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Notional Load Company Executive OfScas/111 Bmartway, New York. NY 100P6 _ ALFRED F. BAUER Vice President GEORGE B. COALE Vice President EDWARD J. HANLEY Chairman of the Board, Allegheny Ludlum Steel Corporation JOHN B. HENRICH President J. MURRAY JOHNSTON Vice President JOSEPH A. MARTINO Honorary Chairman CLAUDE M. MERRELL Vice President DAVID A. MERSON Former Vice President ERIC G. ORLING Vice President RICHARD M. PAGET President, Cresap, McCormick and Paget Inc. E. R. ROWLEY Chairman MORRIS H. WRIGHT General Partner, Kuhn, Loeb & Co. E. R. ROWLEY Chairman JOHN B. HENRICH J. MURRAY JOHNSTON JOSEPH A. MARTINO CLAUDE M. MERRELL .ERJCG. ORLING (R* Al e x a n d e r a g r e e n `f 120 Broadway, Now York. N.Y. 10005 E. R. ROWLEY Chairman JOHN B. HENRICH President ALFRED F. BAUER Vice President; General Manager, Doehler-Jarvis Division EDWARD F. BEALE Vice President, Corporate Development GEORGE B. COALE Vice President; General Manager, Baroid Division RICHARD A. DONOVAN Vice President, Employee Relations J. MURRAY JOHNSTON Vice President; Manager, TAM Division JAMES MacGUFFlE Vice President, Mergers and Acquisitions JOHN A MARDICK Vice President; General Manager, Metal Division CLAUDE M. MERRELL Wee President, International Operations ERIC G. ORLING Vice President; General Manager, Tttanhim Pigment Operations HARRY W.S1EFERT Vice President, Finance KENNETH C. 8PEEHT Vice Presidents Manager, Mot Division .HENRY J. WHITSON Wet PreaUant; Manager, Wgmsnts and Chemicals Division jwiwn i c.mN* ^JinCKKirTwIrrilKNnit nlPlp- : THOMAS P. MERCK laps . Stock symtxk: LT--Listed on the New York and Pacific Coast Stock Exchanges TRANSFER AGENTS: The Chase Manhattan Bank, N.A., One Chase Manhattan Piaza, New York, N.Y. 10015 Old Colony Trust Company, 45 Milk Street, Boston. Massachusetts 02106 National Trust Company Limited, 21 King Street East, Toronto 1, Canada Crocker-Cltizens National Bank, 150 Post Street San Francisco, California 94120 REGISTRARS: Bankers Trust Company, 16 Wall Street, New York, N.Y. 10005 The First National Bank of Boston, 45 Milk Street, Boston, Massachusetts 02106 The Royal Trust Company, 66 King Street West, Toronto 1, Canada United California Bank, 405 Montgomery Street San Francisco, California 94104 TRUSTEE AND INTEREST PAYING AGENT: The Cham Manhattan Bank, MA., *iOne Chase Manhattan Plaza, ' ^Naw York, N.Y. 10015 , -tt* ** a**' ' - K 0000-NLI-000018853 I |r , Stf-L r nv *<. % f * - f ' fir icial highlights I- S. For 1 ; year 1969 1968 i S:- -5 $929,785,000 $858,195,000 N Income 50,675,000 49,985,000 er share Ca-r dividends paid 2.12 40,272,000 2.08* 39,062,000 ^er share Pr: oerty expenditures 1.70 39,830,000 1.62Vi* 45,010,000 At ye end * f Wc - ing capital e Lc g term debt 185,861,000 94,688,000 203,633,000 54,761,000 SF '"holders' equity 403,975,000 404,764,000 Per: re calculations adjusted for two-tor-one stock split. r 1I u- L r NATIONAL LEAD Seventy-Eighth Annual Report 1969 contents 2 Letter to Shareholders 4 Corporate Developments 4 Management Changes 4 Research and Development 5 Environmental Health 5 Shareholders 6 Consolidated Operations Report 18 Affiliates' Report 20 Financial Report 23 Financial Statements 27 Auditors' Report 28 Ten Year Review of Operations 30 Divisions, Subsidiaries & Affiliates f t Shareholders are cordially invited to attend the seventy-eighth annual meeting of National Lead Company, Thursday, April 16, 1970, in the Hotel Robert Treat in Newark, New Jersey at 2:00 p.m. 0000-NLI-000018854 i I E. R. Rowley, Chairman of the Board, and J. B. Henrich, President, leave the corporate research laboratories at Hightstown, New Jersey. to our shareholders: For National Lead, 1969 was a year characterized by internal and external developments supporting the Company's commitment to corporate growth. These included the continued reorganization of our operational and management structure, a major new venture, plant expansion, and new acquisitions. Sales reached a record high during the year. Sales of $929,785,000 for 1969 were 8.3 per cent above those of the previous year. Earnings totaled $50,675,000, or $2.12 per share, slightly higher than the $49,985,000, or $2.08 per share, in 1968. Earnings growth for the year did not keep up with record sales due to production start-up costs at new plants, rising interest charges, and the continuing cost/price squeeze. In 1969, nearly $125 million was committed or spent for new ventures and plants and for acquisitions in the United States and abroad. Significant progress was made in the following principal areas: New Expansion--The largest new venture is a magnesium and chemical complex on the shores of Utah's Great Salt Lake. This $70-million project, to be completed in late 1971, will have a capacity of 45,000 tons of magnesium and will increase U.S. production of this light, strong metal by more than 30 per cent. The new plant also will produce chlorine and other chemicals from the brines of the Lake. Two new foreign plants went on stream 2 last year, expanding the Company's production of titanium dioxide. This is the pigment that provides whiteness, brightness, and hiding power to paints, paper, and other products. These highly automated, computer-controlled production facilities at Varennes, Canada, and Nordenham, West Germany, ensure that National Lead will continue as a leading producer of this important pigment. Expansion of the Company's chemical capacity also included the start of construction of a $4-million mineral synthesis plant by the Baroid Division in Houston, Texas. Plans also were begun for a ben t o n e gellants plant in West Germany. Corporate Development--We are presently midway in the development of a program begun last year, to reshape and streamline the management structure. The corporate organization has been bolstered by the realignment of several existing departments and the creation of some new corporate functions. Key executives, as well as middle management, have been given additional staff responsibilities in such vital areas as market research, long-range planning, employee relations, financial control, mining and exploration, and research and development. To all these efforts we have applied the technique of management by objectives. We are making a total plan in setting goals, designing strategies, and calculating the physical and human resources needed to achieve orderly development and desired sales and earnings targets. In the employee relations field we are developing rapidly a compreherc ve manpower planning program. Th s will encompass individual programs o' employee evaluation, succession, incentive, and recruitment. This effort is directed toward the continuing development of r ore effective employee programs, standards of performance, and personnel recognition. To realize its commitment to growth, National Lead must have the ab . ty to attract, develop, and advance conoetent people, and this program is des;gned to achieve that objective. Acquisition Progress--As pa" of the contihuing program of diversifies*, on and broadening of the Company's ope-ational base through acquisitions, three companies were acquired in 1969. In January, the $38-million acquisition of the Lake View Trust and Savings Bank of Chicago was consummated. This already has proved to be the sound investment expected and has served to demonstrate our willingness to enter areas totally unrelated to our present major fields. In July, certain assets of the McCullough Tool Company of Houston and Los Angeles were acquired for $7.5 million. This company has an excellent line of services to meet the needs of the petroleum industry. With the talents and skills of McCullough's people integrated into the Baroid Division, National Lead now provides one of the most complete lines of oil field products and services. 0000-NLI-000018855 Jon -an Manufacturing Company, acq. sd in September, is a multiproduct com ny making precision parts for the elec jnic and aerospace industries. This com- my meets our basic criteria for acqi itions since it has high growth potc ial and adds to National Lead's dive fication. Oth r Company Developments-- Ric -d M. Paget was elected to the Board of C ;ctors. Mr. Paget is president of Cre -o, McCormick and Paget Inc., ma; cement consultants. He is the Board's thir - utside director and succeeds Wll -i J. Welch, a retired vice president of the ' -npany, who served as a valuable Boa* member for 17 years. Ir oril, shareholders at the Annual Mee- g approved the resolution for the two --one split of the common stock. Also auL irizeC was an increase in the number of s -es of common stock from 30 mil; on shares of $5.00 par value to 60-- II ion shares of $2.50 par value each. Eorly in 1969, the Board of Directors ar- ounced its intention of declaring di\ oends of equal amounts on a quarterly be- ; instead of three equal payments and a h oner year-end payment. This change, cot - led with an increased rate, raised the toto dividends paid on a split-share basis for one yearfrom $1.6254 in 1968 to $1.~3 in 1969. Financial Strength--National Lead's financial position continues to provide a solid base for expanding operations, with total assets at the end of 1969 amounting to $695,260,000. The Company has strong borrowing power for the major investments in new ventures and new production facilities it is planning during the next few years. These are unsettled times, and it is difficult to foresee what is ahead for the economy and for National Lead in the next year. The Company has embarked on a substantial, long-range effort to develop further its operational skills and its management, to broaden its base and profitability in traditional industries, and to seek long-term and profitable investments in new fields and new ventures. National Lead has a commitment to invigorate and redefine the character of the Company and to enhance its potential. We have the capabilities and loyalty of more than 29,000 people in the United States and around the world with which to accomplish these goals. With their help and our substantial financial and physical resources, we intend to grow and to prosper. Respectfully submitted, E. R. Rowley / Chairman of the Board highlights of the yes. January--Acquired Lake View Trust and Savings Bank of Chicago for $38-million cash. February--Started joint study program on nuclear fuels for electric power with The Anaconda Company. April--Announced $70-million magnesium and chemical complex at Great Salt Lake, Utah. Shareholders vote two-for-one stock split. June--Chas. Taylor Sons completed SB-million expansion with opening of research laboratory for high temperature refractories. July--Acquired oil services business of McCullough Tool, Houston, for $7.5 million and integrated it into Baroid Division. New multimillion-dollar ben t o n es gellants plant planned for West Germany. Opened $30-million titanium dioxide plant in Nordenham, West Germany. August--Baroid started construction of $4-million mineral synthesis plant in Houston. September--Acquired Jonathan Manufacturing, a maker of aluminum and steel precision parts. December--A $20-million environmental control program announced. CS J. B. Henrich March 16,1970 President 0000-NLI-000018856 3 corporate developments Management Changes A number of executive promotions were made in 1969. Eric G. Orling, a vice president and director of the Company and general manager of the Titanium Pigment Division, was given the additional responsibility of directing worldwide titanium pigment operations. John A. Mardick was elected a vice president replacing Warren T. Trask who retired. He was also named general manager of the Metal Division. Mr. Mardick has been associated with the Company since 1948. He will continue to be responsible for the bearings operations of the Company. Eugene F. Erbin was appointed general manager of the Magnesium Division. He was formerly general manager of technical service and market development for Titanium Metals Corporation of America. Richard K. Martin was appointed general manager of Southern Screw Division upon the death of Fritz Jensen. Mr. Martin had been assistant general manager of the division. John H. Watt was named assistant treasurer of the Company. He has been associated with the Company since 1946 and was formerly manager in the treasurer's department. Colonel Richard K. Hunt became the Washington representative of the Company. A retired Marine officer, he was formerly military aide in the Office of the Vice President and Liaison Officer attached to Congress. Progress In Employee Relations Significant progress was made during 1969 in developing systems for forecasting and meeting future management manpower needs at National Lead. Programs in succession planning, performance appraisal, and management training were inaugurated. Vigorous programs in college and executive recruiting were pursued successfully. Our college recruiting program to find professional and executive talent includes visits to many predominantly minorityoriented colleges and universities in all parts of the country. The search for qualified employees was extended to include Student Career Days, devoted exclusively to the minority community. Improvements were made in compensation and benefit programs for salaried employees. Labor contracts were negotiated at 31 locations for 4,320 employees, providing for wage rates and fringe benefits commensurate with prevailing patterns. Time lost because of strikes was below 0.7 per cent of man-hours worked. Viewed broadly, Company-union relations continued satisfactorily. Employment in all domestic and foreign National Lead operations, both partially and wholly owned, is now approximately 29,000. This is an increase of several thousand employees and is primarily a result of acquisitions made during the year. The Company's continuing commitment 4 to Plans for Progress, National - ;ance of Businessmen, and its internal A'- rmative Action Program in 1969 was ma-ked by a gratifying increase in the employment and advancement of minority grcuc members. i t I ' Expanded Research and Development A comprehensive plan of mode" zation and expansion of the Company's research and development activities was -.itiated during the year. Two new groups were formed. The first is the Technical Coordination group responsible for accelerating deve'opment of the research process by pooling the expertise and efforts of the various divisions toward common objectives. The other is the New Ventures group which is responsible for speeding the conversion of research results into practical applications and development of new, profitable products. * During the year, we augmented our installation of the most modern scientific instruments in the Central Research Laboratory at Hightstown, New Jersey. The Chas. Taylor's Sons Company, The Baker Castor Oil Company, and the Bamid and Magnesium Divisions have built or acquired new research laboratories and have expanded their scientific staffs. Several important research diversification programs were initiated during the year, which should lead the Company into new business opportunities. These include projects on organic chemicals and electronics. 0000-NLI-000018857 N 'ona/ Lead's continuing research toward the c. 'trol of atmospheric emissions led fo c elopment of a new digestion process at the $ Louis titanium pigment plant. E nvironmental Health Plans were ft Tiulated during the past year to make s jitional investments of approximately S ' 3 million for plant atmospheric emissions c ttrol, waste-water treatment, and ir ernal environmental control programs. :n these areas, the Company has d- /eloped an improved digestion process f' - the production of titanium pigment, is new, semicontinuous process spreads s digestion chemical reaction period over : oproximately one hour, in contrast to the p evious time of about five minutes, and t^us permits more complete control of : missions to the atmosphere. The process now in use at the St. Louis titanium : gment plant and will also be installed at t e Sayreville, New Jersey, plant. A patent acplication has been filed for the process. Another technological innovation enveloped by the Company is a unique c jst-collecting system for electric arc urnaces at the TAM Division's Niagara Falls r ant. The system, nearly two years in development, is considered a major advance in the control of emissions rom this type of equipment. The Company is pursuing a program to achieve the most advanced state of the art for control of sulfur oxides in the manufacture of sulfuric acid. The first sulfuric acid manufacturing facility in the United States to use the new double absorption technique developed in West Germany is now being built at the St. Louis t tanium pigment plant As part of the continuing program to upgrade waste-water treatment facilities at its various locations, the Company also is engaged in extensive studies of advanced waste-water treatment concepts and evaluation of new equipment. The Company is cognizant of its responsibilities as a corporate citizen and neighbor and strives to contribute to the most wholesome environment for its employees and the residents of its plant communities. Shareholders At year end, there were 23,681,381 common shares outstanding compared with 23,830,730 common shares outstanding (adjusted for the two-for-one stock split in April, 1969) at the end of 1968. The number of shareholders at the end of 1969 was 50,824 as compared with 49,159 last year. Geographic Distribution of Shareholders Region New England Mid-Atlantic South Atlantic North Central South Central Pacific & Mountain Per Cent 10 35 14 22 5 14 0000-NLI-000018858 5 report on consolidated operations } V Metals 26%: $245 Million in Sales. Primary lead, zinc, tin, antimony and cadmium. Lead wool, foundry molds, castings, coatings; solders and printers metals. Fabricated lead pipes and fittings for the plumbing and construction industries; Pumps, tanks, linings for chemical processing; sound insulation; battery plates; radiation shielding; lead shot. Screws, bolts, and metal fasteners. Steel containers. Aluminum tooling plate and extrusions for aircraft. Precious metals including gold, silver, platinum, iridium, palladium, osmium, rhodium, and mercury; chemicals for photographic film and papers. 6 Titanium Pigments 23%: $212 Million. Sulphate and chloride process titanium d gments for the paint, paper, plastic and rubber industries. Prisms and lenses for optical systems, lasers, gem stones, and heat-sensing devices. \ 0000-NLI-000018859  * i > < * i * I* Die Casting 18% :$169 Million. Custom producerof die castings in aluminum, zinc, magnesium and brass. Parts and assemblies for appliances, 1 business machines, aircraft, motor r vehicles, lawn mowers and many other industries. Aluminum and steel elevated floor panels and site environmental systems. Chemicals & Plastics 9%: $84 Million. Anti-corrosive pigments, stabilizers, gellants, flame retardants, battery oxides, and extender pigments for use in the paint, ink, electronic and adhesive industries. Custom injection molded plastic products. Oil Well Drilling Services 9%: $81 Million. Oil well drilling materials. Chemicals for the petroleum and pollution control industries. Weil logging services and testing equipment. Bearings 5%: $49 Million. Precision bearings, rail journal bearings, roller bearings, diesel engine bearings. Paint 5%: $44 Million. Dutch Boy paints. Other Industries 5%: $46 Million. Nuclear fuel elements, fabricated depleted uranium products. High temperature refractories: Zirconium oxides, and chemicals. 0000-NLI-000018860 The spectacular view of molten metal shown at the far right symbolizes the Company's activity covering the full spectrum of base metal fabrication . .. from ingot to sheet, alloyed and rolled to exacting tolerances. metal products Metal products accounted for about 26 per cent of consolidated sales in 1969. A major contribution to these results was made in the smelting and refining of secondary lead and in the fabrication of lead shapes and alloys. Favorable market conditions and the introduction of new operational techniques also were important factors in the progress of this part of our business. In the metals area, National Lead is involved in the marketing of lead, zinc, cadmium, antimony, and precious metals; and the production of steel containers and automotive brake pistons. Lead alloy products include such items as pipe, sheet, wire, shot, and solder. The strategic nationwide location of plants and warehouses and a reputation for efficiency and integrity in the industrial community afford the Company a highly favorable position in the metals industry. Increased sales of antimonial lead offset minor declines recorded in other metal products. Shipments of blue lead, metal alloys, and sheet lead used for X-ray shielding and other specialty products fell short of the 1968 level, which was abnormally high because lead smelters owned by struck copper companies were not in operation. The Goldsmith Division had a profitable year in 1969. Goldsmith is a leading supplier of silver nitrate to independent photographic film and photocopy companies and a large producer of silver chloride, rolled strip, and stamped electrodes for battery cells. The recovery of silver from scrap and silver coins has become a more important operation than it has been heretofore owing to the scarcity of the metal. Strong growth possibilities in the electronics, electrical, and aerospace industries, and the consequent demand for silver and other precious metals, put this division in an advantageous position. Sales increased in the Steel Package Division, a maker of small steel containers, and in the Screw Machine Division a leading supplier of master cylinder and hydraulic brake pistons for the automotive industry. The Screw Machine Division's production capacity will be increased in 1970 with the installation of automatic multi-spindle machines. Morris P. Kirk & Son, Inc., a majority owned subsidiary, located on the West Coast, which is engaged in the manufacture of lead products and alloys, increased its sales. Production improvements to be effected in 1970 will significantly increase output. Pioneer Aluminum, Inc., a subsidiary of Kirk and a distributor of aluminum aircraft extrusions and manufacturer of aluminum tooling plate, had a somewhat disappointing year. In 1970, it will expand its capacity for melting and casting aluminum tooling plate for the aerospace and other industries and thus improve its profit potential. Southern Screw Division, which manufactures screws and metal fasteners, reported favorable earnings and sales (Left) National Lead's position as a leading producer of screws and metal fasteners has been solidified by the early-1970 start-up of Southern Screw Division's new plant in Puerto Rico. (Right) Precision cast aluminum tooling plate manufactured by Pioneer Aluminum, must meet the exacting Quality standards of the aerospace industry. metal products continued despite a seven-week strike. Sales to its major customers--the automotive, appliance, and furniture industries--were higher than for the previous year. Over-all, the entire metal fastener industry enjoyed a high demand for its products. A new plant in Puerto Rico, which began production in early 1970, will help promote the growth of the division. Further expansion and a broadened product base are being contemplated. Jonathan Manufacturing Company, which was acquired in September, increased its profits and sales in 1969. Development of a new precise-action ball bearing steel slide for the commercial market and expanded marketing and manufacturing of food, drug, and chemical equipment accounted for the major portion of the increase. The steel slides are used in equipment that must be easily accessible, such as computers, business machines, telephone systems, and home audio systems. In September, Jonathan acquired Anaheim Citrus Products of Anaheim, California, a processor of citrus peel used for pectin extract and livestock feed. Magnesium The Magnesium Division was established in April, and development of a $70-million plant at Utah's Great Salt Lake is proceeding on schedule. Construction has begun at the plant site on the southwest shore of the Lake about 60 miles from the Utah capital. Transportation lines--a 14-mile road and a 20-mile railroad spur--have been completed to the site of the plant. Nearly 30 square miles of solar ponds have been built. These giant evaporating ponds serve to concentrate the lake waters into a chemical-rich brine, high in magnesium content. Construction of the main plant buildings, including a large-scale pilot facility, will begin in the early spring. National Lead's chemical-metal complex, which will be completed late in 1971, will extract magnesium from the brines of the Lake. Capacity of the facility will be 45,000 tons of the light, strong metal, thereby increasing this country's production by more than 30 per cent. Initial output will also include 80,000 tons of chlorine. Divisional headquarters are located in Salt Like City, and key members of the engineering, marketing, and research staffs have been recruited. 10 1 y (Right) The new sulfate process titanium pigment plant at Nordenham, West Germany, went on stream in July. Its capacity of 40,000 tons a year will supply Europe's rapidly growing markets. 0000-NLI-000018863 0000-NLI-000018864 *CFX 90131 (Left) The plastic and paint industries are the largest customers for the chloride process pigments produced at Sayreville, N.J., Leverkusen, West Germany and Varennes, Canada. (Right) Titanium pigment, dispersed in water, has been developed especially for the paper industry; it may be unloaded from tank cars in a fraction of the time required for bagged pigments. titanium pigments Sales of titanium pigments made up 23 per cent of consolidated sales in 1969. Worldwide titanium dioxide operations were consolidated during the year under one management, and beneficial results from the new organization already have become evident. Sales of the Company's t it an o x and k r o n o s titanium dioxide pigments increased satisfactorily in 1969, continuing the upward trend of the previous year. New production facilities, including the new chloride process plant at Varennes, Canada, and the new sulfate plant at Nordenham, West Germany, were brought on stream. Their combined annual capacity of 50,000 tons will enable the Company to supply a greater portion of the worldwide demand for these products and further solidify our marketing position. National Lead now supplies more than 25 per cent of the world's titanium dioxide. The sales of some of the newer, more sophisticated grades, chloride as well as sulfate, were maintained at a high level, and additional manufacturing facilities are being planned. Slightly lower earnings in 1969 were due to start-up costs at the new plants and severe production cutbacks caused by emission control problems at the St. Louis facility. These atmospheric control problems were corrected late in the year, and production was resumed at optimum levels. The already widespread acceptance of National Lead's titanium dioxide by its two major consumers, the paint and paper industries, was enhanced by the introduction of new products. Additional grades of titanium dioxide for use in latex paints--the fastest growing segment of the paint industry--provide our customers with a choice of grades for all specific uses. The introduction of tank car shipments of pigment dispersed in water enabled us to serve the paper industry more economically and with better quality. Efforts to penetrate further the plastic, ink, and ceramic industries are meeting with success. Plans laid during this year for increasing the efficiency of our worldwide technical and manufacturing facilities will further improve the profit position in the coming years. 12 0000-NLI-000018865 Doehler-Jarvis Division, the world's largest custom die caster, serves major industries with a vast array of parts. Die castings range from one-piece aluminum automotive transmission housings on the left to specialized magnesium castings for office machines, agricultural products, industrial tools and photographic equipment on the right. !t casting Die castings and die cast metals represented approximately 18 per cent of consolidated sales in 1969. The Doehler-Jarvis Division, the world's leading custom die caster, rebounded f'om the effects of a strike in 1968. A new sales record was established in 1969, and earnings improved. Demand for die cast components and assemblies, especially for the automobile industry, was strong until the last quarter when a softening was experienced. Doehler-Jarvis is meeting the challenge rosed by increasing competition from substitute materials with intensive research r rograms to reduce the cost of die cast z nc components and to expand the range cf zinc die casting applications in new areas. Other research during the year led to initial production of die cast aluminum wheels for the automotive market. These wheels are used extensively as a style item on sports cars. It is anticipated that this market will develop into a major die cast application. The Company has responded to the introduction of plastics in the automotive industry by direct entry into injection molding. Late in 1969, installation of a plastic injection molding facility was begun at the Doehler-Jarvis Grand Rapids plant. It includes equipment for automatic plating of injection molded plastic parts. Initial production runs already have been made at this unit, which has provision for further expansion. Canadian subsidiaries, Barber Die Casting Co. Limited and Lakeshore Die Casting, Ltd., increased sales and earnings. Metal Castings Doehler, Ltd. of Worcester, England, experienced an excellent year. High sales and improved operating efficiency resulted in a most satisfactory profit contribution. Ridge Machine Co., which manufactures die casting machines and parts for Doehler-Jarvis and performs custom machining for other customers, satisfactorily increased both sales and earnings. Cochrane Foundry, Inc., a custom producer of non-ferrous sand castings, increased sales but earnings were slightly lower reflecting higher labor costs. Floating Floors, Inc., had record sales and earnings. In 1969, the subsidiary was reorganized and moved to Toledo, Ohio. It is a leading supplier of elevated floors and site environmental systems for computer rooms and other applications. A new steel floor panel, introduced by Floating Floors, Inc., is expected to provide a quality entry into the low-cost end of the elevated floor market. I i :! 0000-NLI-000018866 13 (Below) Injection molded plastic parts, such as the grill for the 1970 Valiant "Duster," are produced and assembled by Amos-Thompson. (Right) Expanded research efforts at Baker Castor Oil Company has led to the development of polyurethane adhesives for bonding metals, wood, glass, vinyl products, and metallic foils. chemical? & ptarllc? Chemicals and plastics products sales accounted for approximately 9 per cent of consolidated sales in 1969. The Pigments and Chemicals Division, which produces and markets a wide range of specialty chemical additives for use in coatings, plastics, rubber, ink, and cosmetics, experienced increased sales and profit improvements in 1969. The division also makes lead oxides for storage battery, glass, and ceramic manufacturers. In the plastics field, specialized heat and light stabilizers were developed for vinyl resins, and gellants were introduced for thickening and flow control of cosmetics and paints. These products also have found wide application in inks, plastic foams, and flame retardants for the textile, paint and plastics industries. New pigments for corrosion-resistant paints were developed for better and longer protection of iron and steel. These have been used to protect major bridges and other metallic structures in the United States, and their use in the recent painting of the Eiffel Tower signaled the development of expanding applications in Europe. The operations of the DeLore Division in the field of extender pigments continued to be satisfactory. Its barium sulfate pigments and l o r it e, its diatomaceous calcite, are used as fillers and extenders for brake linings, paints, sealing and rubber compounds, seamless plastic flooring, and petroleum refining. In 1969, the division penetrated a new market--urethane foam for carpet backing. Sales by the plastic sector of Amos-Thompson Corporation increased appreciably in 1969 with a complementary improvement in earnings. The A-T plastics group produces injection-molded and rotationally cast plastic parts for the automotive, appliance, office machine, and electronics industries. The Wood Division of Amos-Thompson, which supplies hardwood face veneers for wall paneling and furniture, recorded higher sales despite the continuing weakness of the market. Earnings, however, declined as a result of a sharp increase in the cost of walnut logs. 14 1 1 (Top Right) Rutile, the vital raw material for tltanium metal and chloride process titaniurfi pigments, is extracted by tn>s "floating" plant at Hawks Nest, Australia. Unique process restores Queensland beaches to their scenic beauty. (Bottom Right) O/VCOR M50& Pigment, devel oped and produced by National Lead, protects the San Francisco Bay Bridge from the corrosive salt air atmosphere. 0000-NLI-000018867 Baroid engineers perform service work on drilling rigs under extreme operating conditions on the North Slope of Alaska. Acquisition of McCullough Tool's services broadened the Company's operations in the dynamic petroleum industry. Installation of automatic forging equipment at Bunting Brass improves properties and reliability while effecting economies. oil well products & services Baroid Division sales and services to the oil, chemical, and other industries were 9 per cent of National Lead sales in 1969. Baroid is one of the country's leading suppliers of oil well drilling materials, equipment, and services to the petroleum industry. Worldwide oil and gas well drilling activity was slightly higher in 1969. Baroid sales increased due to expanded exploration and production in Alaska and Canada. International operations were at peak levels with particular growth recorded in North Africa, Australia, and Southeast Asia. Sales volume in products for the water well and seismic industries rose during the year. Revenues also increased from rental of oil field equipment and from sophisticated electronic and mechanical services supplied to the drilling industry. The recent acquisition of McCullough Tool Company's logging, perforating, and other wireline services contributed to the improvement of sales and the long-term outlook for the division. The capabilities of the McCullough organization in well completion and workover operations have broadened the scope of Baroid services to the worldwide petroleum industry. Baroid is actively increasing the number and variety of its products related to air and water pollution control. New and improved chemical formulations developed by the Company for corrosion, scale, and biologic control provide the base for major growth possibilities in virtually all industries, especially in filtration for environmental control. Sales of treatment chemicals to the oil industry and for water treating, pollution control, mining, and other industrial applications continue to increase. Chemical manufacturing facilities at Houston were expanded early in the year with the completion of a new plant for the production of intermediate and basic chemicals. A further step in the diversification of this division was taken by the start of construction of a $4-million mineral synthesis plant adjacent to the present plant complex. The plant will supply products applicable to many markets but most particularly to the oil, petrochemicals, and plastics industries. The division will also provide related backup technical services to these industries. bearings Bearings accounted for slightly more than 5 per cent of consolidated sales. Sales and earnings increased over 1968 levels. The products in this area include brass and bronze castings; precision bearings for internal-combustion engines, gas-turbine compressors and allied applications; and roller and journal bearings for the railroad industry. Bronze bushings, bars, and sintered and powdered bronze and iron parts also are produced for a variety of industrial equipment. Magnus Metal Division, maker of journal and motor-support bearings for the ra Toad industry, was the largest contributor to sales and earnings. Magnus Roller Bearing Division, established in 1968 completed its first production year. Machinery has been installed to perm t the production of a much larger volume during 1970. The Bunting Brass and Bronze Corroany increased its production capacity with the installation of two Auto Forge units and a vertical continuous casting machine. The full benefits of this automated equipment should be realized in 1970. Sales and earnings were down from last year's levels at the American Bearing Division because of higher unit costs and competitive factors. Automatic equipment is being installed to reduce manufacturing costs. Aluminum Match Plate Corporation increased its sales though earnings were depressed due to lower profit margins. Outlook for the bearings products of National Lead appears favorable in 1970 as capacity increases and cost-reduction programs are realized. paints Sales of the d u t c h bo y line of quality paints were some 5 per cent of consolidated sales, consistent with the Paint Division's sales contribution in recent years. The familiar d u t c h bo y continued as a prominent figure in an extensive 0000-NLI-000018869 16 t- casting and fabrication of depleted t ^niurn. 4 Refractory materials for lining glass and steel furnaces are test-fired at the new research lab of The Chas. Taylor's Sons Company. Dutch Boy "color packs" are just a small part of the complete sales arsenal supplied to dealers. ationwide TV advertising program. Latex interior and exterior paints were the i_ featured subjects of d u t c h bo y * : immercials appearing in prime time 11 network television during the peak c - the painting season. A special Ic cal TV advertising program also was c inducted, reaching 40 major markets throughout the country. 1 Sales of products in this grouping were approximately 5 per cent of 1969 sales. Sales and profit performance of the ~AM Division were well ahead of those of :ne previous year. Its extensive line of :pacifiers, which provide texture control and color stability for ceramic glazes, outperformed sales by the industry. Operations also were excellent for the division's electro-ceramics products. These are basic materials used in the production of dielectric components by television and other electronics manufacturers. During the year, TAM also began producing thermistors, tiny electronic heat switches. Operations for the specialized refractory products of The Chas. Taylor's Sons Company were at an all-time record. Its rapid growth is the result of the need to meet the increasing demand of the iron and steel, metallurgical and glass i industries for quality high-temperature refractory materials. Taylor completed a three-year, $8-million capital expenditures program during 1969 with the start-up of production at expanded manufacturing facilities at South Shore, Kentucky. It also relocated its headquarters and research laboratory to a new complex in Greater Cincinnati and began construction of a refractory cement and specialties plant there. In Florida, the Edgar Plastic Kaolin Company is completing a substantial expansion of a glass sand production facility. Operations of this new acquisition were very satisfactory in its first full year as a part of National Lead. The Tool and Engineering Division experienced continued growth. The division through its unique services and skills prepares special dies and tooling for the production of prototype body parts for car models several years in advance of introduction. Its facilities were expanded in 1969 as a result of a sizable increase in assembly work. This now includes the building of complete prototype bodies of future car models. Depleted uranium fabricated by the Nuclear Division gained wide acceptance during 1969 for use as a counterweight in aircraft. The Company received orders during the year for counterweights to be used on every major commercial aircraft presently on the drawing board. Depleted uranium--a metal of very high density--also is being used increasingly for shielding with nuclear, X-ray, and other equipment where protection from radioactivity is necessary. National Lead's Albany, New York, plant produces the largest depleted uranium castings required for radiation shielding purposes. Soon to be completed is a joint study by The Anaconda Company and National Lead of the market potential in the fabrication of nuclear fuels for electric power generation. The Baker Castor Oil Company had sales and earnings ahead of those of last year. Baker is oriented principally to the manufacture and sale of castor oil and organic chemical specialties, with emphasis on fatty chemicals. The company's chemicals have wide application in the electrical, electronics, and protective coatings industries. National Lead has made an offer to purchase the remaining minority interest in Baker. These negotiations will be completed during 1970. i. H; | 0000-NLI-000018870 17 Timet, our 50% owned a`>diate, suppne, significant Quantities of t tanium metal fa aircraft such as the Boe'ng 747 and ottte new-ge-.eration aircraft Titanium Metals Corporation of America increased sales in 1969 by 20 per cent or $10,000,000 despite a 3y2-month strike at the Toronto, Ohio, plant that ended early in the year. Profit margins, however, continued to be adversely affected by the prevailing weak market caused by industry overcapacity and the financial requirements of t imet 's recently completed $50,000,000 capital investment program. A net loss of $502,000 did not allow for the payment of a dividend to the parent companies, Allegheny Ludlum Steel Corporation and National Lead, but was a significant improvement over the loss of $2,545,000 for 1968. Indications are that the titanium industry is recovering. After reaching a peak shipping rate of 28,300,000 pounds of titanium in 1966, industry shipments declined gradually to 23,800,000 in 1968. In 1969, however, a recovery to a new high of approximately 32,000,000 pounds took place and further improvement is expected in the 1970's. In anticipation of expected growth in demand, t ime t recently completed construction of an extrusion plant, bar finishing facilities, and installation of rotating die bar and special-shape forging equipment at its Toronto, Ohio, plant. The capacity of the Henderson, Nevada, plant also was expanded. These new facilities will enable t imet to effectively maintain its leadership in the expanding market for non-aerospace titanium products. Promising new uses for the metal, particularly in equipment for power generation, desalinization, and metal processing, received marketing emphasis that should yield major sales gains in 1970. During the year, the affiliate was awarded a contract to supply 2,000 tons of titanium sponge to the federal stockpile, the full effect of which will be reflected in 1970 earnings. This large order is well within the current production capability of the Nevada plant. The outlook for t imet and the aerospace industry is encouraging, especially because of the increased use of titanium in the new jumbo transport aircraft. Such aircraft as the Boeing 747, McDonnell-Douglas DC-10 and the Lockheed L-1011 will provide a sustained market for the next several years. The Federal Government's decision to proceed with the development of the prototype of a supersonic transport, the Navy's Grumman F-14 program, and the Air Force's new F-15 fighter program also will increase the demand for titanium in the foreseeable future. Lake View Trust and Savings Bank had an excellent year in 1969. Its earnings after taxes of $4,520,000 reflected a large improvement over results for the previous year. Organized in 1905, the bank has grown to over $300 million in total assets, is the eighth largest in Chicago and the 184th largest commercial bank in the United States. The bank has been working actively with retailers and real estate owners in tneir efforts to develop commercial projects in its area. The recent development of a 72-acre industrial park should benefit the local retail business and, in turn, have a favorable effect on the bank's futu-e prospects. R-N Corporation in 1969 witnessed an intensification of worldwide interest in the SL/RN process for the direct reduction of iron ore for steelmaking. Several process licenses were granted, arc there was a broadening of areas for future licensing. This process can cut the capital investment of steelmaking uo to 50 per cent by eliminating the blast furnace. , ' The Canada Metal Company Limited, a secondary smelter and refiner of lead scrap as well as a producer of lead products, brass and bronze forgings, bars and bushings, zinc alloys, and powdered metals, increased its earnings in 1969. Higher sales volume, firmer metal prices, and improved operations through increased capacity of equipment accounted for the good year. Mineral Deposits Limited of Australia completed a large expansion of its production facilities. Worldwide demand has been increasing for the rutile ore it supplies for titanium metal and chloride process titanium dioxide. This mineral sands producer also mines the raw material used to produce zirconium and titanium compounds made by the TAM Division. 0000-NLI-000018871 18 f. IllIC - wf _ : C. j. Sales: Sales in 1969 set an all time record of $929,785,000, representing an 8.3% increase over 1968. Increased sales in 1969 have been recorded in almost all major categories. United States and foreign sales also increased, respectively, over the 1968 level. United States Foreign 1969 $796,371,000 133,414,000 $929,785,000 1968 $743,259,000 114,936,000 $858,195,000 Bearings Paints Other Industries Oil Well Materials and Services Chemicals and Plastics Pie Castings Titanium Pigments Metal Products National Lead Company Sale* by Product (Millions of Dollars) Earnings: Net income for 1969 totaled $50,675,000, or $2.12 per share. Comparative earnings of United States and foreign operations were as follows: United States Foreign Net Income 1969 $38,106,000 12,569,000 $50,675,000 1968 $39,410,000 10,575,000 $49,985,000 Per share of common stock $2.12 $2.08 All per share figures stated in this report have been calculated on the basis of the average number of shares outstanding during the period and after giving effect to the two-for-one stock split which was effective April 18, 1969. Dividends: In 1969, the amount of dividends paid per share was increased to $1.70 from $1,625 per share paid in 1968. The Company has paid cash dividends on its common stock every year since 1906. Total cash dividends paid in 1969 and 1968 amounted to $40,272,000 and $39,062,000, respectively. Taxes on Income: The provision for United States and foreign taxes on income amounted to $44,593,000 in 1969, compared to $46,313,000 in 1968. The provision for deferred income taxes (arising principally from accelerated depreciation utilized for tax purposes) amounted to $3,568,000 and $240,000 for 1969 and 1968, respectively. The Company's United States income tax returns 20 1965 1966 1967 1968 0000-NLI-000018873 X i < have been examined and settled through year 1964. Years 1965 At December 31, 1969, net assets of consolidated foreign and 1966 are now under examination. The liability for taxes on subsidiaries aggregated $100,721,000. income covers both United States and consolidated foreign Book value per share amounted to $17.06 at the end of subsidiaries and the Company believes that adequate provision has 1969,compared with $16.98 at the beginning of the year. been made for all years not yet examined. Financial Position: The Company continued to maintain its strong financial position during 1969. Total assets increased in 1969 to $695,260,000 and shareholders' equity, exclusive of treasury stock, increased to $420,230,000. The following chart illustrates the growth in total assets and Working capital at year end amounted to $185,861,000 as compared with $203,633,000 at December 31,1968. This change resulted principally from increased short term borrowings from banks to finance capital investments. The following schedule compares working capital at year end 1969 and 1968: l shareholders' equity, exclusive of treasury stock, over the past five years. 1969 1968 United States $695 Foreign $143,344,000 42,517,000 $185,861,000 $162,435,000 41,198,000 $203,633,000 * The utilization of working capital is shown on the consolidated source and application of funds statement on page 26. Inventories at the end of 1969 amounted to $176,130,000, an increase of $21,708,000 over the comparable 1968 amount. A comparative summary follows: v \-s 1969 1968 Raw materials $ 41,003,000 $ 40,406,000 1i Finished & in process 115,905,000 99.069.000 Supplies 19,222,000 14.947.000 $176,130,000 $154,422,000 Property, Plant and Equipment: During the year the Company invested $39,830,000 in property, plant and equipment. Y Major expenditures were made for the Company's titanium pigment operations, Doehler-Jarvis division operations, the acquisition of certain operating assets of McCullough Tool Company for the Baroid Division, The Chas. Taylor's Sons Co. operations and initial investment in the Magnesium Division facilities. 1965 1966 1967 1966 1969 0000-NLI-000018874 21 continued S4S National Lead Company Capital Expenditure* <41 and Depredation (Millions ol Dollars) Depreciation F Capital Expenditures <32 <33 t * f <20 <18 ^ <17 <40 1 i i <19 f Manufacturing properties are depreciated principally on the straight line method; mining properties are depleted on either the unit of production or the straight line method. Long-Term Debt: At December 31, 1969 long-term debt had increased to $94,688,000 from $54,761,000 at the end of 1968, The composition of long term debt at December 31, follows; 4%% subordinated debentures due in annual installments of $850,000 through 1973 and $1,297,000 thereafter to April 1988 1969 $24,798,000 1968 $24,876,000 6V4% deutsche mark bearer bonds, due 1972 ,u k h o 16,275,000 15,000,000 Bank loans incurred for purchase of Bank at prime interest rates, due 1971 through 1976 38,000,000 5Vi% to 6%% bank loans Other 8.694.000 6.921.000 $94,688,000 11,133,000 3,752,000 $54,761,000 1965 1966 1967 1968 1969 Manufacturing properties Land Buildings Machinery & equipment Mining properties $ 13,785,000 142.208.000 357.351.000 39.257.000 Intangibles not being amortized 22.492.000 Less reserves 575.093.000 301.924.000 $273,169,000 $ 12,162,000 130.656.000 327.558.000 38.660.000 22.492.000 531.528.000 278.645.000 $252,883,000 The debentures outstanding at December 31,1969 and 1968 are after deducting $2,515,000 and $3,287,000, respectively, representing the principal amount of debentures held by the Company. In January 1970, the Company entered into a credit agreement with 18 banks which provides for the borrowing of up to a maximum of $135,000,000. Initial borrowings of $58,000,000 will be used to settle shortterm loans outstanding at December 31,1969 under terms of a previous credit agreement. The Company may, on or before May 1,1971, convert such borrowings as it may have made to a long term loan repayable over a 4 year period in 8 equal semi-annual installments. The agreement provides that the Company must maintain consolidated working capital of at least $100,000,000 and contains certain restrictions on additional borrowings and payment of cash dividends. Approximately $86,000,000 of retained earnings is free of such restrictions. 0000-NLI-000018875 22 National Lead Company Revenues: Net sales Equity in majority owned foreign companies (after taxes) (Note 1) Lake View Trust and Savings Bank (Note 2) Other income Years ended December 31, 1968 $858,195,000 1,348,000 ------7,412,000 866.955.000 Costs and expenses: Cost of goods sold (Note 3) Depreciation, depletion and amortization Selling, general and administrative interest (Note 2) Minority interest 623,304,000 18,187,000 124,749,000 3,753,000 664,000 770.657.000 Income before taxes on income Provision for United States and foreign income taxes Net income Income per common share (based on average shares outstanding} Retained earnings at beginning of year: ^1.1 /. * | National Lead Company j Acquired Companies (Note 2) _ , ;'lr .... ........................................ Lass: . ..... Dividends paid by: - *. ' ; i . 96,298,000 46,313,000 49,985,000 $2.08 309,873,000 ; 5,607,000 365,465,000 23 National Land Company ' Assets Current i , . Cash, IfKdUdtag time i . VUrKBwWVCQnuB- - --.-- --.at.a__i_ _ __ _- - ' Accounts and notes receivable, leas allowances of fl ,991,989in 1969 and $1,910,000 in 1968 inventories (Note 3) Prepaid expanses ' ....: Total current assets........ -.'`vw ':7. Dacombor 31, 1968 36,787,000 2,110,000 116,668,000 154,422,000 2,090,000 312,077,000 : **' Investments: Lake View Trust d Savins lail lliiBTrf Unconsolidated sUubsMidiaries Associated companies : SS^.. : T' 1 *y r-t V1>- ' 7,332,000 15,868,000 -- Property, depletion of $3013*400ip: Cthara vi.il'. -c 1 *r ' " * 252383,000 ': 5,431,000 ------- -r; ".'7'f8W,59i,ooo surnpyssir'-'-'- r g4. .*~ 7 *$$ j*'4*-*'*" ig 0000-NLI-000018877 ; us:-; -- UabMtia* Current liabilities: Loans payable Accounts payable and accrued liabtfities Taxes on income Total current liabilities Long term debt (Pegs 22) -rr?*'-.-. Deferred taxes on income (related princ^a^teaocateataddapmcMtan)' Other liabilities and reserve* (Note 1) Minority Interest anramxm N*eiy (Notes 2,Sand page 22) : Common Mock, par value $2.50; 24.177.168 share* in 1969 and 24|nlW SI, 1968 $ 23,510,000 64.021.000 20313.000 108.444.000 54.761.000 16.213.000 2336,000 7(873,000 i National Load Company Year andad Dacambar 31,1888 Source: Net income Depreciation Increase in deferred taxes Long term borrowings, net Other Application: Increase in investments: lake View Trust & Savings Bank Other " Dividends paid Capital expenditures " ~ ' Purchase of treasury stock: _ Fr Used for acquisitions ~ ` Other -- _ \ Decrease In working capital Working capital at beginning of year, Working capital at end ofjaar, f Represented by: Current assets Current liabilities gj:' : -'a Se:?. $ 50,675,000 19.207.000 3.568.000 39.927.000 5.912.000 $119,289,000 $41,535,000 3,389,000 44,924,000 40,272,000 7.071.000 4.964.000 137,061,000 17,772,000 203,633,000 $185,861,000 $347,318,000 161,457,000 ^$185,861,000 - . tf} r- 0000-NLI-000018879 *- * _ " ; 1. Consolidation principle* The consolidated fjnar " al statements include the accounts of the Corr : a^y. all domestic subsidiaries and major appr: priate rates of exchange. Pertinent financial data egarding foreign subsidiaries Is shown on pagr- 20 and 21. Commencing in 1969 the Comp any stated its investments In major _ uncs-solidated majority-owned foreign subs : aries to reflect its equity in their unc- ying net assets, and Included In Income its ecu in the net Income of such subsidiaries, prev ously, these Investments had been carried at cos: and income thereon was reflected to the exit" : 'eceived as dividends. The dividends rece ved from such companies during 1968 are inc .led in the income statement caotion "Edpity in majority-owned foreign companies." n- years nave not been restated since the effect wc- d not be material. At December 31, 1968, the Company's equity in the underlying net assets of these companies exceeded the cost of its nvestment by approximately $1,814,000, and sue" amount has been transferred to a Reserve for roreign Operations. Aise transferred to this newly created reserve tt-e amount of $3,628,000, which Included a reserve previously deducted from the investments in unconsolidated subsidiaries and a gain resulting from recent French and German currency adjustments. It is Intended that this reserve will absorb losses and be credited with ga ns resulting from major foreign exchange adjustments and other major unpredictable occurrences Involving foreign operations. 2. Acquisitions During 1969. the Company exenanged a total of 207,904 shares of Its treasury stock for all the outstanding stock of Jonathan Manufacturing Company and the H-K Corporation. These acquisitions have been accounted for at poolings of interests and, accordingly, the results of operations for 1969 include the net income of these companies for the entire year. ho adjustment has been made for prior years since the effect would not be material Asa result of these transactions, capital surpkai and reiained earnings were charged $390,000and $6 272,000, respectively, representing principally the appropriate portion of the excow of the coat o' me treasury shares issued over the aggregate pa d in capital of the acquired companies. The agreement with Jonathan Manufacturing Company provides for the delivery of addittonet Ccmoany stock, not to exceed 135,904 shares, contingent on the amount of Jonathan Manufacturing Company's net income (as defined) for the years 1969,1970 and 1971. i r early January, 1969 the Company acquired for cash, 99.85% of the outstanding stock of :ne Lake View Trust and Savings Bank. The Company's investment in the Bank is reflected a: cost, plusnihaaquantchanges Inequity. Allowing M a summary of the pertinent financial nformatioa relating to the Bank as of December 31, 1969: * {in thousands) Assets > 311.178 Deposits and other MMMa National lead's equity in Bank's net inoanie Less: tntomt coat to NaOonei laad, afar appticabto taa af $1,680,6*0 fi,c funda barrewsd to aunef-------------1 Net income attributable te in such inventories being stated at less than current replacement cost at December 31. 1969. The valuation of a portion of these same :_">iwimi)nJlurtiwMrit*M9fartoe uw.qfihe^ baw desdt method. Pursuant to such method, " an inventory reserve (amounting to $10,572,000 in 1969 and $12,272^)00 In 1968) Is maintained hs--n on quantities deemed normal at related fixed prices. Qua to changas In operating conditions, end as part of Its program te mere effectively control the investment Hi imanlartaa, the previously established normal quantities were reduced during 1969 resulting In an Increase In net Income of $2,267,000. During 1969. net income was reduced by $1,750,000 under the tast-in, ftrst-out method. 4. Associated Companlsa The Company's Investments in Its associated 50 percent owned companies are carried at cost The Company's equity In the underlying net assets of these unBs exceeded Its investments by $18,666,000 at December 31, T969 and $19,123,000 at -- -- December 31,1968. of their employees. Total pension costs approximated $9,400,000 in 1969 and $8,500,000 In 19BS. to Income as they accrue and are funded as to the major plans. The major portion of toe prior service costs is being charged to Income end -funded over a period of thirty years. Unfunded mated benefit* at Deoember 31,1969 amounted to approximately $24^00,000. T. Raatstamaula Certain amounts in the 1968 financial statements ham been restated to conform to classifications used In 1969 with no effect on net income or shareholders' equity. 5. Common Stock and Stock Options On April 19,1969, the shareholders approved a two for ana common stock split The per share data included In this report for prior years has been rwijjrtirl to reflect this stock split. Under provisions of the 1968 Stoek Option frcentfve Plan, 700,000 tfiaras of the Company's common stock have been reserved for issuance to officers and to other key employees. Under toe plan, options may be granted to purchase common stock at 100% of the market price at tot data of grant and art exercisable amr a period of five years from date of grant Details of shares under option at December 31,1969 and transactions during the year follow: -------- V-,' lybrand, Rosa Brea. A Montgomery Certified Public Accountants 4 Broadway, New York, N.Y. Batano* at January 1, 1969 Granted Balance at December 31, 1969 37,400 179,000 Te toe Shareholders ef National Lead Company New York, N.Y. Woe per sharer Ttofvsm examined toe consolidated balance autstanding at December 31, 1969 Shares exercisable AvsRabie for future options at 31, 1969 Ktto$36 __17%000 990.600 Sheet Of NATIONAL LEAD COMPANY end Its Consolidated Subsidiaries as ef December 31,1969 and the related consolidated statements ef income and retained earnings and of source and application of fund* for the year then ended. "With respect to the 1958 stock option plan, - .~^39urexamination was made in accordance with option* for 94,480 shares expired during M69 gsn mi nil y iin spiral mrilTlig ilemlenli and and options for 7,550 shares were axarelmrl at accordingly Included such tests of the accounting an emraga prioa of $34. Options for lySOO shares // feoords and such ether auditing procedures as were outttanrfog at December 31,1969. These we considered necessary in the circumstances. options expire In March 1970 and no additional toe were furnished moons of ether public -options may be granted under the Plan. - .accountants upon their examinations of the In connection with toe acquisition of The Bunting Brass and Bronze Company In 1968, the Company granted to holders of Mock options prerjouak yarded to Bunting,satetfha* MnckspBsnste ' purchase 3,134 shares of common stock of toe Compewi at $30.50 per share. During toe year options were exercised to purchase 1,151 af, toess toares and the remaining options sm financial statements of certain consolidated and unconsolidated subsidiaries and fifty per cent owned companies. Our opinion expressed herein, ~Z. Inagfar ee It retotat to the amaafit Included for ' - keen eubeldiariee and companies. Is bastd solely upon such reports. We mad* a similar 4lmmfnation af th* financial Matamants of the Company and Its Consolidated Subsidiaries for .Dm year 1968. . 1533,000) gride inuusadrifrtm to our apltoen. to* aforementioned financial )MMnt fslrly tfM -- flipwoia! psaWsnof National Laad Company JpMi.lto CanBoaiMed torbakfiarlas at December .->54^.1916 adlMMe oonsoddated mutt* 1--rrr frti~ririMr marketOariatw nial ton using thotsto'lflfirtocut snatog^jfjMflh.jpwMt a. Pp j BOBtawo*. ttoONTaownrr 27 -sr-tg-.-- - -___ __j. ' ; '-j National Lead Company . "" P .jPr "' :: m Net sales.............................................. $858,195,000 Income before taxes............................ . _ ^ 96,298,000 Net Income............................r./dMtWOO Per common share ....._____ ___ - -- 8.08 Dividends paid on common stores .... , . - iK. 39,062,000 Per common share . .TAT^t s .^t - zifr..:. Current assets G*""1 ** ;.... Woridag ........ ." '^^ropwtjr expenditures ~ ToW V f ;ShrehoWere' ^ tr:*-------- jflfei r;.. -tL^***^--*** _ ~,r ~ _ SiaaSWBRi' ___ __ _ _________ 1967 $818,905,000 95.577.000 54,309,000* 2.27* 38.786.000 1.625 331.851.000 102.187.000 229.664.000 286,4*0,000 32.860.000 588^03,000 399.640.000 ' ':" . -- 1966 $865,687,000 113.379.000 61.634.000 2.56 38.296.000 1.625 310.311.000 97.721.000 212.590.000 214.725.000 32.440.000 *M474X 570.754.000 368.586.000 ^Wm ""`'I ------,----_----g* fei-s . ->-. JL*., ' T^fcgV'^ A.. - ' :!*v- 0000-NLI-000018881 f r*. 1965 $819,772,000 111,723,000 59,673,000 2.55 38,072,000 1.625 296,548,000 97,599,000 198,949,000 196,134,000 41,096,000 -*6373300 520.861.000 356.956.000 1964 1963 1962 1961 1960 $735,189,000 108,086,000 56,763,000 2.43 $664,606,000 96,888,000 50,116,000 2.13 $615,269,000 95,853,000 49,546,000 2X13 $599,357,000 100,135,000 52,157,000 2.14 $604,551,000 101,873,000 52,676,000 2.16 38,036,000 1.625 ' 4.625 "~V~ 4"geDWO lirmfillfiOO ... ; 1.625 38,012,000 1.625 300,974,000 276,069,000 270375.000 263,656,000 848,402,000 99.600,000 11,461,000 -B03B0300 30,918,000 75,353,000 201374,000 154,606,000 189395,000 182,738,900 ' 173,049,000 174,961,000 - 478363300 471386,000 20,447,000 4^34^aMoo T453l800 171,585.000 - 18,241,000^ 488322300 25325,000 497.296.000 467,264300 ^^4*0^73^00 jt^lGJXO 436,640,000 339.744.000 MOJTMTO JJTpBUaEBBO . . XvV, ' 5 4^7S,000 341,767,000 tU. i>= , * -r- JT' l; . - tT ,, V* ^S?`- 0000-NLI-000018882 Metal Product* pigments end chemicals tor the paint, paper, INDUSTRIAS DOEHLER do BRASIL, S.A. (95%): GOLDSMITH DIVISION: Precious motels and plastics and rubber Industries. Sayravitle, N. J. Die castings. Sao Paulo, Brazil precious metal oxides. Chicago, III. JONATHAN MANUFACTURING CO.: Precision parts and other services. Fullerton, California MAGNESIUM DIVISION: Magnesium metal and chlorine [on-stream late 1971). Salt Lake City, Utah CANADIAN TITANIUM PIGMENTS, LTD.: Titanium pigments; gallants; lead pigments; stabilizers; zirconium end titanium compounds. Montreal, Canada DERIVES du TITANE, S.A.: Titanium pigments. Lsngarbrugge, Belgium BARBER DIE CASTING CO. LTD: Aluminum, brass, magnesium, zinc die castings. Hamilton, Canada Chemicals A Plastics AMOS-THOMPSON CORPORATION; Molded MORRIS P. KIRK & SON, INC. (76%): Aluminum, lead and zinc alloys, fabricated lead products and lead oxides. Lo* Angela*, California MASTER METALS DIVISION: Antimanlal lead, soft lead. Babbit and solder metal. Cleveland, Ohio; uravv Mcrapni METAL DIVISION: Andmerry, cadrhtam.'lwad end zinc metals; fabricated Med product*. New York, N.Y. PIONEER ALUMINUM, INC. (76%): Aluminum and sheet aircraft extrusions and cast aluminum tooling plates. Lo* Angeles, Caltfomia SCREW MACHINE DIVISION: Hydraulic brake cylinders. Chicago, IH. SOUTHERN SCREW DIVISION: Complete Unott screws and other metal fasteners. Statesville, N.C. STEEL PACKAGE DIVISION: Smtff Steel Shipping containers. SL Louis, Mo. ------- TEXAS MINING A SMELTING DIVISION: Antimony metal and antimony oxide. Laredo, Ten* KRONOS TTTAAN N.V.: Titanium pigments; gallants; teed pigments. Rotterdam, Netherlands KRONOS TITANIUM PIGMENTS, LTD.: Titanium pigments. London, England KRONOS TITANPtaMBiTJLR. (7S%): Titanium , pigments; gallants; lead pigments. "Stockholm, Sweden BOClferf BELGE du TITANE S. A.: Titanium .ptffTWfitt} getttntt; /n c / ptpnmti. 6ru--to, Beiffum . SOCIETEINOUSTRIELLE du TITANE (91%): "Bantam and lead pigments. Ports, Fiance "THE CARTER WHITE LEAD COMPANY OF CANADA, ^ US. (50%): Lead plgmants; oxides; steamers. Mantrsst Canada TITAN 00. A/fc Titanium pigments; gallants; lead pigments; stabilizers. rredrfkstsd, Norway T-TFTANGESELLSCHAFT m.b.H.: Bantam pigments; gallants; lead pigments. Leverkusen, Blsat Germany plastics; wood veneer and lumber. Edinburg Indiana DELORE DIVISION: Barium end calcium pigments. St. Louis, Mo. LANDOVER MANUFACTURING DIVISION: Cast acrylic sheeting. Landover, Md. PIGMENTS & CHEMICALS DIVISION: Antimony oxide; lead pigments and chemicals; lead oxides end separators for batteries; gellants; stabilizers. New York, N.Y. ABBEY CHEMICALS LIMITED (52%): Gellants. stabilizers lor vinyl plastics. London, England OB Well Products I Services BAROID DIVISION: Oil well drilling materials and services. Chemicals lor petroleum industry, gallants for grease; water treating chemicals. Well perforation end completion, nuclear well logging. Houston, Texas TITANIUM METALS CORPORATION OF BAROID OF AUSTRALIA, LTD. (99%); Oil well AMfRiCA (50%): Titanium metal gKwigl,lggm 7 drilling materials. Sydney. Australia and mill products. West Caldwell, N_L BAROID do BRASIL, SJL: Off well drilling HOjfT METAL COMPANY: Antifriction mataft. materials. Salvador, Brazil London, England BAROID OF CANADA, LTD.: 00 wed drilling INOUSTR1AS DCRIPLOM g. A-: Lead--Mas. Buenos Aire*, Argentina ------r GOEHLER-JARVW DfVtSfON:SMc materials end sendee*. Calgary, Canada BAROID INTERNATIONAL, S.pJL: Oil well drilling SCHRAUBStFABRIK NEUSTAOT QOe!ZCflE materials. Roms, Italy GMBH (99%): Screw* and metal festaners. BOPIIWlEFOUrffiRY, 4NCL: Bendcam BAROID OF NIGERIA, LTD.: 00 well drilling Nsustsdt/Bchwsirwtd, Wset TtHc,#to 4Wini U|Olt Nipni THE CANADA METAL OOMPANY Load oxides, lead and sim. aBs>% treat and bronze products, Toronto, Cradl' NATIONAL LEAP OOMPANY, 1. Au Laodandante ftMHMNOiJ MWo BAROID (U.K.), LTD.: 00 well driving materials. London, England PERUBAS, SJLu OB wav drilling materials. tlML Pam. rPtSMENTDE MINERAIS INDUSTRIAL * "COMMERCIAL PRMINA SX: Barytes mining. BMvwdsr, Brasil ft: TITANIUM I BAROID OF LIBYA, LTD. (49%): Oil wet! drilling materials "Benghazi, Libya ...- r-r.-. 0000-NLI-000018883 I* BAROID de VENEZUELA, S.A. (89%): Oil well drilling materials. Caracas, Venezuela BARYTES A MINERALS LIMITED (50%); OH waff drilling materials. Trinidad, British West Indies Bearing* ALUMINUM MATCH PLATE CORPORATION: Sand, shell and permanent mold castings ct nortferrous metals. Kenmore, N. Y. AMERICAN BEARING DIVISION: Precision sleeve searings, bearing seals, bushings and machine parts. Indianapolis, ind. THE BUNTING BRASS AND BRONZE COMPANY: Brass, bronze, iron and aluminum parts. TMsdo, Ohio MAGNUS METAL DIVISION: Brass andbmoa journal bearings and castings. Chicago, IIL MAGNUS ROLLER BEARING DIVISION: Precision tapered roller bearings. Cincinnati, Ohio COLVER INDUSTRIAL PAINTS, S.P.A. (70%); Paints Milan, Italy PAINT DIVISION: Dutch Boy Paints, Haw York, N.Y. NATIONAL LEAD COMPANY {PHILIPPINES), INC. (51%): Psints and rotated products. Manila, Philippines NUCLEAR DIVISION: Depleted uranium; fuel elements; nuclear services. Albany, N. Y. QUEENSLAND TITANIUM MINES PTY. LTD. (7S%): Mining oI rutile, zircon ores. Tin Can Bay, Queensland, Australia R-N CORPORATION (50%); Process for the direct reduction and beneHctation ot iron eras. New York, N. Y. TAM DIVISION: Zirconium oxide, sllicatetand chemicals; zirconates and stannates. OpaclHars tor porcelain enamels,' electronic products. New York, N. Y. THE CHAS. TAYLORS SONS COMPANY: Spe&aHted high temperature refractories Cincinnati, Ohio THE TITANIUM ALLOY MANUFACTURING CO. PTY., LTD.: Mining ot ruble, zircon ores Tweed Heads, Australia TOOL & ENGINEERING DIVISION: Dies taoffng; prototype assembly and engineering. swvtBee. fflrfcsRa castings Chicago, Illinois VHLSON-SNEAD MINING COMPANY, INC. (90ft): Bauxite mining. Eutauls, Alabama figure* to represent percentage < voting asascurtUas ovrrmdI., ot partiaHyaanad -rSa4*T-' - --- awesavv -* SA'AH- fe-./pfr- <T THE BAKEf CASTOR OIL COMPANY (71%)l Cedar olit snd chemical derivatives, pulyurstharm products. Bayonne, NJ. CHA3. TAYLOR SONS, S.A.: High temperature refractories. BntaaaH, Belgium EDGAR PLASTIC KAOUN CO.tJEMfln Mag and / glass tand. Edgar, FtarMe .. LAME VIEW TRUST AMD SAVINOgMNK P%Ji Commercial Bank. Chtcngo, HHnate . MINERAL BGPQSITg, LTD. (BnUtMMteMPMML 4MB eras Bytfney, in--i ' ;T,1'"Tigs, ATONAL LEAD COMPANY OPDHIO: DM** ? jrelte ~ art- -> uTf.-TSVi TR.-'- -.... *rv > ' 'ww--11 rwi wiairw iw it m wr* Burepean subsMtarf Itaenctng.M*Yak. H. )C* ^ ? ^.:- -.rite?; ------ ` -' ............ " '" ` 0000-NLI-000018884 31 The new National Lead. 4*r* - metal by more than one-third. into the mod mode. As designers demand more vinyl and urethane coated fabrics, fashion is creating a major new market for our plastic stabilizers and titanium pigments. Girl-watching is big business these days. The new National Lead is wise in the ways of the world. International operations have expanded to account for over 15 percent of our nearly one-billion dollar annual sales.Today, you'll find National Lead plants,offices and mines in over 20 countries. Meeting the worldwide needs of the chemicals, metals, nuclear, petroleum, automotive and aerospace industries. NATIONAL LEAD Printed in U S.A. 0000-NLI-000018886 I i % h NATIONAL LEAD Seventy-Eighth Annual Report 1969 0000-NLI-000018887