<PAGE> 1
SCIOTO INVESTMENT COMPANY
COLUMBUS, OHIO
ANNUAL REPORT
YEAR ENDED
DECEMBER 31, 1995
<PAGE> 2
SCIOTO INVESTMENT COMPANY
C/O 4561 LANES END STREET, COLUMBUS, OHIO 43220-4254
DIRECTORS:
Stephen Kellough Marilyn B. Kellough Arthur D. Herrmann
E.C. Redman Brooks P. Julian Donald C. Fanta
OFFICERS:
Stephen Kellough, President and Treasurer
Marilyn B. Kellough, Vice President and Secretary
Transfer Agent and Registrar for the Company's Class A
Common Stock: National City Bank, Stock Transfer Department,
1900 East Ninth Street, Cleveland, Ohio 44114
<TABLE>
<CAPTION>
U.S. Average Annual
Inflation Rate, Based
upon the Consumer Price
Index, as a Per Cent,
for Each Year
-------------------------------
<S> <C> <C> <C> <C>
1976 4.8
1977 6.8 Class A Common
1978 9.0 Stock Market
1979 13.3 Weighted Average Price per Share,
1980 12.4 Maturity Term of in Dollars,
1981 8.9 the Company's Bond at December 31
1982 3.8 Portfolio, in Years, ----------------
1983 3.8 at December 31 Bid
1984 3.9 --------------------- ---
1985 3.8 7.1 7.00
1986 1.1 7.0 7.50
1987 4.4 6.2 7.50
1988 4.4 6.0 8.20
1989 4.6 3.8 9.00 Asked
1990 6.1 3.3 12.00 -----
1991 3.1 3.0 12.00 15.00
1992 2.9 2.8 11.50 14.50
1993 2.7 2.0 11.00 15.00
1994 2.7 1.4 12.00 14.00
1995 2.5 1.4 11.50 14.00
</TABLE>
2
<PAGE> 3
SCIOTO INVESTMENT COMPANY
C/O 4561 LANES END STREET
COLUMBUS, OHIO 43220-4254
Dear Fellow Shareholders:
Scioto Investment Company's net investment income was $267,350 in 1995
($0.597 per share) compared to $255,555 in 1994 ($.570 per share). The per
share amounts are based upon the 447,950 shares outstanding throughout each
year. Dividends paid were $261,603 in 1995 ($0.584 per share) compared to
$253,988 in 1994 ($0.567 per share). Because the Company's portfolio was
invested exclusively in state and municipal bonds, all dividends for both years
were designated as exempt from federal income tax.
Unrealized appreciation of investments was $65,933 in 1995 versus
unrealized depreciation of investments of $182,473 in 1994. Net asset value
per share increased slightly to $17.08 at December 31, 1995 from $16.92 at
December 31, 1994. Net assets were $7,652,761 at December 31, 1995. Gross
investment interest income continued to decline in 1995 principally because
interest rates in the economy declined throughout 1995. Bonds purchased in
1995 generally yielded slightly less than bonds maturing in 1995.
The Company would like to thank and to recognize E. C. Redman for his
many years of loyal service and valuable contributions to the Company. Mr.
Redman is retiring from the board this year and will not be standing for
re-election at the annual meeting of shareholders to be held in June, 1996.
Mr. Redman was associated with the Company's predecessor business, Big Bear
Stores Company (BBSC), an Ohio corporation, and with the Company's founder,
Wayne E. Brown, from 1938 until BBSC's sale of its assets in 1976; and has been
a director of Scioto Investment Company, successor business to BBSC, the same
corporation after a name change, continuously since its inception as a
regulated investment company in 1976. The Company has always, from 1938 to
date (58 years), relied on his expert skills and insightful advice. We
appreciate the opportunity of having worked with Mr. Redman during his steady
and shining performance.
Kent K. Rinker, president of Rinker & Co. and senior vice president of
Laidlaw Equities, Inc., is standing for election to the board seat being
vacated by Mr. Redman.
Scioto Investment Company is a non-diversified closed-end management
Company registered under the Investment Company Act of 1940. The Company
generally invests in state and municipal bonds which are exempt from federal
income tax and rated "A" or better by Moody's Investors Service, Inc., before
the effect of insurance coverage on the bonds, if any. The Company has
qualified as a regulated investment company under the Internal Revenue Code
since 1976 and expects to again so qualify in 1996. Therefore it is expected
that all of Scioto Investment Company's 1996 net investment income will be paid
out to shareholders in the form of interest dividends exempt from federal
income tax.
Sincerely,
SCIOTO INVESTMENT COMPANY
/s/ Stephen Kellough
-------------------------
By Stephen Kellough, Chairman and
CEO, April 29, 1996
3
<PAGE> 4
DELOITTE &
TOUCHE LLP
[LOGO]
- --------------------------------------------------------------------------------
155 East Broad Street Telephone: (614) 221-1000
Columbus, Ohio 43215-3611 Facsimile: (614) 229-4647
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
Scioto Investment Company:
We have audited the accompanying statements of assets and liabilities of
Scioto Investment Company, including the schedules of investments, as of
December 31, 1995 and 1994, and the related statements of operations and of
changes in net assets, and the financial highlights for each of the five years
in the period ended December 31, 1995. These financial statements and the
financial highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included either physical counting, or confirmation by
correspondence with the custodian, of securities owned at December 31, 1995 and
1994 and for the securities purchased but not yet received at December 31, 1994,
we received confirmation from the broker. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Scioto Investment
Company at December 31, 1995 and 1994, and the results of its operations, the
changes in its net assets, and the financial highlights for each of the five
years in the period ended December 31, 1995 in conformity with generally
accepted accounting principles.
/S/ DELOITTE & TOUCHE LLP
January 19, 1996
- ---------------
DELOITTE TOUCHE
TOHMATSU
INTERNATIONAL
- ---------------
4
<PAGE> 5
SCIOTO INVESTMENT COMPANY
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
ASSETS:
Investments in money market funds and securities - at
quoted market value (amortized cost, 1995 - $7,583,690;
1994 - $7,772,011) (Note 1) see accompanying schedules $7,625,523 $7,747,626
Interest receivable 40,910 51,780
Cash 1,220 1,710
Prepaid expenses 783 783
---------- ----------
Total assets 7,668,436 7,801,899
---------- ----------
LIABILITIES:
Payable for investment purchased 203,916
Accrued expenses - professional and transfer agent fees 15,675 16,902
---------- ----------
Total liabilities 15,675 220,818
---------- ----------
NET ASSETS (net asset value per common share based
on 447,950 common shares outstanding, 1995 - $17.08;
1994 - $16.92) (Notes 2 and 4) $7,652,761 $7,581,081
========== ==========
</TABLE>
See notes to financial statements.
<PAGE> 6
SCIOTO INVESTMENT COMPANY
SCHEDULES OF INVESTMENTS
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
December
-----------------------------------------------------------------------------
Moody's
Investors Yield to
Service, Inc. Moody's Maturity
Bond Rating Investors (Based on
Before Service, Inc. Quoted Coupon
NAME OF ISSUER AND Insurance Bond Rating Market Interest Due Principal
TITLE OF ISSUE (Unaudited) (Unaudited) Value) Rate Date Amount
<S> <C> <C> <C> <C> <C> <C>
UNAFFILIATED MONEY MARKET FUNDS:
Cardinal Government Securities Trust 5.13% 5.13% Demand $ 130
Cardinal Tax-Exempt Money Fund 3.08 3.08* Demand 1,464,637
----------
Total unaffiliated money market funds
1,464,767
UNAFFILIATED MUNICIPAL BONDS ----------
LISTED IN ORDER OF MATURITY:
Salt River Project, Agricultural
Improvement, Arizona AA AA 6.00 6.00 01/01/96 200,000
Franklin County, Ohio, Childrens Hospital AA AA 3.76 5.40 05/01/96 150,000
State of Ohio, Highway, Series Q AA AA 3.39 5.70 05/15/96 200,000
State of Ohio, Highway, Series Q AA AA 3.39 5.70 05/15/96 500,000
Columbus, Ohio, Sewer System Revenue AI AI 3.66 5.00 06/01/96 300,000
Upper Arlington, Ohio, General Obligation AA AA 3.36 5.70 12/01/96 100,000
Worthington, Ohio, City School District A AAA 3.36 6.10 12/01/96 100,000
Lockland, Ohio, City School District AI AI 3.54 9.70 12/01/96 150,000
Dublin, Ohio, City School District A AAA 3.62 5.00 12/01/96 500,000
Hamilton County, Ohio, Building Renovation AA AA 3.77 6.10 12/01/96 200,000
Ohio State University, General Receipts AI AI 3.78 4.55 12/01/96 200,000
State of Ohio, Higher Education AI AI 3.92 4.625 12/01/96 700,000
Flat Rock, Michigan, I.D.R. AI AI 5.22 5.375 09/01/97 145,000
Blue Ash, Ohio LTGO Road Improvement AA AA 3.69 4.450 11/01/97 150,000
Belmont County, Ohio Various Purpose N/A AAA 3.93 3.550 12/01/97 150,000
Delaware County, Ohio LTGO B/E AI AI 4.03 4.450 12/01/97 250,000
Grandview Heights, Ohio CSD BEO AI AI 4.01 7.500 12/01/97 100,000
Ohio State Higher Education Series II-A AI AAA 3.92 5.300 12/01/97 400,000
Dublin, Ohio, City School District A AAA 3.92 4.65 12/01/97 500,000
Lucas County, Ohio, Improvement Revenue BAAI BAAI 5.18 5.25 02/01/98 180,000
Montgomery County, Ohio Waste B/E AA AAA 4.18 4.10 11/01/98 100,000
Cuyohoga County, Ohio LTGO B/E AA AA 4.03 4.10 11/15/98 400,000
Canton, Ohio Waterworks System Import BAA AAA 4.14 5.00 12/01/98 115,000
Columbus, Ohio CSD RFDG B/E A AAA 4.14 4.45 12/01/98 300,000
State of Pennsylvania 6.00 02/15/95
State of New Jersey 5.50 05/01/95
State of Ohio, Highway, Series Q 5.70 05/15/95
Franklin County, Ohio, Holy Cross 3.40 06/01/95
Youngstown, Ohio 5.75 10/01/95
Hamilton, Ohio, Gas Systems Revenue 3.20 10/15/95
Delaware County, Ohio, District Library 11.75 11/01/95
Woodmore, Ohio, Local School District 6.00 12/01/95
Cleveland, Ohio, City School District 4.15 12/01/95
Franklin County, Ohio, General Obligation 7.00 12/01/95
Ohio State Water Development Authority 3.35 12/01/95
Reynoldsburg, Ohio, General Obligation 4.80 12/01/95
-----------
Total unaffiliated municipal bonds 6,090,000
-----------
TOTAL $ 7,554,767
===========
Ratings shown have not been audited by Deloitte & Touche LLP.
* Represents average yield for 1995. (1) Total principal amount of 1995 maturities - $2,970,000.
(2) Total principal amount of 1995 purchases - $1,965,000.
(3) Total principal amount of 1995 mandatory sales - $85,000.
See notes to financial statements. (4) Total principal amount of 1995 sales - $50,000.
</TABLE>
6
<PAGE> 7
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
31, 1995 December 31, 1994
- ---------------------------------------------------------------- ----------------------------------------------------
% of Total % of Total
Portfolio Portfolio
Annual (Based on (Based on
Coupon Quoted Quoted Quoted Quoted
Interest Amortized Market Market Principal Amortized Market Market
Income Cost Value Value) Amount Cost Value Value)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 7 $ 130 $ 130 $ 123 $123 $123
45,111 1,464,637 1,464,637 19.22 % 490,590 490,590 490,590 6.33 %
------- --------- --------- ----- --------- --------- --------- -----
45,118 1,464,767 1,464,767 19.22 490,713 490,713 490,713 6.33
------- --------- --------- ----- --------- --------- --------- -----
12,000 200,000 200,062 2.62 200,000 200,239 202,416 2.61
8,100 150,000 150,797 1.98 150,000 150,000 150,835 1.95
11,400 199,966 201,686 2.64 200,000 199,876 202,952 2.62
28,500 503,057 504,215 6.61 500,000 511,209 507,380 6.55
15,000 300,000 301,638 3.96 300,000 300,000 300,642 3.88
5,700 100,000 102,093 1.34 100,000 100,000 102,019 1.32
6,100 100,000 102,453 1.34 100,000 100,000 102,748 1.33
14,550 154,264 158,273 2.08 150,000 158,917 163,351 2.11
25,000 500,000 506,170 6.64 500,000 500,000 501,345 6.47
12,200 201,873 204,156 2.68 200,000 203,916 203,916 2.63
9,100 202,253 201,374 2.64 200,000 204,711 198,360 2.56
32,375 703,128 705,572 9.25 700,000 706,541 695,464 8.98
(4) 7,794 144,606 145,339 1.91 195,000 194,163 195,105 2.52
(2) 6,675 151,175 151,992 1.99
(2) 5,325 149,450 148,944 1.95
(2) 11,125 250,000 251,913 3.30
(2) 7,500 104,541 106,375 1.39
(2) 21,200 406,964 410,060 5.38
23,250 500,000 506,640 6.64 500,000 500,000 494,070 6.38
(3) 9,450 178,728 180,252 2.36 265,000 262,204 265,077 3.41
(2) 4,100 100,261 99,781 1.31
(2) 16,400 400,000 400,748 5.26
(2) 5,750 115,000 117,694 1.54
(2) 13,350 303,657 302,529 3.97
(1) 100,000 100,000 100,171 1.29
(1) 300,000 300,063 301,236 3.89
(1) 400,000 400,063 401,964 5.19
(1) 150,000 149,970 149,118 1.92
(1) 120,000 119,865 120,696 1.56
(1) 240,000 240,000 236,983 3.06
(1) 100,000 106,860 105,849 1.37
(1) 100,000 100,000 101,087 1.30
(1) 230,000 231,705 229,045 2.96
(1) 230,000 237,817 235,078 3.03
(1) 800,000 800,000 789,888 10.20
(1) 200,000 203,179 200,118 2.58
------- --------- --------- ----- --------- --------- --------- -----
311,944 6,118,923 6,160,756 80.78 7,230,000 7,281,298 7,256,913 93.67
------- --------- --------- ----- --------- --------- --------- -----
$ 357,062 $7,583,690 $7,625,523 100.00 % $7,720,713 $7,772,011 $7,747,626 100.00 %
========== ========== ========== ====== ========== ========== ========== ======
</TABLE>
7
<PAGE> 8
<TABLE>
<CAPTION>
SCIOTO INVESTMENT COMPANY
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, 1993, 1992 AND 1991
- ----------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Nontaxable interest (net of bond premium amortization and discount accretion, 1995 - $43,899;
1994 - $33,494; 1993 - $22,782; 1992 - $40,508; 1991 - $49,617) (Note 1)
Taxable interest
Total investment income
OPERATING EXPENSES:
Professional services:
Accounting and bookkeeping
Audit and tax
Legal
Transfer agent fees
Directors' fees
Miscellaneous
Total operating expenses
INVESTMENT INCOME - NET
REALIZED AND UNREALIZED GAIN ON INVESTMENTS - Unrealized
appreciation (depreciation) of investments
Net gain (loss) on investments
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, 1993, 1992 AND 1991
- ----------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
Operations:
Investments income - net
Realized and unrealized appreciation (depreciation) of investments
Net increase in net assets resulting from operations
DIVIDENDS TO SHAREHOLDERS FROM INVESTMENT INCOME - Net
TOTAL INCREASE (DECREASE) IN NET ASSETS
NET ASSETS AT BEGINNING OF YEAR
NET ASSETS AT END OF YEAR (Including undistributed net investment income,
1995 - $185,147; 1994 - $179,400; 1993 - $177,832; 1992 - $177,457; 1991 - $174,155)
8 See notes to financial statements.
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Year Ended December 31
-------------------------------------------------------------
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
$332,004 $343,179 $369,159 $422,049 $429,211
6 4 3 4 6
-------- -------- -------- -------- --------
332,010 343,183 369,162 422,053 429,217
-------- -------- -------- -------- --------
16,550 17,810 15,433 16,195 16,185
13,250 17,400 12,950 12,750 12,200
18,139 35,622 16,967 16,625 12,659
6,207 6,341 6,538 3,907 2,435
8,000 8,000 8,000 7,500 6,000
2,514 2,455 2,053 2,069 2,092
-------- -------- -------- -------- --------
64,660 87,628 61,941 59,046 51,571
-------- -------- -------- -------- --------
267,350 255,555 307,221 363,007 377,646
-------- -------- -------- -------- --------
65,933 (182,473) (24,126) 16,745 236,175
-------- -------- -------- -------- --------
65,933 (182,473) (24,126) 16,745 236,175
-------- -------- -------- -------- --------
$333,283 $ 73,082 $283,095 $379,752 $613,821
======== ======== ======== ======== ========
- -----------------------------------------------------------------------------
Year Ended December 31
-------------------------------------------------------------
1995 1994 1993 1992 1991
$ 267,350 $ 255,555 $ 307,221 $ 363,007 $ 377,646
65,933 (182,473) (24,126) 16,745 236,175
-------- -------- -------- -------- --------
333,283 73,082 283,095 379,752 613,821
(261,603) (253,988) (306,846) (359,704) (377,174)
-------- -------- -------- -------- --------
71,680 (180,906) (23,751) 20,048 236,647
7,581,081 7,761,987 7,785,738 7,765,690 7,529,043
--------- --------- --------- --------- ---------
$7,652,761 $7,581,081 $7,761,987 $7,785,738 $7,765,690
========== ========== ========== ========== ==========
9
</TABLE>
<PAGE> 10
SCIOTO INVESTMENT COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------
1. ACCOUNTING POLICIES
Organization - The Company was incorporated in 1933 in Ohio. In September
1976 the Company registered under the Investment Company Act of 1940 and
presently operates as a non-diversified, closed-end management company. See
Note 3 regarding sale of Company assets on August 30, 1976, change of
business and name.
Security Valuation - Investments in municipal bonds are stated at the bid
price as of the end of the year. The bid price (used to determine quoted
market value in the accompanying schedule of investments) is determined
from written quotations received from a reputable broker. Investments in
money market funds are stated at cost which equals market value. At
December 31, 1995, unrealized appreciation of investments of $41,833
consisted of $44,826 of unrealized gains and $2,993 of unrealized losses.
Cost of investments is the same for Federal income tax purposes.
Security Transactions - Security transactions are accounted for on the
trade date. Purchases and sales (including maturities) of investments,
excluding money market funds, for the year ended December 31, 1995 were
$1,965,000 and $3,105,000, respectively. Cost of securities sold is
determined using the identified amortized cost basis.
Pervasiveness of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the year ended December 31, 1995.
Actual results could differ from those estimates.
Federal Income Tax - The Company's policy is to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies, principally Sections 851 and 852 of Subchapter M, and
to annually distribute substantially all of its investment income to its
shareholders; accordingly, no Federal income tax provision is required on
net investment income. Realized capital gains are subject to Federal income
tax at regular corporate capital gains tax rates. Realized capital losses
can only be used to offset capital gains.
The Tax Reform Act of 1984 permits certain regulated investment companies
to be personal holding companies as defined in Section 542 of the Internal
Revenue Code. The Company will be able to retain regulated investment
company status for Federal income tax purposes even if it is a personal
holding company. As a personal holding company, the Company is permitted to
invest in taxable investments. If, at the close of each quarter of its
taxable year, at least 50 percent of the value of the total assets of the
Company consist of tax exempt obligations, a pro-rata portion of the
Company's distributions will qualify as exempt interest dividends.
Income and Expense Recognition - Interest income and related expenses are
recognized on the accrual basis. Amortization of bond premiums and
accretion of bond discounts, calculated by the straight-line method, are
charged or credited against interest income over the term of the bond.
10
<PAGE> 11
2. FINANCIAL HIGHLIGHTS
Selected data for each of the 447,950 common shares of Scioto Investment
Company outstanding for each of the five years in the period ended December
31, 1995 is as follows:
<TABLE>
<CAPTION>
PER SHARE DATA: 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Asset value at
beginning of year $ 16.92 $ 17.33 $ 17.38 $ 17.34 $ 16.81
Income from Investment
Operations:
Investment income (bond interest) 0.74 0.77 0.82 0.94 0.96
Operating expenses (0.15) (0.20) (0.14) (0.13) (0.12)
------- ------- ------- ------- -------
Investment income - net 0.59 0.57 0.68 0.81 0.84
Unrealized and realized gain
(loss) on investments 0.15 (0.41) (0.05) 0.04 0.53
------- ------- ------- ------- -------
Total from Investment
Operations 0.74 0.16 0.63 0.85 1.37
------- ------- ------- ------- -------
Distributions of investment
income - net (dividends) (0.58) (0.57) (0.68) (0.81) (0.84)
------- ------- ------- ------- -------
Net asset value at end of year $ 17.08 $ 16.92 $ 17.33 $ 17.38 $ 17.34
------- ------- ------- ------- -------
Total return (aggregate) 4.40 % 0.94 % 3.64 % 4.89 % 8.15 %
</TABLE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE
NET ASSETS: 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Operating expenses 0.85 % 1.14 % 0.80 % 0.76 % 0.67 %
Investment income - net 3.51 % 3.33 % 3.95 % 4.67 % 4.94 %
SUPPLEMENTAL DATA:
Net assets at end
of year $ 7,652,761 $7,581,081 $7,761,987 $7,785,738 $7,765,690
Number of shares
outstanding at end
of year 447,950 447,950 447,950 447,950 447,950
Portfolio turnover rate 27.71 % 20.60 % 32.52 % 17.82 % 19.32%
</TABLE>
11
<PAGE> 12
3. SALE OF COMPANY ASSETS, CHANGES IN BUSINESS, AND LEASE LIABILITIES
UNDERTAKING
Prior to August 30, 1976, the Company operated a chain of 54 supermarkets
and 12 discount department stores in Ohio, West Virginia, and Kentucky in
leased premises. On June 30, 1976, the Company and each of its
subsidiaries (the "Company") entered into an Agreement of Sale,
pursuant to which substantially all of the assets of the Company were
sold for $33.00 per Class A and Class B common share cash and
assumption of all of the liabilities of the Company, however, the Company
remains contingently liable for non-cancellable leases entered into
previously that are still in effect. The Company would only be required to
make payments under these leases in the event of non-payment of rent by
the existing tenant, The Penn Traffic Company through its Big Bear
Stores Division, (a Delaware Corporation, Federal ID #25-0716800,
which acquired the Big Bear Stores Company, a Delaware Corporation,
Federal ID #31-0888208.)
Subsequent to the sale consummation on August 30, 1976, the Company's
subsidiaries were liquidated and merged into the Company, and the
Company's name was changed from Big Bear Stores Company, an Ohio
corporation, to Scioto Investment Company, an Ohio corporation (Federal
ID# 31-4128470).
As indicated above, the Company remains contingently liable
for non-cancellable leases entered into prior to the date of sale. At
December 31, 1995, the remaining minimum future lease rental commitments
during the non-cancellable lease terms are approximately $5,700,000 and
the total of the non-cancellable leases plus total option period minimum
future lease rental commitments are approximately $24,500,000. These
non-cancellable leases require approximately $1,200,000 in annual minimum
rentals.
4. COMMON SHARES
The status of common shares, stated value of $.66 per share, at December
31, 1995 follows:
<TABLE>
<CAPTION>
PAR SHARES
TITLE VALUE AUTHORIZED OUTSTANDING
<S> <C> <C> <C>
Class A $.0066-2/3 4,000,000 108,800
Class B $.0066-2/3 1,000,000 339,150
</TABLE>
On July 29, 1981, the shareholders approved a 25 for 1 reverse stock
split which was effective August 3, 1981 and fractioned shares were
purchased (total of $119,950) by the Company at the rate of $23.30 per
pre-reverse split share based on the June 30, 1981 book value per share.
On December 13, 1989, the shareholders approved an amendment to the
Articles of Incorporation to increase the authorized number, and
reduce the par value, of the Company's common shares and to eliminate
provisions relating to the authorization of prior preferred stock and
preferred stock. A 50-for-1 stock split, effective on December 14,
1989, was approved by the shareholders. Each share of Class A stock is
entitled to one vote and each share of Class B stock is entitled to ten
votes.
* * * * * *
12
