Document ppvXNNwD2066dLZ1DjEmjKb7D

saint josepn JLeaa company Annual Report -- America's Corporate Foundation; 1943; ProQuest Historical Annual Reports Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ST. JOSEPH LEAD COMPANY Incorporated March 25, 1864, under the Laws of the State of New York Executive Offices, 250 Park Avenue, New York BOARD OF TRUSTEES Clinton H. Crane, Chairman Frederic E. Camp, Hoboken, New Jersey Stanly A. Easton, Pres., Bunker Hill & Sullivan Mining & Concentrating Co. Daniel K. Catlin, St. Louis, Missouri Andrew Fletcher, Vice-Pres., and Treasurer C. Merrill Chapin, Jr., Vice-President James H. Grover, Pres., St. Louis Union Trust Co. Hendon Chubb, of Chubb & Son J. Howard Holmes, St. Louis, Missouri Irwin H. Cornell, Vice-Pres., and Sales Manager Edward V. Peters, Vice-President Fir min V. Desloge, St. Louis, Missouri *Fred W. Shibley, , New York, N. Y. *Mr. Shibley Died March 1st, 1944 EXECUTIVE OFFICERS Clinton H. Crane, President Irwin H. Cornell, Vice-Pres., and Sales Manager Andrew Fletcher, Vice-Pres., and Treasurer C. Merrill Chapin, Jr., Vice-President Edward V. Peters, Vice-President George I. Brigden, Secretary and Comptroller Robert Bennett, Asst. Secretary and Asst. Treasurer Charles Fleig, Assistant Secretary James G. Colvin, Assistant Comptroller STOCK TRANSFER OFFICE 250 Park Avenue, New York REGISTRAR City Bank Farmers Trust Company, New York , 1 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ST. JOSEPH LEAD COMPANY PRESIDENTS ANNUAL REPORT TO STOCKHOLDERS Due to the relaxation of the regulations of the War Department, the statistical information pertaining to the Company's domestic production and stocks for the previous ten years, which was omitted in 1942, is included in this report. However, the regulations will not as yet permit publishing the same data for our Argentine subsidiary and they are, therefore, excluded again this year. Consolidated Earnings The consolidated net income for the year 1943, after deducting Federal and State taxes on income in the amount of $1,690,262.17, was $4,033,973.90 as compared with a net income of $5,655,625.61 after deducting taxes of $5,543,393.35, for the previous year, a reduction in net income of $1,621,651.71. The income for the year before taxes is reduced by non-recurring charges in the total amount of $1,442,471.62 of which $318,738 represents the portion of a retroactive increase in wages applicable to 1942 and a deficit of $1,123,733.62 in Block *`P" operations during the year, including depreciation and depletion charges required to write down the property to scrap value. The Block "P" property was permanently closed down October 27, 1943. Gross profit from operations dropped from $13,500,243.94 in 1942 to $8,229,353.42 in 1943. This decrease of $5,270,890.52 is in general attributable to lower production, higher wages and increased cost of all supplies, in conjunction with a drop in efficiency due to replacement of experienced workers by those of less experience. Although the operating profit of all divisions, with the exception of Kansas Explorations, Inc., was lower than in 1942, the largest decrease was that shown by the com bined Southeast Missouri lead divisions which amounted to $4,598,431.77. The reduction in profits of the combined Northern New York and Josephtown, Pennsylvania zinc divisions was $563,740.65. These decreases account for all but $108,718.10 of the total reduction in gross profit from operations. The comparative consolidated earnings for the ten years ended December 31, 1943 are shown below: Year 1934............... 1935............... 1936............... 1937............... 1938............... 1939............... 1940............... 1941............... 1942............... 1943.,.__,,s Income after Interest but before Other Deductions . $1,936,908.95 , 2,005,781.59 . 4,473,237.08 10,035,885.12 2,873,815.43 . 7,586,972.10 . 8,287,597.10 9,070,705.65 12,633,212.55 7,940,997.33 -------------- Provision for---------------- Federal Depreciation Income Taxes $1,121,960.66 1,072,013.14 1,063,605.02 1,055,575.37 1,059,034.49 1,058,924.04 1,064,639.12 994,436.94 939,993.43 1,269,271.24 $78,862.23 35,502.59 307,944.03 1,329,491.03 173,922.80 672,485.97 1,305,670.04 2,740,699.45 5,499,604.80 1,643,240.12 Net Income before Depletion, Etc. $736,086.06 898,265.86 3,101,688.03 7,650,818.72 1,640,858.14 5,855,562.09 5,917,287.94 5,335,569.26 6,193,614.32 5,028,485.97 .. Provision* for Depletion, Etc. $1,548,604.47 412,043.61 590,686.46 522,873.57 309,601.68 562,654.53 805,346.24 442,114.08 537,988.71 994,512.07 * Includes abandoned leases for the years 1<?34 to 1937, inclusive, and provision for obsolescence of the Doe Run Mill for the years 1935 to 1937, inclusive; also the abandonment of Block "P'e property in 1943. Dividends Quarterly dividends of fifty cents per share were paid on the tenth day of March, June, September and December 1943 making a total of two dollars per share for the year. These dividend distributions aggregating $3,911,360.00, were paid entirely out of the surplus earnings of the Com pany accumulated after February 28, 1913 and are, therefore, subject to Federal income taxes. 2 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission The following is a record of dividends for the years 1934 through 1943: Year 1934........ 1935........ 1936......... 1937......... 1938........ Amount .. $586,701.30 ... 782,269.30 ... 1,955,676.90 ... 4,889,198.50 1,955,680.00 Per Share $.30 .40 1.00 2.50 1.00 , Year 1939.......... ... 1940.......... .... 1941......... ... 1942.......... ... 1943.......... . . . T . T ....__... Amount $3,911,360.00 4,400,280.00 3,911,360.00 3,911,360.00 3,911,360.00 Per Share $2.00 225 2.00 2.00 2.00 Financial Information The Consolidated Balance Sheets as of December 31, 1943 and December 31, 1942 of St, Joseph Lead Company and Subsidiaries, and the Summaries of Consolidated Net Income and Surplus for the years ended on those dates, are submitted herewith as a part of this report. All subsidiaries of the St. Joseph Lead Company are included in these statements with the exception of Aguilar Cor poration and its foreign subsidiary, which statements are shown separately. With the surplus funds available for investment, the Company purchased 195,000 shares of New Jersey Zinc Company capital stock on March 9, 1943. This purchase represented about 9.9% of the outstanding capital stock of that Company and was acquired at a cost of $11,651,250. Inasmuch as the employees of the Missouri mining and milling divisions had been promised the same $1.00 per working day wage increase retroactive to September 19, 1942 as was granted to the Missouri smelter employees by the War Labor Board as soon as approval can be obtained, the $1,362,589.11 estimated to be due to December 31, 1943, has been taken into costs and is shown as a current liability on the balance sheet. No future commitments have been made for the purchase and sale of commodities which would have a material effect on the financial position of the Company. Capital expenditures by St, Joseph Lead Company and consolidated subsidiaries for improve ments and additions to plant and equipment amounted to $1,033,676.39 in 1943 in comparison with $1,369,261.33 in 1942. In the audit of the books by Messrs. Haskins & Sells, verification of inventories was again made by physical tests of the quantities shown by the records as being on hand. This firm also handles the audit of the Argentine operations. The Accountants' Certificate addressed to the stockholders is set forth on page 12 of this report. United States Operating Information The Company is pleased to announce that the A.rmy-Navy "E" was awarded to the Josephtown Zinc Smelter of the St. Joseph Lead Company of Pennsylvania, at Josephtown, Pennsylvania, on November 9, 1943. Although all the lead and zinc properties of the Company were operating on a full time basis throughout the year 1943, the lead concentrate production in Southeast Missouri decreased 19,608 tons or 7j%, whereas about the same tonnages of zinc and lead concentrates were produced from the Balmat and Edwards mines in Northern New York as in 1942. The Kansas Explorations, Inc. production of lead and zinc concentrates in the Joplin area showed a 14% improvement over the previous year but a comparatively small tonnage was involved. South American Operating Information Inasmuch as the Metals Reserve Company was unwilling to purchase lead concentrates or pro vide for their export, operations at the Aguilar Mine in Argentina continued on a curtailed basis throughout 1943 and only sufficient lead concentrates were produced to take care of Argentine requirements. The entire production of zinc concentrates, together with such additional tonnage from accumulated stocks as the Argentine State Railway was able to handle, was sold during the current year to the Metals Reserve Company. Similar arrangements have been made for the sale 3 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. of zinc concentrates during the first six months of 1944 and it is expected that the balance of the inventory will be moved by the Railway and sold by July 1, 1944. As the result of disposing of a portion of the inventory of zinc concentrates, in addition to current production, income before depreciation, depletion, and taxes on income, increased from $809,173.70 in 1942 to $1,614,280.17 in 1943. The 1943 capital expenditures amounted to $22,244.14 in comparison with $108,227.23 in 1942. The Consolidated Balance Sheets of Aguilar Corporation and Subsidiary at December 31, 1943 and December 31, 1942, together with Summaries of Consolidated Net Income, etc. for the years ended on those dates, are submitted as a part of this report and will be found on pages Nos. 9 to 11. The comparative consolidated earnings since the property was placed in operation are as follows: Year 1936........................ .... 1937........................ ..... 1938........................ ..... 1939........................ ..... 1940........................ .... 1941........................ .... 1942........................ ..... 1943........................ ..... Loss. Income After Interest but before Other Deductions $ 192.78 998,294.21 807,923.50 930,981.17 867,790.12 938,733.60 809,173.70 1,614,280.17 ---------- Provision for---------- Net Income Argentine before ------- Provision for Depletion--------- Depreciation Income Taxes Depletion, Etc. On Cost On Appreciation $115,340.41 , ------ : *$ 115,147.63 $ 35,143.18 $ 322,584.30 130,214.52 $ 25,458.01 842,621.68 63,407.60 579,914.66 149,105.03 21,954.42 636,864.05 73,447.08 671,733.70 175,793.81 39,642.36 715,545.00 100,082.61 915,337.33 193,667,52 35,125.21 638,997.39 121,188.16 1,108,320.38 207,305.29 33,181.40 698,246.91 127,786.09 1,168,708.13 216,780.14 208,628.83 28,225.49 187,000.00 564,168.07 1,218,651.34 80,718.97 81,987.47 738,240.88 747,778.85 Stockholders The number of stockholders of record on December 31st of each year since 1934 and a classifi cation of their holdings are as follows: Year 1934............................. 1935............................. 1936............................. 1937............................. 1938............................. 1939............ ................ 1940............................. 1941............................. 1942............................. 1943............................. Total 5,300 5,304 5,560 5,992 6,463 6,586 6,697 6,858 7,065 7,530 19 or Less 1,549 1,491 1,483 1,571 ' 1,719 1,695 1,772 1,751 1,697 1,848 General 20-99 1,712 1,748 1,851 2,038 2,213 2,260 2,263 2,393 2,547 2,758 100-1991 873 911 1,000 1,139 1,227 1,337 1,371 1,417 1,528 1,634 20Q~Over 1,166 1,154 1,226 1,244 1,304 1,294 1,291 1,297 1,293 1,290 The Stockholders are again reminded that the net value of the capital assets set forth on the accompanying Consolidated Balance Sheets are depleted and depreciated figures based on appraised values as of and after March 1, 1913 or on cost as stated. They do not indicate the present day values or prospective future values of the Company's property, plant and equipment, as such values could be arrived at only by current estimates which would vary from time to time depending on the price of metals, rate of production, cost of labor and other factors. Although the appraised value of areas owned on March 1, 1913 have been entirely written off the Company's books by depletion deduc tions, ore is still being mined from these areas at a profit, and probably will be for years to come. Due to the additional ore which had been developed through prospecting, or made available by reason of the improvement in mining practices, the basis of determining depletion was changed as of January 1, 1935, by dividing the then undepleted book value by the estimated tonnage of ore in the mines at that date and applying the unit value thus determined to the tonnage sold. This change resulted in a considerably lower provision for depletion than in years prior to that date, and the basis adopted in 1935 has, with minor exceptions, been consistently used for subsequent depletion computations. Clinton H. Crane, New York, March 11, 1944. 4 President. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ST. JOSEPH LEAD COMPANY AND SUBSIDIARIES Summaries of Consolidated Net Income For the Years Ended December 31, 1943 and 1942 Net Sales ............................................................................. ..... Cost of Sales (exclusive of depreciation and depletion)........, Year ended December 31, 1943 1942 $47,099,749.12 $51,360,604.63 38,870,395.70 37,860,360.69 Gross Profit from Operations before Depreciation and Depletion............... $ 8,229,353.42 $13,500,243.94 Deduct: Selling, general and administrative expenses .............. Capital stock and miscellaneous taxes..... ........................... $ 725,796.41 66,945.13 $ 719,382.97 792,741.54 156,456.07 875,839.04 Net Profit from Operations before Depreciation and Depletion.................... $ 7,436,611.88 $12,624,404.90 Other Income: Dividends on The New Jersey Zinc Company stock...... Other dividends, interest, etc........................................... $ 487,500.00 63,907.50 551,407.50 $ 52,596,20 52,59620 Income before Depreciation, Depletion, and Taxes on Income.................... $ 7,988,019.38 $12,677,001.10 Deduct Provisions for: Depreciation (including amortization of war facilities, $257,576.14 in 1943 and $64,305.12 in 1942)--see note 2 Depletion--see note 2 ................................................... . $1,269,271.24 994,512.07 $ 939,993.43 2,263,783.31 537,988.71 1,477,982.14 Provision for Taxes on Income: Federal excess profits taxes ...................................... . .... Federal normal income and surtaxes ...... i.Aii;;.:..'. $ 270,063.19 1,400,411.93 $ 5,724,236.07 $3,990,533.39 1,907,225.55 $11,199,018.96 $1,670,475.12 Deduct post-war excess profits tax refund............. 27,235.00 $5,897,758.94 398,154.14 State income taxes.................................................... .... . $1,643,240.12 47,022.05 $5,499,604.80 1,690,262.17 43,788.55 5,543,393.35 Net Income for the Year..................................... ....................... $ 4,033.973.90 $ 5,655,625.61 Summaries of Consolidated Surplus For the Years Ended December 31, 1943 and 1942 Surplus at Beginning of the Year (including surplus from revaluation of ore reserves--1943, $56,098.98; 1942, $78,171.80)............................................ Year ended December 31 1943 1942 $13,332,494.78 $11,588,229.17 Add net income for the year ............................ .....................,,.... .......................... 4,033,973.90 5,655,625.61 Total ................................................................................................. $17,366,468.68 Deduct cash dividends paid during the year...................... .............. ,............. . 3,911,360.00 Surplus at End of the Year (including surplus from revaluation of ore reserves--1943, $36,948.17; 1942, $56,098.98).................................................. $13,455,108.68 $17,243,854.78 3,911,360.00 $13,332,494.78 Notes: ... . . (1) All subsidiaries of the parent company are included in the above summaries with the exception of Aguilar Corporation and its foreign subsidiary, the consolidated income and surplus (deficit) statements of which appear on page 9. (2) The provisions for depreciation and depletion were increased in 1943 to reduce to salvage value the Block "P" property which was closed in October 1943. The provisions made for depreciation and depletion, respectively, of the Block "P" property were $230,113.74 and $532,538.69 in 1943 and $111,726.09 and $45,615.38 in 1942. 5 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ASSETS ST. JOSEPH LEAD CO] Consolidated Balance Sh< "T Capital Assets (Note 1): Ore reserves and mineral rights: Appraised value as oi March 1, 1913............................ Less reserve for depletion...................................... December 31,1943 $13,500,000.00 13,500,000.00 -- December 31,1942 $13,500,000.00 13,500,000.00 -- Additions subsequent to March 1, 1913 (at cost)..,. $19,984,127.97 $20,951,173.56 Less reserve for depletion...... ............................. 16,443,394.20 $ 3,540,733.77 16,381,153.99 $ 4,570,019.57 }i Appreciation arising from revaluation subsequent to March 1, 1913........... .............. ............................. $ 3,500,000.00 Less reserve for depletion...................................... 3,463,051.83 $ 3,500,000.00 36,948.17 3,443,901.02 56,098.98 Total ore reserves and mineral rights, net $ 3,577,681.94 $ 4,626,118.55 Shafts and underground equipment (at cost)................ :.. $ 5,721,677.69 $ 5,512,517.37 Less reserve for depreciation............ ............................ 4,531,655.38 1,190,022.31 4,338,584.50 1,173,932.87 Land, buildings, plant and equipment (at cost)......... ..... $18,683,283.42 Less reserve for depreciation.......................................... 13,171,703.39 $19,100,719.62 5,511,580.03 13,267,796.91 5,832,922.71 Total capital assets, net................................. . $10,279,284.28 Investments and Advances: Aguilar Corporation (at cost--90% owned)..................... Mine La Motte Corporation (at cost--50% owned)....... The New Jersey Zinc Company (at cost--9.9% owned) Sundry securities, loans, etc. (at cost, less reserve, $200,000.00) ........................................................................ $ 137,759.72 550,000.00 11,651,250.00 216,995.61 $ 12,556,005.33 $11,632,974.13 137,759.72 550,000.00 232,354.81 920,114.53 Current and Working Assets: Cash on hand and in banks...................................................... U. S. tax anticipation notes (at cost).................................. U. S. Treasury certificates and savings bonds (at cost) Notes and accounts receivable--trade (less reserve-- 1943, $16,102.82; 1942, $17,825.73).................................. Other notes and accounts receivable................... ............. Inventories (valuation not in excess of market); Finished lead, zinc, etc. (at cost, exclusive of de preciation and depletion) ........................................ Lead, zinc, etc., in process (at cost, exclusive of depreciation and depletion) ................................ Purchased lead and zinc concentrates, etc. (at cost) Materials and supplies (at cost, less reserve for slow-moving items --1943, $80,294.29; 1942, $68,623.63) .................................................................. $ 4,126,287.08 2,660,000.00 4,087,909.06 119,713.97 1,379,031.65 1,660,904.89 542,131.23 2,736,299.93 $ 9,229,880.32 6,000,000.00 4,000,000.00 3,985,471.51 92,458.31 1,111,191.26 986,387.96 737,163.94 17,312,277.81 2,862,509.12 29,005,062.42 Miscellaneous Assets: U. S. Treasury, State and Municipal securities on de posit with Federal and State departments (at amortized cost; market quotation value --1943, $190,870.00; 1942, $176,650.00) .................. ................... Post-war excess profits tax refund.................................. Cash in closed banks.... ........................................................... $ 175,985.28 425,389.14 4,110.13 $ 157,186.08 398,154.14 605,484.55 5,842.83 561,183.05 Deferred Charges: Deferred operating costs.......................................................... $ Prepaid insurance, taxes, royalties, etc...... .......................... 31,361.26 146,387.78 $ 251,756.84 177,749.04 163,411.73 415,168.57 Total ...............................................]................. $40,930,801.01 $42,534,502.70 Notes: (1) The net value of the capital assets as shown in the above consolidated balance sheets does not indicate the present value of the companies' property, plant and equipment, as such value could be arrived at only by current estimates which would vary from time to time depending on the price of metals, rate of production, cost of labor, and other factors. (2) All subsidiaries of the parent company are included in the above consolidated balance sheets with the exception of Aguilar Corporation and its foreign subsidiary, the consolidated balance sheets of which appear on pages 10 and 11. The ownership by St. Joseph Lead Company of Aguilar Corporation is represented by 8,020 6:: ' "' ( Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ANY AND SUBSIDIARIES Di ecember 31, 1943 and 1942 Capital Stock: '"i ' ; LIABILITIES December 31,1943 December 31,1942 Authorized, 2,500,000 shares of $10.00 each.... ................... $25,000,000.00 ^ Issued, 1,996,840.85 shares................. .................. Less in treasury, 41,160.35 shares..,.......... .................. 411,603.50 $25,000,000.00 $19,968,408.50 411,603.50 Outstanding, 1,955,680.5 shares. $19,556,805.00 $19,556,805.00 Current Liabilities: Accounts payable ................................................................... . Due to subsidiary not consolidated.................................... . Wages payable .......................................................................... . Estimated retroactive wage increases................ ............... , Accrued taxes: Federal income and excess profits....................... ....... . Other ...................................................................... .............. . $ 2,525,509,82 316,480.64 173,120.03 1,362,589.11 2,385,802.40 298,534.18 $ 2,541,752.42 201,221.60 111,927.04 7,062,036.18 5,613,994.23 320,794.89 8,789,690,18 Deferred Income .............................................................................. --- 1,953.44 Reserves: For injury claims and workmen's liability insurance...... . $ 231,852.87 For employees' life insurance and retirement........ .......... . 315,059.73 For contingencies ................................ .......... ..... .................. . 309,938.55 $ 856,851.15 188,738.27 354,882.48 309,938.55 853,559.30 Surplus: Earned ........................................................................................ . $13,418,160.51 Revaluation of ore reserves....................................... . 36,948.17 $13,276,395.80 13,455,108.68 56,098.98 13,332,494.78 Total ..................................................................... $40,930,801.01 $42,534,502.70 Notes Continued: shares of the preferred and 80,764 shares of the common stocks of that company. Gross profit, before depre ciation and depletion, of the foreign subsidiary on its sales to St Joseph Lead Company of products which remained in the inventories of the latter at December 31, 1943 and 1942 amounted to approximately $25,000. ,(3) St. Joseph Lead Company and the foreign subsidiary of Aguilar Corporation were contingently liable < at December 31 1943 to refund to customers the sales price, $591,385.05, of concentrates ^aid for by the cus tomers and stored in Argentina, in the event any future Argentine law should prevent shipment thereof, and were similarly contingently liable at December 31, 1942 in the amount of $939,056.71. 7 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. IL S. REFINED LEAD STOCKS, LEAD AND ZINC PRICES Comparative Annua! Statistics Year Tons of U. S. Refined Lead Stocks At End of Year 1934................. ............. 1935................. ............. 1936................. ........... 1937................. ............. 1938................. ..... ....... 1939................. ............. 1940................. ............. 1941................. ............. 1942................. ............. 1943................. ............. 235,457 222,306 171,856 129,131 115,902 58,777 40,926 20,185 34,937 33,090 Average Lead and Zinc Prices in Cents Per Lb. Lead F.O.B. St. Louts E.&M. J. ; Average Lead. Zinc . F.O.B. St. Louis F.O.B. St. Louis St. Joe E. &M.J. Average Average 3.724 r : 3.915 4.560 5.859 4.589 4.903 5.029 5.643 6.331 6.350 3.700 3.878 4.534 6.015 4.598 4.942 4.986 5.617 6.346 6.320 4.158 4.328 4.901 6.519 4.610 5.110 6.335 7.474 8.250 8.250 ST. JOSEPH LEAD COMPANY AND SUBSIDIARIES Production in Tons Year 1934............ ..... 1935............ ..... 1936............ ..... 1937............ ..... 1938............ .... . 1939............ ..... 1940............ ..... 1941............ ..... 1942.......... ..... 1943............ ..... Ore Mined 3,269,864 3,382,403 3,804,451 5,536,952 3,816,637 5,255,960 6,209,863 6,192,805 7,674,941 7,476,873 Lead Concentrates 124,240 133,044 147,160 212,827 157,188 202,003 225,041 219,819 269,854 253,736 Pig Lead Equivalent 86,060 92,611 101,999 ! 146,274 107,600 138,307 154,281 149,035 179,602 165,584 Zinc Slab Zinc Concentrates Equivalent 46,353 47,214 54,590 71,031 60,797 74,681 85,571 88,236 105,502 104,986 22,389 22,857 26,400 34,519 29,606 38,188 44,406 45,907 53,606 54,172 Lead Sales and Stocks at End of Year in Tons Year 1934............... 1935................ 1936................ 1937................ 1938................ 1939................ 1940................ 1941................ 1942................ 1943................ Lead Sales St. Joe Production Purchased Lead Sold ..... 84,964 39,566 ..... 87,077 41,714 ..... 126,846 47,776 ..... 160,091 38,930 ..... 97,865 50,782 ..... 172,481 39,347 ..... 178,111 . ... 60,199 .... 155,475 60,241 ..... 178,561 67,152 ..... 157,659 45,242 Total Lead Sales 124,530 i 128,791 174,622 199,021 148,647 211,828 238,310 215,716 245,713 202,901 Pig Lead Equivalent of Stocks 103,918 108,849 83,575 72,969 79,775 46,173 30,737 20,767 15,896 23,716 * Includes purchased lead and estimated recoverable lead in concentrates together with other lead stocks in process of refining at smelters. 8 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission AGUILAR.CORPORATION AND SUBSIDIARY Summaries of Consolidated Net Income For the Years Ended December SI, 194-3 and 1942 Net Sales (Including sales to St. Joseph Lead Company in 1942, $115,974.39) Cost of Sales (exclusive of depreciation and depletion).................................... Year ended December 31, 1943 1942 $3,475,353.46 $1,795,163.92 1,728,004.26 856,593.36 Gross Profit from Operations before Depreciation and Depletion................ - Deduct: Selling, general and administrative expenses...... .............. $131,279.80 Taxes, other than taxes on income............................................. 31,296.43 $1,747,349.20 162,576.23 $122,981.05 24,862.48 $ 938,570.56 147,843.53 Net Profit from Operations before Depreciation and Depletion. Other Income ........................ ................................................................. Total............................................................................. Interest on indebtedness......................................................................... $1,584,772.97 30,984.23 $1,615,757.20 1,477.03 $ 790,727.03 26,225.93 $ 816,952.96 7,779.26 Income before Depreciation, Depletion and Taxes on Income. Provision for: Depreciation .................................................................................... Depletion computed on cost.................................... .............. ... Depletion computed on appreciation of ore reserves............ $208,628.83 81,987.47 747,778.85 $1,614,280.17 1,038,395.15 $216,780.14 80,718.97 738,240.88 $ 809,173.70 1,035,739.99 Provision for Argentine income and excess profits taxes. $ 575,885.02 187,000.00 $ 226,566.29 -- Net Income for the year (net loss).......................................... Loss. $ 388,885.02 *$ 226,566.29 Summaries of Consolidated Deficit For the Years Ended December 31, 1943 and 1942 Deficit at Beginning of the Year............................................... Add Argentine Income Taxes for Years 1937 to 1942....... Year ended December 31, 1943 1942 $1,749,412.42 183,586.89 $1,522,846.13 -- Deduct: Net income for the year (net loss).................................... ....... Reversal of provisions for transportation expenses, etc set up in previous years............................................................. $388,885.02 133,077.09 $1,932,999.31 521,962.11 *$226,566.29 ------- $1,522,846.13 *226,566,29 Deficit at End of the Year............................................... .......... Loss. $1,411,037.20 $1,749,412.42 Notes: (1) Included in the above summaries are Aguilar Corporation and its only subsidiary, Compania Minera Aguilar, S. A. (a foreign corporation). (2) The operations of the foreign subsidiary are included in the above summaries in U. S. dollars at the approximate average free rate of exchange for the year except as to provisions for depreciation and depletion which have been converted on the basis of the rates of exchange at which the balances in the related asset accounts are stated. 91 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. AGUILAR CORPORATION AND SUBSIDIARY Consolidated Balance Sheets, December 31, 1943 and 1942 ASSETS ' Capital Assets: December 31,1943 December 31,1942 Ore reserves and mineral rights: Cost, including exploration and development prior to the commencement of operations......................... $ 1,517,391.03 $ 1,507,858.82 Less reserve for depletion.............. 663,230.41 $ 854,160.62 581,242.94 $ 926,615.88 Appreciation arising from revaluation.................... ...... $13,790,750.50 Less reserve for depletion.............................. ......... 6,064,847.78 $13,790,750.50 7,725,902.72 5,317,068.93 8,473,681.57 Total ore reserves and mineral rights, net $ 8,580,063.34 $ 9,400,297.45 Land, buildings, plant and equipment (at cost)............. $ 2,631,188.76 $ 2,628,281.71 Less reserve for depreciation..................... ...................... 1,391,377.60 1,239,811.16 1,186,933.21 1,441,348.50 Total capital assets, net.................................... $ 9,819,874.50 $10,841,645.95 Current and Working Assets: Cash on hand and in banks...................................................... $ 495,226.53 Argentine Government securities -- at cost (market quotation value $1,057,000).................................................... 1,045,523.58 Accounts receivable--trade ................................................ 549,696.94 Other accounts receivable, etc................................ 14,227.59 Inventories (concentrates at cost exclusive of deprecia tion and depletion--valuation not in excess of market; silver at estimated value; materials and supplies at cost) ................................................................................................ 1,687,405.41 $ 207,104.31 384,831.19 14,614.54 3,792,080.05 1,652,157.86 2,258,707.90 Goodwill 50,000.00 50,000.00 Deferred Charges 80,896.33 64,028.55 Total $13,742,850.88 $13,214,382.40 Notes: (1) Included in the above consolidated balance sheets are Aguilar Corporation, a domestic holding company, and its only subsidiary, Compania Minera Aguilar, S. A., incorporated and conducting business in Argentina. (2) Current assets, current liabilities, deferred charges and reserves of the foreign subsidiary are included in the above consolidated balance sheets in U. S. dollars at the closing quoted rate of exchange at Decem ber 31, 1943 and 1942, respectively (except in a few instances where original dollar values applicable to foreign transactions are used). Capital assets and related reserves and capital stock and capital surplus accounts reflect the approximate dollar equivalents at the rates prevailing at the dates of the transactions of which the balances in these accounts consist. 10 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission AGUILAR CORPORATION AND SUBSIDIARY Consolidated Balance Sheets, December 31, 1943 and 1942 ' LIABILITIES ' Capita] Stock: Preferred stock--$7.00 cumulative shares without par value (entitled upon redemption or liquidation to $115.00 a share) Authorized 89,776 shares; issued 9,976 shares at a stated value of $1.00 a share................ Common stock--Shares without par value--authorized 248,070 shares; issued, 88,470 shares at a stated value of $.05 a share......... .......................................................... . $ December 31,1943 9,976.00 $ 4,423.50 $ 14,399,50 December 31,19423 4 5 9,976.00 4,423.50 Current Liabilities: Loans payable--bank ............................................................ . Accounts payable--trade ................................................ . Wages payable ...................................................................... .. Accrued taxes .......................................... ........... ................ . Proceeds from sales of concentrates for future export.... Estimated expenses on concentrates held for future delivery ..................................................................................... Other accounts payable........... ................................................. < 119,248.99 16,786.46 203,794.97 233,900.00 539,045.90 6,880.82 $ 185,878.19 106,096.06 16,711.90 7,608.39 233,900.00 1,119.657.14 459,728.52 7,464.68 Deferred Credits; Unrealized profit on foreign exchange, etc......................... 64,482.88 Reserves: For compensation and accidents.......................................... For other expenses.................................................................. ,, $ 45,217.63 33,177.74 $ 78,395.37 37,447.19 17,607.20 Surplus: Capital surplus: Arising from revaluation of ore reserves by the subsidiary ........................................................................ Arising from reductions by Aguilar Corporation in stated value of its capital stock, $1,758,278.50, less excess of cost over stated value of stock purchased and retired, $1,672,075.81.......;:^...:;.;...,.... $13,790,750.50 86,202.69 $13,790,750.50 86,202.69 Total capital surplus.......................... ................. . $13,876,953.19 $13,876,953.19 Earned surplus (deficit): Surplus based on depletion computed on cost........ . Deduct depletion computed on appreciation of ore reserves ............................................................. ............... $ 4,653,810.58 6,064,847.78 $ 3,567,656.51 5,317,068.93 Earned surplus (deficit)............. .......................... $1,411,037.20 $*1,749,412.42 Remainder ..................................................... 12,465,915.99 . 12,127,540.77 Total .................................................................... $13,742,850.88 $13,214,382.40 Notes Continued: (3) Cumulative dividends on the $7.00 preferred stock have not been declared since its issuance, and at December 31, 1943 and 1942 amounted to $911,380.75 and $841,548.75, respectively. (4) The foreign subsidiary and St. Joseph Lead Company were contingently liable at December 31, 1943, to refund to customers the sales price, $591,385.05, of concentrates paid for by the customers and stored in Argentina, in the event any future Argentine law should prevent shipment thereof, and were similarly con tingently liable at December 31, 1942, in the amount of $939,056,71. (5) Contingent liabilities also existed in respect of customs duties on materials and supplies imported into Argentina duty free, not yet officially exempted from duties. The Company does not anticipate that any loss will result from this source. n Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. HASKINS & SELLS CERTIFIED PUBLIC ACCOUNTANTS t EAST 44TH STREET NEW YORK ACCOUNTANTS5 CERTIFICATE To the Stockholders of St, Joseph Lead Company; We have examined the consolidated balance sheets of St, Joseph Lead Company (incorporated in New York) and its wholly-owned subsidiary companies, and of Aguilar Corporation (incorporated in Delaware--a majority-owned subsidiary not consolidated) and its subsidiary, Compania Minera Aguilar, S. A. (incorporated under Argentine law) as of December 31,1943 and the related summaries of consolidated net income and surplus for the year ended that date, have reviewed the accounting procedures of the companies, and have examined their accounting records and other evidence in sup port of such financial statements. Our examination was made in accordance with generally accepted auditing standards applicable in the circumstances and included all auditing procedures we consid ered necessary, which procedures were applied by tests to the extent we deemed appropriate in view of the systems of internal control; it was not practicable to confirm receivables from the United States Government but we have satisfied ourselves with respect to such receivables by means of other auditing procedures. In our opinion, the accompanying consolidated balance sheets and summaries of consolidated net income and surplus, with the footnotes thereon, fairly present the financial condition of St. Joseph Lead Company and its wholly-owned subsidiary companies, and of Aguilar Corporation and its foreign subsidiary company, at December 31, 1943 and the results of their operations for the year ended that date, in conformity with generally accepted accounting principles and practices applied on a basis consistent with that of the preceding year. HASKINS & SELLS New York, February 28, 1944. 12 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ST. JOSEPH LEAD COMPANY PRESIDENT'S ANNUAL REPORT TQ STOCKHOLDERS FOR THE YEAR 1943 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.