Advisory opinion letter

TO: Members, NPFI Executive Committee
FROM: E. M. Wheeler
Gentlemen:

-A preliminary proposal for a financial data project was approved by the Board at its June meeting. Since thén, the Controller Committee has met and has made a few modifications in the proposal. These are minor but, since this is. a new project—and one which we consider very important—I would like you to examine it carefully” Afte receiving the Executive Committee’s suggestions and approval, we will consult with counsel and secure any governmental approval deemed necessary to insure ourselves we are not running into antitrust problems. Completion of this step then takes us into a sales-ratification position with not only our own members but anyone else in the industry who desires to participate. Unless we have broad support of the industry this effort will be meaningless. Co Since coming-into the.industry I have been impressed by two things: One. A dearth of meaningful financial and statistical guide lines on which sound management decisions can be reached. Two. An intense expressed desire by management to do a better job for its customers, stockholders and employees. The proposed Fertilizer Industry Financial Report is designed to help the industry to attain the desired goal as outlined in “Two” above. I urge your approval and support.

Attached is the outline of the proposal prepared by the Controller Committee. This outline is a condensation of many hours of work by a top-notch group of men in our industry. Undoubtedly, some of your own personnel have contributed to it. (See attached committee list.) As is done with the Fertilizer Index, all individual company data will be handled in a strictly confidential manner by a highly reputable accounting firm. Twice yearly the data will be prepared and a public report in dollars (Exhibit “A”) will be released together with the aforementioned ratios as outlined in detail on pages 7 and 8. Simultaneously, your own company data will be converted to ratios and returned only to you for individual company study and action. We have discussed this project with three of the top eight national firms. Estimates thus far indicate that the cost of the project is well within our budgeted item of $15,000. I look forward to getting your response on this by Thursday, July 31.

SUBJECT: NPFI FERTILIZER INDUSTRY FINANCIAL REPORT T. Purpose and Primary Criteria A. The Fertilizer Industry Financial Report has the objective of assisting management in decision making by providing: 1. Individual companies with key ratios and other other data which will enable closer scrutiny and more effective management of the industry’s financial condition, as well as enabling a company to compare its data with those of the industry.

2. Information such as that concerning profit levels and returns on investments that can be useful in: (a) Improving the industry’s image with financial and other public groups.

(b) Providing protective evidence in objection to additional taxation or other regulatory controls.

B. The following additional criteria are observed : ; 1. The data from which this information is obtained must be available or obtainable with minimum effort.

2. The information must be in keeping with the competitive structure of the industry.

3. The statistical information for the industry may be made available to the public.

4. The individual company reports to the tabulating organization will be kept strictly confidential and should never be sent to the NPFT. 5. The cost of tabulation and distribution will be borne by the NPFYT,