7. Excerpt from the Annual Report of PPG Industries, Inc. to the Securities and Exchange Commission for Fiscal Year 1970 (Response to Item 1 (c) of Form 10-K)

The Corporation maintains centralized research and development laboratories for the Glass and Fiber Glass Divisions at Harmarville, Pennsylvania, and for the Coatings and Resins Division at Springdale, Pennsylvania. The Chemical Division's research laboratories are located in Barberton, Ohio; Natrium, West Virginia; and Corpus Christi, Texas. Basic research and development of new and improved products and processes are carried on each of these laboratories and to a limited extent at a number of the manufacturing plants. Research and development expenditures during 1970 amounted to approximately $33,526,000. Approximately 830 professional employees are engaged in this activity.

Average employment during 1970 by the Corporation and its subsidiaries was approximately 39,000.

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(c) During the four years ended December 31, 1970, percentages of net sales and pre-tax earnings of the Corporation by lines of business were as follows:

Pricing

Corporate costs and income, including administrative expense, interest charges and investment income, have been allocated on a consistent basis using sales and assets employed as the criteria for determining pre-tax earnings by lines of business. procedures for intra-company transfers of product did not have a material effect on the above percentage of pre-tax earnings.

The 1970 changes in percentages of pre-tax earnings by lines of business primarily reflects the sharp drop in earnings of Glass and Fiber Glass. Although Chemicals and Coatings & Resins earnings remained reasonably constant, the percentages increased because of the decline in total earnings.

The sharp decline in Glass earnings is attributed to decreased demand in the transportation and construction markets, unrecovered inflationary costs, and the automotive strike. The decline in Fiber Glass earnings in 1970 was prime-ily caused by lower sales volume, start-up costs related to a new insulation plant, and the strike in the tire industry. Chemical earnings were adversely affected during most of 1968 and 1969 by soft prices in some major chemical markets served by the Corporation.

8. Excerpt from the Annual Report of W. R. Grace & Co. to the Securities and Exchange Commission for Fiscal Year 1970 (Response to Item 1 (c) of Form 10-K)

All of the principal raw materials needed for Grace's United States and Cana operations, with the exception of potash, sulfur, natural rubber and castor oil, are either produced by Grace in the United States or Canada or purchased from domestic sources. Ammonia is sup

plied to certain United States plants from Grace's Trinidad plant. The major part of Grace's requirements for potash and sulfur is supplied by United States and Canadian producers while the remainder is imported. Most raw ingredients for food products are available locally except that cocoa beans are obtainable only from foreign sources.

Grace engages in an active research and development program directed toward the development of new products and processes, the improvement of existing products and processes and the development of new uses for existing products. There is a central chemical research laboratory in Clarksville, Maryland, and additional research activities are conducted at other locations in the United States and Europe. Total research and development expenditures for 1970 were $20,772,000 and there are approximately 1,000 professional employees engaged in research and development work. The amount of research and development expenditures relating to customer and governmentsponsored projects (as opposed to company-sponsored projects) and the number of such professional employees engaged full time in customer and government-sponsored work is not considered material. Grace has approximately 61,700 employees.

(c) FINANCIAL Information as to Lines of Business and Classes of Products and SeRVICES The following table gives the sales and operating revenues of the Company and its consolidated subsidiaries for each Group described above for the five years ended December 31, 1970.

•The data in this table has been restated to include businesses acquired in poolings of interests transactions. ** Includes $28,000,000 for 1966 (from September 22). $126.000.000 for 1967, $135,000,000 for 1968 and $63,000,000 for 1969 attributable to Miller Brewing Company, sold in June, 1969.

***Grace Line sold in December 1969 and Peruvian operations deconsolidated as of June 30, 1970 (except that Peruvian sugar operations deconsolidated as of June 30, 1969).

63 4

68 4

131

8

148 8

66 4

92-578 O 73 - 39(2B)

F. SECURITIES AND EXCHANGE COMMISSION PAMPHLET, "THE WORK OF THE SECURITIES AND EXCHANGE COMMISSION," NOVEMBER 1971

WARNING TO INVESTORS!

INVESTIGATE BEFORE YOU INVEST

Avoid unnecessary losses in the purchase of securities by following this ten-point guide to safer investments:

1. Before buying-Think!

2. Don't deal with strange securities firms. (Consult your broker, banker or other experienced person you know and trust.)

3. Beware of securities offered over the telephone by strangers.

4. Don't listen to high-pressure sales talk.

5. Beware of promises of spectacular profits.

6. Be sure you understand the risks of loss.

7. Don't buy on tips and rumors-Get all the facts!

8. Tell the salesman to: Put all the information and advice in writing and mail it to you-Save it!

9. If you don't understand all the written information-Consult a person who does.

10. Give at least as much consideration to buying securities as you would to buying other valuable property.