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B.A.T IMM)MRS P.LC. - MMUMA DEpogffony Copy CEI) pUMMAWr To "I.D.
COMENT JUDGMP(r DATF pmw cw
EDUMIN SIA110FAMMSOM ErAL V. PUSPAWRRM ETA CASENO.Cl.94.&M
BROWN & WILLIAMSON TOBACCO CORPORATION
1967-192.9
PREVIEW
TABLE OF CONTEATS
I. Management Overview
11. Sales Forecast
IZ@-. Financial Assumptions/Implications
XV. Capital Expenditure Plans
V. Sensitivities
V1. Somnary Of the LIFO Decrement Position
tb/33681/-
C)
SAT INMOMIES P.L.C. - UWJEWTA DEPOWTORY COPY P"MCED PURN)ANT To V1W. OF
Comm iuoamm DATEo aILIS iN SrATE oF Aftw5grA, Er Af. v. PWV Akftw, Er CASE NO. C14K4H5
P.;
rIJ
B.A.T INDusmiEs P.LC. - MWNESOTA DEIKMITORY Copy - PRooucED PURSUANT To VII.D. OF
CONSENT JUDGMENT DATED S/M IN StATE OF AFONNESOI& ET AL V. PNLI! UORIM ET CASE NO. C1-94-W5
cil
Lr
B.A.T INDUMIn P.LC. M*SMWA DMXMTORY COPY - PROD=D PURWAKr TO VILD. OF
ComsEmTJuDowNrDATEoS/S/NiNSrArEoFAftAmsorA.ErALv.PmxpAkg#wrrA CASENO.C1444=5
I. Manaoene7: Overview
The 1957-1989 Preview sawariziis finanzial prcjections for 50's business in
line with historical sa:es volume. trencs ano anticipate'. results @aseo on
assumen spencing levels.
Over tne Preview perioc, a decline I-) total industry consuiption, which has
accelerated since the 1983 doubling of the Federal Excise Tax, is expected to
continue. Driven by anti-smoking activities, higher state and local taxes, and
increased regulation, Domestic Industry Cigarette volume is anticipated to
decline by approximately 1.3% per year over the preview period. Concurrently,
growth in the Value-for-Mioney segment is expected to continue, based on growth
of discounted 25's and low list brarced 20's. This situation Is expected to
pose significant challenges to cigarette manufacturers in maintaining the high
profit ano cash flow levels of previous years. Growth in operating income is
expected to cam from continued aggressive pricing, manufacturing cost
containment /reductions and reduced marketing spending, offsettir-Q the impact of
the lower sales volumes.
Based on volume assumptions the. re;rasent a simple extrapolation of historical
trends; and therefore, co not consIce: results of various programs currently
being oeveloped and tested, the following highlights SN's financial
performwice. Tobacco Group Tracing Profit is projected to increase 7% in 1987
from the estimated 1986 level and to be relatively flat 1988 through 1989
contingent in part to the assumed investment in New Products as outlined In the
Financial Assumptions (section 111). Operating cash flow is Projected to grow
from $4-50 million in 1986 to $390 million In 1989. RONA increases from 64.2%
in 1986 to 69.5% in 19E9. Domestic sales volume is projected to decline by
more the.,% 7% over the 1987-1989 period, causing market Viars to shrink from
11.8% in 1986 to 10% In 1-989. Commensurate with the forecasted oaclining
volumes, inventory liqu!:ations (LIFO :ecremeents) are assumed to occur each
year 1936-1989.
Althouan 30's Preview reflects a loss In market share, it continues to provide
significant performance Improvement in profit to sales margins, cash flow and
RONA basea on pass-throu;lt of price increases. Additionally, the preview
represents a more tightly focused management of limited marketing spending
through balanced allocation of resources zetween franchise building, regional
marketing and distribut!on maintenance activities. It Is envisioned that
competition for in-store display anc Promotional space w!ll escalate throughout
the perie- In order to remain c*mpet.1tive, S&W will need to allocate a
greater portion of its resources in "mass activities. This will result In a
continue.4 s@ift from movertising men's towarcs in-store promotion.
3069115 NJ
B.A.T INMMMIES P.LC. - MOMEWA DEPOWORY copy - Pwwao PuRsUANT To WIA OF
Comm iuoawwr DATgD WN iN STArg oF ANANN80TA, rr AL v. PMLJP UORMS, ET A CASE NO. C1 94 WS
-2-
Throu" ',out the preview Period, S&WIS New Product strategy will be to deve.l:o
ano launch new bra-ids for emerging rwket segments or those segments where SO.
is unnerce-velopeed. This strategy inziudes now offerings in the following
segments:
Full Flavor/Llc-n:s Non-menthol
Female
Box
Extra Length
Value-for-momey
All ftw Product marketing activities are targeted to high opportunity markets.
BO's phased rollout strategy minim!zes financial risk to the company through a
gradual expansion of new offerings into strategic geographical areas (only
after demonstrated success) supporte: by regional marketing pro;zams. Two N-ew
Procuct launches are assumel in the Preview - one beginning in April 1987 and a
second new Product launch occurring April 2989.
In summary, the 1987-1989 Preview re:.-esents stricter management of
controllable expenses and more tig;htly focused allocation of limited resour:es
and is based on a continuation of historical volume trends. @bweve:, despite
projected volume decreases (i.e., not including benefits from new marketing
programs) and required investments f.-r New Product launches; tracing profit,
operating cash flow and RONA all reavi record levels during the preview years.
306711/4
S.A..T IWWrRW9 P-LC- MWMOTA DBVWM COPY P"OWCFO PURWMT To A"O' OF
CONSEW jUOGWW DATEO 5WN IN STATE OF A*AMSOTA. ET AL- V. Poixp UORWX ET CASE MID. C144-MS
7Z
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B.A.T lmusTR*s P.Lc. - Momsm DEposrToRy Copy - Now= PuRstimT To VILD. oF
CONSEw JuDe#AENr GATEo SISM im SrATE oF Adroffsom Er AL v. PHxv Afogm, Er CASF NO. C14M-MS
11. Sk.Es FORE:AS
BROW & WILLIAMSON TOBACCO CORPORATION
1987 -198
PREVI
ASSLMIONS TO MUM FORECAST
FORECAST TO DECLINE AT AN ANWAL RATE OF 1.% (ADJUSTED FOR BILLING DAYS)
AssumEs INCREASING YEAR-END LOADS AND BEGINNING OF YEAR UNLOADS
MLIM WADS
KOOL TO MAINTAIN LEVEL SHARE IN THE 19 IMPACT MAWETS
KW_ SHARE TO CONTINLE DECLINE (HISTORICAL TREND) IN THE REMAINING CORE MARKETS
INrAEmEKTAL KOOL voLLK NERsus TREND) DERIVED FROM KOOL MiLos BOX LXJCH
5M OF KOOL MiLDs Box voLumE INCREMENTAL (53 cxmismanoW
VICROY, REIGH AND MAIR wff iNuE KW.ET SHARE DECLINES
BARCLAY SHARE To DECLINE wrIL CORE FRANCHISE OF VUERS IS ACHIEVED IN 1W,'
SHARE IS THEN HELD LEVEL
RICHAND
PIMERATEE SHARE AM VOLUME WWTH IS FORECnTED EACH YEAR
9MIC/PRIVATE LABEL
. VbLLrc-s To BE CONSTANT AT 12.1B FOR EACH OF THE FORECAST YEARS
NEW PRODXTS(BT WdEn
NEwDRwx7 A To BE L4uNo*i) APRIL 1W
flEw Pima B To BE LAuNcHED APRIL 1M
. INTR3mcioN ircro %, IM, 1% AND 209 OF U.S. RESPECTIVELY
, INTR0:)tJCTIONS AT SIX-MONTH INTERVALS
B.A.T ImusTRiEs P.Lr- - MINNESOTA DEPOSITORY COPY - PwwcED PURWAwr To I VILD. OF
CONSENT JUDOWNT DATED 5/8411 IN STATE OF UNNESOU, Er AL v. PmtV AkRM% Er CASE No. CI-944MG5
Brown WiHic-mOn TOccco Corporation
1987 - 19ag
Preview
Forecasfsd Volumn
Tii
19M
low
W
371
3LI
314
20.6
3,
,
A
L,
u
1
Le
@
L7
32
I
2.5
.9
,
12
2A, Is
j
1.1
53.41
-
412!
Nm FmdAb
4.0
12.1
1 1
1 4JI
1
2.1
2
IL01
2.1
1.1
ail
12.11
2.3
!Tsw I a W
ail
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Tow mwn
Forecaged WorW Shars Pvmt
In$ 1W, I
INS m
6.4 1.11
V
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I
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BAT INDusTmEs P.Lc, - MmESGTA Disvowm Copy - PRMCEO PURWANT To VILD. OF
CONSENT JUDGMENT DATED 51M INSTATE oFAINNEsDrA6 ETAL. V. PHXPUORRW. ETA CASE 140. CI-944MS
VICEROY STMCRING PROGRAM
in VOLUME IWACT
A S2.00 off a Carton St!:kering program for the VICEROY Family is currently being
tested. The potential volume imipacct of such a program extended on a national basis
effective January 1, 1957 is outlined In the following table.
1966E 1987 1"8 1989
4.7 VICEROY Volumes - Preview 3.7 2.8 2.0
4.7 VICEROY Volumes with Stitkering 4.7 4.7 4.7
- Incremental volume 0
6% VICEROY Share - Preview .6x .3x .4%
.8% VICEROY Shere with Stickering Ax .8% .8%
-- Incremental Share ---.x .3% .4%
Note: Compared with Preview assumptions, this program will produ--e a positive
contribution by year thres. with breakeven In the second quarter of year four.
1987 1988 1989
Impact on Preview Contr.1--ution Trrd) -T4-. 0) -W.0
L30,
3D68I/l3
ON
B.A.T INOMMIES P.LC. - MMESOTA DEPOWTORY COPY PRODUcEo PumANT To I VILD. OF
CowEW JUDOWNT DATED SAM IN SrATE OF ANNNESOTA, ET AL v. FWXV MORM, ET A CASE NO. C1 94 BUS
KOX 1WROVEMENT
Volume Impact
In the Preview, tnt KOOL 0:9.-4 fam!lY forecast is based on an extrapolated
underlying historical treno wnicn ap.=ximates an 8.0% decline each year. An
improvement in the umarlyi-V trev of one percentage point each
year would impact
volume and contribution as follows:
19S6E 1987 1988
1989
37.8 KDDL Volumes - P;eview 35.1 32.4
29.6
6.4 KDOL Share - Preview 6.1 5.7
3.4
l%r year. currr--lative)
-
Slower NO i
e
5 ufts 35.5 33.3
30.6
Incremental volumes 4 9
1.0
Incremental Share :1 :2
.2
Compared with Preview assump-.!ans, a 1% Improvement in 9WL's dec
line rate would
improve the Preview variable mar;!n/3:ane Contribution as follows
(S millions):
TOTAL
19&7 1988
Impact an Preview ContrLbut!zn -8-.5 NX
1987 IN7
T5-.
INQ
CD
30681/14
--,4
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N
A-D
FINS
0a
BAT JNMWMIES P.I-C. - MMEWTA DEPOSITMY CO" PROO=D PURSUANT To VILD. OF
IT CASE NO. C14M-MS
.wT iuoamrr DATED 5/8M IN SUTE OF MAINESOTA, ET Aia V- PHILIP MORFE
CONSF
Lr
-@o
r%j
Ll'i
Ul
BAT IMMMMIES P.LC. - MW4WTA DEFMITM COPY - PWWCED PURWMT To VILD. oF
Comm JuDommT DATEv SWU vi STATE oF Owsom, Er AL v. FW&P Akow, ET CAsE No. CI-24-6565
I I I. F i W4,'@ 1 A!- At TIONS/14PLICATIONS
BROW4 & WILL IAMSON TOWCO CORPOW I ON
1997 - 1982
PREVIE
INIMMY KV FIMKIAL ASSLVPTIONS
. FORECAST To DEaiNE AT AN ANNLIAL RATE OF 1.!K (A&usnD FOR BILLING DAYS)
VARIA&E WGIN
SELLING PRICE FOR ALL PRODLCTS (EXCLUDING DlscwNm 25's) To INCREASE $1.25 PER M
EACH JWJARY 1 AND JULY 1 OF EACH YEAR
DiSCOUNTED 25 It WILL BE AT 8% OF RILL REVENUE PRODUCTS
FEDERAL EXCISE TAX PRoxcrED To REMAIN AT $8.00 PER M THRcuGHotA PREVIEW PERIOD
M FLUE CURM%JRLEY AUCTION PRICES SW AS M CROP WITH 2( INCREASE FOR
SUBSEQUENT YEARS CROPS
MET
ESTABLISPiED, SWIDS
KANAGING MARKET SUPPORT DOM VIA cmoumnNG KOOL SPENDING IN THE 19 IMPACT
MARKETS WM REDUCED SPENDING IN T@E REMAINING CORE KWEETS
RIMM
. SPENDING PER 14 ON A RMXING RATE
NEW PRocucTs
INTRoDuctioNs AT six-mom INTERVALS INTO %, EX, 29 AND 2CK OF me U.S.
NEW Noma A. A DIswjm 25's PRODUCT, TO BE LAmm APRIL IW, wrTm
MMP-71NG SUPPORT OF SB, 95, AND $32 MILLION FOR THE FIRST THREE YEARS
NEW PRODUCT B. A FULL REVENUE PRODUIC T, WITH INITIAL LAuN.,m APRIL 1%9, WITH
MWEETING &F-JRT OF SIB MILLION THAT YEAR
SELLING RELDMON-SPECIFIC
INCREASED IN 1W TO REFLECT weis PENETRATION FOR CONTRACT MF SPACE.
INFLATED 7HEREAFTER
ALL OM pp3-sa
. GENERALLY FOLLOW CPI-U OR ARE ADJUSTED IN RELATION TO DECLINING VOLUMES
LIFO IE22 Ml
INVENT,3RY LIOLI;--KTICK OCCUR IN EACH YEAR (BM-1%9) UTILIZING "LIFO POSITION
PAPER SCENARIO I110.
B.A.T INOurmiEs p.Lc. - MW#UWA DEpOSffM COPY
CONSENT JUDGMENT DATED S/M IN STATE OF A*MNIESOTA, E PwwcE0 PURSuANr To I VILD. OF
'r AL Y. Pwr Umgm Er AL- CASE mo. ci444as
in
of
n
Oofts:lc u-.!t volume has been projected to decline at
a rate of -7.4 per year
I
durin;
the ::eview period. Total industry volume has
0 'n projectec to dezlint all
the rat
e c' -2.1% (-1.5% adjusting for billing days).
International's projectec
growth
pe: -.mar is 2.5% (total quantities). Tobacco Group volume
is projected -.o
decline
A.2S per year.
TOBACCO GRDJP
PROXCTED UNIT VOLUME
WILLION5)
CGR
1985A
:586E 19$7
1988
1986-89
70.7
6 Domestic 63.9
59.4
55.3 - 7.4
Nd
International
6.8
9.1 Export/Contract/Import 1010
10.6
U.1 + 6.S
19.9
23.5 Liciensee 20.2
20.5
20.8 + .5
-9-4
_TP572 Total 8WT M4
-VO-. 5-
-9" 7-747
Die to the :--clirw of Domestic Sales Volumes, Tobacco Group Sales
Revenue Is
projected = decline 1.3%. The following Table outlines sales revenue through the
Preview
pe: -Iods:
TOBACCO GROW
S%@' @@Y
JUOLLAP.5 IN MILLION5)
CGRX
I
REAL MOTH
1985A
im 1967 19H
19$9
255"9 1986-89
2,DBB.6
2, *1 30.7 Domestic 2,093.2 2,D63.7
2,022.9
- 1.7 5.5
136.0
A.42.2 International 160.6 173.8
186.2
9.A 5.6
81.3
!3A.O(A) ELT 101.5 104.4
107.2
7.2 11.0
2,3061
T 73r§ Total BWT TITS" 2,341.9
7-,5r"
1.3 5.1
(A) fte
conslieration of Sales Deferrals directed at minimizing LIFFO -:)--:renent.
3MI12
B.A.'T WMWTIM P.Lr- - MINIMWA DEPOWORY COPY PROCU(21) PURSUANT To VIIA OF
CoNWNT JUDGMENT DATED SWU IN STATE OF AINNESOTA, ET AL v. P14LP UORRIS, Er CAsE No. C14M4M
Domestic market spending is projezted to oecline .2% over :1e Drev-:e- as
tn
Estaoiisheo aranis are managed down via concentrating XOOL spe7tzing e 19 impact
markets with reJuced spending in KOOL's Core markets offset In Part New Product
introductions Aaril of 1986 and April 1987.
TOBACCO GROUP
DOME@@NG
($ MILLlWT-
CGR%
REAL GROWTH
1985A
1986E
1987
1985
1989
195% 6-89
1986-89
Media/Promotlon
219.5
190.6
Pre Now Products
131.5
108.5
93.5
-
-
23.5
132.6
149.1
NDn-Specific/Selling Fiel
d 162.9
170.6
179.0
+
i.4
. 2.6
21.7
20.1
All Other
24.2
23.8
24.6
+ 7.0
+ 3.2
Total Pre New Proclucts
New Products
MT.76
10.4
M"
34.8
N"
A9.6
- 5.2
N/4
= 9-0
NIM
373.8
V9-8
Total
W-0
M-7-7
N"
= -4. 0
Trading Profit will grow at a higher rate then sales revenues over "no Preview period,
with a declining real growth of approximately 2.OX per year.
TOBA= GROUP
TRAWNG b I
T RWY
MILLI
ONS)
CM
REAL GROWTH
l9a5A 1986E 1987 1988 1989
i9B649 198"9
637.1 701.1 Dmst1c Profit Contr. 717.3 719.2 707.3
+ .3 - 3.3
34.1 30.6 Int'l. Profit Contr- 30.0 32.0 3A.3
+ 3.4 - .4
8.0 12.1(A) ELT Profit Contr. 8.6 8.7 8.7
-:0.4 - IA.2
235.3 2D8.9 Comn Cost 202.9 201.7 197.1
-1.9 - 5.7
Trading ;;@fit
/A43.7 534.9(A) Pre LIFO Decrement 553.1 558.2 352.9
+:.I - 2.7
6.1 LIFO Decrement 26.8 21.3 23.1
-
-
-
-
"
+&:-8 38.0
-
-r
=
7
9 37Y
.5
54.T
.O Total Trading Profit 3W.
5 6
-
.
0
(A) IT SHMU BE NOTED THAT ELT SALES DEFE1RRAL IN 1986 (To MINIMZZE L.VM DECREMENT)
WOULD NEGATIVELY IMPACT ELT CONTRIBUTION BY APPROXIMATELY S3.2 P-L-ION FROM THE
AMOUNT STATED ABOVE.
NJ
30481/3
B.A.T INDusTRin P.LC, - MWESaTA DEP081TORY Copy - NODUcED PuRmANT To VILD. OF
CoNsEwT JuDaww DATED WN im.STATE oF Aftwsom ET AL@ Y. PHup Moam Er CASE HID. CI-94-MS
New Inves-.ments a:e proiezteo to decline 32.?.@ tne P-.evie% Le:.'0c
due to oe:lining fixed asset aaditions an: :ne ce::ease in lnventc:ies as a
of aeclining Domes-.ic sa!es volumes.
TOBACCC aROLP
NZA @NV-z@,Z.M
CzFN
@ROOiTM
1985A 1986E 1907 1983 1989 1986-89 1996-89
51.6 71.8 Fixed Assets Additions 85.7 68.1 55.5 - 8.2 12.0
Inc./(Dec.) Operating
18.6 97.4 working Capital (28.5) (8.3) (2.7) N/M N/M
-S ---In
" -37
7" TZ" Total Now Investment -
.
a
,
IN b
in
RONA I
t
d t
im
h
in
th
?
e
69
d
i
i
d
rev
)
s expec
e
o
prove eac
ur
e
ew p
r
o
-
yes:
, rea=
g
g
y
1989. Not Assets are projected to dazline .7% P:!mrily due to declining
inventories and the continuing amortization of tne Tradvarks. Fixed Asset
expenditures, while exceeding aepreciation in 1967 and 1988, approximate annua:
depreciatlon in 1909.
TOBACCO GRMP
INVE9-,MZNT "MMANCE
(DOLLARS IN lo.ILLICNS)
CG:i%
RZAL GROWTH
19M 195SE M 1938 1989 1986-89 1986-89-
749.1 $45.4 Net Assets 650.6 B-13.7 828.2 - .7 - 4.5
59.2 64.2 RONA 66.2 E9.7 69.5 - -
l
.-Ilior eac"t yur during t." Previe. period,
Projectec Operating Cash Flow exceeas S500 m
growing 9.9%, or a real growth or 6.o%.
TOSACC: GROLP
DP--'ffM7KGw'-%S;T LOW
(DOL.L@ IN MIL-."M)
CM
M;L 0OWT;;
A85A 1986E 1987 -'938 1989 1996-89 19WO9
A43.7 543.0 Trading Profit 579.9 579.5 576.0 2.0 1.8
39.7 40.6 Depreciation 45.5 51.4 56.2
11.6 12.6 Amortization 1.1.6 1-1.6 11.6
51.6 71.8 FiKed Asset Additions 85.7 68.1 55.5
Inc./(Dec.) Ooerating
18.6 57.A Working Capital (18.19) !8.3) (2.7)
Other Changes in
(51-0) (20.5) Net Assets (5-3) .13.6) (.4)
U53 =67 operating Cash Flow 3 4" 73rn MM 9.8 --'5-
(307.2) (492.0) Memo: LVO Reserve (473-9) (463.6) (463.4)
CD
4
3
61
D6
/
B.A.T Mousmm P.LC. - MMAESOTA DLvwrm Copy - PRMUCED PURSUANT To VILD. OF
ComFNTJuoomEmTOATso&lMimrAreoFAtw4EscrA.ErALv.PH#LipUoRgis.ErA Caaft.C14WMS
TOBA.'CO
GROLP 25:7-1989 PREVTrw
EXECU
TIVE SLW;Ay i
E
COMPARIO-N TO
PLAN FF,' -=
IN
KARCH 1986
(DO
LLARS IN MILLIONS)
CGRX
1985A
1986E
1957 1988
1989
1986-89
UNIT VMAAC (Excludes Litensee volumes)
79.6
82.4
Wr-a-fe-gTE-Flan
81.2 82.2
132.8
.2
79.6
7a.7
Preview
73.9 70.0
".3
3.6
Difference
(7.3 (12.2)
NET SALES
2306.1
2477.1
3t-r-at=egc Plan
2527.4 2649.0
2763.6
+ 3.7
2306.1
2406.9
Preview
2355.3 2341.9
T17n
5
"
2316.3
1.3
-
(70.2)
Difference
) T
5
)
(447.5)
TRADING PROFIT
443.7
550.3
Ttrategic. Plan
538.3 573.6
602.5
3.1
443.7
$43.0
Preview
579.9 579.5
576.0
2.0
-
T")
Difference
TRADING PROFIT S
OF NET SALES
19.2
22.2
Strategic Plan
7-1.3 21.7
21.8
19.2
22.6
Preview
U.6 24.7
24.9
-
.4
Difference
3.3
C:)
30681/7
tQ1
'.U
C@
B.A.T IMUSTRIES P.L.C. - UMMMA DEP091TORY COPY PRODUcEo PumAHT To VILD. oF
CoNsENT jUDGmENT DATED SISM jN SrATE OF A*NvESOTA, ETAL. v. Pmtr Moggg ErA CASENO-Cl-94-MB
la
7:=-;::O QRXP 1987-19
89 PREVIEW
ZX--LUIIVE S
U*MY S
UO =r
cov*@=
-ZON TO P@AN
PRWM-
Slg KTR
CH 1986
-
(MLLARS
IN MILL
MT
CGFL%
1985A
198a
1987
1985
1982
1986-89
M--T ASSr',S
749.1
865.9
lan
913.1
925.6
911.8
1.7
749.1
845.4
P:eview
830.4
-
$43.7
-
82a. 2
-
-
.7
-
-
TEM
D-1 f ferenze
4.7)
r6
TU
9)
63
T
6)
-2.4
S4-U M IfT ASSETS
3.1
2.9
Strategic Plan
2.8
2.9
3.0
3.1
2.8
P.-eview
2.a
2.8
2.a
D! '-ferann
R:%A (EN' .11CE, NZT ASSETS)
39.2
63.6
5-.:ate;!: Kan
58.8
62.0
".1
59.2
64.2
P.-mvlaw
68.2
68.7
69.5
CUM
CUM
475
a
433
5
0=-RAT:NG CASH. FLOW
n
K
40
1
563
1
616
3
I
MWO
igs7-ag
1
665
5
.
.
a
.
.
.
.
,
475.8
446.7
P-mview
374.9
5M.2
391.5
2,199.
1 752.6
Mffenla
9"
30661/8
B.A.T INUMMIES RLCL MINNESOTA DEPOSITM COPY PWNCgD PuRsuANT To I VILD. OF
CoNsENT JuoamENT DATED SOU IN STATE OF AIIAMSOTA, ET AL. V. P#AP-UCRRA ET CASE NO. C14M4105
I
0
2
v@
p
r%j
C:)
-4
Ln
No
r%)
-t@b
B.A.T Imusmas P.Le. - UWANOTA Dolo@ COPY - PROMCED PUFtSUANT To I WLD. OF
CONSENrJuDomENr DATED MWN SrArEoFMANasom ETAL v. PwvAfmm. ErA CAsENo.Cl4M-SM
IV. :a:-**--a-1 Ex:enc;-'ture'P-1a7s
Proccsed Preview period major ca:iza- ex;:e-,@:-4%:es are di:ezzted at quality
imp:zvements, equipment for unic,--e Neo P----:.jc:s (VISA), pr-,c--ctivity
imp.=vements and cost reduction ozrcle:ts. Ex---*@xlec from proposed capital
- gr:
expenditures is any spending fo. -.-.I
A sxnary of major projects to be s=-1itte: f-.: a;)Proval C-,;:!ng the balance of
1986 and during 1987 are as foll-.ws:
Colc Storane Fac1l1tv-Macon (csc!ta2 36.0
The pu:pose of this project is to canstruc: a cold storage sarehouse am the
Macon Brancn site to allow the flex!:!Iity to hold up to 3.5 billion units of
finisned product in a fresh conc!zlon for ase. The -roject was not
Incluced in the 1986 Capital Lkidget was !m:-luded in the 1986-1990 Firm
Pl7an ($5.5M) with spending to be-.in in 19E7.
Fourzten Lasers Phase Il (ceoltal $2.: mll:!:-)
Seventeen lasers were initially purcnased ' to p:.-vide for ventilation of all.
domestic non-Actron brands. Subsequently, A:t=n-Plus has :ten developed for
BARCLAY. Tnis is a loser ventilated --.oduc-. Two other lose: candidates,
RICHLA14D LIGHTS and KIM, have been su2sequenzly oevel=ed. This project Is to
purchase and Install lasers to meet tne new croduct requirewts and
screc4ing flexibility.
l
H@Iah Soeec Fabrication Machinery For Develo.-w
t Cents: (ca.-!tal $3.0 millign)
This project will provide high speed e=ipment and other Improvements for
sample manufacturing along with high szeed a=11ziment for w-ndnery
develoMent. The equipment and improvements will make manufacturing
operat!ons more compatible with Macon and wil! Provide for a more efficient
transfer of technology.
5gonstitutn Tobacco Plant (caoital SN-5 -r-1111!on
It Is being studied to determine If a @and cast reconstituted tobacco process
of the RCS type is more advantageous tran tne currently usec EBR paper
process. By late 1986, we will be in a pos!t!ci to determine if the optimum
utilization of reconstituted tobaczo is all :&,%: cast. all panear type, or
mixtures of the two. A band cost facility wc@;!Z have a rewired capacity of
between 3 million to 15 million P.-Uncs *@ re:zns:!tuteO toba.---o per year
devencing upon the desired type and mixture. C--!struction c! our own plant to
make tnat Product could begin in 1987, witm s:&:-.-up early in 19ag.
C:)
30691/9
pWWCO pupwAnT To VILD. OF
BAT INDUSTRIES P-LC- MWESOTA DW091TM COPY pHLlp UMM, ET AL. CASE No. C1.9""s
CONSEkT Juommmr DATED 5/8M IIN STATE OF AMMSOTA, ET AL. V.
Secon: 1/3 Share Point VISA (caoital S6.9 million)
This project will provide the capability for increasing VIS- ffanufactUring
capability from 2 B/Yr. to 4 B/Yr and includes conversion of four pa--kers to
the VISA size.
Fabrication 2000 Plant-Wide (caoital $2.0 million)
This project consists of the design and implow. tation, of a plant-Avide
Fabrication Quality Assurance Infamtion and Control System. This phase will
consist of a minicomputer per group that will communicate w!th quality sensors
on each wdule (both off-line and on-line) and provide the operator witn vital
quality data per a CRT display at each module.
Propow capital spending by =jar project is defined on the succeeting
Schedule.
WN
3D691/10
B.A.'T INDUSTRIES P.LC. MINNESOTA DEPOSITORY COPV pM=D pURWAw To VILD. OF
CONSENT jUDGIAENT BATED $ISM IN STATE OF NAIRIESOTA, IT AL X, PHIP AWN& Er Al- CASS NO. C14M4105
dyl
. .... . ....
ail nw!l!qtv
a 44 m a xw-mv .4
-i 1 91.
C! dt 1! 0:
Ft Ins
64 P% on sk
6
6
too
3
BAT INmomms P.I-C. - MINNESOTA DEPOSITORY COPY PRMCED PURSUANT TO VILD. OF
CONSENT JUDGMENT DATED 5/8M IN STATE OF MNNESOT01, ET AL V. PWV AkRM& Er CASE NO. CI-9441565
C@
B.A.T IMMMMES P.LC. UMMOTA DEPOWORY COPY PAMCED PURWMT To VILD. oF
CoNsENT iuoamEmT DATEt) 5/$M iN SrArE oF A#NwsorA. Er AL v. PHjLp MaRRA Er CmE No. Cl-"4U5
V. Sr-NS:TI-VITI=--5
SENS @.Tt IV T.T TIES
Domestic Pricino ImDect
The Preview assumes that donest!c prices will Increase at an aggressive :ate of
31 25 per M each )an 1 a.: July I of each year. Sensitivities refle:tIng '-he
impact of lower pricing comme-s-,rate witm one dollar increases Janua:y 6-,4 July of
each year and lower pricing a: the general inflation rate follow.
Toca:-zo Grow Performance Impact
(I RT115R-s T-
CUM.
1987 1988 1989 1957-89
Pricing at S1.00/$1.00
Sales (22.7) (49.0) (71.2) (143.0)
Trading Profit (22.0) (47.5) (69.1) (13!.7)
Operating Cash Flow (22.D) (47.5) (69.1) (138.7)
CPI-U Pric1no IncludIno Excise Tax (Average Inc. Per Year $1. 30 Per m)
Sales (82.5) (145.7) (197.1) (425.3)
unding Profit (80.0) (141.3) (191.2) (A12.5)
Cberating Cash Flow (80-0) (141.3) (191.2) (A:2.5)
3---66:/9
B.A.T IMMMIES P-LC- - MWMWA DEPOSITM COPY - P"McED PuMANT To VILD. OF
CoNsrcNr JuoamEw DATEo BMW IN STATE OF MINNESOTA, ET AL y. PmjF AkRM& ET A CASE NO. CI-94-MS
n
ps
Imoact of N--: Introdwzino
new s:"s
The Preview -alls for twO
new brand introductions in April 1987
and April 1989
respectively. The critical impact to Pg:f
ormance expectations is beyond 'he Preview
period as the second now product is still
in its IntroductM period. The Impact of
not lounchin; the two new
brands over the
Preview period would be as follows:
Tonacco Grow PHO nce Imoact
-
-T
M
I
I
CUM.
volume (Bill!:Is)
1987
i9aa 1989
1967-89
New Product A
(.2)
(2.1) (1.9)
(3.3)
New Product 3
(.3)
(.3)
Total
--T-T)
-(M) 7")
71-.6)
Sales
New Product A
(4.7)
(24.7) (524)
(82.2)
New Product 3
- (10.6)
(10-6)
Total
=4.7)
r2-47) -(61-3)
TFE-7)
Trading P.-of.".
Now Product
6.2
23.9 8.6
40.7
New Product 3
11.1
Iota!
-772
-T"
n
7
4
30631110
B.A.*T IMXMTM P-LC- MWMOTA DOVUrO" Copy P"O") PUMANT To 1 AI'D- OF
cowwr jummorr DATO 5/8M *A VATE OF AINNESOTA, Er di- V- PFKF MORM Er CAsE No. CI-944065
Brand Seament Perf=mance
The following sensitivities indicate zhs relative impa:t on Sales Revenue and
Variatde margin of any SO price se;,-ent decreasing/increasing volumes by I billion
units each year from 1987 through 1939.
Cum.
Full Revenue 1987 19as 2989 1987-89
Wet Revenue 35.5 37.9 40.4 113.8
Variaole margin 20.9 22.9 25.0 68.8
Discounted 25's
Sales Revenue 26.6 28.4 30.3 85.3
variable margin 11.3 12.8 14.3 38.3
GEWRICS
Wes Revenue 23.0 25.5 27.9 76.4
Varlole margin 5.3 7.3 9.2 21.8
C:)
X-SEK/12
BAT INDUVRIES P.LC. MwNEwA DEpowrm Copy - PWwcED PumuANT To VILD. oF
CONSEW JUDGMENT OArED $19WIN STATE OFA6NN"OTA, ETA#- V. PWFAIORN& ErA CASEHO.C14K4M
fli
CD Tl
0
B.A.T INDUSTRIES P.LC. - MmmoTA Dposffm Copy - PWDuCED PURSUANT To I VILD. oF
CONSENT JUDGMENT DATED 54W IN STATE oFANNNEsom ErAL. v. PHiLipAfogge, ETA CASE NO. Cl-944MSGS
VI- SuMi-Iftry 2f thl LIFO Decrement Posit4on
POSITION P"ER
LEAF LIFO DECRDMNT XW&G0MKT
During the September 1905 CPC review meetings and subsequaztly inco:parat*d
in 0 "Position paper." Tobacco Group management focused attant.1--a on the
likelihood of a 12 million green pound 198S decrement under the assumpticz- of
continuing to maintain full durations. This, when coupled vith the desires to
duce durations (particularly in support of GENERIC volumes) iz!icated a
ssible 39 million green pound decrement to be exp*ri*31c*d is :;85. In letter
2905, while difficult to read because of the significant 2o&dx/,=Ioadx,
Indications veto that the decline rate on KOOL had ameliorated. which, when
coupled with GENERICS and RICHLAND, indicated that it was not uzrealistic to
aspect a flattening in BAN sales volume in spite of a projected continuing
decline in total U.S. Domestic market consumption. As a result of this
environment, we could envision economic benefit with deferring duration
r ductlo 5 into the future to prevent the liquidation of LrFO layers and the
r:sultax: liquidation of prior income tax deferrals. Additiona::y, this
position benefited SAT Industries' financial results by alleviatizq, as o"osed
to aggravating, the negative change is year-to-year reported lmz:m* mainly as 4
In result of foreign currency translation.
Nowever, the U.S. an well as IISM's environment has changed sizes the market
01 place reading in latter 1085. 14or* specifically; U.S. industry sales are now
forecasted to be lower, competitive activity in the value-for-mozey segment has
intensified lowering RICKLAND short-term sales ozpoctations, 5SN's establi"ad
19 brands are not performing above historin trends and it is premature to predict
the progress /performance of SAM new brands. While Tobacco Group's cormitmw=t to
growing Trading Profit, cash rlow, RONA and market share remains u=:hanged, the
B.A.'T INMOMIES P.Lr- - MINNOWA 0V0*ffGRy Copy - Pw)m=D PURSUANT To I VILM OF
comSENT JUDGMENT DATED SAW IN STATE OF MESETA, IT A6 V- PHLIP HORMS IT CASE No. CI-94-SM
changed environment lessens the confidence level of market share grov:.h in the
intermediate term. Within this changed environment. Tobacco Group RL-magemect
have reassessed the Intermediate period sales expectation Ltd conclude that
t ta2 N&W volume performance will decrease over the zsxt severwl years carrying
w:th it the Lz9vItAb2* situation of experiencing LIFO decrements,
notwithstanding inventory duration reduction desires.
The purpose of this paper Is to assess the economics of spreading the
impact of anticipated sales volume related decrements. and ignores the Impact or
economics of duration reduction decrements. It is recognized that economics are
only an* of the Inputs for decision making with regards to LIrO decrement
management. Sizeat SAT Industries reports an a FIr0 inventaiy valuation method,
any LIFO decrement has a negative impact oa U.K. basis reported Me t Income to
the extent of the higher U.S. Income taxes.
Tram an economic point-of-view, It we accept that unit volumes are going to
decline each year Is the Intermediate term. the only Justification for deferring
decrements would be the probability of U.S. lot=@ tax low changes reducing the
Corporate tax rate burden. The curreat tax reform proposals In Souse/Senate
Conference. provide for a loweriag of the Corporate tax rate. The post likely
oute Is a Corporate rats, of approximately 33% versus the current rate of
40%. Combining the federal end state rates would result in a rate of
approximately 37% versus 49%. $Luc* there exists a good probability of tax law
&%- a bsigg loqI&j&t*d for 19&7. & pprm"gat savings on the order of 12%. Lf
offectIve Jaa"ry 1. 1087. would be roalLsed an all jacme deferred until 2997
or ea expense items advanced from Igo? into loM 2his factor, depandiag On the
aseassammat of probability of poses", would clearly Indicate that the 1986
decremant abould be sla.1mized and deferred until 3.087 or later years.
2
BAT MmmiEs P.LC. - MMMMOTA DEPOSffM Copy - PRMCED PURSUANT To I VILD. OF
Comm JuDamwr DATEo Saw iN STATE oF AfINjyEsOrA, Er AL V. PHXV MOR#W. Er CASE No. C1444"S
in order to assess t),.* economics we have assumed, -lizing the same sales
forecast for each Setnaric, the impact on thet amount and timing of decremects a!
the following different purchase sce,mariost
Scenario 2 Do not alter purchases or defer tL7 sales to spread the
decrements over tb* Intermediate term.
Saissaria, XX A2t*r the smount of purchases and dofor ZLT sales such the,.
tbo decroonsts are spr*ad owuly w"r the intermediate tem.
Scenario 111 Same as Scenario 11 except alsLalso the 1986 decrement to
maximize tho betefLt of the probab2a thugot in the U.S.
Income Tax rate.
In someary, the pro-U.S. tax bomeflt and the V.X. basisr negative Not Incono
impact (assuming a constant U.S. corporate TAX Rate) is as f*220wst
(I Millions)
-&I- LM
lose 29.6 16.7 8.2
1097 25.6 17.7 26.8
less 21.6 31.3 22.3
Mo UA 21a 2=
Total 1996-1999 J30A I" =1
U,W, Basis Pet Xnew-at (S WIlliess)
lose (14.5) (8.2) (4.0)
1037 (12-5) (8.7) (13.2)
lose (10.6) (20.4) (20.4)
less _(1,21 (11,11) 111,21
Total 1986-1911 4"JI 121-91 AUAL
SM: ft Scenario ZZ and 111. 11 and U.S. 1986 Pre-tax Laecl%* would be
$2.1 less and UK and U.S. Not Income $1.4 041lion 1*88 " & r9su2t
of the tLT sales deforral. This ZLT castrIbutles impact has been
excluded from the Scenario 11 and X11 sumbers presesud hotels.
3
BAT INDUMMS P.LC. - MINNESOTA DEMWORy Copy - PRODUCED PURSUANT TO I VILD. OF
CONSENT JUDOWNT DATED SAM IN STATE OF A*NNESOrA, Er AL V. PHXV AkRMS. ETd6CASE NO. CI-94405
Ass-=inq the U.S. Corporate Tax late is reduced to 37% it 1957. the
Degative inpa:t On UX basis wet Income is as follows:
U.K. Regis Wet Tneomeq (S Millions)
1986 (14.5) (8.2) (4.0)
Los? (9-5) (6.5) (9-9)
lose (8.0) (7.9) (7.0)
loss (S.51 18,51 (2,S)
Total 1996-2950 117.51 M-11
Zxcluded from these calculations Is the impact an normal LITO and/or
standard costs of the differing levels of purchases as the amounts are rather
Insignificant and would directianally offset over the four years. ,From the
analysis, Scetarlo III creates a savings versus Scenario I and a breakeven with
Scenario 11 un-der a constant U.S. Corporate Tax iste, and an economic benefit
versus the other two Scenarios usdar a 1917 reduced U.S. Corporate Tax late.
Offsetting these savings would be the incremental carrying costs of "vancing
purchases (19--sring the deferral of tLT sales which provides permanent tax
savia95) resu:ting In the following Incremental working capital Investments
Co4mulatl2l Work
- 1.
Scenario Is
ZIA.
scenario III
Seenarle I
lose
3.2
*14.9
2987
9.4
0 9.6
loss
*10.0
#10.0
loss
-
-
It Is the Tobacco group's conclusion that from an economic point Of view.
advancing purchases to *at justified maleEt the U.S. Corporate Taz 2419 Is
reduced. While there sea be *cosmic jettIficaties for advancLog -pm2-
purchases. particularly the son-discousted Murl*Y tobaccos. there also exists
certain risks.
Y-Zl
BAT INDUSTRIES P.LC. MINNESOTA DposffM COPY - PROOUCIED PURSUANT To VILD. OF
."T jUDGMENT DA*MD SISM IN STATE OF A&MMSOT& ET AL V. PMtr MORRML ET A" CAM NO. Cl-944M
CONSF
W
Specifically. with decreasing market &bar*, S&W's miximum requir*ment
lessens and, nor* importantly, the purchase agreements provide for termination
should the basis of the support program change or earmarking of any cigarette
*zcise tax occur.
Attacb*d are eabibIts defining purchases/decremeats under each of the three
Scenarios.
It is ImperatLvt that %=JZfzAT advise at the earliest opportunity which
pathway Tobacco Group In to follow.
an
Attachments
7-14-86
B.A..T INDUWMIES P.LQ MIMNESWA DEPOWFORY COPY PWDUCED P"WANT To V"'M OF
CoNsENT JUDGMENT DATED SAM IN ArAll OF ARAWSOTA6 IT AL- V' PHXIP WERS' ET CASE NO. C14M-Mg
GpTrN POUNDSAMLL)Lps IN MILL
TOTAL
au IM IM IM 12AG-19to
POUNDS 32 2 21 17.6 12.6 94.3
111MM S (PRE-TAX) 29:5 25:: 21.6 14.6 91.4
orl SPREA5 EvrV--y fnrrrR r
POUNDS 17
.7 17.7 17.6 17.9 70.9
INCMC S tn"AX) 15.7 27.7 22.3 23.1 79.9
1996 (DrFER r=1
POUNDS 25.4 17.6 17.9 70.2
2
0
0
INCOM $ (PRv_tAx)
3
:
1 26.8 21.3 23.2 79.3
NOTESs All three scezarios as*=@ bringing Ma*s 1989 year-end Inventories to
current target durations (i.e., SM management's dealt* to reduce target
l*af duratiors has not been attainable). The higher Scenario I
cumulative Poundage decrement results from assuming con-deferral of W.
Sales whereas Scenario It sad III assume deferral In 1296 ase each year
tbo:*aft*r. :t should be noted that ZLT sales deferral in 2985 would
negatively ir.-ract ELT contribution by S3.2 million from the amo=t
included in tie juA* on.
C.:1
@z
IA
V
MW"WA DWx)WrORV COPY - PRODUCED PURMANT TO w-o-OF
B.A.T INDUSTRES P-LC- CASE 140. CI-Wws
COMEW JUDaMENT DATED 5/$M IN STATE OF MWESOTAET AL V. pWjp MRRM ET
ROUGH CALCULATION OF PR03ECTED
OFUENTAL REDRIED)
LEAF MJN:) DECREMENTS WRLEY/FLUE-CLAE2 I N
MAINTA
ASSLAOUNG
@
INING TAR@.T
ION
S
(POU
PLP--HASES
USINSS
2986
No (Ex:10ing ELY)
F;ue-:u:eo
54.4
74.7
(23.3)
birley
66.2
0.1
6.1
C-.1ental
t
14.1
15.5
T3"
(1-6)
T77)
al
Sub To
ELY - Inventory Change (Non-Deferral)
(16.6)
Total
T")
1997
TD9 (Excludino ELY)
_
a@
-Irus-cu.m
63.5
68.4
(A.9)
sirley
37.8
55.2
(17.4)
M-lental
13.9
T"
13.5
TW
T
.4
=V)
Sub Total
ELT - Inventory Change (W-Deferral)
.
-0-
Total
198!
N4 (EX:1W4.12 ELY)
F1u2-;J-.e=
56.0
64.9
(8.9)
&=ley
".7
52.3
(7.6)
r--lental
11.5
12.9
(1.1)
Sub Total
irry
T"'.T
T777)
Ej - Invemory Change (Non-Deferral)
-0-
Total
T.,T.T)
19ep
-No; (Ex:ludd!np ELY)
Flue-Cure:
54.0
60.0
(6.8)
&i-.ley
44.6
49.1
(4.5)
M-lental
10.9
12.2
(1.3)
SU15 Total
To"
T1776)
ELY - Inventory Change (Non-Deferral)
-0.
--Total
BAT IMMMIES P.L.C. MINNESOTA DEPOSITORY Copy PRODUCED PURSUANT To V11.0. OF
CONSENT JuDamENT DATED 540B IN STATE OF MINNESOTA, Er AL V. PMtp AAORAM ET CASE No. Cj4W4W5
ROUGH CALCULATION OF PRCJECTED
LEAF POUND DECREF@IZNTS LEY/FLUE-CLRED GREC -'"L
11 UR tr4w Ur PorM.,M)
ASSLNIhC IAK"i UW.TrIA, Aj
(pujMJ5 AN MILLIV11b)
PURCHASES Uslics INECREoc.1,
1986
Ww (Excluding ELT)
Flue-Curec 54.4 74.7 (213)
s.r-ley 66.2 6C.1 6.1
D.-lental 15.2 15.5 (.3)
Sjb Total T" TSM Tr4-;)
JLT - Inventc:y Chanp (Deferral)
Total
1987
WW (Excludino ELT)
Fiut-=Co 63.2 6e. 4. (5.2)
ffirley 43.4 55.2 (11.8)
ftlental 12.8 13.5 (M
Sib Total Trr-4 77rT TrrT)
ELT - Inventory Change (Deferral) -0-
octal T")
1989
Ww (ExcW.Ino ELT)
Flue-CLred
56.0
fA. 9
(8.9)
ex-ley
44.7
52.3
(7.6)
0:11enW
11.6
12.9
(1.1)
Sub Total
M's
MY
TM)
ELT , 1"van1c.-, Change Iofe=a,)
-0-
s-
ll
W (EX EILT)
gl
a
flue-
e
a
54.3
so.$
(6.5)
8--ley
39.0
A9.1
(10.1)
Miental
Sub Total
20.9
Ta .7
12.2
=-T
(1.3)
ELT - Inventory Charge (Deferral)
Total
TrM
(a) Indudes deferral of 13.4 million pouros each year thereatte.-.
7/11/86
13lu/2
C-3
B.A.T INDUSTRIES P.L.C. - MINNESOTA DEposrroRy Copy PRODUCED pURSUMT To I VII.D. OF
CONSENT JUDGMENT DATED SWU IN STATE OF A#1NNES0TA, Er AL V. PhLp AfoRgIS, Er CASE No. C14M-M5
ROV44 CALCLXATIDN OF PROYECTED
LE&r POUN:) Dc---R-:MC-WTS (BLRLEYMLFE-C
@D
LR
&U
511TAL REDR' , Q)
AMMM M-AINTAININS TAR3ET MATIONS
-Rn
AT
$
Z
k
r
M !N4- 17zb UL;A"-mzKT
(KJUrV
b IN MILLION5)
"CHASES
USINZI
NJ
(Excluddinc ELT)
Flue-M7.9-d
59.4
74.7
(115.3)
9j:11y
68.9
60.1
8.8
Driental
15.2
15.5
-
Od
SLb Total
=4
7r.7)
ELT - Inv;ntory Change (Deferral)
(3.2)(a)
--Total
TOM
1997
Uw (Excludino ELT)
Flue-C=00
58.2,
'
68.4
2
(14
5)
Mley
40.7
55.
.
Oriental
12.6
13.3
7
@
So Total
4
)
T
ELT - Inventory Change (Deferral)
--
-0-
TIM)
total
1983
Ww (Excludin., ELT)
Flue-"Ctd
56.0
64.9
(8.9)
Burley
44.7
52.3
(7-6)
Miental
11.5
12.9
(1.1)
SLO Total
1MY
Tj,,j-r
TM. 9)
ELT - Inventory Ommgm (Deferral)
-0-
Total
l"9
aw (Exc.1u.4ing ELT)
Fiue-=Cd
54.3
60.5
(6.5)
0=10Y
39.0
49.1
(10.1)
Miental
10.9
12.2
(2.3)
'a")
&b Total
-0-
ELT - inventory chimp (Deferral)
Total
(a) Ircludes deferral of 13.4 million pounds and each year thereafter.
7/11M
131u/3
46,5795L V4.
B.A.T Wousmas P.LC. - UNNESOTA OEpOWORy COPY - pMMCED pURSUA#ff To I.V11.0. OF
ComsENT JuDamEw DATED 5/8M INATATE OF AJINWSOrA, ET AL V. PHLIp AjOgW, ET CASE NO. CI-944MS
0
LIFO LEW DEM-WO WAVMNT
W-M-WIS-1 w W LL I (INS
fLUE-CUFIED #III MINIMIZE #I TARMY Oil SPREAD #111 MINIMIZE
It 1XIM.1 #a 11 51MEM) 'NIS -M[-:NYS 1986 DRM-WHIS
OJIMI JIM tX! L IE14-NTS rRpAI11W, t)F
1986 IX-CAL14L jW
1986 49.4 58.1 (a) 58.1 (0) 58.1 (a)
bixqestjc/Gff*zre 44.4 44.4 10.0 8.1 8.1 10.8
- "Pool" 10.0 10--0 -5rw
2 total 54.4 54.4
29.7 35.3 35.3
53.5 53.2 4a.2
"Pool" 10.0 10.0 10.0 8.1 8.1 5.4
Total -6-371 -55--.f
1908 - 48.0 36.9 36.9 36.9
49.0 4a.0 7.8
8.0 8.0 8.0 7.8 7.8 ----
7- -W.5 44.7 44.7 44.7
Total 56.5 5675
ci M9 46.3 37.1 31.5 31.5
".0 46.3 7.5 7.5 7.5
"Poop 8.0 8.0 39.0
-3r- -koy
T9 --0
Total .0
Totals 1"6-1"9 161.8 161.8 161.8
unwstlc/UFFSMVO 191.9 191.9 191.9
36.0 36.0 36.0 31.5 31.5 31.5
-- DWI TOO 1-93-3
Total 22rl 227.9 22T 9
3b
tbte: All three SM-005 ss-99W being at target durations for both Flue-Dired WO DurleY at year-end 1989. Future
year deCfements or awroximatelY 10-15 million green paumis wwId continue to be experienced assuming continuing
C)
C-) sales volume declines at approximately the saw rate.
0 S 4 (a) includes 9.9 million green pmwWs or im crop purchaw post x-mas i9es.
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