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B.A.T Immmmas P.Lr- - MMEWTA DEPOWTORY COPY PRODUCED PuRSUANT To VILD. OF
ComEw JuDamut DATED 5/$M iN SrATE oF A6*esoTA, Er AL v. PIPKP Mongs, Er CAsE No. C14M4=5
DEFINITION OF ACCOUNTING TERMS
SECTION I
ROSS PAID SALFS - DOMESTIC, on pages I consists of the Domestic
value, less the cas
h discount for prompt payment.
D
OMESTIC SALES QUANTITIES, on page 4 & 5, includes the free component of the
*
buy one get one free" banded stocks.
VARIABLE MARGIN, shown
zn Page 2, is the amount that remains from sales value
s
after d
ducting the co s which vary directly with each unit of sale including
:
Variabl Manufacturing Costs, LIFO-Leaf (adjusts leaf to current cost),
Federal
Excise Tax, Coupon Plan. Freight Costs, Stamping Allowance, GPC Royalty and
GENERIC Rebates.
SPECIFIC RRAND
EXPFNSF!J, on pages 2 & 6, includes the accounts Advertising
Media, Sales P
romotion - Specific, Coupon Promotion, and Loss an Returns.
B
RAND CONTRIBUTION, on pages 2 & 7, shows the amount that remains from
V
ariable Margin after deducting Specific Brand Expenses.
UN-SPECIFIC MARKETING EXPENSES, on pages 2 & 6, includes the accounts Sales
tion - Non-S
which are not identifiable b
Pro
ecific
d Sellin
Fi
ld
w
an
e
,
y
p
g
brand.
6ENFRAL I A04INTSTR
ATTYE EXPENSES, on page 2, includes the IWO G&A Expenses
for the Domestic bu
siness, after the transfer of amounts to the other cost
centers.
DQNJSTI@ PROFIT CON
TRIHM
10
K., on pages I & 2, shows the amount of profit
applicable to the D
omesti
c
business before application of costs common to both
the Domestic & International businesses.
INTERNATI
ON
AL
PROFI
T CDM
IMJTT
. on a & 9, shows th amount of profit
p
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:
l
applicabl
e
to
the I
nternat
ional
of costs common to
Busi ne
s
be
ora applicatio
both the D ome stic and International businesses.
COMMON OPERATING CO
STS - MRWFACTURING, an pages 2 & 12, includes the accounts
Manufacturing Ovorbe
ads, Cost Variances,Depreciation, Rents, Etc., and
Inventory Adjustments and are common to both the Domestic & International
businesses.
NBU LIFO - OTHER, an pages I & 2, represents LIFO other than Leaf Replacewt
cost.
T
RADING PROFI , on pages I & 2. represents the contribution from operations
a
d EL
W
f
l
i
i
f
f
n
ncoine
nvestment
or O
T
ore
edera
and state income taxes and
T be
and expense.
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B.A.T INDUSTRIn P.LC. - UnazoTA, Dvowrm copy - PMWCED PURWAmT To I VILD. oF
CoNaur JuDamENT DATED SAM im SrATE oF Wwsor;a, Er AL V. PHLP UORRA ET A CASE NO. C1444US
DEFINITION OF ACCOUNTING TERNS (CONT10-1
SPECIFIC MARKETING EXPENSE, shown an page 6. includes the accounts Advertising
Nadia, Sales Promotion - Specific, and RALEIGH/BELAIR Premium Program.
LOSS ON RFTURNS EXPENDITURES, on page 6, are composed of the list price plus a
6.5% distributors handling allowance (S.65 Full Revenue and RICHLAND 261s; $.so
Low Price Branded; S.30 Extra Low Price), less excise taxes refunded plus the
expense of the Returned Goods Operation, (primarily labor) and incoming freight.
DOMESTIC JENFRAL I ADMINISTRATIVE EXP 8, includes the NET GLA
Expenses for the Domestic business, af'N!r'St-h:'tp:'n:fer of amounts to the other
cost centers.
SALARTFS I ENPLOYEE WELFARE EXPENSES. on page 8, includes expenses for Salaries
(including Overtime and Gratuities) and Employees' Welfare. Employees'
Welfare expenses Include the Company's portion of expenditures for F.I.C.A.,
Workmen's Compensation Insurance, Unemployment Insurance, Group Insurance,
Hospitalization Insurance, and Pension.
OTHER EMPLOYFF RELATED EXPENSES, on page 8, includes expenses for Employee
Relations, Entertaining. Travel, Telephone & Telex, Memberships (Individual),
Subscript Ions , Automobiles and Office Supplies.
GENERAL 0 1 on page 8, includes expenses for Taxes (after transfers),
Insurance aft* transfers), Depreciation & Rents, Maintenance. Uti Iitios &
Upkeep, a Security Services (after transfers).
Q"TTY AND THIMSTRY RELAT12M. an page 8, Includes expenses for
Contributions, Publicity Media, and Corporate Memberships.
OlffSTOF SERVICES, on page 8, includes expenses for Professional Fees & Services
(after transfers), part-time temporary help, and Service Charges.
Mj;CFLLMFQUj OPERATING EXPENSES, on page 8, includes expenses for Commissions &
Allowances, Incidentals, Postage Used. Factory Labor, Bad Debts, and Product &
Process Development.
TRANSFER CHARGES, on page 8, represents the amount transferred to other cost
centers (including transfers for Taxes, Insurance, Security Services, Actron
Defense Overseas related expenses, and Corporate Legal expenses).
PRODUCTTYM, on page 12, represents the number of cigarettes produced by Macon
per hour worked for hourly employees. Both direct and overhead hours am
included in the calculation. Hours worked in Primary for tobacco shipped to
other locations, Returned Goods, and Quality are excluded.
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B.A.T lHmmmas P.LC. - MWIESOTA DEPOSffM Copy - PRODUCgD PURSUANT To I VILD. oF
CONSENTJUDGAIENT DATED 51819181MILATICEMNESOM ErAL V. PFALVA0ORRIS, ErA CASEftC1-9"W5
DEFINITION OF ACCOUNTING TERMS (CONT'D.1
CUFBENT ASSETS, on page 1. are those assets excluding non-operating cash which
will be consumed in the business within the operating cycle, no rmally one year.
This includes Net Inventories which are valued at cost under the wNatural
Business Unita (Single Pool) method.
CUARFNT LIARIL.ITIES,,:ntpage 1, are those liabilities which will be discharged
with current assets he normal operating cycle of the company; generally one
year from the balance shoot date. For this presentation the current
liabilities representing interest bearing, income tax obligations, and deposits
held for affiliates are excluded.
OPERATING WORKING CAPITAL, on page 1, are Current Assets less Current
Liabilities of a non-income tax and non-interest bearing nature.
NET FIXED ASSETS, an page 1, are the historical investment in land, plant and
equipment less accumulated depreciation.
IKTARGIALFS, on page 1, includes the unamortized portion of the Trademark
Purchase and the Richmond Branch Business.
NET ASSFTS, on page 1, are Operating Working Capital plus Net Fixed Assets,
Intangible Assets, and other Assets less Non-Currant Liabilities as defined.
SUPPLEMENTAL SECTION
TRADING PROFIT - TORACCQ. on page la, represents the contribution from
operations for BWT and ELT before federal and state income taxes, and
investment income and expense.
TRADING tROFTT - CORPORATF_ on page la, represents the expenses associated with
certain functions previously performed by BATUS. These functions include cash
management (investments and borrowings) and portions of corporate tax and law
(excluding functions handled by BWT)-
OTHER INCOMMEXPENSE1, on page la, includes income from real est-ate joint
ventures and expenses associated with purchased tax benefits, leveraged lease$
and non-income taxes.
NET INTFRgST EXPENSE, an page la, includes the interest expense incurred from
commercial paper and from long-term debt with affiliated companies, netted with
income generated from investments.
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B.A.T INDusTRms P.Lc. MUMMA DEPOWORY COPY - PMMCED PuRsuANT To VILD. oF
CoNsEmT JuowmNT DATEo 5/vu iN SrATE OF Aftwscu, ET AL v. Pmtv Afogm, Er CAsE No. C14M.M5
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B.A.T INDUSTRIEs P.Le. MoommA DEPOSITORy Copy pRODUCED pURSUANT To I VII.D. OF
CONUNT JUDOMENT DATED 5SW IN STATE OF AIRAWSOTA, Er AL v. PHxip Aloggm Er CAsE No. Cl-944W5