691182501.

xlsx

AMERICAN CHEMICAL CORPORATION

Harvard Business School
Case Software 2-293-742

Copyright (c) 1987 by the President and Fellows of Harvard College.

Developed in conjunction with MicroMentor, Inc., Cambridge, MA.

This case was prepared as a basis for class discussion rather than
to illustrate either effective or ineffective handling of an
administrative situation.

This worksheet contains the data from the following exhibits:

Exhibit 1: Financial Statements of Large Chemical Companies
Exhibit 2: Financial Statements of Large Paper Companies
Exhibit 5: Financial Statements of Sodium Chlorate Producers
Exhibit 6: Financial Statements of the Collinsville Plant
Exhibit 7: Financial Statement of Dixon Corporation
Exhibit 8: Pro-Forma Financial Statements of Collinsville Plant
REVISION HISTORY
Date Name Explanation of Change
11/12/84 K. Gustafson Data Resources, Inc, Lexington, MA
Base implementation
05/01/85 D. Stenberg Compressed per bug report
03/16/87 M. Colantoni Converted to version 2.01
04/04/88 D. Lustiber Converted for use with ELAI;
Changed all formulas to constants
01/31/90 P. Brantley MicroMentor, Inc., Cambridge, MA.
Converted to MicroMentor format
2/1/1992 J. Royo Harvard Business School, Boston, MA
Converted to Excel
6/4/1992 J. Royo Stripped HBSUTIL
7/2/1997 M. Sarmiento Upgraded to Excel 7.0

Page 1
 Harvard Business School
EXHIBIT 1 - Financial Statements
AMERICAN CHEMICAL 1974 1975 1976 1977 1978
Sales ($ millions) $4,828 $4,671 $4,805 $5,235 $5,490
Net income ($ millions) 323 198 212 251 349
Earnings per share ($) $7.60 $4.66 $4.98 $5.91 $8.20
Dividends per share ($) 1.00 1.25 1.50 1.65 1.80
Dividend yield (%) 5.3% 5.7% 4.3% 5.0% 4.1%
Common stock - high ($) $23 $30 $36 $46 $48
Common stock - low ($) 10 17 21 30 32
Common stock - close ($) 19 22 35 33 44
Closing P/E 2.5 4.7 7.0 5.6 5.4
Total capitalization 2,014 2,109 2,198 2,465 2,527
% debt 44% 37% 37% 29% 39%
% preferred stock 0% 0% 0% 0% 20%
% common stock 56% 63% 63% 71% 41%
Beta 1.20 1.20 1.20 1.20 1.20
Interest coverage (a) 6.3 3.9 4.1 4.3 6.7
Bond rating (b) BBB/A BBB/A BBB/A BBB/A BBB/A

ALLIED CHEMICAL 1974 1975 1976 1977 1978

Sales ($ millions) $2,216 $2,333 $2,630 $2,923 $3,268
Net income ($ millions) 151 116 117 135 120
Earnings per share ($) $5.43 $4.17 $4.52 $4.93 $4.25
Dividends per share ($) 1.53 1.80 1.80 1.85 2.00
Dividend yield (%) 6.3% 5.4% 4.5% 4.5% 7.1%
Common stock - high ($) $54 $42 $45 $51 $45
Common stock - low ($) 23 27 33 39 28
Common stock - close ($) 28 33 40 44 28
Closing P/E 5.2 7.9 8.8 8.9 6.6
Total capitalization 1,550 1,839 1,959 2,279 2,467
% debt 28% 34% 33% 36% 38%
% preferred stock 0% 0% 0% 0% 0%
% common stock 72% 66% 67% 64% 62%
Beta 1.43 1.43 1.43 1.43 1.43
Interest coverage (a) 9.2 5.7 5.2 5.4 4.9
Bond rating (b) A/A A/A A/A A/A A/A

DOW CHEMICAL 1974 1975 1976 1977 1978

Sales ($ millions) $4,938 $4,888 $5,652 $6,234 $6,888
Net income ($ millions) 558 616 613 566 575
Earnings per share ($) $3.18 $3.33 $3.30 $3.01 $3.16
Dividends per share ($) 0.60 0.75 0.95 1.15 1.30
Dividend yield (%) 2.5% 1.7% 2.3% 4.5% 5.6%
Common stock - high ($) $35 $48 $57 $44 $31
Common stock - low ($) 25 27 38 25 22
Common stock - close ($) 28 46 43 27 25
Closing P/E 8.8 13.8 13.0 9.0 7.9
Total capitalization 3,498 4,316 5,118 5,889 6,793
% debt 37% 36% 37% 40% 43%
% preferred stock 0% 0% 0% 0% 0%
% common stock 63% 64% 63% 60% 57%
Beta 1.25 1.25 1.25 1.25 1.25
Interest coverage (a) 10.6 8.2 6.5 4.9 4.4
Bond rating (b) A/Aa A/Aa A/Aa A/Aa A/Aa
 Harvard Business School

DU PONT 1974 1975 1976 1977 1978

Sales ($ millions) $6,910 $7,221 $8,361 $9,435 $10,584
Net income ($ millions) 404 272 459 545 787
Earnings per share ($) $2.74 $1.81 $3.10 $3.69 $5.39
Dividends per share ($) 1.83 1.42 1.75 1.92 2.42
Dividend yield (%) 6.0% 3.2% 3.7% 4.8% 5.8%
Common stock - high ($) $60 $45 $54 $45 $46
Common stock - low ($) 28 29 39 35 33
Common stock - close ($) 31 42 45 40 42
Closing P/E 11.3 23.2 14.5 10.8 7.8
Total capitalization 4,874 5,085 5,772 6,127 6,394
% debt 16% 17% 22% 21% 17%
% preferred stock 5% 5% 4% 4% 4%
% common stock 79% 78% 74% 75% 79%
Beta 1.22 1.22 1.22 1.22 1.22
Interest coverage (a) 9.5 4.1 6.0 6.1 9.5
Bond rating (b) AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa

MONSANTO 1974 1975 1976 1977 1978

Sales ($ millions) $3,498 $3,625 $4,270 $4,595 $5,019
Net income ($ millions) 323 306 366 276 303
Earnings per share ($) $9.35 $8.63 $10.05 $7.46 $8.29
Dividends per share ($) 2.30 2.55 2.75 3.03 3.18
Dividend yield (%) 5.9% 3.4% 3.2% 5.4% 6.8%
Common stock - high ($) $70 $81 $100 $89 $60
Common stock - low ($) 39 41 76 52 44
Common stock - close ($) 41 76 88 58 47
Closing P/E 4.4 8.8 8.8 7.8 5.7
Total capitalization 2,396 2,942 3,349 3,668 4,115
% debt 25% 29% 27% 28% 30%
% preferred stock 0% 0% 0% 0% 0%
% common stock 75% 71% 73% 72% 70%
Beta 1.43 1.43 1.43 1.43 1.43
Interest coverage (a) 11.4 9.1 8.4 7.0 6.5
Bond rating (b) AA/Aa AA/Aa AA/Aa AA/Aa AA/Aa

UNION CARBIDE 1974 1975 1976 1977 1978

Sales ($ millions) $5,320 $5,665 $6,346 $7,036 $7,870
Net income ($ millions) 530 382 441 385 394
Earnings per share ($) $8.69 $6.23 $7.15 $6.05 $6.09
Dividends per share ($) 2.18 2.40 2.50 2.80 2.80
Dividend yield (%) 5.3% 3.9% 4.0% 6.8% 8.2%
Common stock - high ($) $46 $67 $77 $62 $43
Common stock - low ($) 32 40 56 40 34
Common stock - close ($) 41 61 62 41 34
Closing P/E 4.7 9.8 8.7 6.8 5.6
Total capitalization 3,752 4,485 5,212 5,750 5,997
% debt 26% 30% 32% 30% 28%
% preferred stock 0% 0% 0% 0% 0%
% common stock 74% 70% 68% 70% 72%
Beta 1.05 1.05 1.05 1.05 1.05
Interest coverage (a) 14.0 8.4 7.0 5.0 4.9
Bond rating (b) A/Aa A/Aa A/Aa A/Aa A/Aa
Footnotes
(a) Equal to earnings before interest and taxes divided by interest
expenses.
(b) Standard & Poor's rating/Moody's rating.
EXHIBIT 2 - Financial Statements 691182501.xlsx
UNIVERSAL PAPER 1974 1975 1976 1977 1978
Sales ($ millions) $1,867 $1,902 $2,136 $2,248 $2,525
Net income ($ millions) 149 109 154 168 191
Earnings per share ($) $3.60 $2.63 $3.72 $4.06 $4.61
Dividends per share ($) 0.75 0.75 0.75 0.85 1.00
Dividend yield (%) 6.3% 3.9% 2.5% 2.8% 3.6%
Common stock - high ($) $17 $21 $34 $36 $38
Common stock - low ($) 10 12 18 24 26
Common stock - close ($) 12 19 30 30 28
Closing P/E 3.4 7.1 8.1 7.4 6.0
Total capitalization 1,349 1,620 1,787 1,938 2,018
% debt 30% 29% 32% 32% 33%
% preferred stock 0% 0% 0% 0% 0%
% common stock 70% 71% 68% 68% 67%
Beta 1.52 1.52 1.52 1.52 1.52
Interest coverage (a) 6.8 5.0 6.8 7.4 8.2
Bond rating (b) A/Aa A/Aa A/Aa A/Aa A/Aa

CROWN ZELLERBACH 1974 1975 1976 1977 1978

Sales ($ millions) $1,172 $1,767 $2,136 $2,318 $2,467
Net income ($ millions) 125 75 98 109 112
Earnings per share ($) $5.06 $3.01 $3.88 $4.34 $4.39
Dividends per share ($) 1.75 1.80 1.80 1.83 1.90
Dividend yield (%) 7.5% 5.1% 4.0% 5.6% 6.2%
Common stock - high ($) $40 $41 $49 $45 $38
Common stock - low ($) 20 24 36 32 29
Common stock - close ($) 24 36 43 34 31
Closing P/E 4.7 12.0 11.6 7.8 7.1
Total capitalization 1,220 1,290 1,345 1,446 1,647
% debt 33% 33% 31% 30% 34%
% preferred stock 1% 1% 1% 1% 1%
% common stock 66% 66% 68% 69% 65%
Beta 1.03 1.03 1.03 1.03 1.03
Interest coverage (a) 8.1 4.5 5.3 5.7 4.7
Bond rating (b) A/A A/A A/A A/A A/A

INTERNATIONAL PAPER 1974 1975 1976 1977 1978

Sales ($ millions) $3,042 $3,081 $3,541 $3,669 $4,150
Net income ($ millions) 263 218 254 234 234
Earnings per share ($) $5.95 $4.93 $5.60 $4.98 $4.94
Dividends per share ($) 1.75 2.00 2.00 2.00 2.00
Dividend yield (%) 5.6% 3.5% 2.9% 4.6% 5.5%
Common stock - high ($) $56 $62 $80 $70 $49
Common stock - low ($) 32 35 58 39 35
Common stock - close ($) 36 58 69 44 37
Closing P/E 6.1 11.8 12.3 8.8 7.5
Total capitalization 2,207 2,801 3,093 3,303 3,407
% debt 33% 41% 34% 32% 28%
% preferred stock 0% 0% 0% 0% 0%
% common stock 67% 59% 66% 68% 72%
Beta 1.43 1.43 1.43 1.43 1.43
Interest coverage (a) 11.1 5.4 5.1 4.7 5.3
Bond rating (b) AA/Aa AA/Aa AA/Aa AA/Aa AA/Aa
MEAD CORPORATION 1974 1975 1976 1977 1978
Sales ($ millions) $1,526 $1,245 $1,599 $1,822 $2,322
Net income ($ millions) 82 53 89 98 121
Earnings per share ($) $3.27 $2.05 $3.61 $4.10 $5.12
Dividends per share ($) 0.60 0.80 0.89 0.98 1.21
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Dividend yield (%) 9.2% 691182501.xlsx
6.6% 4.4% 4.7% 6.8%
Common stock - high ($) $13 $13 $23 $24 $34
Common stock - low ($) 8 9 12 18 17
Common stock - close ($) 9 12 21 22 23
Closing P/E 2.8 5.9 5.8 5.4 4.5
Total capitalization 826 880 965 1,071 1,171
% debt 34% 35% 33% 38% 36%
% preferred stock 6% 6% 5% 4% 1%
% common stock 60% 59% 62% 58% 63%
Beta 2.16 2.16 2.16 2.16 2.16
Interest coverage (a) 4.6 2.9 4.5 4.7 5.3
Bond rating (b) A/A A/A A/A A/A A/A

KIMBERLY-CLARK 1974 1975 1976 1977 1978

Sales ($ millions) $1,439 $1,484 $1,585 $1,726 $1,911
Net income ($ millions) 95 103 121 131 149
Earnings per share ($) $4.10 $4.41 $5.21 $5.60 $6.36
Dividends per share ($) 1.48 1.60 1.80 2.20 2.60
Dividend yield (%) 6.5% 4.4% 4.1% 5.1% 6.4%
Common stock - high ($) $35 $37 $47 $48 $50
Common stock - low ($) 19 24 36 37 39
Common stock - close ($) 25 37 44 43 41
Closing P/E 6.1 8.4 8.4 7.7 6.4
Total capitalization 1,030 1,086 1,196 1,347 1,435
% debt 24% 21% 20% 20% 19%
% preferred stock 0% 0% 0% 0% 0%
% common stock 76% 79% 80% 80% 81%
Beta 0.99 0.99 0.99 0.99 0.99
Interest coverage (a) 9.1 8.3 10.0 10.1 10.5
Bond rating (b) AA/Aa AA/Aa AA/Aa AA/Aa AA/Aa

ST. REGIS PAPER 1974 1975 1976 1977 1978

Sales ($ millions) $1,471 $1,395 $1,642 $1,996 $2,300
Net income ($ millions) 105 96 91 107 127
Earnings per share ($) $4.76 $4.27 $3.82 $3.36 $3.94
Dividends per share ($) 1.25 1.43 1.55 1.66 1.74
Dividend yield (%) 7.3% 4.5% 4.2% 5.6% 6.4%
Common stock - high ($) $37 $35 $31 $39 $35
Common stock - low ($) 18 20 34 29 26
Common stock - close ($) 19 34 39 31 28
Closing P/E 4.0 8.0 10.2 9.2 7.1
Total capitalization 1,127 1,189 1,296 1,694 1,791
% debt 33% 29% 26% 31% 30%
% preferred stock 0% 0% 0% 0% 0%
% common stock 67% 71% 74% 69% 70%
Beta 1.14 1.14 1.14 1.14 1.14
Interest coverage (a) 7.6 7.2 6.1 5.6 5.9
Bond rating (b) NR/NR NR/NR NR/NR NR/NR NR/NR

(a) Equal to earnings before interest and taxes divided by interest

expenses.
(b) Standard & Poor's rating/Moody's rating.

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EXHIBIT 5 - Financial Statements 691182501.xlsx
PENNWALT 1974 1975 1976 1977 1978
Sales ($ millions) $641 $714 $777 $835 $921
Net income ($ millions) 27 33 35 42 45
Earnings per share ($) $2.81 $3.25 $3.56 $4.23 $4.54
Dividends per share ($) 1.24 1.36 1.54 2.25 2.05
Dividend yield (%) 7.4% 4.6% 4.9% 5.2% 6.7%
Common stock - high ($) $26 $30 $38 $39 $43
Common stock - low ($) 15 17 27 32 32
Common stock - close ($) 17 28 33 39 33
Closing P/E 6.0 8.6 9.3 9.2 7.3
Total capitalization 371 441 469 500 524
% debt 28% 34% 33% 34% 31%
% preferred stock 0% 0% 0% 0% 0%
% common stock 72% 66% 67% 66% 69%
Beta 1.33 1.33 1.33 1.33 1.33
Interest coverage (a) 2.9 3.3 3.8 4.1 4.2
Bond rating (b) A/A A/A A/A A/A A/A

KERR-MCGEE 1974 1975 1976 1977 1978

Sales ($ millions) $1,550 $1,799 $1,955 $2,165 $2,072
Net income ($ millions) 116 131 134 119 118
Earnings per share ($) $4.64 $5.15 $5.19 $4.61 $4.57
Dividends per share ($) 0.85 1.00 1.19 1.25 1.25
Dividend yield (%) 1.4% 1.4% 1.8% 2.7% 2.6%
Common stock - high ($) $93 $95 $83 $75 $53
Common stock - low ($) 47 60 61 45 40
Common stock - close ($) 72 70 68 47 48
Closing P/E 15.5 13.6 13.1 10.2 10.5
Total capitalization 851 1,091 1,325 1,433 1,533
% debt 19% 20% 24% 21% 17%
% preferred stock 0% 0% 0% 0% 0%
% common stock 81% 80% 76% 79% 83%
Beta 1.06 1.06 1.06 1.06 1.06
Interest coverage (a) 19.4 17.1 10.8 8.4 6.4
Bond rating (b) AA/Aa AA/Aa AA/Aa AA/Aa AA/Aa

INT'L MINERALS/CHEMICALS 1974 1975 1976 1977 1978

Sales ($ millions) $859 $1,303 $1,260 $1,280 $1,364
Net income ($ millions) 70 166 135 108 120
Earnings per share ($) $3.59 $9.91 $7.73 $6.09 $6.61
Dividends per share ($) 0.57 1.38 2.10 2.45 2.60
Dividend yield (%) 1.9% 5.3% 5.9% 6.4% 7.4%
Common stock - high ($) $41 $49 $42 $44 $44
Common stock - low ($) 21 31 33 35 34
Common stock - close ($) 39 38 41 41 35
Closing P/E 10.9 3.8 5.3 6.7 5.3
Total capitalization 577 781 990 1,083 1,161
% debt 42% 38% 37% 36% 32%
% preferred stock 10% 4% 2% 1% 1%
% common stock 48% 58% 61% 63% 67%
Beta 0.81 0.81 0.81 0.81 0.81
Interest coverage (a) 5.5 11.6 8.4 5.5 6.3
Bond rating (b) NR/A NR/A NR/A NR/A NR/A

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GEORGIA-PACIFIC 1974 691182501.xlsx
1975 1976 1977 1978
Sales ($ millions) $2,432 $2,359 $3,038 $3,675 $4,403
Net income ($ millions) 164 148 215 262 302
Earnings per share ($) $1.74 $1.54 $2.12 $2.54 $2.93
Dividends per share ($) 0.47 0.49 0.70 0.83 1.03
Dividend yield (%) 3.1% 1.9% 2.1% 3.5% 4.5%
Common stock - high ($) $27 $30 $37 $37 $33
Common stock - low ($) 13 16 26 25 24
Common stock - close ($) 15 26 37 28 24
Closing P/E 8.6 16.9 17.4 11.0 8.2
Total capitalization 1,935 2,150 2,045 2,541 2,878
% debt 45% 42% 22% 29% 29%
% preferred stock 0% 0% 0% 0% 0%
% common stock 55% 58% 78% 71% 71%
Beta 1.50 1.50 1.50 1.50 1.50
Interest coverage (a) 4.3 4.4 8.1 9.9 9.3
Bond rating (b) AA/Aa AA/Aa AA/Aa AA/Aa AA/Aa

BRUNSWICK CHEMICAL 1974 1975 1976 1977 1978

Sales ($ millions) $1.90 $2.10 $3.00 $4.00 $4.30
Net income ($ millions) 0.20 0.15 0.37 0.71 0.79
Earnings per share ($) 0.40 0.30 0.74 1.42 1.58
Dividends per share ($) 0.10 0.10 0.15 0.35 0.40
Dividend yield (c) #N/A #N/A #N/A 2.9% 3.5%
Common stock - high (c) #N/A #N/A #N/A $13 $14
Common stock - low (c) #N/A #N/A #N/A 8 9
Common stock - close (c) #N/A #N/A #N/A 12 12
Closing P/E #N/A #N/A #N/A 8.5 7.3
Total capitalization 2 2 2 3 3
% debt 33% 30% 25% 19% 15%
% preferred stock 0% 0% 0% 0% 0%
% common stock 67% 70% 75% 81% 85%
Beta (c) #N/A #N/A #N/A 1.10 1.10
Interest coverage (a) 6.7 5.0 12.3 47.0 53.0
Bond rating (b) #N/A #N/A #N/A #N/A #N/A

SOUTHERN CHEMICALS 1974 1975 1976 1977 1978

Sales ($ millions) $1.70 $2.00 $2.70 $3.60 $3.90
Net income ($ millions) 0.10 (0.05) 0.28 0.74 0.73
Earnings per share ($) 0.61 (0.24) 1.38 3.69 3.66
Dividends per share ($) 0.00 0.00 0.00 0.30 0.30
Dividend yield (c) #N/A #N/A #N/A 1.2% 1.3%
Common stock - high (c) #N/A #N/A #N/A $28 $31
Common stock - low (c) #N/A #N/A #N/A 11 20
Common stock - close (c) #N/A #N/A #N/A 25 23
Closing P/E #N/A #N/A #N/A 6.7 6.4
Total capitalization 2 2 2 2 3
% debt 50% 50% 41% 28% 21%
% preferred stock 0% 0% 0% 0% 0%
% common stock 50% 50% 59% 72% 79%
Beta (c) #N/A #N/A #N/A 1.20 1.20
Interest coverage (a) 3.5 0.4 9.0 22.0 24.0
Bond rating (b) #N/A #N/A #N/A #N/A #N/A

(a) Equal to earnings before interest and taxes divided by interest expense.
(b) Standard & Poor's rating/Moody's rating.
(c) Stock not publicly traded.

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 691182501.xlsx
Rentabilidad promedio 7.17% 5.93% 8.64% 10.73% 10.55%

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EXHIBIT 6 691182501.xlsx
Financial Statements of the Collinsville Plant (000's)

------ For years ended December 31 ------ (a)

1974 1975 1976 1977 1978 1979
REVENUES
Sales - tons 36,899 30,819 37,464 40,076 39,790 38,507
Avg. price/ton 188 243 295 367 392 413
Sales - $000 6,937 7,489 11,052 14,708 15,598 15,903

MANUFACTURING COSTS:

VARIABLE COSTS
Power 2,935 3,395 4,631 5,530 6,173 6,759
Graphite 354 369 545 653 689 714
Salt & other 693 800 1,047 1,274 1,307 1,385
TOTAL $3,982 $4,564 $6,223 $7,457 $8,169 $8,858

FIXED COSTS
Labor 590 608 646 739 924 1,072
Maintenance 143 201 220 272 235 237
Other 474 659 902 1,063 509 1,107
TOTAL $1,207 $1,468 $1,768 $2,074 $1,668 $2,416
MFG COSTS $5,189 $6,032 $7,991 $9,531 $9,837 $11,274

OTHER CHARGES
Depreciation 433 394 402 391 384 399
Selling 114 92 126 155 181 204
R&D 105 154 207 274 351 429
TOTAL 652 640 735 820 916 1,032
OPER. PROFIT $1,096 $817 $2,326 $4,357 $4,845 $3,597
(a) Expected

EXHIBIT 6 Balance Sheet of Collinsville Plant (000's)

------ For years ended December 31 ------ (a)

1974 1975 1976 1977 1978 1979
ASSETS
Accts. recvbl. 701 779 1,128 1,456 1,575 1,622
Inventories 254 544 681 647 639 651
Net PP&E 4,066 3,978 4,003 3,853 3,964 4,014
TOTAL ASSETS $5,021 $5,301 $5,812 $5,956 $6,178 $6,287

LIABILITIES
Accts. payable 402 472 619 780 795 873
NET ASSETS $4,619 $4,829 $5,193 $5,176 $5,383 $5,414
(a) Expected

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 691182501.xlsx
EXHIBIT 6 Percent of Sales Ratios
(cont.) (a)
% OF SALES 1974 1975 1976 1977 1978 1979
Power costs 42.3% 45.3% 41.9% 37.6% 39.6% 42.5%
Variable costs 57.4% 60.9% 56.3% 50.7% 52.4% 55.7%
Fixed costs 17.4% 19.6% 16.0% 14.1% 10.7% 15.2%
Mfg. costs 74.8% 80.5% 72.3% 64.8% 63.1% 70.9%
Oper. profit 15.8% 10.9% 21.0% 29.6% 31.1% 22.6%

Accts rec. 10.1% 10.4% 10.2% 9.9% 10.1% 10.2%

Inventories 3.7% 7.3% 6.2% 4.4% 4.1% 4.1%
Accts. payable 5.8% 6.3% 5.6% 5.3% 5.1% 5.5%
Net assets 66.6% 64.5% 47.0% 35.2% 34.5% 34.0%

Operating profit/
net assets 23.7% 16.9% 44.8% 84.2% 90.0% 66.4%

(a) Expected

Costo de la Deuda, de Patrimonio, de capital

1974 1975 1976 1977 1978 1979
% de Deuda 8.01% 8.90% 10.65% 13.10% 12.87% 13.89%
% de Patrimonio 91.99% 91.10% 89.35% 86.90% 87.13% 86.11%
Beta 1.20 1.20 1.20 1.20 1.20 1.20
Impuestos 48% 48% 48% 48% 48% 48%
Rentabilidad del mercad 7.17% 5.93% 8.64% 10.73% 10.55% 10.55%
Tasa libre de riesgo 4.50% 4.50% 4.50% 4.50% 4.50% 4.50%
Kd 0% 0% 0% 0% 0% 0%
Ke 7.70% 6.21% 9.47% 11.98% 11.77% 11.77%
Kc 7.08% 5.66% 8.46% 10.41% 10.25% 10.13%

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 691182501.xlsx

EXHIBIT 7 Financial Statement of Dixon Corporation (000's)

-- For years ended December 31 -- (a)

1975 1976 1977 1978 1979
Sales $19,128 $23,830 $28,348 $34,770 $42,259
Cost of goods sold 14,085 16,889 19,950 24,467 29,185
Selling and admin. 1,952 2,308 2,824 3,291 4,436
Research 325 388 593 682 716
Interest 400 320 240 160 80
Taxes 1,125 1,878 2,285 2,932 3,818
PROFIT AFTER TAXES $1,241 $2,047 $2,456 $3,238 $4,024

Earnings per share $1.13 $1.86 $2.23 $2.94 $3.66

Dividends per share $0.20 $0.30 $0.40 $0.40 $0.50

Cash & marketable sec. $385 $357 $556 $1,273 $2,996

Other current assets 4,208 5,016 5,939 7,267 8,917
PP&E 7,436 7,895 8,354 8,842 8,918
TOTAL ASSETS $12,029 $13,268 $14,849 $17,382 $20,831

Current liabilities $2,314 $2,836 $3,402 $4,138 $5,113

Debt (incl. curr. matu.) 5,000 4,000 3,000 2,000 1,000
Stockholders equity 4,715 6,432 8,447 11,244 14,718
TOTAL LIABILITIES $12,029 $13,268 $14,849 $17,382 $20,831

Stock price - low $7 $8 $19 $25 $35

- high $14 $22 $30 $40 $45
- close (b) $9 $20 $27 $38 $40

Beta 1.06 1.06 1.06 1.06 1.06

Bond rating #N/A #N/A #N/A #N/A #N/A

(a) Expected.
(b) 1979 value as of 10/30/79

Costo de la Deuda, de Patrimonio, de capital

1975 1976 1977 1978 1979
% de Deuda 60.80% 51.52% 43.11% 35.31% 29.35%
% de Patrimonio 39% 48% 57% 65% 71%
Beta 1.06 1.06 1.06 1.06 1.06
Impuestos 48% 48% 48% 48% 48%
Rentabilidad de mercado 7.17% 5.93% 8.64% 10.73% 10.55%
Tasa libre de riesgo 4.50% 4.50% 4.50% 4.50% 4.50%
Kd 0.08 0.08 0.08 0.08 0.08
Ke 0.07 0.06 0.09 0.11 0.11
Kc 0.05 0.05 0.07 0.09 0.09 0.00

Page 11
 691182501.xlsx
EXHIBIT 8 Pro Forma Financial Statements of the Collinsville
Plant (a) (000's)
----- For years ended December 31 -----
1980 1981 1982 1983 1984
REVENUES
Sales - tons $32,000 $35,000 $38,000 $38,000 $38,000
Avg. price/ton 415 480 520 562 606
Sales - $000 13,280 16,800 19,760 21,356 23,028

MANUFACTURING COSTS:

VARIABLE COSTS
Power 6,304 7,735 9,386 10,526 11,780
Graphite 645 791 875 940 992
Salt & other 1,285 1,621 1,753 1,836 1,956
TOTAL $8,234 $10,147 $12,014 $13,302 $14,728

FIXED COSTS
Labor 1,180 1,297 1,427 1,580 1,738
Maintenance 256 277 299 322 354
Other 1,154 1,148 1,179 1,113 1,153
TOTAL $2,590 $2,722 $2,905 $3,015 $3,245
TOTAL MFG COSTS $10,824 $12,869 $14,919 $16,317 $17,973

OTHER CHARGES
Selling 112 125 138 152 168
R&D 451 478 508 543 591
Depreciation 1,060 1,110 1,160 1,210 1,270
TOTAL $1,623 $1,713 $1,806 $1,905 $2,029
OPER. PROFIT $833 $2,218 $3,035 $3,134 $3,026

Page 12
 691182501.xlsx
EXHIBIT 8 Pro Forma Financial Statements of the Collinsville
(cont.) Plant as of December 31 (a) (000's)

Expected
1979 1980 1981 1982 1983 1984
ASSETS
Accts. rec. 1,622 1,328 1,680 1,976 2,136 2,303
Inventories 651 598 756 889 961 1,036
Net PP&E 10,600 10,025 9,440 8,840 8,230 7,560
TOTAL ASSETS $12,873 $11,951 $11,876 $11,705 $11,327 $10,899

LIABILITIES
Accts. payable 873 730 924 1,087 1,175 1,267
NET ASSETS $12,000 $11,221 $10,952 $10,618 $10,152 $9,632

EXHIBIT 8 Percent of Sales Ratios

1980 1981 1982 1983 1984
% OF SALES
Power costs 47.5% 46.0% 47.5% 49.3% 51.2%
Variable costs 62.0% 60.4% 60.8% 62.3% 64.0%
Fixed costs 19.5% 16.2% 14.7% 14.1% 14.1%
Mfg. costs 81.5% 76.6% 75.5% 76.4% 78.0%
Oper. profit 6.3% 13.2% 15.4% 14.7% 13.1%

Accts rec. 10.0% 10.0% 10.0% 10.0% 10.0%

Inventories 4.5% 4.5% 4.5% 4.5% 4.5%
Accts. payable 5.5% 5.5% 5.5% 5.5% 5.5%
Net assets 84.5% 65.2% 53.7% 47.5% 41.8%

Operating profit/
net assets 7.4% 20.3% 28.6% 30.9% 31.4%

(a) These pro forma financial statements were based on the following
assumptions:
(1) Continued use of unlaminated graphite electrodes.

(2) Though excess industry capacity would hold price

increases to less than an 8% annual rate in 1980, by
1984 the average annual price increase over the
period 1979-1984 was assumed to equal 8%.

(3) Power costs per KWH would increase 12 percent per year.

(4) Depreciation would increase because Dixon would

have written-up the value of the Collinsville plant
to $10.6 million.

Page 13
Flujo de caja libre sin el efecto de la inversion en laminado
------ For years ended December 31 ------ (a)
1974 1975 1976 1977 1978 1979
REVENUES
Sales - tons 36,899 30,819 37,464 40,076 39,790 38,507
Avg. price/ton 188 243 295 367 392 413
Sales - $000 6,937 7,489 11,052 14,708 15,598 15,903

MANUFACTURING COSTS:

VARIABLE COSTS
Power 2,935 3,395 4,631 5,530 6,173 6,759
Graphite 354 369 545 653 689 714
Salt & other 693 800 1,047 1,274 1,307 1,385
TOTAL $3,982 $4,564 $6,223 $7,457 $8,169 $8,858

FIXED COSTS
Labor 590 608 646 739 924 1,072
Maintenance 143 201 220 272 235 237
Other 474 659 902 1,063 509 1,107
TOTAL $1,207 $1,468 $1,768 $2,074 $1,668 $2,416
MFG COSTS $5,189 $6,032 $7,991 $9,531 $9,837 $11,274

OTHER CHARGES
Depreciation 433 394 402 391 384 399
Amortizacion
Selling 114 92 126 155 181 204
R&D 105 154 207 274 351 429
TOTAL 652 640 735 820 916 1,032
OPER. PROFIT $1,096 $817 $2,326 $4,357 $4,845 $3,597
(a) Expected

EXHIBIT 6 Balance Sheet of Collinsville Plant (000's)

------ For years ended December 31 ------ (a)

1974 1975 1976 1977 1978 1979
ASSETS
Accts. recvbl. 701 779 1,128 1,456 1,575 1,622
Inventories 254 544 681 647 639 651
Net PP&E 4,066 3,978 4,003 3,853 3,964 4,014
TOTAL ASSETS $5,021 $5,301 $5,812 $5,956 $6,178 $6,287

LIABILITIES
Accts. payable 402 472 619 780 795 873
NET ASSETS $4,619 $4,829 $5,193 $5,176 $5,383 $5,414
(a) Expected

EXHIBIT 6 Percent of Sales Ratios

(cont.) (a)
% OF SALES 1974 1975 1976 1977 1978 1979
Power costs 42.3% 45.3% 41.9% 37.6% 39.6% 42.5%
Variable costs 57.4% 60.9% 56.3% 50.7% 52.4% 55.7%
Fixed costs 17.4% 19.6% 16.0% 14.1% 10.7% 15.2%
Mfg. costs 74.8% 80.5% 72.3% 64.8% 63.1% 70.9%
Oper. profit 15.8% 10.9% 21.0% 29.6% 31.1% 22.6%
Accts rec. 10.1% 10.4% 10.2% 9.9% 10.1% 10.2%
Inventories 3.7% 7.3% 6.2% 4.4% 4.1% 4.1%
Accts. payable 5.8% 6.3% 5.6% 5.3% 5.1% 5.5%
Net assets 66.6% 64.5% 47.0% 35.2% 34.5% 34.0%

Operating profit/
net assets 23.7% 16.9% 44.8% 84.2% 90.0% 66.4%

(a) Expected

Inversiones y Depreciacion 1980 1981 1982 1983 1984

Vida Util 10 años

Saldo Inicial 4,014.0 4,212.6 4,391.3 4,552.2 4,697.0
Inversión del Periodo 600.0 600.0 600.0 600.0 600.0
Depreciación Periodo 401.4 421.3 439.1 455.2 469.7
Depreciación Acumulada
Neto Propiedad planta y Equipo 4,213 4,391 4,552 4,697 4,827
 1980 1981 1982 1983 1984

41,972.6 45,750.2 49,867.7 54,355.8 59,247.8

446.0 481.7 520.3 561.9 606.8
18,721.5 22,038.9 25,944.2 30,541.5 35,953.5

7,570.1 8,478.5 9,495.9 10,635.4 11,911.7

425.7 453.3 489.1 543.6 606.6
1,277.0 1,359.8 1,467.3 1,630.8 1,819.7
9,272.8 10,291.6 11,452.3 12,809.8 14,337.9

768.47 818.29 882.99 981.36 1,095.02 0.45132725

210.07 223.69 241.38 268.27 299.34 0.12337695
724.15 771.09 832.06 924.76 1,031.86 0.4252958
1,702.70 1,813.08 1,956.43 2,174.39 2,426.22
10,975.5 12104.6456 13408.777872 14984.199497 16764.097744

401.40 421.26 439.13 455.22 469.70

60.00 120.00 180.00 240.00 300.00
189.70 199.73 209.11 230.02 253.68 0.19476569
367.86 387.30 405.48 446.04 491.92 0.37767726
1,018.96 1,128.29 1,233.72 1,371.28 1,515.31
6,727.03 8,805.98 11,301.71 14,186.05 17,674.08

1980 1981 1982 1983 1984

1,751.76 1,891.90 2,043.25 2,206.71 2,383.25

703.08 759.33 820.07 885.68 956.53
4,213 4,391 4,552 4,697 4,827
6,667.44 7,042.57 7,415.53 7,789.38 8,167.07

942.84 1,018.27 1,099.73 1,187.71 1,282.72

5,724.60 6,024.30 6,315.80 6,601.67 6,884.35
Flujo de caja libre con el efecto de la inversion en laminado
------ For years ended December 31 ------ (a)
1974 1975 1976 1977 1978 1979
REVENUES
Sales - tons 36,899 30,819 37,464 40,076 39,790 38,507
Avg. price/ton 188 243 295 367 392 413
Sales - $000 6,937 7,489 11,052 14,708 15,598 15,903

MANUFACTURING COSTS:

VARIABLE COSTS
Power 2,935 3,395 4,631 5,530 6,173 6,759
Salt & other 693 800 1,047 1,274 1,307 1,385
TOTAL $3,982 $4,564 $6,223 $7,457 $8,169 $8,858

FIXED COSTS
Labor 590 608 646 739 924 1,072
Maintenance 143 201 220 272 235 237
Other 474 659 902 1,063 509 1,107
TOTAL $1,207 $1,468 $1,768 $2,074 $1,668 $2,416
MFG COSTS $5,189 $6,032 $7,991 $9,531 $9,837 $11,274

OTHER CHARGES
Depreciation 433 394 402 391 384 399

Selling 114 92 126 155 181 204

R&D 105 154 207 274 351 429
TOTAL 652 640 735 820 916 1,032
OPER. PROFIT $1,096 $817 $2,326 $4,357 $4,845 $3,597
(a) Expected

EXHIBIT 6 Balance Sheet of Collinsville Plant (000's)

------ For years ended December 31 ------ (a)

1974 1975 1976 1977 1978 1979
ASSETS
Accts. recvbl. 701 779 1,128 1,456 1,575 1,622
Inventories 254 544 681 647 639 651
Net PP&E 4,066 3,978 4,003 3,853 3,964 4,014
TOTAL ASSETS $5,021 $5,301 $5,812 $5,956 $6,178 $6,287

LIABILITIES
Accts. payable 402 472 619 780 795 873
NET ASSETS $4,619 $4,829 $5,193 $5,176 $5,383 $5,414
(a) Expected

EXHIBIT 6 Percent of Sales Ratios

(cont.) (a)
% OF SALES 1974 1975 1976 1977 1978 1979
Power costs 42.3% 45.3% 41.9% 37.6% 39.6% 42.5%
Variable costs 57.4% 60.9% 56.3% 50.7% 52.4% 55.7%
Fixed costs 17.4% 19.6% 16.0% 14.1% 10.7% 15.2%
Mfg. costs 74.8% 80.5% 72.3% 64.8% 63.1% 70.9%
Oper. profit 15.8% 10.9% 21.0% 29.6% 31.1% 22.6%

Accts rec. 10.1% 10.4% 10.2% 9.9% 10.1% 10.2%

Inventories 3.7% 7.3% 6.2% 4.4% 4.1% 4.1%
Accts. payable 5.8% 6.3% 5.6% 5.3% 5.1% 5.5%
Net assets 66.6% 64.5% 47.0% 35.2% 34.5% 34.0%

Operating profit/
net assets 23.7% 16.9% 44.8% 84.2% 90.0% 66.4%

(a) Expected

Inversiones y Depreciacion 1980 1981 1982 1983 1984

Vida Util 10 años

Saldo Inicial 4,014.0 6,462.6 6,416.3 6,374.7 6,337.2
Inversión del Periodo 2,850.0 600.0 600.0 600.0 600.0
Depreciación Periodo 401.4 646.3 641.6 637.5 633.7
Depreciación Acumulada
Neto Propiedad planta y Equipo 6,462.6 6,416.3 6,374.7 6,337.2 6,303.5
 1980 1981 1982 1983 1984

41,972.6 45,750.2 49,867.7 54,355.8 59,247.8

446.0 481.7 520.3 561.9 606.8
18,721.5 22,038.9 25,944.2 30,541.5 35,953.5

6,245.3 6,994.8 7,834.1 8,774.2 9,827.1

1,277.0 1,228.5 1,180.9 1,292.9 1,431.2
7,522.3 8,223.3 9,015.0 10,067.1 11,258.3

576.36 554.47 532.98 583.51 645.92 0.45132725

157.56 151.57 145.70 159.51 176.57 0.12337695
543.11 522.49 502.24 549.85 608.67 0.4252958
1,277.03 1,228.53 1,180.92 1,292.87 1,431.16
8,799.4 9451.80507 10195.967465 11359.968131 12689.446583

401.4 646.3 641.6 637.5 633.7

60.0 120.0 180.0 240.0 300.0
189.70 199.73 231.02 277.92 311.13 0.19476569
367.86 387.30 447.97 538.93 603.33 0.37767726
1,018.96 1,353.29 1,500.62 1,694.32 1,848.18
8,903.15 11,233.82 14,247.62 17,487.24 21,415.85

1,751.76 1,891.90 2,043.25 2,206.71 2,383.25

703.08 759.33 820.07 885.68 956.53
6,462.60 6,416.34 6,374.71 6,337.24 6,303.51
8,917.44 9,067.57 9,238.03 9,429.63 9,643.29

942.84 1,018.27 1,099.73 1,187.71 1,282.72

7,974.60 8,049.30 8,138.30 8,241.92 8,360.57
Flujo de Caja Libre 1974 1975 1976 1977 1978

Utilidad Operativa 1,096.0 817.0 2,325.9 4,356.9 4,844.7

- Impuesto Opearativo 526.1 392.2 1,116.4 2,091.3 2,325.4
UODI o NOPLAT 569.9 424.8 1,209.5 2,265.6 2,519.2
+ Depreciación y Amortización 433.0 394.0 402.0 391.0 384.0

Flujo de Caja de Operación 1,002.9 818.8 1,611.5 2,656.6 2,903.2

Inversión en capital de trabajo -298.0 -339.0 -133.0 -96.0

Cambio en CxC -78.0 -349.0 -328.0 -119.0

Cambio en Inventario -290.0 -137.0 34.0 8.0
Cambio en CxP 70.0 147.0 161.0 15.0

Inversión en Activos Fijos (CAPEX)

Inversión

Flujo de Caja Libre

Valor Terminal

VPN FCL (Fin Año)

Valor de la Operación

CIO
Activo Fijo Neto
Capital de Trabajo Operativo

g 0.051

Costo de la Deuda, de Patrimonio, de capital 1974 1975 1976 1977 1978

% de Deuda 8.01% 8.90% 10.65% 13.10% 12.87%

% de Patrimonio 91.99% 91.10% 89.35% 86.90% 87.13%
Beta 1.20 1.20 1.20 1.20 1.20
Impuestos 48% 48% 48% 48% 48%
Rentabilidad del mercado 7.17% 5.93% 8.64% 10.73% 10.55%
Tasa libre de riesgo 4.50% 4.50% 4.50% 4.50% 4.50%
Kd 0% 0% 0% 0% 0%
Ke 7.70% 6.21% 9.47% 11.98% 11.77%
Kc 7.08% 5.66% 8.46% 10.41% 10.25%
1979 1980 1981 1982 1983 1984

3,597.4 6,727.0 8,806.0 11,301.7 14,186.0 17,674.1

1,726.7 3,229.0 4,226.9 5,424.8 6,809.3 8,483.6
1,870.6 3,498.1 4,579.1 5,876.9 7,376.7 9,190.5
399.0 461.4 541.3 619.1 695.2 769.7

2,269.6 3,959.5 5,120.4 6,496.0 8,072.0 9,960.2

19.0 -112.0 -121.0 -130.6 -141.1 (219.57)

-47.0 -129.8 -140.1 -151.4 -163.5 -176.5

-12.0 -52.1 -56.2 -60.7 -65.6 -70.9
78.0 69.8 75.4 81.5 88.0 95.0

-600.0 -600.0 -600.0 -600.0 -600.0

-712.0 -721.0 -730.6 -741.1 (819.57)

3,247.5 4,399.4 5,765.4 7,330.9 9,140.6

154,803.60

111,218.61 120,636.62 129,950.47 138,925.97 147,316.67

111,218.61 120,636.62 129,950.47 138,925.97 147,316.67

5,724.60 6,024.30 6,315.80 6,601.67 6,884.35

4,212.60 4,391.34 4,552.21 4,696.99 4,827.29
1,512.00 1,632.96 1,763.60 1,904.68 2,057.06

1979 1980 1981 1982 1983 1984

13.89% 14.14% 14.46% 14.83% 15.25% 15.71%

86.11% 85.86% 85.54% 85.17% 84.75% 84.29%
1.20 1.20 1.20 1.20 1.20 1.20
48% 48% 48% 48% 48% 48%
10.55% 11.00% 11.00% 11.00% 11.00% 11.00%
4.50% 4.50% 4.50% 4.50% 4.50% 4.50%
0% 11.25% 11.25% 11.25% 11.25% 11.25%
11.77% 12.30% 12.30% 12.30% 12.30% 12.30%
10.13% 11.39% 11.37% 11.34% 11.32% 11.29%
Flujo de Caja Libre 1974 1975 1976 1977 1978

Utilidad Operativa 1,096.01 817.02 2,325.88 4,356.89 4,844.68

- Impuesto Opearativo 526.09 392.17 1,116.42 2,091.31 2,325.45
UODI o NOPLAT 569.93 424.85 1,209.46 2,265.58 2,519.23
+ Depreciación y Amortización 433.00 394.00 402.00 391.00 384.00

Flujo de Caja de Operación 1,002.93 818.85 1,611.46 2,656.58 2,903.23

Inversión en capital de trabajo 0.00 (298.00) (339.00) (133.00) (96.00)

Cambio en CxC (78) (349) (328) (119)

Cambio en Inventario (290) (137) 34 8
Cambio en CxP 70 147 161 15

Inversión en Activos Fijos (CAPEX)

Inversión

Flujo de Caja Libre

Valor Terminal

VPN FCL (Fin Año)

Valor de la Operación

CIO
Activo Fijo Neto
Capital de Trabajo Operativo

g 0.02222949

Costo de la Deuda, de Patrimonio, de ca 1974 1975 1976 1977 1978

% de Deuda 8.01% 8.90% 10.65% 13.10% 12.87%

% de Patrimonio 91.99% 91.10% 89.35% 86.90% 87.13%
Beta 1.20 1.20 1.20 1.20 1.20
Impuestos 48.00% 48.00% 48.00% 48.00% 48.00%
Rentabilidad del mercado 7.17% 5.93% 8.64% 10.73% 10.55%
Tasa libre de riesgo 4.50% 4.50% 4.50% 4.50% 4.50%
Kd 0.00% 0.00% 0.00% 0.00% 0.00%
Ke 7.70% 6.21% 9.47% 11.98% 11.77%
Kc 7.08% 5.66% 8.46% 10.41% 10.25%
1979 1980 1981 1982 1983 1984

3,597.39 8,903.15 11,233.82 14,247.62 17,487.24 21,415.85

1,726.75 4,273.51 5,392.24 6,838.86 8,393.87 10,279.61
1,870.64 4,629.64 5,841.59 7,408.76 9,093.36 11,136.24
399.00 461.40 766.26 821.63 877.47 933.72

2,269.64 5,091.04 6,607.85 8,230.40 9,970.83 12,069.97

19.00 (112.00) (120.96) (130.64) (141.09) (219.57)

(47) (130) (140) (151) (163) (177)

(12) (52) (56) (61) (66) (71)
78 70 75 81 88 95

-2850 -600 -600 -600 -600

-2,962.00 -720.96 -730.64 -741.09 -819.57

2,129.04 5,886.89 7,499.76 9,229.75 11,250.39

124,746.40

96,798.07 105,915.08 112,288.58 117,738.12 122,033.65

96,798.07 105,915.08 112,288.58 117,738.12 122,033.65

7,974.60 8,049.30 8,138.30 8,241.92 8,360.57

6,462.60 6,416.34 6,374.71 6,337.24 6,303.51
1,512.00 1,632.96 1,763.60 1,904.68 2,057.06

1979 1980 1981 1982 1983 1984

13.89% 10.57% 11.23% 11.90% 12.60% 13.30%

86.11% 89.43% 88.77% 88.10% 87.40% 86.70%
1.20 1.20 1.20 1.20 1.20 1.20
48.00% 48.00% 48.00% 48.00% 48.00% 48.00%
10.55% 11.00% 11.00% 11.00% 11.00% 11.00%
4.50% 4.50% 4.50% 4.50% 4.50% 4.50%
0.00% 11.25% 11.25% 11.25% 11.25% 11.25%
11.77% 12.30% 12.30% 12.30% 12.30% 12.30%
10.13% 11.62% 11.58% 11.53% 11.49% 11.44%