Document rBqbMqkNd9jgnYN0mbBRVj5pr

N11777 o Md iMiu m rfnww, wad MMMttlHlIil ciins.stfW " ** A* laforsatlen required to bo pi t o o under ths it** herein st forth If S&M^CpCCtfSeaHy 4*fla#d in the "Instruction BooV for Fora 10-K for . f..' Sba Instruction 2ook slflo oote forth requirements a* to exhibit* which ore tc.accoapony the casual report* AmUATlOSS 1* Uft tiM ffUoftt| and indicate the recpoetlTO percentages of other taill of control, as roqulred by the Instructional (ft) AH fAUitflM of the registrant. Stats of Xneoruor&tlen Stock Owned .a Mine Ststm Badlwoy1 _ TttUatli8 M hitetl Cfclo Cospany2 tam s California Ohio California Ohio Illinois Ohio Ontario, Canada Ohio All All All All All All AH AH SIj u KIb1i CoBpujr, She California ;;fifiiy ati tatr--aate Valley A Sacten Ballway 'luilii i tirMtfcitt bcacace ttij have Ml bean nmiiJii iBfHfti lnTOtUeaf arc lastcnlflcant. K MN' Crf opctaUac mtam cf track corporations CM also tftfMftt&t, as tfcoy arc Ia mUt b. dUlaiiso iaeledod in all statonanto* Linlted, Is a Canadian oorpem , Man rc earriod as an iawootasat, It 1c and is Indudcd la consolidated otata- m&m $WWk ;|i^P ,,,.. ItllMi tttllo* Inc* not iaeoipomtod by the radHrcnt for the pwxposa of aaMfaetnrlas odaal ??MAnatumla principally the predacts of the Soya IModea of Cm reglttraati on HocMbsr SI* 1MB MSiff d all the assets and aesnaod all tbs ________^^^JftlUaal Mills, Inc* * shlefe eesperatlon Is 'prkgajjyi/MjiMAiMdL . tbe registrant. ASS / CStadftvees** of sU drcctars and cfflccrc of emec cr cfTina fcdd. If My persen It as state* iSgl,,: ; iSR.y-.':. flitF- f AS- T, . i'V 91**r " ;fivtw wir wi'cr! t**ifftyAy5g.y-igtf :V-. '. -laso Mill 9 Jo?eo a. 2 dBPfkw^ a* * do-da-- V, * 9lMa *ye ? S*. ^tsgso Qifftoail. loll J JU llttn E--*4 Stetty V'.' 9. V G--at ?. ; ' v omit 1296 Ualaa Go is mt c o Bsil&ag Claaalaadv Ohio 1296 Baloa G--eo Ml&ag Clovaland. C9do 1396 Oaioa 0--i-- MUia( CUalttd Ghi 1396 QUw Co--vm latUias Claaoland* Obi* 11001 Madlaas i-- Glnolttd* Ohio 1396 Ualoa Caaaafoo 3*1161ag Clovtlaad* Ohio 11001 Madlaoa If-- OmtMl, Chio 11001 H-- -- OlmUali Ohio Haftoa Mono i lofBi Mml CfeiBOgB* XlllMtO 11001 Baiiaon J-- ClovolaMU Oklo F--tdont sl 31--99? 8al? 71m 9mlte9 sad BlTOOftO? n PifdlM -- Mmtov n# ?---- aft ai--t? n TifdM aad &lm&2s> Woa Praidaaftxd Btsooft? Sooretajy aad St-- t-- Btsootov aad 4$pelat& haaitad Anlilhtt tecadaiy , S*, tteo lQfati --ftdvoA Mit lttf *U jw>w --lag ofMMfd ttaalO pr --ft of **y cUta of sfdty nwiiHwf tto rodaftfoat* d ef JSs99&SZJBkJ2SL Vs 0MVt data olthia 91 ir) ( "r1 al aUfVM title f Xtaa* .vWIPI' - fraf/MB LV)s^^ l *W TH9X^ wW ,; i-^MrflalAlXyo mm to 91m kaiMlM^ <r 9lM M^otwrt ' , Ed&Slw to fUri* taftnutSM m to tte ntflstam*'*------- -- ****'* pl*x (MMitiMa --t>y ww 'lU^'jNMNjnat' Dm MMMti * .* to aad* trth M to *to ........ $Ku- .Tl * * ** ' 5. State briefly the goaeral effect eft (e) aaterlal ehaagas, aade sithia the fiscal year ead aet la ecatracta sad arraagoasats of the eaiagsrlea sas&erated bhlee sfcieh here bees previously reported; (b) sash sontracts uft arvaagOaea&e* er la effect vlthla the fieeal year and aet pntiftulf reported, dates thereof sad aaaes of partlos thereto, (1) naterlal Hsafiaaot or general sepervitesr ieatraeta providing for aaaagvasai of, er terrieea to, the registrant or any of its e*bsldiarltt| There here heoa ae aateriml ehasgos lm eeatrseta previously reported end no eoatreeta and# er ia Offset aet prevleosly reported, (U) naterlal advisory, ooaotraetioa or service eeaftff&gbe iU affiliates providing for neaogonont of, or services td* the roglotraat er say of Its sahsldlarlsot , There have beea as aatarlal Usages la i prsvloasly reported sad a oeatraets nods or in effect ft aet provloosly ropertod. } ri .: ;,. , "0' 'iyf-:u.- (Ill) aoterlftl eeatmets, eaeept ae provided by the bstreea the rsgittrait er ay affiliate of the regietraal ea -h .. ji i hand, sad, the ether hand, any direetef or offieer of the egr priMpdl aadirarlter of ay oeearitioo of the ragietanM f iW. :s ' v.?:. Ei tho regletfaal within the past three floes! years, holdsr aeasd la eaewsr to Ilea St or gr edgnril V' y. t i; Shore have beea ae naterlal dhaagea la eodtfhct* prevleasly reported ad a eoatreeta node or la offset not provleaely reported. (Iv) aater&al beans sad profit-sharing araigiwagta. There hare beea ae notarial ehaagoa la esatreele pverieaaly reported sad ae eeatrsete aade er i effoe* sot provleaely reported. t. Aitiay epilate ertstaattggat the elese of th + Unrtinut ooearltiee ef the rogietreat frea the nttletwl)i rtrt. *th the title sf the iesae, eaUedfw> hr weh^ brMly the prises, eeptratlee dates, sad tthar astariad Mfcoptleds mr bo awreteedi (e) give the saw nd eaih epUoae eeUiag for aare wm* he option, ead giro the mmm% tailed fertr the P*M*| ead <d) for ech elate ef ****! m* girth tho emeideralloa for the graatftac thereof* > There rare ae opttoae s*staeliag on Qotrtsr tt, lirt to . seeerlUoe ef the reglstraat froa the regSetmt, wsxaass f* StMf&lM MtA/ the aatsrtal which say have occurred within tbe fiscal jeer la th general character of the business dose by the registrant and lt eabsl diaries. ttim have bees so Material changes within the fiscal year eattag October SL 1938 la the general character of the Ira*laces toe by the registrant and Its subsidiaries. 7ISANCIAL 8TAHM3BIS 8* ' TcbBti financial stafceoeats In Accordance with the Instructions ttfidthe'Sales sad Segalatloas of the Conniption supplementary thereto. The following financial Statements and Schedules 08 8tiwm CSSPA3T Solaces Ihost. - October 31, 193d SoheCtl* 1* Investments is eecnrltiee of affiliate* toedcle , H - Property, plant and egalpaent ffitffniilo IXi* Special reserves for revaluation CbhCCnlc III - Beeerree for dapreelatlea, depletion. and Mortlsatlon of Property* riant aat* Iqdpocafc teheCale XT Intangible asset a gQhstnlo n > funded I*bt ' MMiiMto' VX* - fieserwee BehedOe Tm. Capital stock O Th* eeatttSean wUM (3} <&) as t. 5o SmM ZA sd T lltt MljiM Hltav it art s l o t s * ^s e p a iy SMImMmAV am wiliurt miw i $& la&tTastleaa for itaa /v-: ;'' jiy^v^-V^pv' ' ... .. '.' I'i.ij :: : ,- >' :/. .. .. 1 '".`J'/- ' A',. ' : ' ft ' u -v-t -1 ' m `j \ "4 r" *\> <| *S f , "* .^* iA +>*> , The Gliddan Company, Cleveland, Ohio. We hare sad# an examination of the balance sheet of TH3 GLZBCBW C0HPA97 as at October 31, 193d, and of the con solidated balance sheet of THE OLXDDSX COUPAST and its wholly owned subsidiaries (California mining companies excluded) as at October 31, 1938, and of the eoneolidated profit and loss state ment for the /ear ended at that date* In connection therewith we examined or tested accounting records of the companies and other supporting evidence* and obtained information and expla nations from offloors and emplo/ees of the companion wo also made a general review of the accounting methods and of the eporatlng and income accounts for the /oar, but wo Aid not moke a detailed audit of the transactions. The balance sheets and profit and loss stat referred to, together with supporting schedules which haws also been examined by us, bare bean prepared for Inclusion in loss 10-K for annual reports of corporations pursuant to Section 13 of the Seeurltles Exchange Act of 1934* The supporting soho&EU^a referred to arc enumerated as followst The Glldden Company* Schedule Z - Investments In seeurltles of affiliates Schedule II Property, plant and equipment Schedule II-A - Reserve for revaluation of. property* plant and equipment Schedule III - Reserves for depreciation* depletion and amortisation Schedule IV Intangible assets Schedule VI funded debt Schedule VII Reserves Schedule VIII Capital stool Schedule IX Surplus The Olldden Company and eoneolidated subsidiaries! Schedule I - Investments in securities of affiliates Schedule II - Property, plant and equipment Schedule XI-A - Reserve for revaluation of property* plant ***** equipment Schedule III - Reserves for depreciation* depletion and amortisation Schedule IV - Intangible assets Schedule VI - funded debt Schedule VIZ - Reserves Schedule TUI - Capital stock Schedule IX - Surplus / Schedule X - Supplementary profit and lose information Schedule XI - Income from dividends 2a oar opinion, upon oar examination aad osoladlag the California Mining conpan1o ths aeeo^Qjriai feeloans ahest* aad rolatad profit and loss atatcaaat, tegs^ap vita tAm tmpyorUag ielH4Ia above referred to. fairly present the position of the Company or of too Company aad its shelly i--si consolidated mUUlttit* at Ootofeer 31, 1938, aad the soasolldatod rosalts of thslr oporations for tbs yoar ended at that data. farther, it la oar opiaioa that ths statements have been prepared la aeeerdaaee viti acooptod priaoiplss of ae- somatlas, vfcleh m ooaoistoatly Maintained fey ths ooayacios daring ths yoar exeept that inventories of oortaia ran materials at October 319 193T, sere laoludod at cost which ixetd^ertet prlooo at that data as stated in lot# A to the consolidated profit and leas statement* Cleveland, Chi January 24, 1930 BBHST Jk'SKVST Certified Public Accountants I' / i i ii ! Vi" &,'/* ' *>**#^y :. |. J .-. ' H\ & |EfVi'.' :H ^V;, 3 mi xJ^Stv. 111,1 jtlf #\ = - * ! WlKi-'t mm {$#* ..jtfff at tut Xi h anslItttloA fc ( ! iMvUitilra ig itMk and itoUmiaxi 428, [1x7 and affiliated oonpanles eosslit or 1 ia following! eonsolldated subsidiaries aro carried ati u&ouats re- mMal ,oo sf acquisition* the difference , 967.80 equity m ilaaata ee shown Vj the parent Company**!? k iJc s and the t aeeets as shown toy the subBidiaric**tof ca represents aadUtvttillt MOvailAtad nat earnings sf tha subsidiardiess slnoa datessfasqpiisltlon and Is rsfleoted In earned surylisln consoll- datlensftfcaaeoounta. t ftfHliMilta llj Pal 1 fnrnln joining ooaponies, whoa* aesetseonslet almos tBtlntor #fL8te9artifB not being operated, are statedIhereln at lass tta' a ^< M-- -^-l^ina_ : e._annHa>r4lsmmc aAmtnnoiuiMnft of Mthemse* iInmrransntIhai*a nn tswoha ttlhi e htooa*<als Oo niwinlttfil Halsnn sheets *as $19,128.4? aora than^th<btoooJtTalue of iha nst assats of those oompaniee. Unaudited etatettenteof those eesBsnlad shew aecuffralated lasses or $1,170,019*s7/fj date or ao~ lsitim oi >Ostatosr flit 1938 axeluslya or depreoial ^on appreol- atlonaad interest an bonds held toy tha pamy mpany, which Intereet-Ms^not bean taken into inoona toy tha latm ghainet thesi ssoanalatad iassae# the parent>Cosvanr. has prorldedM Bilor years,- "r''4 m $ AJ*fc'*iW i> *:.-. " ifIlls: vgjj^^ '-/'fj ,7 . . F&Eg^^Y'' V ; f, .a') lllb jM^Vv ` ti?,M IM! >A W*.k- _______^JKaseeunt* and * "[ - Bet# B ........ . ijiiiii, j wad oquipaaat* at ---nuimnna ix . . fjg/BBIMMltdaa-. as. tfitwiinA by UstlOW8SMrtwIs XX-a . -r dgM^tion aad dopIstion-SchsdnX* . mSm ot fast lass saortla&tlon --nfsolom^at Mat lass aasrtlcatioa v **.a4wo<i|S||Bg' steak and aUtla&i7v . .aadnBpifl^MK. CBpa&a^a aw*'' proioowSyalspaisiit t 480. laoriboggfaxy and affiliated oonpa&lss aeasiit or the foUovliti Iliif lo iirooaoolidatod subsidiaries are carried at|a&ounts re- eerdedaidatse or acquisition* the difference or $la06*9676O between ivrestaents ee ahown lay the parent Coapany#s felboJca and the equlty ln aet aoeeta as shown by tho subsidiaries' boues represents undlotrlbatod accumlatednot earning* or tho subsidltries einoo dates of eoqslsltlon and Is refloated in earned surplus la consoli dation sf the accounts. ?i'. XBVSotnsiWs iii Oaiirornia Mning ooa^ponies, whoso assets consist almoe entirely* afproperties not being operated, are stated therein at less thea eeat* : the carrying aaount of these lareetaante.los the baala o -V unaudited balanoe sheets* wae $19*128.47 aore than the; booh value or the hot assets OT those companies. Unaudited statements of those osanontiii show aeeamulatod looses or $1*170* 019.7,fr6a date of ao- MdSitioa ot Ootober 41* 1998. exclusive of depreciation on appreol- ation and eaneld intereat on bonds held by the parentrCompany* which interost been taken into income fey the lattorlf ;Againet thea aeeSBalatsdlesees, tho parent Company hae provided* in; prior years* tW m* |88I07i*7^ oat of surplus and oontingenoyfreoerro, and has a oredkt or t312*00000 arising from its reaoqulsition of |MOOOt>0O jpllMipftl novat of feonda of The California Zino Company ___________ M|||'<|I 'S'?*? m PSOeiV&blS or market! $ 11,401-07 l.tsa.oaa.o* $ 1,444,035.35 8 9 5,913,950.38 U68 3,804,333.30 $ 4,539,310.33 for work 4a p< ,,jbMt>afatt U*S5*JS-!S 135,351,35 707M.CU3B38T ASS2TS 849, viSlJ3s* 0i easelid&i@d-&t loo t&o a t13a,257.! LXk BXLXTX'..^ gPBHsart l ia b Sj t Es Accounts poyable-tra< '(Sages and qosaaieaioua Processing taxas-fed! Jaderal and state paj Affiliated compaay-ni Accrued liabilities a Taxes la&srest royalties, eater r Insurance Provision for federsu Udatcd-ai ti its Set* 8 l equij at rtule 23. is determined i i -a l A&6 mt Isas worUttUeB ; Isas amortisation sic sta&l J,icaO,2iS.fl7 v. r 690.001.00 1,898,494.34 433.043.00 73,955.47 79,1 14,444.13 74,! 985,983.77 $84,357,4 1 3,954.0 W87 320.785,408.47 P 3.710.343.32 V, ; L* 74,199.37 1 f* 438,489.87 i| 14,072,789.89 92,871.14 944,403.78 1 affiliated companies consist of iks follow!^t dated subsidiaries srs carried atpaounts rsequisltioni til* difference of $1,8,937.80 &a shewn by the parent Company's tiboks and tbs 1 as shown by tbs subsidiaries* bebks represents lated net earnings sf tbs subsidiaries slnoe 1 and is reflsstsd in earned surplus in consoli- its. I 1 nla aialBg companies, whose assets consist almost es not being operated, are stated Jhoreln at less yiag amount of these investments, on the basis of sets, was $19,128.47 more than the book'value of ess oompaniss. Unaudited statements sf those ulated losses of 41,170,019.57 from date of ao- 31, 1958, exclusive oC depreciation on apprecisrest on bonds held by the parent iCimpany, which a taken into income toy the latter. Against these the parent Company has provided, in`prior years, 73 out of surplus and contingency reserve, and ,500.00 arising from its reacquisition of 1 amount of bonds of The California ,21m company ......... .... $35,842,384.00 w ,w w m July 1, 1940, respectively serial aoies-priacipi $500,000.00 annual] 1944, and $2,000,0* m Convertible prefers share (redeemable ad 492.50 a shsoi threw#; Kerch 1, stock then changi In Articles )t Authorised Converted Issued and outi C&saon, without pu Authorised Cutslanding, imX treasury shares Bcserved for eom Stated capital Surplus - Botes C, I> Capital surplus Bamed surplus 2^03 treasury shares-. 5,302 shares-common COBTIHMgBT LIABIfflISS Letters of credit outi Guarantor of trade not oustomersmaximum 1: at a cost of $13' miwiwg corepantea indeterminable at (o) investment in affil fcrred stock of A the dividends on interest in the c Company shows aoc of which $26,159. Se sotos on following ; awwtwag-- LI^ILglSS, CAPIM, STOCK A3C> SVZ2WS cunts payable-trade 69 and ocaalesloaa erossing taxss-foderal sral and stats pay roil taxes Ulated eestpahy-not consolidated rued liabilities} laws stores t ! QfiltiMi water rest* etc* tsuraaee \ rlsion for federal sad state Sohodule VI --------------prlnslpal'aaoant maturing Tsfsty 2* 1940* ly 1* 1940* sad January 3* 1941-interest at 2* sad 3 speefcively >,; si notes-prlmelpal arcuate maturing 20,000*00 4a July 1*1941* 00*000*00 nwsftUy on July 1948* July 1* 1 44* sod 8*000*000*00 on 1* 1940-interest a g-Sehodule TZZ eeBtlagoaoles Jk Stock-Schedule Tills avertible preferred, ^ tire pax Talas 30*00 a share (rodsenable at 00.75 share through JsOyi.1* 1940* end 08*00 a share thereof share convertible through Barsh 1* 1909* late aine-tenths share of steelc then changing to eighthtenths share as specified In Articles)* Authorised Converted ;r 800*000 shares 60 shares Issued and outstanding non* without par Talus authorised [jutstanding, ineluding 199*940 shares * C* 1*200*000 shares treasury shares 636,391 shares Reserved for conversion Itated capital 179,946 shares Lus - Sotec C, i> and >ital surplus med surplus treasury sh&res-at cost-Sch (08 shares-eoamon Tills (SHY L1ABILITXS3 Mrs ox credit outstanding inter of trade notes issued by or for accounts tf itenters-maximum liability JT '\'b t V. at a cost of 137*000*00* She operation of Xkut mining companies was discontinued in 1987 and tits vul indeterminable at this time* \: treatment in affiliated company represents one hundred,, ierred stock of American zijreenlum Corporation* 'having; a the dlTldends on whleh h&ve'been paid to Oetobsrl* 1900* interest in the ooanon stocief the same company! the Company shows accumulated undistributed earaingsef 00*908 of whioh 26,109*70 is applicable to Hie Gildden Company's >tos on following page BOTES TO Ba IAHCIS SHBST THS OUDORS' CCKPAir October 31} 1936 Soto A - Sundry lure* tments ere Included at eMt or 1cco. Securities carried at a cost of $42,000.00 bad a quoted marmot Taltto of 138,090.00 at October 31, 1938. V. 3. Government <* curl ties included therein at a coat of $15,000*00 were deposited with a bank in connection with vorksea'e compensation iasurg&c requirements. The market value of the remaining securities is unknown* Sote B - Property, plant and equipment are stated ^3 basils of cost or appraisal value lees reeervee provided for m-* valuation, depreciation and depletion* The remaining port&sa ef unrealised appreciation included in the greee amount ef tkss assets is offset by a portion of the revaluation reserve that reserve was alee provided to reduce the carrying amount. ef ff* tain assets from cost to estimated basis of values prevailing during the year 1932 as determined by the hoard of Blreete, Coat of property, plant and equipment represents, principally cash expenditures, although certain properties were acquired m btook. The net book carrying amount 1c Mi intended to pg* sent the present value of the properties. Hote C - Baring the year the parent Company issued ohares of its common stook to Southern Vino Chemical Csmps^' in exchange for the assets of that company* Assets acquired recorded on the books of the Company at the aggregate --meat ef $1,040,910*00 which included property, plant end equipment at mot sound values as shown by Independent appraisal and ether es^sts prineipally at amounts shown by statements ref predecessor oospa* ny at Itbmrjr 28, 1936* The amount of$173,485*00, represesatfant. $5.00 a share for the etoek Isaued was allocated to stated tal and the remainder ($25*00 a share) was allocated to-capitalsurplus In accordance with authorisation of the Company* 9 Z^&rd of Directors* Sote j> * The indenture, dated July 1, 1938, relating to serial notes of the Company 0ontains an agreement that so as any of the notes shall be outstanding the Company will not declare or pay any dividends (other that stook dividends) on easy shares of its common steak or purchase, redeem or otherwise re* tire any shares of its common stock (subject to wedli'isutlgn that the Company may use net exceeding $200,000*00 in the parchase or retirement of its common stock} or make any distslbni$ott in respect thereto, except out ef consolidated net earning* (aa defined in the indenture) subsequent to October 31, 1937* Bote s - In prior years certain items ef discount and ex pense, provision for contingencies and losses en dismantlement3 have been charged to capital surplus* If sneh items together with additional depreciation claimed far federal income tas purposes for the years 1932 to 1936, insluslvs, had been Chewed against earned surplus instead of capital surplus, the respective amounts of such surplus accounts would be $3,641,137*30 ess& $9,401,782*56 as at October 31, 1938* Bote F - Officers of the companies have expressed tho opinion that pending lawsuits are of minor importance and tkat nc material losses will result therefrom. Bote 0 - General reference is made to consolidated haXc&ss sheet submitted herewith. -30- ^ TZTLB 07 133UK tassmauxa C0LUX&T D bjdJMs'XS aSGIBKISO 07 FISCAL rzm Htnasa o f SHARES. .PRINCIPAL a tare o f aso usT B0BD3 OR IB 80TBS COLLARS J OTJkBBi SHARI pr ibc : AE0UB1 bo h ix BOH Coanon eapltol took Coanon oopltal itMk 300 0 ^ooe.oo H 89 Conti uyitil took Ci--n upital took 1,000 100 $800,000. :4,ooo.oo ',800*00 took TVOf--OA took sot# A lotoroot m kooio ii i Itfnlt* i] o , v^;r%~,. 't ^ O* Vv , >, c * A<**W+> /''*."'*'V<** m 4,^,fg| 3CHBP1&B II-PROPERTY. PLAfiT AHD BXi.UIPi&SST THS OLIBDEU CO&PAITY COLtag A CLASSIFICATION wn aWM i ON and leaeee bad iapmftta Beilnad siding Buildings >Mlf1i>Ty and equipment and fixtures >Un equipment PenstTnotion in process Fiscal year ended October 1, 1938 is89c!Cir:sr50sii conaar a COLUiiF C EALAHCS AT BBOIMIira OF ms FISCAL ADDITION YEAR AS AT COST rva PER ACCOUNTS (SOTS A) iisxaaciaia; iSMBXsas: lasaataaratssrzassassaaasaaaaascsa $ 54 ,594.87 2,346 ,203.29 38 ,828.57 65 ,254.44 8,350 ,445.00 10,101 ,622.49 649 ,992.07 90 ,128.40 894 .784.90 ,382.57 ,175.30 ,125.21 ,585.00 $ ,770.04 ,869.16 ,591.46 ,030.99 ,020.17*-B $22,591,854.03 $1,970,509.56 mntBgaBsg38iaBiaaaaa. Fete A Additions at eest include approximately 810,000.00 representing propert equipment acquired from Southern Pine Chemioal Company. Reference is made to Hote C t Faience sheet for information regarding acquisition of the assets of-Southern Pine Che Fete B Represents net deduction. .**&&'< :V;." flflTnmnr.g ii-gROpgRTY. PLAffT ASP B&UIPi&Bgr THE GLIDDEU COKFAEY Fiscal year ended October 31, 1938 'aiBaasanai: saanaaiia* COLUM B COLUfcE C C0LU13J P CQht&fl E COLOO 7 BjmvwAF OTHER BEGIMIXTO 07 CKASG2S B ALa 2<<C E AT TEE 71SCAL ADDITIONS DiiRXT a 3D/GK CLOSk OF TEAR A3 AT COST aSTIK-SAOtirrs CREDIT*- THE FISCAL* PER ACCOUNTS (SOTS A) OR SAIiSS DESCRIBE YEAR ' ixaMtBmnmmstMmmmuMmstmMnmMmmmwmmmmxiMmmsnn-amsi93tmaMwna`ammvtMmstxn'aea aaasBassxaaBssssaasaaasan 4 54,594.87 $ 36,382,57 2,346,203,29 87,175.30 38,828,57 9,125.21 65,254,44 4,585.00 % 999.84 8,350,445.00 671,770.04 85,601.65 10,101,622.49 1,838,869.16 124,635.11 649,992,07 19,591.46 7,209.50 90,128.40 13,030.99 6,461.15 894.784.90 710,020.17*-B ____ ___ 90,977.44 , 2,433,378.59 47j 953.78 ' 68,839.60 8,936,613.39 11,815,856.54 662,374.03 96,698.24 . 184,764.73 422,591,854.03 ll9970,509.56 $ 224,907.25 -c- $24,337,456.34 aaasasmaaassassaaaaaaBasaaaaaaaBaaaaaBassasaaasaaanaaaBasaassaasssBaaa approximately 4810,000.00 representing property, plant and lemioal Company. Reference is nade to Note C to the Company's acquisition of the assets of Southern Fine Chemical Company. -12- SCH5D0LB 11-A-SPECIAL RESERVES FOR REVALUATION THE GrLXDDEif CG&PANY Fiscal year ended October 31, 1938 coLinai a CLASSIFICATIONS Maa>amnnn>anuassaaBsiiBttmas^sssssssiassiat COLUMN B COLONS C COLUMN D COLUMN 2 ^BALANCE AT BEG I iTSTING OF RETIREMENTS, BALANCE AT me FISCAL ADDITION RENEWALS CLOSE OF TEAR AS TO AND MAJOR THE FISCAL PER ACCOUNTS RESERVE REPAIRS YEAR BatBaMBBBJEBiUJ,?Ti--~raaiwi^m Land Buildings Machinery and equipment Furniture and fixtures Railroad siding $ 478,767*77 1,655,196.04 1,446,666.12 31,598.66 $3,618,469.67 $ 478,767.77 $ 48,136.58 1,007,C06.46 16,236.12 19430,333.01 ;1,598.86 o- $ 64,421.70 $3,334,047.87 maarai Vets - These reserves vers provided by charges to surplus and reserve for depreciation, to eliminate appreciation of property, plant and equipment, and to reduce recorded esauats to estimated basis ef values during 1932 as determined by 2oosd of Directors. SCHEDULE III - RESERVES TOR D3PRSQIATI0B. nBPIJ AMD AMORTIZATION OF PROTO'CfP PLAHT" A3BD SOOIPi " . THE OLXDDEH C05l?AHy Fiscal year endad Octatc? SI, 1938 COLDUB A CIA33I7ICATI0NS c o l u mn B BALANCE AT' HBOXBBIBO 07 THE 7XS0AL YEAR AS PER ACC0UST8 COLUMN C iffiP-ms'Haw-- CHARGED TO PR07IT AMD LOSS TO OTHER ACCOUNTSDESCRIES (BOSS A) COLUMN D TOTAL 07 COLUMN B AMD COLUMN C i I I Ora lands and laasaa Land ixprTsnts Railroad siding Buildings Xaohinary and equipmant furniture and fixtures Aatoaotira aquipanant 9 83,810.83 9 8,989,48 1,777.84 8,183.88 8,671.77 1,810.71 1,600,898.15 163,089.89 9 4,071,407.07 478,787.83 404,778.69 89,693.80 -------aatW____ 19.868.43 $6,161,288.18 * 627,834.10 $ 0 30,197,88 3,900.78 9,868.48 1,949.91 1,767,871.33 i 8,183.C3 4,838,317.96 819.SS 434,886.18 399.0* 91.032.87 10,781.84 $3,849,837.42 $ "Credits .iV^ "................. . *^ .a Beta A - Dapraoiation provided on kooks of Southsm Pina O&c^ioal Company fox (data of appraisal of proparty, plant and equipment) to UarehXO, 193d1(data aaaal Hots B - Bat adjuat&ant resulting from revision of dapraoiation ratos In prlo Company's fadaral lnsoms tax returns* This adjustment vs dedueted from dapraolatia Companye Books, resulting In a not dapraoiation and depletion es^poasa of 9608,489 Dapraoiation and depletion pollayt Tka polioy of tka Oompany ^Itk raspaat to dapraala&Lom Is to prorld as fair and reasonable to cover vaar, toar and dotorioratlon of fctea proparty on a It Is not aartaln to mat extent ekeeleseenee is ooTorod in tksea previsions as ok skortoalag tka usafal llfa of tka property. Tka rata far doplat!a Is kasad am tk coverakle ers. Dapraalatloa plainsd la tka Oaamaay*a fadaral tete tan ratoons fa than tka provision in tkls sskednla (9118,188*48 mara tkaa not es^ssaa sftar dadne dua to dapraoiation elalmad an aaats writtan off or aradltad to ^tetiaa raasrv AT 9 07 CAL P3R IS CHARGED TO 7R07IT AHD LOSS TO OTHER AC COURTS1 ISCRIBE (BOTH A) TOTAL 07 Connor b ABD COLOUR C BSKmLS ABD KEFLACBHEBTS IESCRIBS (BOTH B) r a l &^b a t t h e oLoas OF TBS 728G&L TSAR 0.83 $ 6,966.48 8 30,197.85 $ S319T'flS 7.54 9,123.88 3,900.76 3,900.76 1.77 1,210.71 9,568.46 8 831.88* 13&13.70 8.15 165,089.89 8 1,949.91 1,767,871.36 8 30,828.36 110,495.1ft* 1c 3G,944.11 7.07/ 478,787.63 6,163.06 4,568,317.96 106,918.63 50,439.15 4, 3C<S,98996 2.69 89,693.80 819.83 434,665.18 7,038.01 69,331.66 393581ft6 . JWiMhO________2gga2*._____a.gga--S2-- 5.077.00 3.15 $ 697,534.10 8 10,751.84 86,869,637.49 149,650.80 8 9,044.67 86,710,648.68 an book? of Southern Pine Chenles! Corpscy for the period from OeteBer 31, 137, t and equipment) to March 10, 1936 (doto assets sere aoquirod tgr The 61id^qa te^ugr)* og from revision of doproolotion ratoo In prior years to conform to rate tmd in the This adjustment was deducted from doproolatlon provision for tho poor 13 m tho doproolatlon and depletion expense of 8666,469.43. pony *vith roopoot to dopreolstloa is to provide amounts oonaldorod By tho , tear and deterioration of tho property on a Basis of spooifio ratoo as d@tOdaod losoonoo is severed in those provisions as shangoo in tho art ay rtn&iia oporty. Tho rats for depletion is Based on tho ootlmtod want of . w'mmlvite:.. s*a* in tho Osnpagy'e federal interne ton return for the year 1966 nan eaoro (8116,166.43 asre than not oxpaaoo after dodnoting cijutnot referred to fia M I) written off or oredited to revaluation reserve daring 1838. i fHot - Tho cost ln t*n *lte lo o im c a o r tlH A o ro r tho t i t t t iiiaalnlag 11y 8 o f oooh SCHOOLS HLASjgga THB 011003 COMPACT riSMl riAT #nd#d October 31* 1938 gttMMJ, j u l a b c b a F^ Bsamna 07 THS FISCAL ISAS AS FSB A0008XT8 JZfitfZMO. ADDXTIOHS AX COST gOMBUL iMSBS a^g.y FSOFZT AID LOSS s OTHSR CHASCK3- BAIA5S3 ^0 DEBIT AKD/OB OTHBR CREDIT- OF ACCOdTS DSSCRIBS FISCAL TSAR -vi 9 SO,645.*8 * 6*300.81 8 74*1S5.S7 ___ 14.86? .s o b ___ftrfggjflg.,.. j u iu l ia------------------------- ;--------------------------- Mbmjt 4 96*113.87 $ 6*880.00 $ 6*861*7$ $ -0 * 9B,89L'a4 M----M-------- Ml--M--T '*TTWIM is AMrtls4 mr th 1 t--t *t.c* v * ^ 6 -35 - gnH^pn^f? VI-FCBBSP XSSBT THE SUDDSE C02EPASY October 31, 1938 COMW-A COIiTOS COLUSA C COHJH AT&H3HT ODYSYAHDOT AMOU AMDUSTX EXCLUSIVE' OUTSTA AUTHORIZED BY OF THAT AS V. BASIS OF ISSUER AS TITLE OF ISSUE UtDEEHTUBK VS TREASURY BALAHCK HnnEMnnMBMinMnMWMMMaaMMnMBMMBaBMaMnKMMiiiTrm'i" " rirrauMMMuHMMMMna Us ffUttMi CQHpMV-Iaag tora bank loans ($880,000.00 principal aarant Maturing foanoxy 8, 1940, Jnly 1# 1940v and Jhsaary 2f 1941*latmit at and 3t roopootivoly) tho SUddn Canpany-oorial satci (yrlMipa snouts staring $880,000.00 a JWy 19 1941* 0800,000.00 annually July 1, 1942* July It 1943, July 1# 1944, sad $8,000,000.00 on Jttly 1, 1948intorost at 30 to 3&) $ 750,000.00 $ 750*000.00 d 750, , 3,780,000.00 3,750*000.00 3,780, H <S>r~2T'* ^SEh? Hot* - Vn/lmr provisions of tin Sorial Hot# xndoataro, Tho Gllddon goapany k asqr of thooo notoo shall bo oatstanding not to oroato, assuno or inourjaiay foods isniy aortgagoo on roal proporty, In addition to tho $3,780,000.00 of notoo whic tbomwiBlsr, naloas tbs oonsolidatod not Ino--a of tho Osapany wad it* tubsidiarl 18 otlonior souths asact irrooodlng tin data upon which additional funds* dobt is rlasnrrod and tho avorago of tho oonsolidatod not in bo -- of tho Company and it poriod sad tho l--dlotoly prooodiag poriod of 12 oalowdar Booths shall both bo Umi nawal intorost obargoo on all osasolldstod indobtodnoos of tho doapowy aa will bo OBtstaadlng npon tho oroatiaa, aooaastiOB or iaonrring of btiBfchdditloao dotoxsftning tho oonsolidatod not ins ms, no dodnstion shall bo nado \fm intorost snolitfotsil indobtodnoos or for onortlwotion of dobt diooooat and ospifesos with Indobtodnoos. tho qsapsoy is ontitlod to onload* ronow or rofbnd boa^jloawo not tho nftlag thttoof with othor anoooorod^bonk loans provldod that laioay oaoo tho within an roar aftor tho uklag thoroof so ontondod, rssaowedor rofhnd its priaoipsl iniart of $780,000.00. t `""'t'tf-,* t ,**.' * f~i ` * * i*R' M'i % ;.T? ii B P BY HE . connar c AMOUHT OHTSTAHDm KXCUJ3XVS ' OF THAT :! ZH TREASURY I; QQLom p counas j; c o u ims f A220UHT OUTSTAHDEJO AS VSR AMOUNT BALASCE SHEET PI3D0BD hsbi A&OUHT ZH THSA3tJHT coLPaar a AMDUHT BBT.n sr P3 330HS WHOSE STAT3JSEHTS AHE PILED HEREWITH <mm ,g, -CflllMLX AMDOHT IH SIHKITK5 A3 OTHER FTJHDS st&n "HHTHdR AD3ITI0HAI* AJOUBTS &? BS ISSUED 0.00 $ 750,000*00 $ 750,000*00 Heat Hone none Bono (Sm Bote) 0*00 3,750,000.00 3,750,000.00 HaM Bo b * Hone rare. The aliddenOoapanp has agreed eo long ae , assume or IneurjOaor funded debt, except purchase >5,750,000.00 of notes which hare been ieened Ceapaagr and Its 4ubsidlarlea for the period of additional funded debt is to be ereated, assuned leone of the Company and Its subsidiaries for eneh mdar nonthe shall both be net lees than three ibtednese of the roeny end its subsidiaries vhleh Incurring of s|additional funded debtf in shall be nade fen interest en outstanding discount and enposses with respect to sash nr or refund baakfjloens net suturing within one /oar after nrided that in sag ease the aaeont of sash leans net intended, renewed or refunded shall net at sap tine Hone ?Se Vote) iflSBaisa*233ss*m>ai COLOHH A I DESCRIPTIVE HAliuS OB RESERVES * ****** ***** ** ** * RESERVES DEDUCTED FROM ASSETS For doubtful account*, discounts, etc. 21 fas g l ims * c o o pas ? : ft . -.1 `-',r 'l-*'"1J*-f^<t~Wti*Pf"c> f> r < Fiscal /etr ended ootober 3317 1938 jl BALABCK AT BKOlliBZKG OP THE FISCAL YEAR a s vm ACCOUNTS tmntarszzciamt coicaa c ADDITIONS CHARGED TO CHARGED TO PROFIT OTHER ACC0UHT3- AD L03S DESCRIBE $181, 953.00 $108* 314.5S $11 For alalas against eloeed banks 75,012.50 For investments 9,508.74 1,905.70 For miseellaneens notee, etc OTHER asa&HVK For oontlngeneles 47,885.56 9,561.84a Vote a - Transfer free reserve for claims against closed banks to reserve for miscellaneous notes, eto. rw*rr for aisoollonoous not* oto* wiaiBawi MMUl IAMB 07 Z3S9H AMD TXtLS 07 XSSUB SCHEDULE VIII-Ca PITAL STOCK THE OLIDDJSB COUPAST October 31, 1635 mMawnsMHiMMaaasBMsnaaMaMsaMBirmnsszs&Bssam JSSU9BJL BOMBER 07 SHAKES AUTHORIZED B7 CHAHTKH YtntBBH 07 SHARES OUTSTABDIIG SACLUSIVE 07 HUMBER HELD IB TREASURY AMOUHf IB DOLLARS HUMBER 07 SHARK* HELD BY .PSHSOHS *H0SE STATEBSin 07 SHARES ARK rlLivi: IB TREASURY HEREWITH maSBaaanaaasaKBgRBi took eiamlatlTo- ptr iftlut $30*00 a sharo 200*000 Oo mo b -without par alao 1*200*000 199*940 $ 9*997*000*00 Bna 829,989 4.180*655.00 $14*177*635.00 5,602 1 SCHEDULE 1X-SURPLPS. THE 01IDDKH CQHPABY Fiseal year ended October 31, 1938 MaMMUs*>MM**Hs*><l*1u3iiSBSs>ss9BSJisBasBSBaBaa:i;saB&BSMsi CAPITAL SURPLUS Balance Horember lv 1937, as per Recounts $7,520,063.39 ADD1TIQKB Sxeess of amount oF $30.00 a share, as determined by the Board of Directors for 34,697 shares of common etoek Issued for assets of Southern Pino Chemical Company, orer amount of $5.00 a share allocated to stated oapital $ 867,426.00 Sxeess of selling pries of $30.00 a share for 93 shares of common stock sold, orer amount of $6.00 a share allocated to stated capital 2.325.00 $8697750700 Least Sxpenses in connection with issue of shore shares 16.208.37 054.641.63 BALABCS OCTOBER 31, 1938 $3,374,605702 nasMW*>am BARSSP SPRPLfJfl Balance Boremher 1, 1937, as per accounts $3,543,132.36 Add met profit for the flocal year ended October 31, 193$ 2,69.966.30 $5,313,093.66 Leeo diridonds paidi Conrertible prsf*rrtd*$2.26 a ehare $ 449,386.32 Coamon*$.50 a share (paid January 3, 1933) atrium BALABCS OCTOBER Bote In prior years certain items of discount and espouse, prerielon fer oentinBoacles and lassos sa dlsmsmtlemssts here been charged te oapital surplus. If such items together with additional depreeiation claimed fer federal interne tax purposes for the years 1932 te 1933 laelmelee, had been charged against earned surplus instead of capital surplus, the respective amounts of such surplus aeeomnta mould be $3,641,137.30 and $9,401,732.56 as at October 31, 1933. ssr,X5rns!flj!TTOs:js5"r-,r:' ' ? MS twiwdffl the assets aad liabilities of She Gll& MftaidlulffRf She Oliddea Gmr 1U# aal BoUffiis tftmit lilationi She lillrtifAM iaslote so ialiMMpv profits. She esaotsaad liabilities of She eilddea Cea^eyf &td*9 ara lssJ ' :00:'tt'4o23Aff for basis* TmraftMBrti la eeaselldateA nMAitfldi ore easried at aaounta 3 ; - fetor of itfupiloltlffwt thi dlffereaso of 91VCCIV0078O itii i Malgr jimt Gonypany's Mn end tiw osalty la not onsets u oMUnlif* teekt aropdroooato undistributed esenomilntoO' not <w olaoo dates of eoqulsltlen am As refXeeted In u saaolMatlea of Uta eooBata* j 'SSMjkfOO of tks Ceapesy vltfe refcrtws to oossolidatiea of ss boon to a--inoa tks California alitlng soossAss frsa aromgfl rag sepeve&estatOEBsats aro not twoledod herein for those osa^&nioj Irnriof merits ore not hollered to ho elgslfloaist la respect of (3 represent aad () the sales or operating rovsaaoa of sum eossps la tPlS California t "****^ oosopanieo* dose assets ooasist almosl ties B>t hlsg operated* are stated herein at less than east* to entry*r r.nount of theso isvestaentst on the heels of unaudli 11 Slt.isa*47 more than the booh value of the m% assets of ti otatments of those eeapenles shoo aoe&nula&od losses asoalsltien to October 31* 1933. esaiasivo of deprociat Isterest on bonds held by the parent Cespaay. ehloh ijsto Inooms by the XaUa? against those ao<sum0.at3 has provided, la prior years* the sns of 3ai,6?*.7d m # 13,143.81 A 1*407,336 3,903,733 11,449,701*36 --JAfattgalft1 76,612.36 hSSkM 48S,MSi 73,636.67 14,444.13 1,770,216.671 366,073.71 fiwfliiliw it HitmlnK 6o Is tt*4 sad 624,722,061.33 nH^aass ^ *232,964.60 i, at tt 1-- MWrtlntlitt i, At ovi less mw UmUs 74,136.37 MM*** 02,671.14 ':'sHbnnrluU(l36 otesk sad etatt b iiii'j t siarvWsmkM&a>(PP^WSS'''l ^BV^^VWSI^SSf a 442,666.77 MUiUftim l^iitnrV:f^TA ---- --- Assets sat Usktmies ef Tks 0U64ea ittip^ssMed askaldlarlas, Ska (Oittn oiwr 114* aad ksliaaA nils, too gjSw5S^s^Sa4s as later eiaasnr jftftta, Pwmiifcoarf6 liabilities af fk* 6iid*oa esoosagr, I6d, are lalsisl herein a- 6eiSar fer della* tnrfr ' ' ' . __ _. la sensei lists! sahstllariss ar* serried at ssssats retarded at Os 41HMat f #1,666,667.66 hetvses larestasats as LW ssasat Oewpsnys leaks sal tks atilt? la set assets se skews 6gr Os Milsaftes9 keeks nwawts aadlstsikated --sniilsltd set esialsge sf tks dates ef aaqpisltlss sal is reflsetsd la ansd surplus in via refstraw is seats!idatlsja el subsidiaries te California aftalag ewtasfis frsa siwkel reports te skaMkel&aai Mpnasts; stsi wanti net Iselwtei karsts ferthsse erispswUs as tks larwikiiiiti srv set keUeseeeedd te ke stpHfleeat la respect ef (1) tks assets tha-? rsnresfii anfl (2} the sales ear eperatlas rerasass ef soak eeapanlss* torsetseat la ttoCklifepala sanpaalse, am assets ssaslst alasst satire!? ef psepor- bieejwtkdlwt operated, are statedharsls at less tkaa east. I mutM annual sf these iwreatasato, ea tke keels ef anauAltad balaase sksets, m iis.fii.if mm tksa tke keek Talus of tks not assets ef tkese eeaopasles. c- Mdltedstatvents ef tkese eeaaaales skew sseasalatel leases ef $1,170,019.67 frea tsle af asealeltlea to Ooteker 61, 1036, eaalastve ef depreciation on appreciation aa Interest sa koala kail tap tke parent Ceapeap, shleh interest kas set ^si tate issto inseas kgr the latter, against tkese aeessnlated losses tks p&?snt runjsdf has preridsd, la prior pears, tke saa ef #661,671.76 eat ef surplus asd 1*39; 74tal aad state py roll taxes Iff111fttod 6wtra9t osasslidated iaoncd liabilities* Taxes fiscalties, water mt, etc. si* v _0aftlfls10 0 1, ("i ,aiau49 44tY0.tf Prevision far federal, dominion and state taxes mi 1--o t ih i ortfwaUfl t o t a l c o mb b t sgj&xmxm- MB*pW|98990 prlaeipel oaoaat ntwlag tasnr i, 1940* Jdly 1, 1940* and Jsrmtry 8, IMI-lsitmt at 8& Ziffsad 3*, reepootlvaly Serial aeteo'-prlaslpal aaoaat* aatarlag |8MM00O July 1, #900,000*00 situsTTy mi *oy ly im* oaiy i 1943, July x. 1944, aad #3,000,000*00 sa Jfcly 1, IHOHteteroet at 30 te *& m eeatlageaeleo & Oapital w miw mi,s vun OwnrUtu peeferred, 4fr0 neflittn, jar value #90*00 3.71 a soars (rseetaabU at #93.73 a start ttrea* Jtly 1. 1940, a* #98.90 a stere tbetMftor eoab etare eta* artlble ttessji Burnt 1# 1939# late 1---teiitba >hwt ef seaasa steel, ttaea etsnglsg te eigtflkteatte epeolfled ia Arttolasi i Aatterlssd i 809,000 4*00 Cesrerted 00 Issaed aad eateteadlag 199,940 stars* #9,997,000. Ce--mi, wdtteai par value - lets C 1*14 Aathaviasd 1,300*000 starts Oatetaailag, iaelading treasury stares 030,091 stares ): Beeorved for ssarersiea ; 179,940 stavoo 3*41 U'l Stated eapltal Ssadsfl - Bates 0* 2> aad S aad sehtdel# lit 4.130.31a. Capital sarplas 9#B74#909. - Bum* sasplaa -, /. >i Seas trwisiy etaroe-at seat* ' 9#dOB ifiwT>i,_esssiss ; eatetaadiag ffinnitir ef trade astee ieeaed tar or for asseaats ef eaelianrs asirlMie liability oeatlageaey reserve, ead tas a ersdit ef #313,900.00 alibisGgf reeaguieitlea ef #400,000*00 priaslpal swsmrti ef Iw4> ^ Coapaay at a seat of $137,900*00. fee eperatiea ef tte tts California atstag eeapeaies was dlseeatlassd ia 1937 isveetaeate is ladotoralaablo at ttls time. <) Xsveetaeat ia affiliated eeapaar repveseate eas toadied per preferred stock ef Aaerleea Slreealau Oerperatioa, tanas .-a ;& #000,0^0.00, tte dirideade ea vfeleb bate beea paid te oitebm?'!# forty-five per seat latereet ia tte eeasea eteot ef 3s audited statement ef tte Geppsay stare ss smallated aad" ' #93,903.38 at Ostebsr 31, 1930, af whist #30,199.70 is Coapeay's investment therein. See metes ea following page, m. 5S^8!LMd& i0omati c a pmmmc Ata..taaro k.35 m Iwmiing ta2M*federal federal sad state pap roll taxes Affiliated eoapaar-Bot consolidated Aaerasd liabilitiess Taxes Interest loyalties, water mi, etc. Xasnraaoe Prerinlen far federal, dominion and state taxes es lass-- ssttaatsfl t o t al qijaagg t.09 B AHIIIIB ||..... , griaslpal eanmit aatarlar Iwauv t, 1H0, AO; 1, 1 , and January a, Ifil-iatersst at Sit aad & r--peetirely Serial astes-prlaslpal laweis antaring $230,000*00 ea July 1, 1SCI $300,000.00 annually ea AO/ li 1942, JUy 1, IMA, July 1. 1M4, aad *,000,000.00 ea Jdly 1, 1943*iatereat at l* to Si* tanta-n^o^ YXI tT4 ,979*30. $ 44,9tM* HiWfiM rs m:i gjffffdfc awn; dw anHW Capital atesJr-Sehedwls Till* Coarartlbls preferred, 4i| snvnlstlTe, per relate $30*00 3.91 a stare (reliaitli at H>9S s tan ttm# taly 1, U40, |U4S t eksn tataSlev*tat tan tea* rertlble tbreagh tarefc l, 1W9, If lies tieta taste of nwim steer, ttaa etaaglej to eigta-taatbs taare as specified ia ArUeleei Anttarlsed i 900,000 stares U9 j Caesar ted . eastares Zseaed aad eateteadiag 190,040 tarn K.Nr.M Cs--ea eittaet par emlae - ate Ci 1*14 Aatberlsad 1,900,000etares Oatstandlag, laslading i treasury ataree Oitserred far MomiloB ; 010,001 stares 190,940tam 3*40 Stated capital Surplus tates C, P aad 5 aad Schedule 2Zi Capital satplas j 5 asraed earplae isss treasury atares-at easts 0,000 tani es--sn : : ! :?7 i-,*y ' / i:--i -r-m outstanding OMoaater ef trade aetee iseaed by ex far eeeeuata of SMtesOTHaiiaw liability contingency reeerre, aad Has a eredit ef 0310,000*00 ariniasg1 reaeoaiaitlea ef 0400,000*00 priaeipal amoat ef betas attab Coapany at a east ef 0139^000*00* The operatiea ef tta^adaSr tta California aiming eeapaaiee was discontinued ia 1989 esd larestmats is indetoml table at this tins* (e) Xsrastaeat ia affiliated eeapaap repreeeate eae bnaftred per preferred stool of Aieerieea Slreoalm Oerperatioa, tafia* a . $400,0^0.00- tta dirtdead* ea able* tare beta paid to Osteber 1, forty-firs per seat Interest ia tta eeaaea sink ef tta ta^ audited statement ef tta Qoapsny stave msviwilwted nadlstrltatta mf, October 31* 1938, ef CUdde td* asd state pfijr roll taxes d ogQftnfaot eeaMlldfttod Llabilitioa< st lti stttf mtt ate. ' BOS B *97 XMBlf 4mOa 1m and tUt taa9 W tWIW BBtftid T0Z4L CCJMMCT iww principal tawat aatarlaf faiwanr S* 1940* * IMOi and January 2, at Z$ Stf i tlroly atoo-prlnelpal flwMsti aatarlag $200*000.00 k July 1* 1941# 00.00 annually aa JUly 1# 1948# Jtoly 1# 1040# July 1# 1944* #000*000.00 b Jfcly 1# 1949iataroat at 30 to OfeT OaOola m lageaelas stool ttatoadala Villa UUa )ttXmAi 4fc ovoalatlYe, nr oalaa |00.00 azs (wh--111 at $00.79 a. aOaro fOroaQO *Oy 1# i* 4 |tt*M a otesa On n " iUt tarn** null 1# 1909* tote iln fastOs i Ht iwm stoat tfaaa oteangtidif to i4M~*oat9 Iflod la ortlalaas i t&orlsod acrortod i: 900*009 40 iMd M Mtottaditg 190*949 afearas t* vlttMt par nisi - Bata 0a wrlaad itanAtaa# latlsdiss wmay shtm 1*900.0004am : 000*091 nam imi far nsnviloft 199*944ihun led npital Potes G* D and 2 usd aohadala ZZi kl surplus t sorplaa usury 4amsl ooiti rxe2HLXig& of credit eSatstaa&lng Mr of tndi Min lMsed tv or for imosata of nn-oiilaai liability Boatlaeo&oy roaorro* ad boo a credit of 0019*000.00 arlalaa reeaqoialtioa of $400*000.00 principal mnit of Wsdi otf Boapaay at a ooat of 0107*000.00. At operation of tts'a tat Oallforala alalpg eoansin one dlmattiwid la 1997, aa*/' ismtmti is iaditnalaOii at this tine. iv nreetaeat la affiliated oeapaay roproaaata aao lauadred par ooat preferred stool of iaorloaa nreoalaa Oorpoaatloa* harm* a par $490*000.00* tha divldmi oa OOit ten Mn paid to October 1 fortyflre par ooat laterost la tte aaanaa steel of tte aaaaaa audited atatoaoat of tho Goapaay skews aaooaalatod Mttatrtlrtad ratots5r 31* 1939.* of ebisk 99$#199.70 is spplisabl o- goras to c o k s o u d a t s d s a u k c s s h ^t TE:i D&rDDSH C0KPAKY MTO C0tf80X.IDAT:3 SUBSIDIARIES October 31, 1938 Hote a - Sundry investments are included at cost or less- *Securities carried at a cost of $42,000.00 had a quoted market rulue of 38,090.00 at October 31, 1938. tf. S. Government seurities included therein at a cost of $15,000.00 were deposited Sith a bank in connection with workmen's compensation insurance equirementa. The market value of the remaining securitJ.es is nknovrn Sote 3- - Property, plant end equipment are stated on the ' basis of cost or appraisal value less reserves provided for re valuation,- depreciation and depletion. The remaining portion of unrealised appreciation included in the gross amount of these assets is offset by & portion of the revaluation reserve and that reserve was also provided to reduce the carrying amount of cer tain assets from cost to estimated basis of values prevailing during the year 1932 as determined by the Board of Directors* Cost of property, plant and equipment represents,principally, eash expenditures, although certain properties were acquired for stock. The net book carrying amount is not intended to repre sent the present value of the properties. Note C - During the year the parent Company issued 34,697 Shares of its common stock to Southern Pine Chemical Company In exchange for the assets of that company. Assets acquired were recorded on the books of the Company at the aggregate amount of $1,040,910.00 which included property, plant and equipment at net sound values as shown by independent appraisal and other assets principally at amounts shown by statements of predecessor compa ny at February 28, 1938. The amount of $173,485*00, representing $8*00 a share for the stock issued was allocated to stated capi tal and the remainder ($23*00 a share) was allocated to capital surplus in accordance with authorisation of the Company's Board of Directors. ;V vSotc D - The indenture, dated July 1, 1936, relating to ' serial notes of the Company contains an agreement that so long q as any of the notes shall be outstanding the Company will not dsol&re or pay any dividends (other than stock dividends) on any shares of its common stock or purchase, redeem or otherwise re tire any shares of its common stock (subject to modification that the Company zaay use not exceed!^ $200,000*00 in the pur chase or retirement of its common stock) or make any distribution introspect thereto, except out of consolidated net earnings (aa - defined in the indenture) subsequent to October 31, 1937. .. -- Bote IS - In prior years certain items of discount and Ex pense, provision for contingencies and losses on dismantlements have been charged to capital surplus* If such items together with additional depreciation claimed for federal income tax purposes for the years 1932 to 1938, Inclusive, had been charged against earned surplus instead of capital surplus, the respective amounts of such surplus accounts would be $4,648,105*10 and $9,401,782.56 as at October 31, 1938. Bote y - Officers of the companies have expressed the (.pinion that pending lawsuits are of minor importance and that no material losses will result therefrom. CQ&SQLXDATKD PROFIT AND LOS^ STATEMENT THE GLIBDSS CCMPAHY AHD C OHS OLIDA TED SUBSIDIARIES Fiscal /ear ended October 31, 1938 *asE>BaassMastssBscs=sssaxxsa3:sa>asss3ansswanana! .KUsssssaaasBu GROSS SALES-LESS DISCQUHTS. KETUKBS ASP ALLOWAJSCSS. ETC, GOST OF GOODS SOLD - Notes A and C 1 UABUFACTURING PROFIT $44,049,022.51 35*343.137.99 V7,705,834.52 SELLING, 0H3SRAL AMD ADMINISTRATIVE EXPENSES OPERATING PROFIT OTHER INC CtiiS _7-e 349.800.76 $156,033.76 Miscellaneous commissions and profits on merchandise purchased and sold $161,895.39 Dividends receivedschedule XI 92,214.50 Recovery on accounts previously charged off Interest earned Rental income Miscellaneous 34,376.61 14,034.14 10,489.47 23.346.66 $336,356.77 OTHER DEDOCTI QMS Interest expense $119,972.95 Provision for doubtful accounts 110,505.50 Idle plant expense 42,062.63 Life Insurance expense 19,898.96 Miscellaneous PROFIT Credit arising from excess pro vision for taxes on 1noose in prior years* Federal taxes on income $ 26,538.18 Dominion end state income taxes 7.494.43 $ 34,032.61 Less estimated provision for dominion and state taxes on Income for current year 15.408.68 38883.*-93 MET PRQFIT-Motes B and D | 305,597.25 o&naaasnaUM Principles of consolidations (a) Inventories include no inter-company profit. (bJ Inter-company sales are not included. (c) Operating accounts of the Canadian subsidiary are Included herein on a dollar for dollar basic# See notes on following pegs. BOTES TO COHSQLISATED PROFIT AHD LOSS STATK&iSHT THE GLIDDSH CCKPARY A2E3 COSSOLLDATKD SUBSIDIARIES Fiscal year ended October 31, 1938 Vote A - Inventories at October 31, 1937, included certain raw materials priced at cost which exceeded market price at that date by approximately $93,000.00* Inventories at October 31, 1938, are stated at the lcwer of cost or marhot. Vote V - Provision has not been made in the foregoing statement for loss on wholly owned, non-operating California mining companies for the year, amounting to $48,100*56 in cluding provision for depreciation in the amount of $27,798*99* Vote C - Depreciation claimed in the Company's federal Income tax return for the year 1938 was $118,185*46 more thsa the amount included in this statement, due principally to de preciation claimed on costs written off or credited to revalu ation reserve during 1932* Vote P - Reference is made to Schedule X submitted here with for Information as to charges for maintenance and repairs, depreciation, depletion and amortisation, taxes (other than federal income and excess-profits taxes), management and serrisa contract fees, rente and royalties* scmmiB i-iyyg3TttBTS ar s s o u r it is s oyAsyiiiAms m OLXCCKJr C0HPA7Y AKD COBSOXIIUTKD SUBSIDIARIES 7tiOil year ended Oetober 31* 1938 ____________________COLDm A____________________;___________ IBB 07 issoaa TITLE 07 I3SU& lujasa SHAHM^v raaCIMgM BGHDS 17 bc xbk; SHAH PHXHC AH001 BOKD TOT Afterthoacfct b u m MU^St Ikt CzUfonlt 21m Cmptfqr *Umb llresalwi Cerporetien iMriMS lireoslw Corporation CMB fetOOJC ffe--ew stoek Beads 1.000 100 0500.000 Cnaaen tMk Preferred stoek 3.000 8*000 6.000.00 10*000.00 16?*30000 1.80 Bote A - Interest ea these beads is In defsalt* SCKBDOia X ROB&&YY PLANT AHP SVUIPKSHT TBS QLIDJKK COMPANY AND CONSOLIDATED SOBSIPIAHISS Fiscal year ended October 31, 1938 asssn*siBa>aBiRS*3BaxaaiiiniinniMssaB*sBavsBiiUm>asasB 3iiss3BU3sasss connm a_______________ comm b c o l u mn c : c o l u h s j ^ BALA5G& AT BE0INNING OF THE FISCAL ADDITIONS RETIH&JftslHT TBAH AS AT COST OH CLASSIFICATIONS F12H ACCOUNTS (HOT A) SAIfiS Ore lends and leases Xi-ei*d Lead iaproTMMnte Bellroed siding Buildings Machinery end equip--nt Furniture mad fixtures Autonotire equip--at Coastraetlon la process $ 54,594.67 $ 35,382.57 2,402,978*25 87,200.30 38,828*57 9,125.21 85,254-44 4,885*00 $ 999*1 8,460,510*27 873,670.54 85,601.< 10,245,282*581,855,111*03 118,245*^ 584,502.01 21,435.32 6,857.2 91,254*40 14,246.04 6,461.: 594,898.30 ---------------- 822,939,113*79 $2,002,013.16 5 218,175.4 1MMi wirtiiwitiwiriairwitrwnr-- nt-- Nete A - Additions et eost include approximately 1810,000.00 reproseating property, plant sad equip--at acquired from southern Pine Chemical Ceapsny. Rsfereaeo O is aids to Hots C to the eoaselldeted helsaoe sheet forinfos--tien regarding acquisition of the assets sf Southern Fine Chemical Company* Hots 3 * Hepresents net deduction. DB&BTY, VLAS? AHP SvUIFMSBT T AHD C0B30LXDATSD SDBSXDXARX^S r ended October 31, 1938 OHS vaasaasa ass>imaana>B>i mBMH3saasa gfflffiw Qowmj*_____ rnsssui BALAHG& AT BSdIHHZHO 07 THK FISCAL AXXDITIOBS TBAH AS . AT COST FSB ACCOUNTS (HOTS A) coumv mmJk OTH&B CHAHOSS KKTIH&B&HTS USBIT AHB/OB oa CRSDIT* SAIBS 2BSCBIB& AT GLOSS 07 TIB FISCAL year i8 m&t trss it >cas $ 54,594.87 | 38,382.07 2,402,978.25 87,200*30 38,888*87 9,125.21 85,254.44 4,585*00 # 999*84 8,480,510.27 673,870-64 80,601.65 10,246,282*68 1,865,111.03 118,245.73 664,502*01 21,436*32 6,667*20 91,264*40 14,246*04 6,461*15 .........----------------------------------------------------------------------------- #22,939,113*79 #2,002,013-16 # 218,175*62 # $ 00,977.44 2,490,178*53 47,953*78 68,639*60 9,068.779*26 11,993,147*95 679,071*08 99,049*29 -o- #24,722,951*33 .raan felons **t noli ii^Is4f tppmiMtfljr iftilsc proparty, plant and equipment horn Pimm Ghoaioal Ooapsajr* Reference to tho consolidated balance shoot for lag acquisition of tho assets f loal Ceospaay* osonto nst IHuetiM 26 SCHA.POi.:. IIA-aj '' .UI.-u j i.\ ._\v . -> cO.-. K. <V/si;U AT Iufl t h i> g d it -'!-' .*< Cw>.i a a V Cv < a T..(' j JB Fiscal year ended October 31, 1938 aaaa-aa-aM3aaasag 'sssxs asassstsassaBsaasMasaaSBaasasasassBaM* ' cou&y a c o l u u * b c o l u &h a couiks i>cohifia; s is Ai*A.NG Is AT ii.v.:GXK>Ui'fG OP BAl*AfCfC AT THI-: FISCAL AJltiiTZc,V;J KKNS.VAL3 CLOSE 0* y;-;.na Ai TO AND AtAJCR THE FISCAL CLa SJIFICa TIw .iS i-Ai ACCOUNT j IfSS.aiV-iS - .PAIRS*' YfcAR ' =ras*sm**ats*aisxa3sBJ3-s:Bt*ara:*3:3*:*a=a3!:*JSsss1BS*,tta,,,***ttSS3earaa:***=:* hand Buildings iiachinery and equipment Furniture and fixtures Railroad siding 500,937.7? 1,693,630.00 1,471,640.05 $ 500,937.77 ii 48,186.58 1,645,443.48 16,235.12 1,455,404.93 29,032.68 29,032.68 6.339.77 ________________________ ___________6,339.77 ^3,701,580.27 & -o- | 64,421.70 *3,637,158.57 aasaaanavsiaaaasaaaaxsasasiaaaasBsaiassnaflunH Zfote - These reserves were provided toy charges to capital surplus and reserve for depreciation, to eliminate appreciation of property, plant and equipment, and to reduce recorded amounts to estimated basis of values during 1932 as determined by Board of Pirectora. ,* < SCUBPPLS III - RESfSRVgS FOR DEPRECIATION. DKPLKTX AND AMORTIZATION Off PROPERTY. PLANT ASH SQBl'PMafl TUB GLIDDRH COMPANY AND CONSOLIDATED 3rtJBBIDIARl Fiscal year ended October 31, 1936 Ore lands and leases Land ixcprovemente Railroad siding Buildings Machinery and equipment Furniture and fixtures Automotive equipment $ 83,210.83 3 1,777.64 8j671.77 1,636,415.95 6,986.42" 2,123.22 1,210.71 167,067.39 $ 30,197.25 3,900.76 9,882.48 1,949.91 1,805,433.25 $ 4,155,049.55 416,259.79 52,072.90 479,300.79 30,678.01 19.826.09 8,183.06 4,642,533.40 219.23 447,157.03 ------3--9--9--.-0--4---------- 7i--2.r2--98.0--3----- 6,293,458.33 $ 707,192.63 3 10,751.24 7, Oil, 402.20 0 ssBsaRSsmBaa*sai8uaa*nmaaasaiiuMD3iss =sa.iu.uaMu Credits Note A - Depreciation provided on books of Southern Fine Chemical Company for (date of appraisal of property, plant and equipment) to March 10, 1938, (date asset Note B - Net adjustment resulting from revision of depreciation rates in prior Company's federal income tax returns. ^jThis adjustment was deducted from the deprec the Company's books, resulting in a net' depreciation sihd depletion expense of 3698, consolidated Depreciation and depletion policy: The policy of the Companies with respect to depreciation is to provS as fair and reasonable to cover wear, tear and deterioration of the property on a fc It is not certain to what extent obsolescence is covered in tnese provisions as chs the useful life of the property. The rate for depletion is based cn the estimated Depreciation claimed in the Company's federal income tax return for the year 1938 * in this schedule (118,185,45 more than net expense after deducting adjustment refe claimed on costs written off or credited to revaluation reserve during 1932. s c h ed u l e h i - r es er v es f o r d epr ec iat io n * d epl et io n AMD AMORTIZATION Off PROPERTY. PLANT AND S#9srasr< TIES GLIJEM COMPANY AND CONSOLIDATED SUBSIDIARIES Placet! year ended October 31, 1938 .MwnwWMaBCTgaiMiwiwi US B COLUMN 0___________ ADDITIONS ~~ COLUMN D COLUMN B________________ COLUMN ? OS AT 1 " c har g ed " ISO OF TO OTHER TOTAL OF CHARGES TO RESERVES BALANCE AT ISCAL CHARGED ACC0UNT3- COLUMN B` RSTZREkSNTS,OTHER- THE CLOSE .3 PER TO PROFIT DESCRIBE AND RENEWALS AND INSCRIBE OF THE UMTS AMD LOSS (NOTE A) COLUMN C REPLACEMENTS (NOTE B) FISCAL YEAR Mnasaait*aisans*mB*Baaaii>naBB*>aia>ai|B>M*i**l"a*Ma<l*SBaiaasamusass>tiBasminsai 210*83 $ 6,986.42 777.54 2,123.22 671.77 1,210.71 415.95 167,067.39$ ,049.55 479,300.79 ,259.79 30,678.01 ,072.90 19.626.09 $ 1,949.91 8,183.06 219.23 399.04 30,197*25 $ 30,197.26 3,900*76 3,900*76 9,882*48 $ 231.22* 10,113*70 1,605,433*26 $ 30,822*36 110,495.12* 1,886,106*01 4,642,533.40 106,704.66 50,439.15 4,485,369.59 447,157*03 6,925.44 69,331*86 370,899.73 72*296*03 5*077.00________________________ 67*221*03 ,436.33 i 707,192.63 ? 10,751.24 7,011,402.20 0 149,529.46 $ 9,044.67 $6,852,828.07 B*nMiMaMBaMa8aw--aBtgttawiaa--aaB3taM*ga*aB--aaaaa--aw aaaaaaaoaBZtaaaaaaaaMa & ed on books of Southern Pise Chemioal Company for the period from October 31, 1937 lent and equipment) to March 10, 1938, (date assets were acquired by The Glidden Company). Iting from revision of depreciation rates in prior years to oonform to rates used in the ms. This adjustment mo deducted from the depreciation provision for the year 1938 on a net depreciation and depletion expense 'of 3698,147.96 for the Company and subsidiaries 5 ......... Companies with respect to depreciation is to provide amounts considered by the management fear, tear and deterioration of the property on a basis of specific rates as determined* obsolescence is covered in these provisions as changes in the art may result in shortening The rate for depletion is based on the estimated amount of remaining recoverable ore. ujy's federal income tax return for the year 1958 was $109,140.78 more than the provision *e than net expense after deducting adjustment referred to in Note B) due to depreciation >redited to revaluation reserve during 1932. SOHSOTOB -ASg^ THE GLIDDEH COMPANY a KD CONSOLIDATED SUBSIDIARIES Fiscal year ended October 31 1933 COLUMN A d es c r ipt io n c o l u mn b BALANCE AT BEGINNING OF THE FISCAL t ear as PER ACCOUNTS o o mag c ad d it io n s AT COST gffimJL......... DEDUCTIONS CHARGED TO .CBAROBj PROFIT AND ; OTHSJ L03S ACCOU1 Patents and trade-marks Rights to manufacture 80,545,08 ___ UsMZlffi.* 9 95,213.87 $ $ 6,390.61 6^630,00 _ 2.472,18 6.520.00 $ 8.862.73 3 Note - The cost of intangibles Is amortised over the remaining lives of such assets. 3 SCHEDUL3 VI-FUHP.SD DEBT TH3 GLIDDEN COMPANY AND CONSOLIDATED SUBSIDIARIES October 31, 1938 COLUMN A COLUMN B COLUMN C COLUMN BAMS OF ISSUES AND TITLE OF ISSUE The Qllddcn Company-long ter* bank loans ($250,000*00 principal amount maturing January 2, 1940, July 1, 1940, and January 2, 1941-interest at 2%t and 3^, respectively) The Gllddea Company-serial notes (principal amounts maturing $250,000.00 on July 1, 1941, $500,000 00 annually on i July 1, 1942, July 1* 1943, July 1, 1944, and $2,000,000,00 on JUly 1, 1945internet at 3# to 5$) AMOUNT AUTHORIZED BY Bmmu mourn OUTSTANDING EXCLUSIVE OF THAT IN THEASUKY a mo u n t OUTSTANI AS P3S BALANCE S IS 3,750,000,00 3,750,000,00 3,750,00 Note - Under provision# of the Serial Vote Indenture, The Gll&don Company has aay of these notes shall be outstanding not to create, assume or Incur any funded money mortgages on real property. In addition to the $3,750,000*00 of notes vhleh : thereunder, unless the consolidated not Income of the Company and its subsidiaries 12 calendar months next preceding the date upon vhleh additional funded debt is to or incurred and the average of the consolidated net income of the Company and its i period and the Immediately preceding period of 12 oalendar months shall both bo no1 times annual interest charges on all consolidated Indebtedness of. the company and : will be outstanding upon the creation, assumption or Incurring of such additional 1 determining the consolidated net Income, no deduction shall be emde for interest os consolidated Indebtedness or for amortisation of debt diseount and expenses with n indebtedness. The Company is entitled to extend, renew or refund bank loans not mi the aaklng thereof with ether unsecured bank leans provided that in any ease the ai maturing within eoa year after the waking thereof so extended, naawd or refunded sTosed an aggregate principal amount of $750,000,00, 750,000.00 $ 5,750,000.00 3,750,000.00 By Ths (Hidden Company has agreed so long as csua* or incur any funded debt, except purchase 750,000.00 of notes whioh hare been issued apaxty and its subsidiaries for the period of iitional funded debt is to be created, assumed s of the Company and its subsidiaries for such ir months shall both be not loss than three sdnsss of the Company and its subsidiaries whioh iirrlng of such additional funded debt; in all bo mads for interest on outstanding soouat and expenses with respeet to such or refund bash loans not maturing within one year after dsd that in any ease the amount of such loans not ended, renewed or refunded shall not at any time SCHEDULE VIII-CAPITAL STOCK THE GLIDDKE COKFANY AND CONSOLIDATED SUBSIDIARIES Ootofcer 31, 1938 ia>MiatBMMgiHansiaBuiaaaBaaraaBitn9a9S3saaaaagBS3sB3==! COLUMN B COLUMN C________COLUMN D COLUSA E ' COLUMN F NUMBER NUMBER OF SHARES OF SHARE; HELD BY NUMBER OUTSTANDING KHOiib. OF SHARES EXCLUSIVE 0? NUMBER STATIN'. NAME OF ISSUER AlTD AUTHORIZED NUMBER HELD AMOUNT 01? SHAHS: AA Fl.Uwi TITLE OF ISSUE BY CHARTER IN TREASURY IN DOLLARS IN TREASURY He r e .an laaMaaasasaaaBaaaBaBavavBaaaaaeisaBasaBaxassaaBvaaaaaaaBaaaaBaBaBaaassesasassaaKsxasssB: ms o l id d e n c o mp a n y i Convertible preferred ileeky ^ <raaulatlT- par Tala# $50*00 a shart 200,000 Coanoa-wlthout par value 1,200,000 199,940 % 9,997,000.00 829,989 4*180,655.00 None 5,602 None None SUBSIJIARX&3 CONSOLIDATED The Glldden Coupany, Ltd*-cOMBOn*par value $100.00 a share Holland Kills, ZgOi* eoanon, without par value #14,177,655*00 asssasaasasBaa 500 None None 250 None Non 500 250 '.Bgyy* SCHEDULE VIII-CAPITAL STOCK [S.GLIDDSN COMPANY AND CONSOLIDATED SUBSIDIARIES October 31, 1938 HMumBatosai&iavssaaBMMHmaaaszssssxxassasxasasssasxaxsBSBBBsisassBBVKata CPLUMB CCOLUMN P COLUMN Mi COLUMN F COLUMN 0 COLUMN H_______ COLUMN I : : NUMBER OF SHARES Oy SHAHu.3 NUMBER HELD BY RESERVED OF SHARES ARSONS NUMBER FOR OPTIONS, OUTSTANDING WHOSE NUMBER OF SHARES WARRANTS, EXCLUSIVE OF NUMBER STATEMENTS OF SHARES RESERVE.j FOR CONVERSIONS, NUMBER.HELD AMOUNT OF SHARES ARE FILED HsLD BY OFFICERS AND AND OTHER IN TREASURY IN DOLLARS IN TREASURY HEREWITH PARENTS .EMPLOYEES .nIOHTS BasssBaSBt,3BBSassaag8aaHBiBSSxass3KSSExaagBsssnasaB3zssa3sesa,,ss,3xssasiiSES3Bsss*sas Oi j. 199,940 829,989 % 9,997,000,00 4.180.655.00 *14,177,655,00 33BBBBSBBZBBBB None 5,602 None None None None None None None 179,946 300 No None 250 None None 500 vNone 250 None None , None None vMane. SCHEDULE XX "SURPLUS THE GLIDES COMPANY AND CONSOLILAT.&0 -SUBSIDIARIES Fiscal year ended October 31, 1938 HBKBasxaBiMansaaaixKSxax3ssssssa9t>ax3csx*3scaB3S3S*assaasasBssssx3ss3AS33S3B=s3ai CAPITAL SURPLUS Balance Soyember 1, 1937, as per accounts $7,520,063.39 ADDITI0M3 Excess of amount of $30.00 a share, as determined by the Board of Directors for 34,697 shares of common stock Issued for assets of Southern Pine Chemical Company, orer amount of $5.00 a share allocated to stated capital $ 867,425.00 Excess of selling price of $30.00 a share for 93 shares of common stock sold, oyer amount of $5.00 a share allocated to stated capital 2,325.00 $ 869,750.00 Lessi Expenses in connection with issue of above shares 15,208.57 834,541.63 BALANCE OCTOBER 31, 1938 $8,374,606.02 EARNED SURPLUS Balanos Norsaber 1, 1937, as peraccounts $6,319,469.21 Add net profit for the fiscal year ended October 31, 1938 205,597.25 $5,525,066.46 Lest dividends paid* Convertible preferred-$2.25 a share $ 449,886.82 Common-^.50 a share (paid January 3, 1938) 399.897.00 849.783.82 BALANCE OCTOBER 31, 1938 $5,675,282764 ssasansasaN* Bote - In prior years certain items of discount and expense, provision for contingencies and losses on dismantlements have been charged to capital surplus. If sueh items together with additional depreciation claimed for federal ineoae tax purposes for tho years 1932 to 1938 inclusive, had boon charged against earned surplus instead of capital surplus, the respective amounts of such surplus accounts would be $4,648,105.10 and $9,401,782.56 as at October 31, 1938. 1- SCHSPPLS DC-SURPLUS THE GLIDBJSN COMPANY AND CONSOLIDATED SUBS 101AKXj So ,Fiscal year ended October 31 1938 CAPITAL SURPLUS balance Norember 1, 1937, as per accounts $7,520,063.39 ADDITIONS Kxeess of amount of $30.00 a share, as determined by the Board of Directors for 34,697 shares of common stock issued for assets of Southern Pine Chemical Company, orer amount of $5.00 a share allocated to stated capital $ 867,425.00 Sxcess of selling price of $30.00 a share for 93 shares of common stock sold, over amount of $5*00 a share allocated to stated capital 2,325.00 $ 869,750.00 Less i Sscpsnses in connection with issue of above shares 15,208.37 854.541.63 BALANCE OCTOBER 31, 1938 $8,374,605.02 BBBSSCMlIllUR SARHKD aURPLOS Balanoo November 1, 1937, as per accounts Add net profit for the fisoal year ended October 31, 1938 86,319,469.21 205.597.23 86,525,066.46 Less dividends paid* Convertible preferred-$2.25 a share Coaaon^i.&O a share (paid January 3, $ 449,886.82 1938) Bote - In prior years certain items of discount and expense, provision for contingencies and losses on dismantlements have been charged to capital surplus. If such items together with additional depreciation claimed for federal income tax purposes for the years 1932 to 1938 inclusive, had been charged against earned surplus Instead of capital surplus, the respective amounts of such surplus accounts would be $4*648,105.10 and $9,401,782.56.as at October 31, 1938. -32- SCH^DULA X-SUP:L'-wv:'.NTr-RY PROFIT AND LOSS INFORM TI03 TH"I GLU)>)^8 COMPANY ABB CONSOLIDATE SUBSlDlAftl-CS Fiscal year ended October 31* 1936 3.rsxs3a8a*-3==3as-'.ss==axa?ss CHARGE DIRSCTLY TO PROFIT AMD. LOSS CHARS-,D TO 07 IT&1C COSTS OTK'.ii ACCOUNT BxaaxsuaiBsasasacssaisxKaaBKCBsSsaxBsasaisSKasssmsBSSSssssxsssascnaBSBsaiaasaasSBSsaasssssn: Maintenance and repairs Depredation and depletion-Hote A Taxes (other than federal income and excess-profits taxes) Rents Royalties Amortisation of patents* trade-marks and rights to manufacture Management and service contract fees 3 508*666-51 $ 32,477.25 696,147.96 -o- 293.363.92 1,490.06 89,082.08 244 *417.S9-B 149*740.65 8,862.73 Bone 3 3 2sa sasa?a:ssit M:KiiSBsassssaarssss Szat Bote a - Depreciation claimed In the Company's federal Income tax return for 1938 was $118,185.45 more than the amount shown In this schedule, due principally to depreciation claimed on costs written off or credited to revaluation reserve during 1932. Refer ence Is made to Bote B to Schedule HZ* consolidated* Bote B - The amount of $244,417.89 shoen for taxes charged to profit and loss, other than costs is stated after deducting a credit of $7,494*43 from exoess provision for Dominion and State income taxes in prior years* -32- y PROFIT AND LQ66 IK.FORM '-TIPS HD COHSOLIDATttD SUBSIDlAiU-'.a ded October 31* 1938 ^ = r.sass2R3 rJSa-ssBBBBaBSs.,sasBas = aj:ax,ssaasaaaessrsssa isasasasacaaasss CHARON DIRECTLY TO PROFIT AKO LOSS CHARGED TO QTH .R ACCOUNTS COSTS OTHt'.R ACCOUNT AMOUNT TOTAL BasaeaassKsssaazsasssasssssssssassBaHKSssaa 3s8a* = a*BSSBs sassssssixassaasassaasssaBBissss ion-Note A al income and , trade-marks ture contract fees % 508,668-51 $ 698,147.96 32,477.25 -0- $ 541*145.76 698,147.96 293*363*92 1*490*06 89,082.08 244.417.89-B 149,740*65 537*781*81 151,230*71 89*082.08 -8.862*73 _ .. 8,862.73 None Hone a ast asc at te a =-sc a* at a auc asaa * a sc =b s % x 3 a = SsaSES = X8SlItSXSSSNSaaSBSBSS9SKCS3sa Ion olalmed in the Company's federal income i $118,185*45 more than the amount shown In leipally to depredation claimed on costs i to revaluation reserve during 1932* Referto Schedule III* consolidated* it of $244*417*89 shown for taxes charged to than costs* is stated after deducting a ns exoeee provision for Dominion and State rears* -32" SCHSUUL'A X-Slir 'L-::(:'.NT/vRY PRO-FIT AKP L066 INFORM' TI US TH-; GLIDJAvfl COMPANY AH.D COHaCLIDArsD SUBSIDIARIES Fiscal year ended October 31* 1936 ae- c.jserssast=**=: = :33%s assassestss assi.w jsaasssatsesaaBssaiisw s -- ~ ~ . ;r;,-:sB=a = a3;:asa=tBit)*iiiaaas=s.,:ss. ITKiC CHARGED DIRSCTLY TO PROFIT AMO.LOSS COSTS OTH.K CHARGE ACC sxtsaaasMaraasAsastttsatttsssassEEtstaKoaisBtssasatsmssssassastssasstasaassastt 3%' ' AS S33B Maintenance and repairs Depreciation and depletion-Hote A Taxes (other than federal income and exoess-profits taxes; Rents Royalties Amortization of patents* trade-marks and rights to manufacture Management and service contract fees 306*668-51 $ 52,477.25 698,147.96 - a- 293.363.92 1,490.06 89,082.08 244,417.89 B 149,740*65 8,862.73 Hone tstatssBrstssaaSBatcsaxts. Hote A - Depreciation claimed in the Company's federal income tax return for 1938 was $118,185-45 more than the amount shown in this schedule, duo principally to depreelation claimed on Coats written off or credited to revaluation reserve during 1932. Refer ence is made to Hote B to Schedule III, consolidated. Hote B - The amount of $244,417.89 shown for taxes changed to profit and loss, other than costs, is stated after deducting a credit of $7,494.43 from excess provision for Dominion and 'State income taxes in prior years. -32- HY y'RQFIT AND LOSS INFORM TIPS A$D CONSOLIDATED SUDSIDIARI-'.S nded October 31* 1938 .r:i-s*aaaaaSBBRsss5ss;ssKasaaa3Ksaa eeasa*asss= saitsassarsaxaaasasaaiiiSassKaaa snassasscssssssais: CHARON DIRECTLY TO PROFIT AKD LOSS CHARQV.P TO OTH..R ACCOUNTS COSTS OTJP'.R . ACCOUNT AMOUNT TOTAL sssaxsxassMsKsssxflassssasssxasssaBMnaMasaaaasSBsasBasBaaBBsssxxsasssjiSsasaansassBssxsas: 8 tion-Note A ral income and /> e, trade-marks eture contract fees 3 508*668-51 $ 32,477.26 698,147.96 -a- $ 541*145.76 698,147.96 293.363*92 1,490.06 89,082.08 244*417.89-B 149,740.65 537,781.81 151,230.71 89,082.08 8,862.73 8,862.73 Hone Hone 383a33SB;3aaS3MBaS33333ESS s3Eesa<=c*3iascax*at3msiBttsat3CA3iBX*aB9i tlon clalMd In the Company's federal income a $118,185.45 more than the amount shorn in actpally to depreelation claimed on costs A to revaluation reserve during 1932* Refer- to Schedule III, consolidated* nt of $244,417.89 shown for taxes charged to than costs* is stated after deducting a os excess provision for Dominion and State jraAjfO* 34 \ -/3- SCHXPULV. Jil-IBCOM' FROM DIVIDENDS TH- GJ.IDD COMPANY AND CONSOLIDATED SUBSIDlAKf/.S Fiscal year ended October 31. 1938 xsxsrsiessKessasf=c==^33e*B=3x3Bassa5aaxzE=x===^3=a3exasssssssasasassssRszasssstssassaasssa AMOUNT OF PI NAKn. OF- ISSUEH TITLfc OF ISSUK. CASH OTH&B .^BBSSsaSBaXSSXasaxnxa >BaasaiBSBXXB!tXZBXSZBxaXgBTOa8IIBBBBasaBl>SaasaiB3VVSBWlBSBBB3SSBSSBBBBI SUBSIDIARIES NOT COKOOLIDATSD California mining companies Common stock $ -o- a f f il ia t e d c o mp a n ie s American Zirconium Corporation American Zirconium Corporation Other security investments Preferred stock Common stock 42,000*00 27,200*00 23>014.50 $ 92,214.50 $ aguasiaBaasauixa* iacoMraoa Dtvio-.KDs an d c o n s o l id at ed s u bs id iar ies sndad October 31* 1938 :==s2:s3se33Ssss:asas3aaie=ssaBXSsx8Ss: i ;R taxsssasca: TITLK OF ISSUK. AMOUNT OF DIVIDENDS CASH OTHSR TOTAL tRBnaaass asansaamii AMOUNT 07 SJiOT IS HST PROFIT AND LOSS* FOR TBS FISCAL TSAR i amsaauawaasaBi )L1PATP japanies Common stock -o- $ 48,108.56* Corporation Corporation lent* Preferred stock Common stock 42,000.00 27,200.00 23.014.50 $ 92,214.50 $ 42,000*00) 27,200.00) 82,430.93 23.014.50 Bet applicable * 0" 4 92,214.50 9. Oiwe the infoyisaiion required below la tabular torsi eonstnu ing the aggregate roamnoratioa paid by the registrant and its subsidiaries, directly or indirectly, to the following persons la all of their capacities. (a) Hie nans and aggregate reamaeratioa of each person aaeng the officers, directors and tnployees of the registrant receiving on# of the three highest aggregate mounts of rcoansratlea. Adrian D. Joyce E. H. Horsbuxgb if . J. O'Briee 2. V. Lsroohagen $96,050.00 30.050.00 30.040.00 30,040.00 (b) Ths aggregate rmmeratlon of all directors of the registrant: Indicate the nuabsr of such diroetore without nanlag thee. 8 Erectors Salaries directors' foes $940,583. 96 330.00 340,863.86 (c) The aggregate rsnoaeration ef all officera, other (teas those who are directors, of the registrant; indicate the sate of sash officers without naelag then. 1 Officer $ 6,800.00 (A) The aggregate reaunomtioa of all eaployeee ef the Mgletmst who, respectively* received reamsration fns the registrant la excess ef $30,000.00 within the fiscal year; Indicate the amber of each snplsyoee without asalfcg then. Vs, or amber ef pereons not maned . Capacities In which raaaasratloa was received Aggregate renaaratlen within sag!*, traat'c fleoel year 1 Salemm $ 30.166.90 10. State the aan ef, and mount received by, adh pereca dh received as bonuses or Glares in prefits $30,000. or eore, fiea the registsscO or its whelly^owaed sahsldiarise, daring the fiscal year. Hone. 11. Give the information required below in tabular fans pananvaiag the aggregate reasneratlen paid by the registrant, dlreetly er indtreetly, to any person, other than a director, officer, or employee. vhosoaggregato reomneration froa the registrant, la all capacities, owe coded $30,006. daring the fiscal year. . Vase Capacities in which remuneration was received fron the registrant : m - Aggregated sauaeia Uoa daring rcglstrmt's fieeal year t Squire, Senders Deapsey Union Comnsrcs Building Cleveland, Ohio General Counsel $80,968,88 N. Hoaneberg, Zae. 10 South U Salle St. Chicago, Illinois Engineering Toes 80,904.68 s a u s o? 5-an;iTi'';s b t r s c i s t r a w 13. Furnish the following information as to all securities of the registrant sold by the registrant within the fiecal ye?.r: 1. COMWC* STOCK WITHOUT PAR VAiUX (a) title of issue; and, if stock, the par value, or, if no par, stated value, if any. Coram Stock Without Par Value; stated vnlue $6.00. (b) Amount sold. 34,790 shares. (a) Bate of sale. As to 93 shares of the above stook, Common Shareholders of record October 4, 1937 ears offered the right to subscribe to Common Stook between October 4, 1937 and the oloee of business December 13, 1937 at $30.00 per share on the basis Of one share for each 12*} shares owned. 84,697 shares of the above stook were delivered to Southern Pise Chemical Company as of harsh 1, 193S, is exchange for all of the aeeets of Southern Pine Chemical Company, on Ohio corporation of Cleveland, Ohio, pursuant to a eoatraot between the registrant and Southern Pins Chemical Company which was approved by the directors sad stockholders of the registrant and Southern Pine Chemleal Company. (d) Aggregate net oaah proceeds, or the nature and aggregate amount of any consideration other than sash, received by the registrant. The 93 shares of Common Stook wore sold for aash and the Company received therefor $3,790.00. The registrant paid out far registration and other, expenses in oonneotlon with the offering of said Common Stook to lto shareholder* up to October 81, 1937, the sum of $33,806.43, and during the flsoal year ended October 31, 1938, the sum of $1,476.54. The registrant resolved from Southern Pine Chemical Company in exchange for said 34,8*7 shares of Common Stock permanent assets on the basin of an appraisal and the balance of the assets of Southern Pine Chemical Company on the basis of bonk value, bath an of October 81, 1987, and amounting la the aggregate in $1,040,910.00, The total expense Incurred by the registrant up to October SI, 1988, in connection with the acquisition of sail sonata wan $18,733.83. (a) lames of principal underwriters. If nay. Indicating asy rrlters an warn affiliates cf the registrant. In aamtrast was made with unftamitara relative to .the sale of said 98 ohavas sf Oommarn ttoekof the registrant, or *tic* with the oxstcago ef eail 84,897 shares of Itack far said aaeeta of Untlmra Pine OhomUal itatensmt that suah seemrltles ware registered the 988, ar a briaf sUtement af tha facts moaaaaavy to i registration was net ragalrai. -36- The 93 shares of Coaaoa stock without par value wars rejiitered radar the Securities Act of 1933 under registrar Horn Bo. 3-3323, which bectmo effective October 6, 1937. It woe sot aeeees&ry to register the Comm Stock without par value which wee delivered la exchange for the meets of Souther* IPiae Chesieal ConjMuopr because it did ot iwvolve e public offering sad was therefore a* exespt transaction. 3. LOW THH 801*38 PATABLE TO BAALS (a) Title of Issues *&, if steak, the per value, or. If *o per, stated value. If say. Long for* Votes Payable to Bosks and aaturlhf follows! $600,000.00 *280,000.00 $280,000.00 $280,000.00 July 1. 1938 January 1, 1940;. July l, 1940 January X, 1941 (b) iacnat sold. $1,250,000.00 () Bats of sals. July 11, 1938. (d) Aggregate set task preceeda, or It* saturs sad sseust af aay omslderatioa sther tha* eaah, raaelved by Us Tg1>tr-->, $1,380,000.00. (a) lama ef principal underwriters, If aay, lndieaU^tJ such underwriters as were affiliates sf tha registrant. learn vac net underwritten. (f) Astateaent that sue* saaurlUsa were registeretvaltiiigr Securities Aet af 1938, or * brief stateaaat of tha faata *tati'>ifjy||kl asmsestablish that cut registration was aet required. ` ...................... Leag Tam Bates Payable ta Banks were sat regiatamhf tha hotriliM dab af 1938 bessw th^ were ihlt $$ aarparstlma far investment sad did aet involve a offeriag. 9, isuiimi (a) Titla af isamat aad. If link, tha par value, per, stated amine, If my. larlal lataa frlnelpal anevate aatarlw m ; 11,000.09 July 1, Utt $800,000.08 Jaly 1, .1848 iws $ 800,000.00 $8,080,000.1 $8,780,000.00 (d) "ggrogote net cash proceed*, or the nature end aggregate of any conoid--ration other than cash, reoeived by the registrant. J3.750.000.00. Inset of principal underwriters. If any. indicating coy _pnderwriters at were affiliates of the registrant. jfe.: Issue was not underwritten. iftc- (f) A statement that such securities were registered uzsdsr the (lies Act of 1933, or a brief statement of the faets necessary to Lish that suoh registration was not required. Serial Votes were not registered under the Securtties Act of 1933 because they were sold to a private corporation for investment and did not involve a public offering. 13. as to any securities for whloh appl lent ion for registration r the Securities Exchange *et cf 1934 had beta filed and which regained esued at the olose of the fiscal year, furnish the following information: (a) Title of issue* CcnsBon Stock without pnr value. (b) The total anouat unissued at the slose of the fiscal yo*r. 179,94* shares. (o) a brief description of the proposed transactions for suance of such securities. 179.946 shares of Goanon stock reserved for the aeovorsloa of 199,940 shares of the Convertible Preferred Stock, cucalatlve, $50.00 pnr value, of the registrant. 77,659 shares of Conaoa Stock unsubscribed as of October 31, 193?. Subscription rights extended to Deconber 15,1937. Of the total 78,400 sh&ree registered prior to October 31, 1937, 741 shires were subscribed for before October 31, 1937, DESCRIPTION Of STCtSUTISS 14, (a) If any notarial codifications, not previously reported, ve been wide in any security a description of which has previously boon rted, or in the iadeature, charter or other constituent lnstruiasnt fining rights of the holders of such security, give the title of the sue And state briefly the general effect of stub modifications. Xoae, (b) Tor each class of capital stoek of the registrant n ascription of whloh has not previously bsen reported, sad which, cither tc dividends or on liquidation, ranks equal or prior to any stock egistered on a national securities exchange, outline briefly: (1) ivluead rights; (3) 1 ini tations In any indentures or other agreements the payment of dividends; (3) voting rights; (4) liquidation rights; . >) preemptive rights; (6) subscription rights; (7) conversion rights; (B) redemption provisions applicable thereto; and (9) liability to further oalis. The registrant does sot have any class of eapltal stock which has not been previously described and which wither as to diridenda or on liquidation rank* equal or prior to any atock registered on & national securities exchange. 15, State briefly the general -effect off (a) Aoy waterisl edifictions# sad within the fiscal year and not previously reported, in contracts of guarantee toy the regintrwaj?^of the securities of other issuers, which h*re keen previously reVporte.>d%,Z; Kona, (h) key such contracts nade within the fiscal yeer and previously reported. Hone, -` VsK^-- `2*f v fhie annual rwpwrt oonpriaeas ,~y_ (1) Pagea suabered 1 to 38 consecutively, and insert pagan nanbered none . including the following financial statements and schedules! a?i lone. (2) The following exhibits! bone. This annual report Is filed subject to the instruction* cental In the Instruction Book for fern 10-1 for Corporations, and snsnberedi bona. 8I0IATOBX Zn pursuance of the requirements of the Securities Exchange 1634, the registrant, The (Hidden Conpany, a corporation organised existing under the lawn of the State of Ohio, has duly caused thin annual report to be signed on its behalf by the undersign'd, the duly authorised, and Its seal to be hereunto affixed and attested in the City of Cleveland and State of Ohio, on the 30th day of J 1939, mmt hs 01IT5D2* coital j X. 8. Horsburgh,: Senior Vice Preside ( SEAL) Attest! Clinton V, Kolb, Secretary. * FEB 1# _ COCKET :, ilr 'w h T* i * ;