax 6.0 ( 2.2) 5.9 ( 8.1) ( 5.0) 10.4 ( 7.2) 8.2 (15.4) [ 9,2) IB.9 .8 9.0 ( 8.2) ( 4.8) 25.6 2.1 9.3 ( 7.2) ( 4.7) 27.7 2.0 8.7 < 6.7) < 5.7) (36.7) 98.3 (93.3) (69.2) 78.8 (88.5) 4.2 47.6 (25.4) 8.2 36.3 (18.4) 7.2 31.4 (20.6) $ 5ales/$ Investment .18 .24 .39 .46 .34 Gross Investment % ROI 33.4 43.9 48.1 56.0 80.4 Major products reported for the Polyester product group are as followsi Page Polyester - Carpet Polyester - Textile Polyester - Tire 172 173 174 0633705 , WATER PCB-00040142 POLYESTER - CARPET ($ In Millions) U.S. Dom. & Exoort Sales Gross Profit SARE-Div. oper. ineome-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. % of Salesi Gross Profit SARE-Div. Net income 1966 Actual 1967 1968 1969 Budget 1970 1.0 .2 .4 ( .2) ( .2) 4.0 .9 .8 .1 ( .1) 5.6 .9 1.2 ( .3) ( .3) .54 .45 .43 .34 .38 .32 20.0 40.0 (20.0) 22.5 20.0 (2.5) 16.1 21.4 (5.4) $ Salea/$ Investment .50 .53 .64 Gross Investmenti Fixed Capital Nbrking Capital Total 1.7 .3 2.0 6.6 .9 7.5 7.7 1.0 8.7 For Sales 2.0 7.5 8.7 % ROI - For Sales Total Capacity - MM lbs. 3.8 12.0 11.3 For Sales Internal Use Excess 1.8 2.0 9.2 2.8 11.3 The Textiles Division entered the polyester carpet fiber market in 1960. 1969 shipments did not meet expectations but were sig nificantly ahead of 1968. Selling prices dropped 114/lb. as was expected, but as manufacturing costs also improved IIS, gross profit increased in proportion to the sales increase. 1970 budgeted shipments are to increase 23%, but Bales revenue increases only 40% as unit selling prices are to decrease 54/lb. Budgeted sales revenue and net.income appear realistic, particu larly if the new OOP fiber becomes available. 0633706 -172- WATER PCB-00040143 POLYESTER - TEXTILE (? in Millions) 17. S. Domr & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax Selling Price/lb. Cost of Sales/lb. % of Sales: Gross Profit SARE-Div. Net Income 1966 Actual_____________ Budget 1967 I960 1969 1970 6.0 ( 2.2) 5.9 < 3.1) ( 5.0) 10.4 ( 7.2) B.2 (15.4) ( 9.2) 17.0 .5 8.5 ( 8.0) ( 4.8) 21.0 2.1 6.8 ( 4.7) ( 3.2) 20.7 4.8 4.5 .3 ( .7) .60 .42 .46 .39 .46 .79 .62 .44 .35 .36 (36.7) 96.3 (83.3) (69.2) 78.B (8B.5) 2.9 50.0 (28.2) 10.0 32.4 (15.2) 23.2 21.7 ( 3.4) $ Sales/? Investment .IB .24 .37 .59 .56 Gross Investment: Fixed Capital Working Capital Total 33.4 38.7 4.3 43,0 39.9 6.2 46.1 31.6 4.1 35.7 33.0 4.0 37.0 For Sales % ROI - For Sales 33.4 43.0 46.1 35.7 37.0 Total Capacity - MM lbs. 13.5 33.0 42.6 48.9 51.7 CD For Sales Internal Use Excess 10.2 3.3 22.7 10.3 37.2 5.4 44.5 7.2 Significant improvements in operating result's were shown in both 1966 and 1969. Shipments have increased in each of the past four years. Selling prices decreased 7C/lb. in 1969, but this was more than offset by a 90/lb. improvement in costs. As a result gross profit as a percent of sales showed a marked improvement. The 1970 improvement in budgeted net loss depends to a large degree on realizing the improvement in selling prices. This appears doubtful. The SAKE reduction, another major contributor to improved net income, will be accomplished. 0633707 -173- I WATER PCB-00040144 POLYESTER - TIRE ($ in Millions) U.S. Pom. & Export Sales Gross Profit SARE-Div. Oper. Income-Div. Income After Tax 1966 Actual______________ Budget 1967 1966 19691970 (1.0) l.a (2.8) (1.5) 1.5 ( 3.7) 3.0 ( 6.7) ( 4.6) Selling price/lb, Cost of Sales/lb. % of Sales: Gross Profit SARE-Div. Het income .58 2.06 (2.47) 2,00 (3.07) $ Sales/? investment .05 Gross Investment: Fixed Capital Working Capital Total 11,3 11.3 26.2 3.0 31.2 For Sales % ROI - For Sales 11.3 31.2 Total Capacity - MM lbe. 20.0 For Sales internal Use Excess 2.5 17.5 The Textiles Division is scheduled to enter the polyester tire yarn business about mid-year 1970. Start-up expenses and other higher costs associated with low sales volume coupled with relatively high research expense will result in a budgeted net loss of $4.6MM. The budgeted loss is realistic. -174- 063370S WATER PCB-00040145 MBW ENTERPRISE DIVISION Division Profitability ($ in Millions) World-Wide Sales Opar, Income-Div. income After Tax 1966 1967 196B 1969 1970 3.3 (20.5) (10.4) 9.4 (22.6) (12.1) 17.0 (17.0) (10.B) Gross Investment 27.0 40.6 69.5 % ROI W.S. Pom, & Export Sales Opar. Income-Div. Income After Tax 3.2 (20.4) (10.1) 9.3 (22.4) (12.0) 17.0 (16.9) (10.7) Inc. A.T. as % of Sales $ Sales/$ Investment .12 .23 .24 Gross Investment % ROI 26.4 40.3 69.5 Investment in the division's enterprises earned the following rates of return for Actual 1969 and Budget 1970t Loss % of Investment 1969 1970 100.0100.0 Enterprises are reported on the following pagesi Advanced Materials Engineered Composites Recreation Pace 176 177 17B Major enterprises reported comprise 78% of the division's invest ment in 1969 and 72% in 1970, 0633709 -175- WATER PCB-00040146 ADVANCED MATERIALS ENTERPRISE (9 in Millions) World-Wide Salas Incoma After Tax Gross Investment 1966 Actual 1967 1968 Budget 1969 1970 1.1 (2.7) 2*2 (3.0) 6.0 (3.1) 5.1 8.5 10.3 U.S. Don. & ^xfiort Sales Income After Tax $ Sales/9 investment Grose Investment 1.1 (2.7) 22 (3.0) .22 .26 5.1 8.5 6.0 (3.1) .33 18.3 I -176- 0633710 WATER PCB-00040147 EHGIKBSRED COMPOSITES ENTERPRISE (? in Millions) World-Wide Sales income After Tax 1966 1967 Actual Budget 196B 1969 1970 .2 (2.6) .8 (2.9) 2.5 (2.8) Gross Investment 7.7 11.7 19.0 U.S. Dorn. A Exoort Sales Income After Tax .2 <2.6) .8 (2.9) 2.5 (2.8) $ Sales/S investment .03 .07 .13 Gross investment 7.7 11.7 19.0 0633711 -177- WATER PCB-00040148 RECREATION ENTERPRISE ($ in Millions) World-Wide Sales Income After Tax Gross Investment 1966 Actual 1967 1968 Budget 1969 1970 1.9 5,4 8.5 (2.1) (1.8) (1.4) S .8 11.1 13.0 P.8* Pom* a Export Sales Income After Tax 1.9 5.4 8.5 (2.1) (l.a) a.4> $ Sales/$ investment Gross investment .33 .49 5.8 11.1 .65 13.0 -178- 0633712 WATER PCB-00040149