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Annual Report 1956 T154210422

Annual Report For the Year Ended December . HIGHLIGHTS ........... 2 PRESIDENTTS LETTER ......... 3 OPERATIONS AT A GLANCE ....... 12 CONSOLIDATED STATEI~IENTS OF INCOME AND RETAIi~ED EARNINGS ...... 13 "CONSOLIDATED BALANCE SHEETS ..... 14 NOTES TO STATEMENTS ........ AUDITOI~S~ CERTIFICATE ........ 17 TEN-YEAR FINANCIAL REVIE~Y ...... 18 DIRECTOI~S AND OFFICEP, S ....... 20 Executive office. 1so Eest 42nd Street, . New York 17 T!54210423

HIGHLIGHTS PER COMMON SHARE Net income ......... • . Dividends paid ......... Net sales ........... Income, before taxes on income Net income .......... Dividends paid (common and preferred) Portion of net income invested in assets used in the business and to provide for debenture sinking fund requirements . Current assets, December 3i .... Current liabilities, December 31 Net working capital, December 3I. Number of stockholders at December 3i: Common .......... Preferred ........... 1956 $1;~2i$22;61"/ • tl 1,s82~0~8 52,048;078 :35,'/.29,59.6 16,31~,482 715;431,521 157,317,016 ' 55e,1i4,5o5 84,250 7,140 1955 $7.45 4.40 $1,090,844,818 113,060,990 51,661,990 31,822,083 19,839,907 727,647,931 171,792,203 555,855,728 80,881 7,357 T154210424

THE PRESIDENT'S LETTER February 4, 1957 To Our Stockholders THIS report covers operations of The American Tobacco Company, in- cluding consolidated subsidiaries, for 1956. Net income in 1956 was the highest in the history of the Company, $52,048,078 as compared with $51,661,990 in 1955. -D~ll~r sales were $-1~,68-2~22,617, less than 1% below the all-time high of $1,090,844,818 recorded in 1955. Unit cigarette sales in 1956 were slightly lower than in 1955, although unit cigarette sales for the fourth quarter were higher than those for the comparable period in 1955. Fourth quarter dollar sales, the first to reflect materially sales of P~ADE Filter Tip Cigarettes, were $278,745,984. This was the highest fourth quarter dollar sales figure in the history of the Company. Again in 1956 your Company's two largest-selling cigarette brands, LUCKY STRIKE and PALL MALL, improved their positions in their respective mar- kets. In LUCKY STRIKE and PALL MALL your Company has two of the three largest-selling cigarette brands in the United States, according to inde- pendent surveys. Although the domestic standard-size market as a whole continued to decline, unit sales of LUCKY STRIKE Cigarettes again showed a compara- tively small decrease. LUCKY STRIKE'S share of the standard-size market thus increased in 1956, as it did in 1955, 1954 and 1953. PALL MALL continues as the nation's leading king-size cigarette. Ac- cording to ii~dependent surveys, P~L MALL accounts for more than half of all sales in the non-filter-tip king-size market. Although the non-filter-tip king-size market in the United States declined during 1956, unit sales of PALL MALL Cigarettes increased. Combined unit sales of PALL MALL and H~.RBERT T~EYTON cork-tip king-size continue to represent more than 60 % of all domestic non-filter-tip king-size sales, according to independent surveys. The filter-tip market in 1956 was marked by continued growth and by the introduction of new competitive brands. Your Company added to its representation in this market in the fall of 1956 with the introduction T!54210425

OJ~ HIT PARADE Filter Tip Cigarettes, a unique new blend which is the result of a study of modern American preferences in tobacco taste. HIT l~ARADE Cigarettes full king-size with a pure white filter-tip developed exclusively for The American Tobacco Company--achieved distribution throughout most of the domestic market by the end of 1956. Although the new brand is still in the introductory stage, with national advertising just begun, the response of the trade and of consumers has been gratifyingly enthusiastic and the outlook for HIT :PARADE Cigarettes at this early stage is excellent. Your Company's earlier entry in the fil~er field, TILTER TAREYTON, held its volume during 1956 against the added weight of new competitive brands. Export (tax-free) sales were lower in 1956 than in 1955, the major factor being reduced requirements for tobacco products by the Armed Forces installations overseas. Your Company's unit sales of cigars again increased during 1956. In the domestic cigar field, the 10¢ EL Ro~-TAN continues to be the largest- selling brand in its price class. The Company's clear Havana cigars, includ- ing LA CORONA, ANTONIO Y CLEOPATRA, and BOCK Y CA, remain the largest- selling Bonded Clear Havana line. The competitive position of the Com- pany's cigar brands was strengthened in 1956 by the introduction of new shapes and by packaging improvements; additional activity along these lines is planned for 1957. 4 T154210426

Your Company's sales of smoking and chewing tobaccos, which account for less than 2% of total dollar sales, continued to decline in line with the industry sales trend for these products. Earnings Net income in 1956 rose to a new record high of $52,048,0"/8 compared with the previous record of $51,661,990 in 1955. After deducting dividends on the Preferred stock, net income per Common share in 1956 amounted to $7.51 compared with $7.45 in 1955. Taxes on income amounted to $9.20 per Common share compared with ea-r-n4ngs-o~ .-5-1-per~hare~a~s. Bivirlends During 1956 a total of $5.00 per share was paid on the Common stock, consisting of four regular quarterly dividends of $1.00 each and an extra of $1.00. This compares with $4.40 per share paid in 1955. The annual dividend on the Common stock has been increased five times since the end of World War II, and the present $5.00 level compares with $3.25 per share paid in 1946. Since that time the number of Common shares on which dividends are paid has increased by over 2,.000,000 shares, so that TI54210427

the total dividends on Common stock in 1956 represent an increase of 124'~; over the 1946 dividends. On January 29, 1957, your Board of Directors declared a regular quarterly dividend on the Common stock of $1.00 per share and an extra dividend of $1.00 per share, payable March 1, 1957, to stockholders of record February 8, 1957. I:innr~es Bank loans at December 31, 1956, were $10 million lower than at the end of 1955, while cash on hand and in banks was about the same. As a result of retiring $12,972,000 _principal amount of debentures through operation of the Sinking Funds, combined long-term and short-term debt at the year end was $22,972,000 lower than at the end of 1955. Of the $325 million original amount of debentures issued since early 1942, approximately $120 million has been retired while net worth has increased over $280 million during the same period. In the present period of higher interest rates it is noteworthy that over $200 million of the amounts originally borrowed through the sale of de- bentures is currently being utilized in our business at an average interest cost slightly in excess of 3%, while the current rate ~or similar ~unds is considerably higher. 6 Ti542"10428

A significant development during 1956 was the continued rise in the cost of borrowing money. As was true in 1955, the prime commercial rate (which is the rate extended to the borrowers with top credit ratings) was twice increased by ¼7~, thus raising the rate from 3½% to the present 4%. In the absence of unusual developments, your hIanagement does not anticipate any need for new financing in the foreseeable future. L~f To In the manufacture of cigarettes the most important single factor is leaf tobacc~,~ch_com~~s n~' clgarettemaanufactu~int~ costs exclusive of revenue stamps. Inventories of leaf tobacco constitute about three-fourths of the Company's total assets. The Government continues to control the growing and marketing of flue-cured and Burley leaf tobaccos, the principal types used in making cigarettes. In the past two decades the yields per acre for these types of tobaccos have risen strikingly. Because of a large supply of flue-cured ~obacco, acreage allotments for 1957 have been reduced by 20% from the 1956 level. In addition, the Department of Agriculture has announced that price supports for the 1957 flue-cured crop will be adjusted to reflect demands for certain varieties and grades. Government support prices oa the 1956 flue-cured leaf crop averaged 48.9¢ per pound, about the same as in the previous year. Auction market prices for flue-cured leaf averaged 51.2¢ per pound, about 1¢ lower than in 1955. Government support prices on the 1956 Burley leaf crop averaged 48.1¢ per pound, nearly 2¢ higher than for the 1955 crop. Auction market prices for Burley leaf up to the end of the year, as reported by the Depart- ment of Agriculture, averaged 63.3¢ per pound, about 5¢ higher than the average for the comparable 1955 period. At the leaf tobacco auctions in 1956 your Company continued its practice o2 buying the better grades of tobacco, firm in the belief that "quality of product" is the best assurance for continued and increased acceptance of its produc~. This well-established policy is being followed in the procurement o2 tobaccos for the Company's newest product, H~T PARADE Filter Tip Cigarettes. Excise T~x ~ ~educ~on i~ the ~e~e~=~ exc~se t=x ~=te ~om eigh~ to seven cedis per p~c~ o~ twenL~ cigarettes w=s scheduled ~o~ ~p~fi I, 195~, 1955 ~nd 195~, but T!54210429

in each instance Congress continued the higher rate for an additional year. Indications are that, as recommended by the Treasury Department, the tax will be extended again for another year. As previously reported to stockholders, the return and deferred pay- ment system for tobacco excise taxes authorized by the Revenue Code of 1954 cannot become effective until the Secretary of the Treasury fixes the date of changeover. Beyond approving a daily return and payment system in connection with the manufacture of cigars, the Treasury Department has continued to defer action on this matter, claiming that the changeover would involve too great a revenue loss. In an effort to end this delay, your Company's representatives, and those of the other p_rineipal cigarette manu- facturers, last December submitted a Memorandum to the Excise Tax Subcommittee of the Committee on Ways and Means in support of a sug- gested form of bill to make the return and deferred payment system manda- tory. Recently the Subcommittee has recommended to the Ways and Means Committee that a return and deferred payment system be adopted for taxes on tobacco products on a semimonthly basis from August 1, 1958, to July 31, 1959, and on a monthly basis thereafter.. In its report, the-Su.beommittee expressed the view that its recommendations would meet the necessary fiscal requirements of the Government, further stating its belief that the tobacco industry is "entitled to definite assurance that a changeover to a return T!5421043O

system will occur at some specific time in the future." Up to the date of this letter no action has been taken on this recommendation. Capital Expenditures During the year expenditures totaling $6,356,000 were made for real estate, machinery, fixtures and equipment. A large portion of this expendi- ture was for improving and modernizing our cigarette-making equipment, including the addition of filter-tip attachments for the increased production of this type of cigarette and the installation of modern quality control devices used in the manufacture of cigarettes. A~ter considering additions and disposals during the~h~_y~a_r_~lLas changes in depreciation reserves, net real estate, machinery, fixtures, etc., increased from $49,057,512 at the end of 1955 to $51,398,692 at the end of 1956. Depreciation charged to cost and expense amounted to $3,677,569. Advertisin!7 ond Soles Promotion Your Company's advertising and sales promotion programs are being ex- panded along with the increase in the number of its major brands. All techniques are constantly being re-examined for possible improvements and economies. Advertising messages via television, radio, newspapers, magazines, billboards and other media emphasize the superior quality of the Company's products, while our Sales Organization maintains maximum distribution and reinforces the impact of advertising by direct sampling of consumers and by point-of-sale displays in retail outlets. In September, 1956, the Chief of Tobacco Tax Branch, Internal Revenue Service, announced that "It appears that the consumption of tobacco prod- ucts, particularly cigarettes, is no longer materially affected by the cancer reports of a year ago. Our collections for 1956 indicate a prosperous out- look for the tobucco industry as well as continued increases in Federal and State tobacco revenues, for the future." Although the publication of anti-cigarette reports continued, other statements issued by scientists reiterated the view that theories attempting to link smoking with lung cancer are speculative. Some of these statements pointed out the wide variation of lung cancer death rates between groups having similar rates of tobacco consumption. Others called attention to environmental factors other than cigarette smoking which appear likely to account for increased incidence. T154210431

For the second successive year the British Empire Cancer Campaign reported that experiments with tobacco derivatives and laboratory animals at a number of leading research centers failed to produce cancer either by prolonged painting, injection, or forced inhalation. Meanwhile, your Company, along with other manufacturers, leaf growers, dealers, warehousemen and cooperatives, continues to support the objective, long-range research program of the Tobacco Industry Research Committee, now in its fourth year. The Company's own research on the composition of cigarette smoke, now in its thirty-sixth year, continues in our Richmond Laboratory, supplemented by direct grants to leading re- search institutions. Industri,*l Reach;or Loboratories, Inc. An important development in your Company's research program took place last year when agreement was reached with nine other leading industrial companies--none of which is engaged in the tobacco business---to build and operate the first nuclear reactor to be owned by private industry for research in industl~ial and humanitarian fields. This venture, known as Industrial Reactor Laboratories, Inc., is being jointly financed by the ten companies involved. Located in Plainsboro, New Jersey, the reactor will be used solely for research purposes, and your Com- pany will have private space in the facility to work on its own projects. Our Research Department will be aided immeasurably by this opportunity to extend its research on the composition of tobacco and tobacco smoke. Personnel Richard J. Boylan, Vice President and Director of Purchases, James R. Coon, Vice President and Comptroller, and William H. 0gsbury, Assistant to the Chief of l~Ianufacture, have retired since the last Annual Meeting of stockholders. James F. Strickland, President of our leaf buying subsidiary, American Suppliers, Inc., retires on February 28, 1957. The Directors gratefully acknowledge the long, conscientious and exemplary services of Messrs. Boylan, Coon, Ogsbury and Strickland as executives and members of the Board and regretfully report their retirement. Chr~nges in Article XII of the By-Lnws As the result of a study made during the year 1956, the Board of Directors is recommending to the stockholders a proposal to make certain changes in Article XII of the By-Laws, which would extend the benefits of incentive ID "['1542"10432

compensation, heretofore provided only for the President and Vice Presi- dents, to a broader Management group, and provide more realistic incen- tives than those presently offered by Article XII, without additional cost to the Company. These proposed changes in Article XII are described in detail in the Proxy Statement and are being submitted to the stockholders for approval at the Annual Meeting. 5tockholrlers" Annua! tlleeting The Annual Meeting of Stockholders will be held on Wednesday, April 3, 1-957~-F-o rmat-not4ce-of-t-h-is-raeet~g,--together-wi-th-the-p r oxy-~nd-pr oxy statement, is enclosed with this report. I should like to acknowledge here the many letters and inquiries relat- ing to the Company's affairs which I have received from the stockholders during the past year. Especially gratifying are those which express a sincere loyalty to the Company's products and an interest in the promotion of our brands. In closing this letter I should again like to express the appreciation of your Board of Directors for the cooperation of our customers and the loyal service of our employees which have made the year's results possible. PAUL M. HAHN President 11 T154210433

ATA OPERATION5 GtAN£E The Company received for goods it sold and from Dividends, Interest and Miscellaneous $1,083,389,000 This is how it was used or set aside: Revenue Stamps and Taxes Tobacco (including applicable expenses) Wages, Goods, Services, etc. Bond and Bank Interest Dividends to Stockholders Earnings Retained to Meet Future Needs • $273~867,000 $180~044;000 $ 9,133;000 $ 35,730,000 $ 16,3i8,000, 25.3% • 16.6% .! 12 T!54210434

I'onsolidated Statements of Inzome and Retained Earnings For Years Ended December 31 Including all wholly o~vned domestic subsidiaries except The American Tobacco Company of the Orient, Inc. 1956 1955 NET SALES ............... Cost of sales, selling, general and administrative expenses ................ OPERATING PROFIT ............ Other iacome .............. Interest and related charges ......... Other deductions from income ........ Total deductions ....... Income, before taxes on income ........ Federal and other taxes on income ...... $1,082,522,617 961,776,81 3 $1,090,844,818 968,547,063 120,745,804 122,297,755 865,728 916,587 121,611,532 123,214,342 9,133,489 9,150,856 495,965 1,002,496 9,629,454 10,153,352 111,982,078 113,060,990 59,934,000 61,399,000 52,Q48,078 51,661,990 163,044,398 143,204,491 21"5,092,476 194,866,481 NET INCOME ............... Retained earnings, beginning of year ....... ' Cash dividends: Common stock, 1956, $5.00 per share; 1955, $4.40 per share ........... Preferred stock, $6 per share ...... Total dividends ........ Retained earnings, end of year (Note 1) ...... 32,562,610 28,655,097 3,166,986 3,166,986 35,729,596 31,822,083 $ 179,3l~2,880 $ 163,044,398 Depreciation provided and charged to costs and expenses amounted to $3,677,569 in 1956 and $3,513,971 in 1955. 13 T154210435

Consolidated Balan[e Sheets As of l]eternber 3|. Including all wholly owned domestic subsidiaries except The American Tobacco Company of the Orient, Inc. 1956 1955 A SSE-TS Cash ................ $ 23,646,051 Accounts receivable, customers ....... 42,565,339 46,596,533 Leaf tobacco, manufactured Stock, operating supplies, etc., at average cost .......... 648,530,~449 656,241,071 Miscellaneous accounts receivable ...... Total current assets ..... 1,042,025 1,164,276 715,~3.1,52:1 727,647,931 Investments in and advances to unconsolidated sub- sidiaries, at amounts not in excess of cost (Note 2) 17,203,024 18,152,198 Insurance deposits and miscellaneous investments . 1,457,690 1,581,109 Real estate, machinery, fixtures, etc., at cost, less allowance for depreciation, 1956, $42,968,452; 1955, $40,140,161 .......... 51,39~692 49,057,512 Prepaid expenses and deferred charges ..... 4,937,544 5,286,426 Brands, trade-marks, patents, good will, etc. 14 1 1 $790,42S,472 ~ $801,725,177 TI54210436

• LIABILITIES 1956 1955 Notes payable to banks .......... Accrued taxes ............. Accounts payable and accrued expenses .... Dividend on preferred stock for quarter ended De- cember 31 ............. Debentures to be redeemed through sinking fund op- erations (Note 3) ........... Total current liabilities .... Debentures (Note 3) ........... $ 80,000,000 $ 90,000,000 51,483,613 56,758,488 13,486,6.57 12,854,969 791,746 791,746 11,555,000 11,387,000 157,317,01"6 171,792,203 193,188,000 206,328,000 350,505,016 378,120,203 STOCKHOLDERS' EQUITY Capital stock (Note 4): Preferred, six per cent cumulative, par value $100 per share ............ Common, par value $25 per share ..... Excess of net proceeds from capital stocks issued over par values ............. Retained earnings (Note 1) ......... Tota I .......... 52,783,100 52,783,100 162,813,050 162,813,050 44,964,426 44,964,426 260,560,576 179,362,880 439,923~56 $790~28,472 260,560,576 163,044,398 423,604,974 $801,725,177 15 Ti54-210437

NOTE5 ACCOMPANYING FINANCIAL STATEMENTS 1. Under the provisions of the indenture relating to the Twenty Year 3% Debentures, due January 1, 1968, cash dividends declared on common stock and payments made in purchasing shares of any class of the Company's stock subsequent to December 31, 1947, may not exceed the aggregate of $15,000,000 and consolidated net income earned subsequent to December 31, 1947, less dividends paid on preferred stock. At December 31, 1956, approximate]y $148,600,000 of retained earnings was free of this restriction. 2. The net tangible assets applicable to the investments in and ad~nc-es~t~ unc~onsol.idated~bsidi~~c~.mb~.r 3:[~ ]956, amounted to $23,459,501. Dividends and interest of $689,957 were received from these subsidiaries in 1956; the equity in earnings applicable thereto amounted to $862,868. Twenty year 3%, due April 15, 1962 .... $ 3,741,000 Twenty year 8 %, due January 1, 1968 3,000,000 Twenty-five year 3%, due October 15, 1969 3,328,000 Twenty-five year 3~%, due February 1, 1977 . 1,486,000 Debentures outstanding at December 31, 1956, comprise: Principal Amounts Redeemable Redeemable Within After One Year* Dec. 81, 1957 $ 45,569,000 48,000,000 56,982,000 42,637,000 $11,555,000 $193,188,000 *Estimated principal amounts to be redeemed through sinking fund operations at prices as provided by the indentures. = Capital stock at December 31, 1956, comprises: Shares Shares Authorized Issued Preferred ...... 540,106 527~831 Common ....... 10,000,000 6,512,522 5. A noncontributory Retirement Plan providing unfunded (pay- as-you-go) b.enefits for employees has been in effect since January 1, 1949. Under the Plan the Company has the right to amend, modify or terminate the Plan in whole or in part at any time. Payments made under the Plan and charged to income amounted to $775,161 in 1956 and $652,110 in 1955. Substantially larger annual expendi- tures would be required to fund the Plan. 15 TI54.210438

THE I~OARD OF DIRECTORS AND STOCKHOLDERS OF 1"HE AMERICAN TOBACCO COMPANY: We have examined the consolidated balance sheet of THE ~M~R[- CAN TOBACCO COMPANY as of December 31, 1956 and the related consolidated statement of income and retained earnings for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting recor'ds of the companies and such other auditing procedures as we considered necessary in the circumstances. We made a similar examination for the year 1955. In our opinion, based upon our examinations, the accompanying balance sheets and related statements of income and retained earn- ings present fairly the consolidated financial position of The American Tobacco Company and the subsidiaries included therein as of Decem- ber 31, 1956 and 1955, and the consolidated results of their operations for the years then ended, in conformity with generMly accepted accounting principles applied on a consistent basis. New York~ February 4, 1957. LYBRAND~ ROSS BROS. & MONT~7~OMERY 17 T154210439

TEN-YEAR FINANEIA! REVIEW I N T H C) U S A N D S (except per share amounts) Year 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 Net Sales $ 819,631 858,996 871,62I 942,552 1,065,738 1,088,380 1,068,579 1,090,845 1,082,523 Income Before Taxes 55,584 7o;5~4 74,327 76,725 80,411 78,352 99,232 91,056 113,061 111,982 Taxes on Income $21,739 26,6,6,6,6,6,6,6,6,6~1-2 28,652 34,992 47,301 44,283 58,006 48,O05 61,399 59,934 Net income Amount $33,845 43~,:,:,9-12 45,675 41,733 33,110 34,069 41,226 43,051 51,662 52,048 Available Per Common Share $5.70 7.58 7.90 7.17 5.57 4.79 5.90 6.12 7.45 7.51 1B December 31 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 Inventories $483,133 514,958 531,558 532,679 594,544 640,753 651,044 632,143 656,241 648,530 Current Assets $537,872 567,883 583,762 593,026 668,234 712,654 725,577 703,086 727,648 715,432 , Wo~ing Capital $365,295 441,496 450,830 459,653 456,056 551,255 548,305 550,454 555,856 558,115 Plant and Equipment (Net) $32,847 41,859 43,507 43,747 44,248 44,480 46,571 47,189 49,058 51,399 TI54210440

AND ITS CONSOLIDATED SUBSIDIARIES Amount $17,704 20,169 21,514 21,514 21,514 23,934 25,816 28,654 28,655 32,563 Dividends Common Preferred Per ($6 Per Retained Sinking Fund Share Share) Earnings Requirements $3.50 3.75 4.00 4.00 4.00 4.00 4.00 4.4O 4.40 5.00 $3,162 3,162 3,162 3,162 3,162 3,162 3,162 3,167 3,167 3,167 $12,979 20,581 20,999 17,057 8,434 6,973 12,248 11,230 19,840 16,318 $ 6,367 6,555 9,749 9,942 10,154 10,377 11,989 12,261 12,532 12,839 Yea~ 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 Total Assets (I) $592,655 632,576 650,507 657,4O5 734,480 783,154 798,870 775,364 801,725 790,428 Notes: (1) (2) Debt Funded $170,608 236,069 226,375 215,653 205,430 243,570 231,266 218,967 206,328 193,188 Short Term $128,557 81,211 89,694 83,722 149,456 102,950 105,107 91,575 101,387 91,555 Net Worth (I) $248,754 269,335 290,335 307,392 315,826 377,O74 390,332 403,765 423,605 439,923 After deducting "Brands, trade-marks, patents, good will, etc." Book Value Per Common Share (1) $36.45 40.28 44.18 47.35 48.92 50.26 51.83 53.89 56.94 59.45 Comprises notes payable to banks and funded debt redeemable with[n one year. December 31 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 19 T!54210441

Directors 0 RP-H-EUS-D~BAXALYS A.LFRED F. B0WDEN THOMAS P. CONNORS JOHN A. CROWE JOHN S. DOWD A. GORDON FINDLAY CHARLES GANSHOW $0HN G. HAGER, JR. VIRGIL D. HAGER PAUL M. HAHN HIRAM R. HANIV~ER HARRY L. HILYARD JOHN R. HUTCHINGS, JR. A. LERoY JANSON FERDINAND MALLGRAF JAMES F. STRICKLAND ROBERT B. WALKER GEORGE A. WILKINSON WILLIAM B. YOUNG *As of February 4, 1957 PAUL IV[. HAHN ........ Presiden~ JOHN A. CR0WE ..... Vice President HARRY L. HILYARD ...... Treasurer A. LEROY JANSON ...... Comptroller ALFRED F. B0WDEN. Assistant to the President CHARLES GANSHOW Deputy Compt.roller J. WESLEY DALE ....... Auditor JOHN W. HANLON ....... Secretary EDWARD D. FLAHERTY. Senior Assistan~ Auditor WALTER A. KENNEDY . . Assistant Auditor FREDERICK W. KENNY Assistant Secretary JOSEPH R. WATERHOUSE. Assistant Treasurer FRANCIS X. WHELAN . Assistant Treasurer Executive Office 150 EAST 42ND STREET, IN'EW YORK 17, N. Y. Corporate Office 117 ]%lAIN STREET, FLEMINGTON, N. J. Transfer Agent GUARANTY TRUST COMPANY OF I~EW YORK NEW YORK 15, N. Y. Registrar CITY BANK FARMERS TRUST COMPANY NEW YORK 15, N. Y. 2D TI54-210442

YDUR I:OMPANY'S PRINEIPAL PRODUET5 WHICH MAriE YOUR DIVIDENDS POSSIBLE CIGARETTE5 LUCKY STRIKE--A blend of the finest Turkish and domestic tobaccos, whose manu- facture includes the LucKY ST~ZKZ process "It's Toasted"--a leader among the s~nd~rd size brands and one of ~he lar~es~-sellin~ ci~are~Ees ~mon~ ~]1 brands PA~L MAL~ ~"Ou~standin~ . . . end they ~re mildZ" ~he naEion's leadin~ kin~ size cigarette. Its ~radi~ionally fine tobaccos ~re ~he fines~ qu~li~ money c~n buy HIT PARADE FILTE~ TIP ~ u unique ne~v blend resulting from ~ s~ud~ of modern Ameri-can p~~~K~~~~ HERBERT TAREYTON~ its distinctive flavor and mildness have been famous for more than 40 years. King size, with the genuine cork tip FILTER TIP TARE~0N~with the Activated Charcoal filter, the same quality tobacco used in HERBERT T~EYTON. Among filter cigarettes its "mildness makes the difference" The Company also manufactures S~ C~POR~L~ ~OHNNIE WALKER, MECCA, OM~, and "111" blended cigarettes, and EaY~Za~ ~rms% M~CHaZNO, Lo~ S~ZSBU~£ and NA~u~ Turkish cigarettes. EIGAR$ EL R01- TAN ~ largest selling 10¢ cigar in Americ~ ANTONIO y ~EOPATRA~ the mildest dear Havana cigar LA CORONA*~ "Supreme the World Over" ~ the world's finest cigar BOCK y CA* ~ the original panetda, created in Havana in 1888 * Cuban Tobacco Company Inc., a domestic subsidiary, and Tabaealera Cubana, S. A., a Cuban subsidiary, manufacture the "International Brands," among which are L~ Coao~, BOCK y CA and H~NRY C~Y. The world-famous Ca~a~as cigars are also made in Cuba and exported to the United States by Tabaealera ~bana, S. A. The Company also manufactures CHANCELLOR, a high-grade domestic cigar. SMOKING TOBACCOS HAEF AND HALF--the Company's leading granulated plug cut, Burley and Bright BLU~ BOAR~Ameriean Tobacco's line leader among high-grade pipe tobacco blends GENUINE "BOLL" DURHAM~still far and away the No. I "roll-your-own" smoke Among the Company's other high-grade smoking mixtures are C~LrON C~oB, Hea~z~ T~Y- TON~ IMP~ CUBE CUT~ OLD ~NGLIS~ CUR~ CUT, ~ERSON~ ~INKUSSO~N~8 ~0TPOURRIs and S~N~. Other poplar-priced brands include CoMPass, Cu~ PzPz, Fz~ Baos., HONES~ LON~ Cu% Iw~ao~, LUCKY S~Ke aOLb C~% M~YO'S Cur P~oe, ~za~ess (~s), Lm~, ST~NDae~ (~MS), BUCKZ~a~ and To~o. For those who prefer ehe~ng tobacco, the Company makes ~IPER ~EIDS[ECK, PENN'S ~&TUR.tL L~, Yellow Ta~, I~ (~YO'S), Co~o~ BO~ and S~Eae ~. T154210443

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