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## Myers Industries, Inc. and Subsidiaries 

For The Years Ended December 31, 2001, 2000 and 1999 

## Summary of Significant Accounting Policies 

## Basis of Presentation 

The consolidated financial statements include the accounts of Myers Industries, Inc. and all wholly owned subsidiaries (Company). Significant intercompany accounts and transactions have been eliminated in consolidation. 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 disclosures at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates. Certain amounts in the fiscal 2000 and 1999 financial statements have been reclassified to conform with the fiscal year 2001 presentation. 

## Translation of Foreign Currencies 

All balance sheet accounts of consolidated foreign subsidiaries are translated at the current exchange rate as of the end of the accounting period and income statement items are translated at an average currency exchange rate. The resulting translation adjustment is recorded as a separate component of shareholders' equity and other comprehensive income. 

## Financial Instruments 

Temporary cash investments, all of which have an original maturity of 90 days or less, are considered cash equivalents. Other financial instruments, consisting of trade and notes receivable, and long-term debt, are considered to have a fair value which approximates carrying value at December 31, 2001. 

## Inventories 

Inventories are stated at the lower of cost or market. For approximately 45 percent of its inventories, the Company uses the last-in, first-out (LIFO) method of determining cost. All other inventories are valued at the first-in, first-out (FIFO) method of determining cost. 

If the FIFO method of inventory cost valuation had been used exclusively by the Company, inventories would have been $3,731,000, $4,756,000 and $3,779,000 higher than reported at December 31, 2001, 2000 and 1999, respectively. 

## Property, Plant and Equipment 

Property, plant and equipment are carried at cost less accumulated depreciation and amortization. The Company provides for depreciation and amortization on the basis of the straight-line method over the estimated useful lives of the assets as follows: 

<img src='content_image/128350.jpg'>

## Revenue Recognition 

The Company recognizes revenue from sales when goods are shipped and title has passed to the customer. 

## Income Taxes 

Deferred income taxes are provided to recognize the timing differences between financial statement and income tax reporting, principally for depreciation, non-deductible reserves and certain valuation allowances. Deferred taxes are not provided on the unremitted earnings of foreign subsidiaries as the Company's intention is to permanently reinvest these earnings in the operations of these subsidiaries. If these earnings would be remitted in future years, the taxes due after considering available foreign tax credits would not be material. 

## Excess of Cost Over Fair Value of Net Assets of Companies Acquired 

This asset represents the excess of cost over the fair value of net assets of companies acquired and is being amortized on a straight-line basis over periods ranging from 15 to 40 years. Accumulated amortization at December 31, 2001 and 2000 was $30,706,000 and $21,483,000, respectively. 

In June 2001, the Financial Accounting Standards Board issued statement of Financial Accounting Standard No. 141 (SFAS 141), "Business Combinations," and SFAS 142, "Goodwill and Other Intangible Assets." These statements are effective for the Company on January 1, 2002 and will result in modifications relative to the accounting for goodwill and other intangible assets. Specifically, the Company will no longer amortize goodwill and certain intangible assets, however, such assets will be subject to periodic testing for potential impairment. Upon adopting the new standards and cessation of amortization for goodwill, the Company anticipates increases in annual income before taxes of $9.2 million and earnings per share of approximately $.30 per share, however, the Company has not yet made a complete evaluation regarding the impact of the new standards, including the possible impairment of goodwill as recorded on the December 31, 2001 balance sheet. 

## Net Income Per Share 

Basic net income per share, as shown on the Statements of Consolidated Income, is determined on the basis of the weighted average number of common shares outstanding during the year, and for all periods shown basic and diluted earnings per share are identical. During the years ended December 31, 2001, 2000 and 1999, the Company paid a ten percent stock dividend. All per share data has been adjusted for the stock dividends. 

