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emphasis when thrown in with the many solicitedl by our Company. Let me tell you that you are one of the o,~vners of this business. More- over 72'c'0 of the stockholders in Lorililard own less than one hundred shares each. Doesn't that give you sonie idea~ ofl your importance in~ the general scheme of things' Management welcomes you and your sug- gestions andl wouldl be delighted to have you! attend the meeting irn person. This year we are holdi'ng the Annual Meeting at the Hotel Plaza, Journal Square, Jersey City, N. J., in order better to accoiaZr modate the ever increasing number of stockholders attending the meetings. This new mceting place i's reached by taking the tubi train of theHudson~ &R=fanhattan Railroad Co, from doR ntown Nevv York, midtown 1VewYork or Newark, tit., Ji., t'othe J,ournal Square Station. If you find it impossible to attend then byy all means join us by sending in your proxy in the stamped envelope enclosed f'or that purpose. Outlook - 1950 Forecasts must be related to economic fluctuations and~ living , as we are in a maze of uncertainties, theouelookmust~ be predicated on fai'th;faith in the products we make and in, the men and' women responsible for planning, precessingand distributing; faith in the method' em- ployed to promote the desire for: greater quantities,of tliefruits of our labor. With that spii-it prevailing thrcughout ourorganizationi we feel confident 1950 will be another good year. To, you, the Stockholder, we express our appreciation for your und'erstandiny and helpftul, sugbesticns. Respectfully submitted,. Rresideiat On the nexo two pages there is reproduced in tninia- turethe double spreadl which appeared in L,ife: Look and Saturday Erenm,,!?wtthis past J;inuary: 9

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d Mca -MpR 41 'WIP M11IIAE' k , ;:. I '.U-t I U i f m rr 't L .± ,.I z 4;,°"p; 4 From the field' in the backgrourrd' the green tobacco goes to this barn tu be flue-cured b_y 1.1 heat, one of the »zauy steps to bring Old Gold sntok'ers maximum smokiitg pleasure. „' The /arrrterserrtinehauselioldbelpsin the task ofselecYing andgradiug the season's crop of tobacco, preparatorp to marketing. Exacting Old Golrf b'lryers seek the best of these grades. E;I w ® A 0 ; I t.;

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Lorillard's ueur redrying plaut at Lesiugtoae: tieutucFl'. is one of the neost' moderu of its kind. Here toGacco_r, are treated, uuder precise coutrolled conditions to assure uitifonni and' exact moistume cnutent: A&I 6r ~`'tOtl[IARDCQ ~:k Jraucwrpt.-[ E.W.4T8S ~ ~. G'W 125t3 Tlie above bogsheads of tobacco are on their way to,the modern storage shed in the Gack'- grouvtd uhere they iuill start t/;eir three j'ears'aging aud conditioning, so importaut to The production of fine cigarettes.

Spread out on thetable top in tliispictttreare the leading general and ne:cspaper-distrib- uted magazines in trhich Old Goltl's full color adsertisenrents are appearing at frequent and regular intere -als. Together these pre/ilications go into more than 25 raillion homes, Here is Ted iblack (extrerne right)l Master ofCerenronies of' both the radio and television versions of the "Original Ama- teur Hour." In this picture he and Don Hancock, Old Gold's radio announcer on both "Orig- inal Amateur Hour" and "Stop thetlfnsic," are watching one ofthehsendredsoftalentedperformers to whom the for- naer [irogram has given an op, portnnit,y to get ;nto show brrs;ness, Bert Parks. tHe p'op7dar emcee of "5top thed(us;c,"posesfbr P. Lorillard Co. stockholderr with the stars of the telet4sion portion of this show and with Dennis James, OldGol11'so«t- standing Teleuision Annorrncer. In the pictrrre. 1. to r., are Bettv Ann Grove, Dennis James. Bert Parks, Estelle. Loring, Ji»tnrv Blaine.

I NWNNL:325m~ P. LORILLARD COMPANY and SUBSIDIARY COMPANY CONSOLIDATED STATEMENT OF INCOME. AND EARNED SURPLUS FOR THE YEAR ENDED DECEMBER 31, 1949 ltr9thComparativeFigures, forthePrecedsng lear 1949 1948 Sales, less Discounts, Returnsand! Allowances . . . 5153,500;123:48 $140,279,236.56 Cosv of Goods Sold, Selling, General and Administrative Expenses . . . . . . 141,i36;93%..53 130,276,521.18' Operating Income. . . . . . . . . . . . . S 12,063,185.95 $ 10,00L,7~15.38'~ Other Income~ . . . . . . . . . . . . . 16'0;07~G,511 165,47405 S 12~,223~,262.46~ S~ 10~,165',1,9033 Interest on Funded Debt ........ S 857,272.50 $ 868,972.50 Amorti¢ation of Debenture Expense . . . . 13,039:98 13,3 '18!64 Other Interest . . . . . . . . . . . . . 141,816.65 5 142;059:96' S 1,012,129.13 S~~ 1,024s3~51.1i0: Income before Federal and State Income Taxes . S11,211,133.33S 9;14'3,539:23 Provision, for Federal Income Taxes ...., S 4,147,000.00S 3,353,p00!00 Provision, f'or State Income Taxes .. 245,000.00 145,900:00 S 4',387,000.005' 3,498,900~00 Net Income for year . . . . . . . . . . . . . S6,824j133.33 S 5,644,939.23' Earned Surplus at beginning of year ... 23,270,020.61 21,6E10.980.35. S 30,094,153.94 S 2-1,325,919.55 Dividends on Preferredl Stock (S- per share)~ S Dividends on Common Stock (i1949, S1175per share; 1948, 511.50per share) . . . . 636,000.00~ 3;931,549.84 S 666,000.00 3,369,898.97 S4',G77,549:84 .S4,055,893.97 Earnedl Surplus at end of year _. ......$ 25; 4!76;60 4.10 S23,2i0,020.61 Depreciatto;a prouided'- 1949 5635,•i,5.32194850:1,946.-i5, 17

P. LORILLARD COMPAN CONSOLIDATED BALANCE With Corrapar-ath ASSETS CURRENT ASSETS: 1949194$ Cash in banks and on handl ....., ... . S5,762,370.59S 5,632,43S.89 Accounts receivable- trade ('less reserves 1949 5650;753.89;1948 S630,073.28) . . . . . . 6,923,209,117 6,300,891.00 Other accounts and notes receivable ........ 147;759:44 146,935.33 Inventories, at cost: Leaf tobacco . . . . . . . . . . . . . . . . 66i571,806;; Q 64,269,906.99 Manufactured stock and revenue stamps ... .. 5,932,642.74 5;390,534.52 Materials and supplies ., . _ . . . . . . . . 2,4$8,505.732;877,831.66Specialldeposits - contra: 836,615.09 631,921.16 Total current assets . . . . . . . . . . ., $ 88,732,9Q9.46 585,250;i59:55 PROPERTY, PLANT AND EQUIPMENT, as ad- justedl December 31, 11932 by authori¢ationi of stock- holders, plus subsequent additions at cost„ less retire- ments S 17;707;279:92 S16,7.26,5611.13 Lesr: Reserves for depreciation . . . . 6,673s23S:366,217,154:74! Tbtall property, plant and equipment S, 111,094,041.56 310,509,40639 BR'ANDS, TRADE MARKS AND GOODWILL S 1.00 S 1.00: DEFERRED CHARGES: Prepaid insurance, advertising and taxes .. 5 509,266.06 S 4 73;362:3' Unamortize&debentureexpense 66,565.87 70;905.55 Miscellaneous . . . . . . . . . . . . . . . . 231,143.-6 177,9 S.OS Total deferred charges. . . . . . . . . . S 507,275.69S 7 22,24 3.25 S100;63d,?27.71 S26,382,110.19 15