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1961 ANNUAL REPORT T154230483

LEWIS GRUBER Chairman of the Board & Chief Executive Oj~cer HENRY E. ERICKSON Director o/Lea] Activities GEORGE W. DAWDS0N Ezecuti~e Vice President, Federal Tin Company, Lorillard Subsidiary MORGAN J. CRAMER President HAROLD X. SCHREDER Executive Vice President and Director Distributors Group, Inc. Treasurer and Secretary Twentieth MELYIN E. DAWLEY Pre~iden¢ and Director Lord & Taylor i~orpuration TIS4230484

contents Board of Directors ....................................... Page 1 Financial Highlights ..................................... Page 3 The Year in Review ...................................... Page 4 Sales ............................................................. Page 7 Research ..................................................... Page 9 Leaf .............................................................. Page 11 Advertising .................................................... Page 15 International ................................................ Page 17 Manufacturing .............................................. Page 19 Federal Tin Company .................................. Page 19 Consolidated Balance Sheets .......................... Page 21 Earnings ........................................................ Page 23 Ten-Year Financial Comparison .................... Page 24 Annual Meeting and Proxy .......................... Page 25 Accountants' Opinion .................................... Page 25 Lorillard Officers ........................................... Page 26 Other Corporate Information ........................ Page 2.6 I II I T!54230485

Sales ............. Net Earnings .......... Results per Common Share: Net Earnings ......... Dividends .......... Shareholders' Equity ....... Current ~4ssets ......... Current Liabilities ........ K/orking Capital ......... Long-Term Debt ......... Shareholders' Equity ....... Number of Shareholders ..... Number oJ Employees ...... 1961 1960 $492,930,882 28,419,o73 4.22 2.20 23.69 303,555,901 105,15o,381 198,405,520 80,706,014 165,513,986 42,000 6,694 $487,329,716 27,381,257 4.06 2.20 21.65 272,174,522 116,979,099 155,195,423 44,139,678 151,945,219 40,290 6,794 T!54230486

Fellow Shareholders: The year 1961 xvas a period of growth and expansion for your Company at every level of its operation--both sales and earnings reached new highs; international operations made substantial gains; subsidiaries' sales and earnings set new records: research and production expanded; our product line was enlarged. Thus, our third century ot: corporate life was launched on an auspicious and gratifying note. Sales for 1961 set a new record of $492,930,882, compared with $487,329,716 for 1960. The highest sales our Company had previously achieved were those for 1959, when they amounted to $490,873,749. Net earnings for the year also achieved record levels--S28,419,073, or $4.22 per common share, vs. last year's $27,381,257, equal to $4.06 per common share. These gains were achieved in the face ot~ charges involving development and launching of a new cigarette brand and start-up costs of a major new facility. Our earlier earnings high was recorded in 1959 with $28,265,157, or $4.20 per common share. Dividends for 1961 totalled $2.20 per common share. Short-term borrowings at year-end were $66,725,000 and it is antici- pated these will, as usual, be substantially reduced in the coming months. In this connection, it is pertinent to note that 1961 prices for the two major tobacco types--flue-cured and bufley--were the highest in history. Finastcial operations TI54230487

Brand advances International activities Our huge Greensboro, N. C., cigarette plant works 16 hoztrs daily, two lull shi[ts. During the year, a new Lorillard brand was introduced--York Imperial- size cigarette. The first Imperial-size cigarette, York features the first increase in cigarette length since king-size was introduced almost a quarter- century ago. Developed in blend, packaging artd concept as a luxury cigarette, but sold at popular prices, York is a non-filter brand, designed in response to market studies which indicated a clear-cut consumer readiness for a new longer-than-king-size, full-flavored cigarette. Sales of York in its initial markets were most encouraging and distribution to new markets was rapidly expanded. In the international area, Lorillard operations were enlarged and export sales increased more than twenty per cent over the previous year to a new record. In addition, your Company has the broadest array of foreign licensing agreements of any domestic tobacco company. Although foreign sales do not yet constitute a major factor in your Company's operations, they grow in importance year by year. Consumer preference for the "United States-type" of cigarette is almost universal. This fact, coupled with the growth (estimated at more than five per cent annually) of world-wide cigarette consumption, and Lorillard's position in the van of international operations, indicate that the outlook for steady and continued expansion of our international sales is very favorable. Federal Tin Company, wholly-owned Lorillard subsidiary, also pro- gressed substantially during the year, setting new sales and earnings records and expanding its operations on virtually all fronts--plant, personnel, product line and capacity. T!54230488

The most notable event of the year for your Company's production departments came with the officiaI opening last November of our new facility in Danville, Virginia. Designed, engineered and equipped to be the worlds largest, most efficient tobacco leaf processing and storage installation, the new Danville plant was built at a cost of $8 million and features pioneering produc- tion techniques and custom-designed equipment unique to the tobacco indus- try. The new facility increases our tobacco processing and storage capacity by some fifty per cent, is expected to effect substantial savings in our costs and should have a healthy effect on corporate progress for many years to come. Management is deeply grateful to Lorillard's 6,694 employees and 42,000 shareholders for their loyalty, cooperation and support of the Com- pany's programs and products during 1961. For those shareholders who cannot be present at the annual meeting. Management earnestly solicits them to fulfill their corporate responsibility by exercising their right to vote by proxy. For the coming year, it is your Management's earnest hope and belief that the growth patterns established during the recent past will be continued, solidified and expanded. Tobacco is America's oldest industry and Lorillard is the world's oldest tobacco company. However, both have the vigor of youth and we are confident that, in the years ahead, both will grow and prosper. It is to this proposition that your Management has dedicated itself. Danville opening PRESIDENT CHAIRMAN OF THE BOARD I-Iarold N'. Temple With profound regret and sorrow we note the untimely death last summer of a close friend and highly respected colleague, Harold F. Temple. President (from January 1, 1959) and Chief Executive Oflieer (from December 1, 1960), Mr. Temple had followed the traditional Lorillard up-from-the-ranks route to executive position. During his more than 30-year career with the Company, he had held virtually every key post in the Lorillard sales and marketing organiza- tion. His qualities of leadership, devotion to duty, and kindly vktue are sorely missed by all who knew him and, particularly, by those who were privileged to work with him. T!54230489

Sales of your Company's products in 1961 were the highest in corporate history, surpassing all previous records in both unit and dollar volume. To achieve this goal, the Sales Division, both in the field and at head- quarters, was enlarged during the year, with supervisory controls and personnel expanded and sales territories realigned to improve coverage of the nation- wide market. Geographical distribution of your Company's products was further improved and the number o~ retail outlets selling Lorillard brands increased. Intensified sales efforts in such specialized markets as Federal and State institutions and vending machines were eminently successful, with the result that our sales in both those areas were even higher than last :/ear's record levels. To supplement what we believe to be the finest merchandising pro- gram offered by any tobacco company, the Sales Division also developed permanent point-of-sale advertising displays made of metal (signs, counter display stands, change trays, etc.) which have proved superior to, and more effective than conventional paper and cardboard units. Our cigarette self- service merchandising fixtures and racks were further improved and the number of cartons of Lorillard brands displayed on such fixtures was the highest in Company history. A full schedule of promotions for our products was conducted at trade shows, medical conventions, county and state fairs and industry exhibits, and virtually every month of the year a special sales program for one or another of our major brands was held in conjunction with tobacco whole- salers throughout the country to widen distribution. KENT continues to be one of the country's best-selling filter brands (and was rated the leading seller in the high-filtration category by the 1961 Top Lorillard sales executives (left) periodically review new marketing strategy to expand distribution o/ Company's leading cigarette bratlds and give them more effective support via improved point of sale displays and merchandising techniques. Ti54230490

Wootten report on cigarette sales). During the year in review Kent king-size sales gained. Kent in the crusl~-proof box held virtually steady and the regular- size decreased in keeping with industry trends. NEWPORT, in both the crush-proof and king-size, showed substantial sales increases and the brand's sales continue to form a strong upward curve which is expected to continue during 1962. OLD GOLD is now available in three types--Old Gold Spin Filters, which continue to maintain their steady volume; Old Gold Straights king-size which also are holding their own; and Old Gold Straights regular-size which, in line with cigarette industry averages, registered a sales loss in 1961. SPRING sales did a turnabout in the second half of 1961 and responded to special selling campaigns with small but steady increases. YORK Imperial-size cigarette, introduced late in 1961, met with favor- able consumer acceptance in its preliminary markets and distribution was expanded as rapidly as production permitted. Now available in virtually every major market throughout the United States, York Imperial-size is expected to give your Company another solid contender in the non-filter market. In all three areas of our non-cigarette products--smoking and chewing tobaccos and little cigars--sales of your Company's products increased. Briggs, India House, Union Leader smoking tobaccos had sales gains sub- stantially higher than those registered by the industry as a whole. The Com- pany's chewing tobacco brands also increased, with our principal brand, Beech-Nut, continuing as the nation's largest seller. In little cigars, industry sales were of[ 2%, while Lorillard's little cigar sales increased approxi- mately 15 %. During 1961 a record ntlmber o] retail otttlets promoted the Lorillard brands. These displays ranged front the windows o.l leading department stores to mass sel]-service stacks at sttperraarkets and included the tho~sands of cotolters oJ retail tobacconists. TI54230491

During 1961 Lorillard's Greensboro, N. C. Research Center was virtually doubled in size. This fact points up the ever-growing importance of our research program which, in the last five years, has produced or improved every one of our major products today. The more our scientists discover about tobacco leaf, the composition of smoke, methods of filtration, tobacco blending, and the dozens of other qualities that make up a "good smoke," the more new avenues of scientific pursuit become apparent. To investigate these areas and to keep our products literally "first with the finest cigarettes-- through Lorillard research," is the function of our enlarged Research Center. Key addition to our research set-up is a newly-installed pilot production line. which permits us to actually manufacture, on a trial-scale, experimental cigarettes o1~ all kinds. Closely guarded and "off-limits'" to all but a handful of authorized scientific personnel, the pilot production line enables us to check out cigarettes with a wide variety of new tobacco blends, different kinds of filters, improved cigarette papers, experimental flavoring ingredients, etc. On it our engineers also test new production techniques and mechanical devices designed to improve product quality or reduce manufacturing costs. Thus, in addition to its purely experimental work in new product develop- ment, this latest addition to our Research Center is expected to play a key role in developing new mechanical ideas for making better cigarettes more efficiently. After a new product, product improvement, manufacturing tech- nique or production device has been proved on the pilot production line, it can be easily transferred to mass, full-line production with a minimum of expense and machinery down-time. Other additions to our Research Center include a well-equipped machine shop with trained machinists; a glass-blowing shop staffed by skilled crafts- men; the most sophisticated new scientific equipment available for each highly specialized task; even a vibration-proof, specially air-conditioned The pictures below and at right depict the scope and range o/ Lorillard's contbtaing research program. In the ttsttal order, they show: Microscopic stttdy of cigarette filter elements: Lorillard-designed smokbtg machine which collects ra~, material ]or basic research on smoke; Super~,'isors o] Company research constdt with laboratory scientists; T154230492

Dotthled in size dttring 1961, Lorilho-d's Rese~trch Cettter in Greensboro. N. C,. house.~ the ]btest scientists attd htboratory eqttipment to be ]ottnd in the tobacco indttstry. Its pioneering ittvestiealions tll't" careJttlly .~ttctrth,d. trader complete "secm-ity laboratory for instruments so delicate lhey cannot operate under normal laboratory conditions. The latest product of Lorillard research is, o[ course, the Company's new- est brand--York Imperial-size cigarettes. Over a period o~ many months, our scientists developed and tested dozens of tobacco bleads before finding the precise mixture~rich and flavorful with no trace o~ harshness~t~or an Imperial-size cigarette. The blend finally selected for York, which uses its Lorillard-developed Imperial-length instead of a filter to deliver its character- istically mild, smooth taste, is comprised o~ 38 different premium tobaccos among the Bright. Burley, Maryland and Oriental types. Filter cigarettes being tested ]or ease-o/-draw during production; Soxlet extractor whh'h is used #t analysis olr Lorilhtrd lea[ tobacco; Highly sophisticated chromatograph to identify various elements in cigarette smoke. These attd other scientific devices are used to develop tobacco product innovations and insure the highest possible quality. T154230493

Certainly the most significant event of 1961 for Lorillard's Leaf Department was the official opening late in the sear of our new tobacco leaf processing and storage plant at Danville, Virginia. A fitting companion to your Com- pany's "showcase" manufacturing plant at Greensboro, 1'4. C., the new Dan- ville facility is a handsome, expandable, highly efficient addition located in the heart of tobacco-land. Its opening was attended not only by Lorillard officials and local Danville dignitaries, but by representatives of virtually every area of public and private interest. The Governor of Virginia, Albertis S. Harrison, Jr., keynoted the dedication ceremonies (just two days after his election and as his first official duty). Constructed to meet Lorillard's expanded tobacco requirements, the new plant at peak capacity will be able to process enough tobacco each hour to make approximately 30 million cigarettes, and store some 180 million pounds of tobacco (equal to 90 billion cigarettes), Now in substantial operation, the facility has two production lines going (a third is to be installed) and I0 of its 32 warehouses are already built and in use. It features a highly- automated, straight-line flow of tobacco from the 320-foot-wide receiving area at the front of the processing building through to the rear of the plant almost one-fifth of a mile away. There the sealed hogsheads of tobacco emerge for cortveyance to the nearby warehouses. With 14V2 acres of enclosed floor space, 12 acres of outside paving, and a fully-fenced and landscaped 148 acre plant site, your Company's newest facil- ity has been designed with a built-in expansion potential. All installations-- processing plant, warehouses, wiring, plumbing, etc.--have been geared for the expected growth of the tobacco industry, anticipated changes in process- ing and storage techniques, and rapid advances in equipment and machinery design. From more than 10 states throughout the South, the finest tobacco grown converges on Lorillard's new Danville plant for processing. Here, in a unique, At our new Danville, Va., ]acility, stacks of tobacco--each weighing almost 1000 lbs.--travel on a miniatttre railway to the start of the proce~sbtg line. In the complex sealed-in system, tobacco is subjected to a var&ty of treatments to ensure ~ull, mild "ll Ti54230494

KENT KING SIZE OLD GOLD T154230498

To dedicate our ne~t" Daaville pk~nt, Virginia's Governor Harrison and some two htmeh'ed state, city and htdttstritd leaderx tom'ed the phmt with LoHllat'd officials (left), and Danville's Chaltlbet" o/ Coltlltlel'ce xponsored a Itll1(gteol! bt honor o/ the el'eltt. sealed-in system, the tobacco is literally floated on air from one operation to the next, with automatic controls governing each step along the way. Final step~Ioading into giant wooden hogsheads, which are stored in the new alu- minum warehouses (each 301'x I15") until the tobacco is perfectly aged. Only then is it transported to our manufacturing plants to be turned into finished Lorillard products. The new Danville plant supplements your Company's other processing and warehouse facilities at Lexington, Ky., Louisville, Ky., Richmond, Va., Madison, Wis., La Crosse, Wis., Evansville, Wis., and Lancaster, Pa. flavor. After emergh~g /tom the processing line, the tobacco is air-lifted to chtttes where gia/zt phtngers pack it l~rmly into hogsheads, which are the/! moved to the tzew, nearby warehottses where the tobacco is "pitt-to-sleep" for the long period o[ aging. T154230495

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Your Company's advertising during 196 l was more extensive and more effi- cient thart ever before. More people were exposed to our commercial messages and more of them bought our products than at any time in history. There can be no more forceful testimony to the efficacy of any advertising effort. During the year. each of our major brands was given appropriate adver- tising backing and all media were used. Nighttime network television remained the cornerstone of our ef[ort, while print media, radio and daytime television played supporting and supplementary roles. In the Fall of 1961, we were sponsors of seven nighttime TV programs-- with an average audience of better than 8 million families viewing each show. Careful planning and strategic buying of network properties enabled your Company to develop an over-all network TV campaign reaching about 50% more people than previously. In addition, we have greater frequency of com- mercial messages and, above all, greater flexibility in the TV structure, so that any brand can benefit by an extra "push" at any time. Kent is advertised on Ed Sullivan and Hennesey, and The Price Is Right is used for Newport. In these three programs: all time-proven properties of great audience appeal, we are major participants, sharing sponsorship with only one other advertiser in a half-hour segment. Thus. in each case, our sponsoring product enjoys close identification with the show itself. Simultaneously, to round out our nighttime television e~ort, your Com- pany uses another tactic: smaller participation in a greater number of shows-- Jack Paar, Hawaiian Eye, Cain's 100, Frontier Circus, Ichabod and Me and Target: the Corrupters. Ichabod and Me is a half-hour show with several spon- sors; the others hour-long with as many as six sponsors. It is with these "par- ticipating" network commercials that we gain flexibility, for in these shows our various brands can be rotated so that each reaches the widest possible Lorillard's advertising is a yearly mttlti-million dollar investment~much of it is spent on television. To get most retttrn /tom this investment, yo,~r Company employs its os~'n specialists (le/t) and the best available talent b~ otttside advertising agencies. T154230498

I II Bob Vc'right-- Kent TV salesman. Ed Sullivan's Top-Variety Show laekie Cooper in Het~t;esey Each Lorillard cigarette brand has its own zmlque appeal; print (above) and television advertising (right) are coordinated to emphasize this appeal to smokers in all areas. audience. In 1961, Kent, Old Gold Filters and Newport used this system to advantage. In 1962, these "participating" minutes can be used to give national impetus to the introduction of our new Imperial-size cigarette, York. A new facet of our television operation is the use of daytime network television for Spring Cigarettes. This came about as a result of our need to make comparatively few dollars work harder in reaching prospective Spring smokers. Daytime television costs less and at the same time delivers the viewers who represent primary prospects for the Spring brand. In 1961 the traditional print media~newspapers, magazines and Sunday supplements---were used in support of our brands. Magazines and Sunday supplements were utilized to display attractive full-color pictures for both Kent and Newport, while newspapers were used as a major introductory medium for York. Our radio advertising was substantially expanded during 196 I. A ~,igorous advertising tool when properly used, radio advertising has proved most effec- tive for your Company because o~ the highly memorable musical jingles which have been developed for Kent, Newport and York. A pleasing measure of their effect is the number of letters we receive from the listening public con- gratulating us on the good taste of these radio commercials and the "eatchy" quality of the music. Bill Cullen, Tile Price is Right Steven McNally, Star o/ Target: the Corrupters Mark Richman o] Cain's 100 Four Stars Hawaiian Eye The Late-Hour Jack Paar Show .lohnny Carson, Who Do Yott Trtlsr? One of several dayffrne TV programs Ti542304~

international In the international area, your Company during 1961 expanded virtually every facet of its operations--sales, advertising, personnel, number of markets and penetration of those markets. As a result, we are now active in every market of any size in the entire Free World. Over-all, our international operations cover three broad fronts: EXPORT FROM THE U. S. of products manufactured and packaged here for shipment and sale in foreign markets. In export, our sales during 1961 far outpaced the gains made by the tobacco industry as a whole. New markets were added to our export li.~t and Lorillard products are now shipped tt) more than 100 countries and territorie~ lhrotlghottt the world. Leading Lorillard cigarette brands are advertised and avaihthle throughout tl~e Free World. Above, the ]amiliar Kent in exotic Hong gottg; a Spanish btts h~ Madrid displays the traditional Old Gold brand: and in Sottth America, local trucks carry ottr ci.~arettes to retailers. Below, a Finnish witulow and a Swiss cottnter imaginatively display Kent; while replica packs decorate *~'alls bt Tokyo, Japan. Newspapers reaching more than 100 cotmtries carry ads [opposite page) [or o~tr maior brands. TI54230500

LICENSING AGREEMENTS whereby Lorillard brands are produced by reliable manufacturers abroad under our supervision and in accordance with our specifications. Under this program, Lorillard cigarettes are manu- factured and sold in more countries than those of any other domestic tobacco company. These agreements, which now cover 14 countries, are especially advantageous in nations where high tariff barriers make it uneconomic to import cigarettes manufactured in the United States. MILITARY SALES of our products to American military personnel overseas through ships' stores, Post Exchange stores, etc. In view of the pres- ent military manpower build-up, sales in this important area are expected to increase still further. During 1961, your Company's brands registered gains in virtually all world areas: Kent continues to gain in world-wide popularity and is one of the most widely sold filter cigarettes abroad. Old Gold Straights, now being manufactured in the Far East for local consumption, increased its sales monthly and plans are now nearing comple- tion for manufacture of Old Gold Spin Filters in Free Asia. Because of the growing popularity of Newport in foreign markets, the brand is now being manufactured in Finland, and is expected to be manu- factured in other foreign countries during the coming year. Embassy continues to enjoy favorable sales in Italy and Sweden. To back up the growth of these sales and to stimulate additional inter- national advances, local advertising campaigns are conducted in virtually every country to which we export. During 1961, these local campaigns were supplemented by advertising in such international publications as Life Inter- national, Time International, and the foreign editions of the Reader's Digest. For closer control and improved supervision of our enlarged international business, the International Department has increased its personnel--sales, manufacturing, and administrative--at both Lorillard's New York head- quarters, as well as at our two subsidiaries serving foreign markets: P. Loril- lard International S. A., located in Zug, Switzerland, which supervises Euro- pean and African sales; and P. Lorillard Pan American, Inc. which services sales in South and Central America, West Indies and Canada. TI54230501

Nelr Lorillard machinery make.9 ttp to 1500 c~t, arettes pet" miracle. Filter cigarettes (right) come [rom the i~takiltg machines joined at the filter tips. two by two. Cttt apart, hall are tttrned over by belt so that all may be packaged filter end up, The goal of the manufacturing department is always "maximum production efficiency at lowest operating cost." During 1961 substantial progress in this area helped offset the continually rising prices for raw materials and labor-- that beset our industry. Perhaps most significant was the near-completion at year-end of a fully-automated cigarette packaging, cartoning and packing system, which improves packaging quality, eliminates several hand-labor operations and reduces the possibility of human error. The new equipment automatically processes the cigarette pack from the time it leaves the paper packaging machine--through the stages where it is cellophane wrapped, cartoned, sealed, inserted in a shipping case, and palletized for shipment. Your Company's wholly-owned subsidiary, Federal Tin Company, had its best sales and earnings year in history during 1961. These results were achieved mainly as a result of its continued diversification and expansion in the production of paper packaging and cartoning and despite a general con- traction in the market for traditional metal containers. Founded 45 years ago as a metal lithographer and metal container man- ufacturer, Federal Tin's major production until 1959 was devoted to tin pack- ages and metal containers ~or such products as smoking tobaccos, little cigars and similar products. In that year a new Gravure Department was organized and Federal Tin is now solidly in the paper packaging (cartons, packages and labels) business as well. During 1961, the production capacity of the Gravure Depai:tment was considerably enlarged and now produces well over one million cartons and ten million labels daily. Currently, it supplies a sizable portion of Lorillard's carton and cigarette package needs and during 1961 added Newport labels and York cartons and labels to the other items it manufac- tures for the Company. To achieve its increased production, Federal Tin this year expanded its employment rolls by approximately 5 per cent and increased its floor space 19 T!54230502

A/ter cigarettes are ~t~ade, they mttst I~e packaged and pt~t into cartons bt one continttous prodt~ction flow. Then, the cartons are packed into shipping cases: the cases are conveyed to the ]reigh~ area, where they will be sent to some 1~ million U. S. retailers. To ensure optimum quality at all times, new quality control devices were added during the year. Rotated on each production line is an electronic central station that analyzes the quality of each cigarette produced by each machine in the line, thus serving as an extra safeguard and double-check on the individual units (on each cigarette-making machine) which check density, weight and over-all quality of Lorillard cigarettes as they are produced. A major engineering project was the necessity to adapt the Company's manufacturing equipment to production of the new longer-than-king-size York cigarette. Months of machinery re-design, on a high priority basis and under complete security wraps, successfully solved the problem of manufacturing Imperial-length cigarettes at the same rate of efficiency as shorter cigarettes. by more than 20,000 square feet, in a building adjoining its main plant in Baltimore, Maryland. I 1 lOl~ Ill I I Ill I T!54230503

P. Lorillard Company ASSETS CURRENT ASSETS: Cash .................... Accoums receivable--customers (less $1,034,337 in 1961 and $1,053,785 in 1960 for doubtful accounts and cash discounts) OIhcr accounts receivable and deposits ......... Inventories (at average cost) : Lea~ tobacco ................. Manufactured stock .............. Materials and supplies .............. Total current assets .......... December 31 1961 10,310,288 26,539,895 831,467 231,166,588 28,302,331 6,405,332 303,555,901 PROPERTY, PLANT, AND EQUIPMENT (Note 1) : Land .................... Buildings and building equipment ........... Machinery and equipment ............. Total ............... Less accumulated depreciation ............ Total property, plant, and equipment--net 880,124 20,484,294 38,541,844 59,906,262 16,941,745 42,964,517 OTHER ASSETS: Prepaid expenses and defcrrcd charges ....... Unarnortizcd debenture discount and expense ....... Mortgage note xeceivable ............. Brands, trade-marks, and goodwill .......... Total other assets ........... 5,486,982 1,490,744 256,168 1 7,233,895 TOTAL ............. $353,754,313 1960 $ 8,890,771 26,177,736 678,512 211.876,667 18,686.819 5,864,017 272,174,522 703,996 18,263,389 32,699,497 51,666,882 14,084,033 37,582,849 5,714,157 557,468 264,219 1 6,535,845 $316,293,216 21 T154230504

and subsidiary companies LIABILITIES December 31 1961 1960 CURRENT L~ABtLtT~ES: Notes payable ................. S 66,725,000 $ 84,600,000 Accounts payable ................ Long-term debt duc within one year (less held by Company) Accrued taxes ................. Accrued payrolls ................ Accrued interest ................ Other accrued llabilities .............. 7,741,741 2,100,664 23,891,252 2,833,916 547,912 1,309,896 Total current liabilities ......... 105, t 50,38 LONG-TERM DEBT (exclusive of amount due within one year) : Notes 3 ¼ %, due serially to July 1, 1963 ....... Twenty year 3% debentures, due October 1, 1963 ..... Twenty-five year 3% debentures, due March 1, 1976 ($350,000 to be retired annually to 1975) (less held by Company) .... Twenty-five year 3a/4 % debentures, due April 1, 1978 ($675,000 to be retired annually to 1977) (less held by Company) . 47/'a % sinking fund debentures, due June 1, 1986 ($1,600,000 to be retired annually 1966 to 1985) .......... Total long-term debt .......... RESERVES FOR EMPLOYEE BENEFITS (Note 2) ....... 1,250,014 10,000,000 11,804,000 17,652,000 40,000,000 80,706,014 2,383,932 SHAREHOLDERS' EQUITY: 7% cumulative preferred stock (par value $100 per share)-- authorized 99,576 shares; issued 98,000 shares ...... 9,800,000 Common stock (par value $5 per share)--authodzed 10,000,000 shares; issued 1961--6,571,148 shares; 1960--6,564,048 shares (Note 3) .................. 32,855,740 Additional paid-in capital (premiums less expenses on common stock issued) ................ 29,888,685 Earnings retained for use in the business (Note 4) ..... 92,969,561 Total shareholders' equity ........ 165,513,986 TOTAL ............. $353,754,313 See Notes on page 23. 5,287,327 2,267,664 20,693,327 2,406,989 415,911 1,307,881 116,979,099 2,916,678 10,600,000 12~00,000 18,423,000 44,139,678 3,229,220 9,800,000 32,820,240 29,643,735 79,681,244 151,945,219 $316,293,216 T!5423050,~

P. Lorilla~cl Company and subsidiary coml~anies Year Ended December 31 1961 1960 REVENUES: Net sales .................. $492,930,882 Other ................... 672,1 t3 Total ............... 493,602,995 COSTS AND EXPENSES: Cost of goods sold, selling, advertising, and administrative expenses 429,567,751 Interest ................. 4,756,171 Federal, state, and foreign income taxes ........ 30,860,000 Total ............. 465,183,922 NEE E^RNIN~S ................. 28,419,073 Dwlom~us ot~ PREFEt~RED STOCK ($7 per share in each year) , 686,000 EAR~I~oS APPL~CgaLE ~ro CO~IMO.X S~roc~ ($4.22 per share in 1961; $4.06 per share in 1960) ............. 27,733,073 RzT~tNeo EgR~N~S, beginning o[ year ......... 79,681,244 Total ............... 107,414,317 DIVIDENDS ON COMMON STOCK ($2.20 per share in each year) 14,444,756 RzrAt~a Ea~I~os, end of year ........... $ 92,969,561 $487,329,716 505,123 487,834,839 424,534,719 4,563,863 31,355,000 460,453,582 27,381,257 686,000 26,695,257 67,426,893 94,122,150 14,440,906 $ 79,681,244 NOTF.~: (1) Property, plant, and equipment is stated at cost with the exception of certain properties acquired prior to December 31, 1932 which are stated at values, lower than cost, determined as ot~ that date. Provision for depreciation amounted to $3,315,848 in 1961 and $2.742.983 in 1960. (2) During 1961 the Company reacquired 21,300 shares o~ its common stock by purchases on the open market at a cost of $1,407,456 for use in the discharge of obligations ot~ a like amount incurred in prior years under its incentive compensation plan. The cost of such shares has been deducted from the reserves for employee benefits, heretofore provided in respect of such obligations. (3) At December 31, 1960, under the Restricted Stock Option Plan for Employees, options were outstanding to purchase 26,200 shares o~ common stock at $39.50 per share, this price being more than 95% of the market price at date of grant, and 44,800 shares were available for the granting o~ additional options under the plan. During 1961 options {or 7,100 shares were exercised and options for 500 shares lapsed. At December 3 I, 1961, options were outstand- ing to purchase 18,600 shares at $39.50 per share, and 45,300 .~hares were available for the granting of additional options under the plan. The outstanding options may be exercised as to S,000 shares at any time up to July 9, 1962 and as to 13,600 shares at any time up to September 18, 1969. (4) Covenants limiting the payment of dividends on common stock and the purchase, redemption, or retirement of such stock are contained in the debenture indeutures and in the note agreement. Under the most restrictive of these covenants the amount which could have been expended for the foregoing purposes at December 31, 1961 was limited to approximately $32,000,000. T!54230506

Celating to operations }rear Ended Earnings brJore Dec. 31 Net Sales Taxes on Income Earnings per Common Shore* 1961 1960 1959 1958 1957 1956 1955 1954 1953 1952 $492,930,882 487,329,716 490,g73,749 479,120,409 293,4[5,430 203,280,417 228,268,392 231,046,695 253,933,462 214,508,482 $59,279,073 58~36,257 60,107,157 57.630,083 24,882A12 8,618,758 13,098,500 12,629,143 18,787,571 11,640,942 $30,860,000 31,355,000 31,842,000 30,593,000 13,398,000 4,099,000 6,502,500 6,287,000 II,594,000 5,940,000 $28,419,073 27,381,257 28,265,157 27,037,083 11,484,412 4,519,758 6,596,000 6,342,143 7,193,571 5,700,942 $4,22 4.06 4.20 4.0l 1.89 .67 1.03 .99 1.14 1.00 Dirldend$ per Common ~hareg. $2.20 2.20 2.20 2.00 .97 .60 .67 .80 .80 .75 relating to balance sheet tit Deo. 31 2"oral Inventories Working Capital Property, Plant and Equipment ~Gross Amount Net utter Depreciation ~ " Shareholders' gqt~lty Amount Per Common Share'~ 1961 1960 1959 1958 1957 1956 1955 1954 1953 1952 $265,874,251 236,427,503 218,613,345 197,069,209 161,449,360 136,652,28l 140,988,335 144,189,440 135,727,170 125,008,096 $198,40$~520 155,195,423 150,577,898 143,916,484 109,803,777 110,245,323 112,451,576 I08,876,796 111,269,498 81,369,651 $59,906fl:62 51,666,882 45,690,733 41,037,558 37,495,633 35,079,590 34,292,757 27,518,065 24,392,884 22,605,222 $42,964,S17 37,582,849 33,748,933 30,927,133 28,513,g52 26,399,56I 25,488,791 18,675,223 16,218,639 15,085,844 $16~51~986 151~45,219 139,690,868 126,552,617 86,674,232 81,438,885 81,028,497 78,969,754 77,878~61 67,820,512 $23.69 21.65 19.79 17.78 13.47 12.55 12.48 12.12 11.93 11.62 • Based on number o/ shares outstanding ag end o/ each ~ 19~8 and prior years adjusted to give el~ect retroac~lvety to Z/or I oommon stocR split In 1959. T!54230507

annual meeting and proxy The Annual Meeting of Lorillard shareholders will be held on April 3, 1962 at the Hotel Biltmore in New York City. Meeting time will be 11:00 a.m. and doors will be closed promptly at 10:45 to keep the session free of inter- ruption. Notice of the Meeting, along with proxy and proxy statement, is being mailed to you under separate cover. Your proxy is your way to approve or disapprove of Management's stewardship. Your vote is therefore impor- tant personally to Management, whether it be for 5 shares or 5.000 shares. I[ you are unable to attend our Annual Meeting on April 3rd in New York, please sign and return your proxy be[ore you put it aside. It will let us know of your continued interest. accountants' opinion HASKINS & SELLS 2 BROADWAY NEW YORK 4 January 31, 1962 To the Board oJ Directors and Shareholders ol P. Lorillard Company: We have examined the consolidated balance sheet of P. Lorillard Com- pany and its subsidiary companies as of December 31, 1961 and the related statement of consolidated earnings 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 records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying consolidated balance sheet and state- ment of consolidated earnings and retained earnings present fairly the finan- cial position of the companies at December 31, 1961 and the results of their operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. 2~ T!54230508

Lorillard officers Lewis Gruber ...................... Chairman of the Board & Chief Executive Officer Morgan J. Cramer ........................................................................... President Manuel Yellen ............................................ Vice President & Director of Sales George O. Davies ............................. Vice President & Director of Finance Dr. Harris B. Parmele .................. Vice President & Director of Research J. Edgar Bennett .......................... Vice President & Director of Manufacturing Anna F. Woessner ....................................................................... Secretary Edward G. Kontos ................................................................. Treasurer John J. Darby ............................................................................... Comptroller other corporate information Executive Offices ........................... 200 East 42nd Street, New York 17, N. Y. Corporate Offices ................................... 15 Exchange Place, Jersey City, N. J. General Counsel ................................ Perkins, Daniels, McCormack & Collins Auditors .................................................................................... I-Iask|ns & Sells Transfer Agent .............................. Chemical Bank New York Trust Company, New York, N. Y. Registrar .................................... First National City Bank, New York, N. Y. Advertising Agencies .................................................... Lennen & Newell, Inc. Grey Advertising Agency, Inc. Albert Frank-Guenther Law, Inc. (Financial) Public Relations Counsel .................................................. Sidney I. Wain, Inc. Manufacturing Plants ................................ Greensboro, N. C.; Louisville, Ky.; Richmond, Va. Research Laboratories ................................ Greensboro, N. C.; Louisville, Ky. Leaf-Storage Warehouses .............................. Louisville, Ky.; Richmond, Va.; Lexington, Ky.; Danville, Va.; Lancaster, Pa.; Madison, Wis,; LaCrosse, Wis.; Evansville, Wis. Stemmeries ............................... Louisville, Ky.; Lexington, Ky.; Danville, Va. Field and Division Sales Offices ................................ In all Principal Cities Subsidiaries .................................. Federal Tin Company, Inc., Baltimore, Md. P. Lorillard Pan American, Inc., New York, N. Y. P. Lorillard International, S. A., Zug, Switzerland T!54.230509

OLD GOLD~ | Ti54230510

T!54230511

ANNUAL REPORT CONTENTS Board of Directors ........ Page ! The Year in Review ........Page 3 Financial Highlights ........ Page 6 Lorillard's 200th Anniversary ..... Page 7 Research ........... Page 9 Sales ............. Page 11 Lorillard's Leading Products ..... Page 13 Advertising .......... Page 15 International .......... Page 17 Manufacturing ......... Page 19 Leaf ............. Page 20 Consolidated Balance Sheets ..... Page 21 Earnings ........... Page 23 Ten-Year Financial Comparison .... Page 24 Accountants' Opinion ....... PAge 24 Federal Tin Company ....... Page 25 Annual Meeting & Proxy ...... Page 25 Lorillard OBcers .........Page 26 Other Corporate Information ..... Page 26 T15423051;~

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• 7FH Fellow Shareholders: This annual report. ~ith its ~xcord or your Company's activities for the year 1960. marks the end or one era and the opening of another. In 1960. we cerebrated the 200th anniversary of Lorillard's founding, 16 years be- fore the American Revolution. With 196l, Lorillavd starts its third century of continuous operation. To make the coming years the most significant, progressive and prolitable in our history is the task your Manage- ment has assigned itself. Year oj Consolidation 1960 was a year of consolidation for P. Lorillard Company. After three successive record-breaking )'ears during which sales more than doubled and earnings rose six-fold, 1960 was the year in which we consoli- dated our gains, geared our operations and organization to the new higher levels, furthe~ modernized our capital equipment, increased our executive team and laid ~olid foundations for the next phase of our growth. A[though sales were at nearly the same levels as those of 1959 (when they were at an all-time high), earnings were lower. The cost of doing business increased dur- ing 1960 and at all lcvcls~raw material, leaf tobacco, labor, etc.~we were faced with higher charges than over before. To counter this situation and to cnabtc us to continue on our upxxard path in the future, we made some far-reaching moves during 1960. Building ]or Growtl~ While the details of this building for growth will be spelled out later in the report, here are some o~ the more significant highlights which herald improved pro- Ultra-modern ]acility under construction at Danville, Vtl., will increase Company's tOhtlCCO processing and storage capacity. -I'!54230514

ductivity and a stronger competitive position for Loril- lard within the tobacco industry: • Lorillard's new $7 million tobacco processing and storage facility in Danville, Va. was begun last April and will be completely operational by late summer. • A new wing has been added to the Company's Research Center at Greensboro, N. C. virtually dou- bling our research area. • Another complete line of the finest cigarette- making equipment available has been installed at our Greensboro plant. • A new production and storage wing was built at Greensboro. • Modernization of our Louisville, Ky. plant and other Company facilities, equipment and installation was continued. Strengthened Personnel In terms of human resources also, 1960 was a pro- ductive year for your Company. During the period in review, we augmented our sales organization until it is now the largest and most effective in our history. Our Tobacco Leaf and Manufacturing Departments were strengthened under the leadership of new aggressive Directors, heading up staffs geared for the expanding activities of their respective Departments. To meet the ever-growing importance of advertising in today's ex- traordinarily competitive cigarette market, we re-estab- lished the post of Director of Advertising. added other executives to the Adverti.,ing Department, and broad- ened the base of our advertising activity, both externally and internally. Within memory. Lorillard has never been stronger with respect to the qualit3 and range of its employee talent. btternational Expansion In the international area. the year marked a period of substantial growth. We introduced our brands to more than 30 new countries (ranging from Afghanistan and Borneo to the Fiji Islands and Kenya) and one or more Lorillard brands is now available in virtually every country and territory of the Free World. Our foreign licensing program was augmented by licensees in new sizable markets and we formed a new foreign sub- l:'xpansion o.f international operations has increased distribtttion of Lorillard pro&tcts to more than 100 ]oreign cotmtrieT. T!54.230515

sidiary--P. Lorillard International S.A., Zug, Switzer- land, which handles overseas sales and complements the work of P. Lorillard Pan American, Inc., New York, N. Y., which services our customers throughout the Western Hemisphere. We believe that Lorillard sales and earnings in markets abroad will continue to in- crease, and will provide in years to come an important contribution to the Company's total growth. Federal Tin Co. During 1960. the operations t~l" our wholly-oxxncd subsidiary, Federal Tin Company. were again expanded and diversified. From its long-established base us an important metal lithographer, Federal Tin has moved successfully into paperboard and paper label printing and can now produce quantity runs o[ printed cartons and boxes, labels and paper packages. Meanwhile. the subsidiary's metal can production--for the tobacco. food, spice, medical supplies and other fields---con- tint, cs profitable. Financial Status Consolidated net sales for 1960 amounted to $487,329,716, compared with $490,873,749 for 1959; while net earnings were $27,381,257, or $4.06 per common share, vs. 1959's $28,265,157 equal to $4.20 per common share. Dividends for 1960 totalled $2.20 per share. Bank loans at year-end were $84.600.000 and these will, as usual, be substantially reduced in the coming months. Each succeeding year, Management is gratified to find that a larger number of shareholders attends Lorillard's Annual Meetings and it is our hope that this year will prove no exception. However. since it is a practical impossibility for all of our shareholders to be with us for the Meeting. we earnestly request those who cannot be present to meet their corporate responsibili- ties as shareholders by exercising their right to vote by proxy. Whether or not your views coincide with thtL~e of Management, whether you have a large or small number of shares, your vote is the legal expression of your opinion o[ Management and Company affairs and. as such. is important to you and to your Comp.'my. Management and Lorillard's entire staff deeply preciate your interest and support of our products and policies during the past year. We hope and believe that, with your continuing assistance, the year 1961 will be a rewarding one for us all. Certainly, we and our associates will do everything possible to make it so. CHAIRMAN OF THE BOARD H. A. KENT It is w#h deep sorrow that we note tire death last summer o[ one ol our most cherished #iends and colleagues, Herbert A. Kent. Mr. Kent had been a part ol the tobacco industry Ior more than 50 years, had held virtually every important executive position with this Company and had made outstat~ding contribtttions to its growth and welJare. He served as Lorillard's President (1942-1952) and its Board Chair- man (1952-1955). Up tmtil his death, he con- thtued to serve the Company he loved tt~ a member oJ our Board o[ Dh'ectors. He w~z~ a warm [riend, a respected associate, and ht his honor Kent cigarette~ were named, lye shall all #liss his wise cottllsel, his great knowledge and experience. T!54230516

FINANCIAL HIGHLIGH Sales ............. Net Earnings .......... Results per Common Share: Net Earnings ......... Dividends .......... Shareholders' Equity ....... C4trrent Assets ......... Current Liabilities ........ Working Capital ......... 1960 $487,329,716 27.381,257 4.06 2.20 21.65 272,174,522 ii6,979,099 155,195.423 44,139.678 151,945.219 40,290 6,794 1959 $490.873.749 28,265,157 4.2O 2.20 19.79 253,688,962 103,111,064 t50,577,898 47,458,342 139,690,868 33,055 7,051 TI54230517

2OOTH ANNIVERSARY Plaint cities such as D~un'ille marked the Coorpttny's anniversary with local /estivities to honor a good neighbor. Atott~al meeting [eatured a giant birthdtty cttk.e ond Chah'tllatl Gl'ltbet" cttt the I~rst slices/or sh~treholders. IFtndow displays h~ stores throttghottt the tttttiott ttsed Lot'illttrtl's tml~iversat3" theme to ]eattlre leadi~tg Compttny prothtt't.~. "1"o I~ring Lorillard's torpor'ate growth stot3" to a wide ptd~lic. Company pttblished six million copies o/20-page./ull-color new~- pt~pt'r-t~t~gazitte tht~t appetwed it~ major papers. Lorilhtrd also ptchlixhed~/or schools, libraries. Cot~pttny tts,~'ochtte.¢~"Lorillard & Tobacco.'" in which oatiott's tobacco hLt'tory is paralleled with Company's 200 a'ears o/ pro.eres~" since Colonial aaYs.... Ti54.23051E

Proud o1~ its 200 years of experience and honorable growth as the world's oldest tobacco firm, P. Lorillurd Company believed it had a significant story to tell the American people on the occasion of its Bicentennial. In making this story known, virtually all media and techniques were used--print, TV, radio advertising: displays, indoor and out; wide-ranging promotional and publicity campaigns; etc. Reflected here is but a sampling of the many exciting even/.~ and noteworthy activities that marked the Company's 200th birthday. l+-'retl ,4tllerica's newspaper inthlsfry saw [it to #tote Lorillard's Bicentennkd by aicarditlg Compa#iy this bronze tobacco lea[. Illuminated arid mobile signs that dramatize the Company's progress n'ere erected in transportation termittitl.l" across the cottntry. In Freedomland, U. S. A., 19th cen- tury-styled tobaccottL~t deroted win- dow dispkty to Lorillard's annirersary. Lorillard's two centuries o/ growth~[rom an early Colonial, one-nlan tobacco "Manufactory" to today's great corporation with its gleaming plants arid modern research cemers~provided a wealth o] material [or ]eatitr¢ stories in publications o/ all type.r, Articles based oil the Bicentennial o[ the world's ohlest tobacco company were published in magazines and newspapers all over the Irorld. TI54.23051~,

H Only four years after opening our pace-setting Research Center in Greensboro, N. C., Lorillard's growing re- search program necc.ssitatcd the addition in 19f~0 of a new wing to the ('enter. When completed in 1961. this half-million dollar cxten.~ion will house more labo- ratories and research offices, and will facilitate ottt" continuing program to develop and pass along research lindings that will benefit the American smoker. In addition, we have also modernizcd and enlarged the control laboratory facilities at our Louisville, Ky.. plant. Research-minded by tradition. Lorillard was one of the first tobacco lirms to set up its own research facility over 30 years ago. Your Company feels much of the credit for its current sales volume and line-up of major cigarette brands must go to the crash research program started in 1956 and anticipates that research will con- tinue to play an important part in l~uture Company progress. Already equipped ~ith the most modern devices for scientific tobacco research. Lorillard's Research Center also includes an engineering development laboratory f~r experimental ~ork on new typc~ tff producti~n mz, chinery and proce.~scs and an area for Special Projects. With the new wing our scientists will have a special area devoted solely to basic research and the delicate instrtmlents necessary to it.,, pt~rsuit. Other arc;ts will eniar-e t~tl|" capacity for investigations in the lield organic chemistry and. it i.~ hoped, add to existing knowledge ubont the preci.,,c composition of tob:~¢co leaf. the make-up of toba~cco smoke and how these and other I'actor,. all'cot ta~,le and consumer enjoyment. In addition, your Company's enlarged Research Cen- ter ~ill house a pilot-.,culc, cigarette-making production line. This pilot-line x~ill enable us to test product im- provements based on next rc.,,earch lindings which often require specially-designed machinery or new manufac- turing techniques begorc low cost, mass production is possible. By first successfully working out any such production problems on the pilot-line, the appropriate modifications in our regular production lines can be ,nade quickly and the improved product put into mass production without loss o|" clticiency or material inter- ruption of production schedule.,,. Mechttnical Smoker pttl~s away at three dozen cigarettes sht~nltaneottsl.v in newly-enhtrged Lorilko'd Research Center. TI5422,0520

~ch,ntl.vtv determble iih'otine t'otltetlt O[ tot~lcco. ThJ~ i~" one o/ Inatly steps ill Lorilhtrd°s thoroughgoblg vc.~ti.gation o/tile propertie.~" atld make-up o[ tobacco. Filter "'xtretcho,t" is pm'l of I'i~t~rtms check all lilter "tt,u"" mll~t lltldergo Be[ore it i~ atct'pted ]or n.~e bl Lorillard c&,arette.~. Oh]ectire is ErelT item that goes imo or aromld Lorilhlrd producls i.~ .wlh]eeted to sealx'hing analy.~is by Comp,my tech- nicians. Particldttr attention is devoted to the tobacco lea~ itsel[ to itlstlre tmi[orm aml desb°ed quality. Lorilhtrd Research C'enler, Ihe most Itlot/ertl altd Best eqldpped in tile blthtstr.r..~et, ks new knowletlg, t" ill it.v c'ontimdng progran~ to keep tile C'omptlny "'["b'.~t With the Finest Cigaretles~Throtlgh Lorilhtrd Re.vearch." T154.23052"I

ROHANDISING The year 1960 was--even for the highly competitive cigarette industry--a year of intense competition, aris- ing both from the introduction of new brands and mark- edly aggressive activity fi'om long-established ones. Nonetheless. sales of your Company's products were just short of 1959"s record levels and in the closing mtmths of the year even moved ahead of the compara- ble period last year. To stay abreast of the intensified competitive activity. the Sales Division enlarged and strengthened its organi- zation in 1960: new people were added, new posts designated and the executive position of General Sales Manager was re-established. The result: expanded d&tribution of al! of our major products in supermarkets, other large volume chain outlets, anaong independent retailers and via the growing number of cigarette vend- ing machines (in which sales of our major cigarette brands are at a record high). In all retail outlets--both large and small~Lorillard during 1960 was able to place substantially more mer- chandising displays, self-service racks and other pro- motional material than during 1959. In addition, the quality, as well as the quantity, oi~ our Company's sales promotions, merchandising displays and point-of-sale material surpassed any previous standard set by Lorillard. Much of this was accompli,;hed through normal. though heightened, activity on the part of the Sales Department. but much resulted also from a series of concentrated selling campaigns instituted throughout the year. Typical of such campaigns were those themcd to our 200th Anniversary and to Kent's TV sponsorship of the Summer Olympic games in R.ome. Italy. Such campaigns enabled us to place tht~usands ~f point-of-sale displays throughout the country, to obtain extra coopera- tion from wholesalers and retailers and to improve dis- tribution of our prodt,cts in retail locations. During the year. sales of our Kent king-size cigar- cttes increased sizably and. according to aathoritative industry analysts. Kent with the Micronite lilter was the second biggest-selling filter cigarette in the country in 1960 (and the fifth best-selling cigarette brand of any type). In keeping with industry trend.,,..~ales of Kent in the regular size and crush-proof box declined some- what. During 1960, our Newport tilter--the menthol cigar- ette with a "'hint of mint"~continued to make marked gains in volume and there is every indication that its uptrend will continue during 1961. Old Gold Spin Filters maintained their volume posi- tion and have good growth potential which, it is hopecl, will be tangibly developed in 1961. Each year" the Cot~tpat~y's sales exect~tives t~eet ¢o plo~ n~arketing strategy, review sales tactics, make plan.~ for comh~g )'eat'. TI54.2305~

Old Gold Straights in the king-size soft package intro- duced in February of 1960. with nation-wide distri- bution completed in May, have been showing satisfac- tory progress. Because of the current growth o1~ the king-size non-filter cigarette market, the Company anticipates further gains for this cigarette, despite decreases suffered by its sister brand--regular size Old Gold Straights, which is following industry trends down- ward. Spring cigarettes have not performed as well as antici- pated and have not yet attained the goals set for them. Based on newly formulated plans, Management is hope- ful that 1961 will see an improvement in this situation. For its non-cigarette products, your Company also increased its selling and distribution efforts with the gratifying result that sales of our smoking and chew- ing tobaccos not only increased, but ran well ahead of industry averages; on little cigars--in a sharply declining market--we maintained our distribution and suffered a smaller decline than did the rest of the industry. Latest available industry figures indicate an industry sales gain of 1.9% for smoking tobaccos; Lorillard's brands--Friends, India House, Briggs, Union Leader, etc.--increased 11.6%. The most recent statistics on chewing tobaccos indi- cate an industry loss of 1.7%; Lorillard's Beech- Nut, Havana Blossom and Bagpipe gained 1.3%. In the little cigar shake-out, our brands suffered along with the industry, but we are left with two of the strong- est contenders in this group--Between-the-Acts and Madison~and an increased share (47.7% for 1960 vs. 27.1% for 1959) of a smaller, but steadier market. Company's merchandising material is care~ally reviewed I~y experienced Lor[lho'd sales specialists he,ore being sen~ to more tha~t It5 million retail outlets across lhe nation. Co~u~ter disph~ys o/ Lorillard cigarette brunds at point o/ pt~rchase is the result of contb~uing work o] Sales Depart- ttletlt. Sitch prol~lotiotLl" *t'b~ IIVM' cltstolllers, boo.¢l sales. T154230523

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ISING Because advertising and sales go hand in hand in the cigarette industry, to a greater extent than in most other fields, the fight for sales supremacy made itself felt in cigarette advertising which was even more aggressive and competitive than usual. To ensure that your Com- pany would continue to be in position to deliver its advertising sales messages to the most consumers in the most markets at the lowest possible cost, our adver- tising efforts were subjected to the day-to-day scrutiny of top Management, via the Advertising Committee. comprised of the President. Board Chairman. the Director of Advertising and Sales Vice President. The executive position of Director of Advertising was reinstated, and to supplement Lorillard's own internally-developed advertising and marketing strategy, your Company utilized the talents and resources of two major advertising agencies. As in past years, Lorillard in 1960 made use of all major media in order to sell our cigarette brands in as many different markets as possible. Network television, national magazines, newspapers, spot tele- vision, radio and outdoor billboards were all utilized, with our heaviest advertising ammunition and concen- tration, naturally, focused on selected top markets where sales studies indicated a high potential for our products. In keeping with the practice of recent years, night- time network television represented the most substan- tial part of our advertising activities. The reason for this is simple--TV has proved itself the most effective sales medium yet developed. More, it still gives no evidence of having reached anything like a saturation point: Television continues to grow, both in number of viewers and hours of viewing. In 1960 two million TV homes were added, making 46 million in all, and aver- age daily viewing reached an all-time high of 6 hours. Thus, virtually throughout the year, Lorillard pre- Lorillard specialists review brand advertising. seated an average of five major TV shows each week-- each different and each appealing to different tastes in the mass audience. This too is necessary, for the mass market is composed of a variety of age, social and cultural groups, each of which reacts to different appeals and stimuli. For Newport. for instance, we have a light situation show featuring a well-known movie star; for Old Gold Spin Filters. wc present an audience-inter- view show m. c.'d by u famous comedian; and for Kent, we have three show.~a western, an underwater adven- ture series, and a situation comcd3'~which deliver our Kent commercial messages into 20 million homes weekly. Further. korillard sponsored the Summer Olympics for Kent. and TV industry estimates indicate that we reached 82% t35 million) of all TV homes through this vehicle. The campaign themes in 1960 emphasized the major sales points of each Lorillard brand: KENT . . . You'll feel better about .~lnoking with the taste of Kent--because Kent with lhe Micronite filter refines away harsh llavor~rcfincs away hot taste ~makes the taste of a cigarette mild. NEW~'OR'r... Refreshes while you smokc~be- cause only Newport adds a hint of mint to the soothing coolness of menthol, in a blend of the world's finest quality tobaccos. OLD GOLD S~'t.,," FtL'rERS . . . Spins and cools the smoke naturally to give you the best taste yet in a filter cigarette. OLD GOLD STRAIGH'rs . . . Tender to your taste because they're made with the tender center leaves... leaves that make a mild, rich smoking taste. St, R~ . . . Keep your taste as fresh as St'R~s~ every day of the year... S~RtNG, the gentlest tasting cigarette made today. In addition, many of our advertising messages in magazines and on most television shows end with Lorillard's famous corporate slogan: "'A Product of P. Lorillard Company--First with the finest cigarettes --through korillard research." Agency submits new adverti.~'ing approaches. T!54230526

Nighttime network television ha~ the blggbsi share Of £orillard'a adver- tising dollar. Each ahow is geared to appea.t to different tastes in the mass audience, from comedy to western. T!54230527

-TIO NA L During 196~), international operations of P. Lorillard Company expanded appreciably and our products are now sold in well over 100 countries. The sales results from this increased international distribution have been gratifying: Kent, which accounts for the nmjor part of [,odllard cigarette sales overseas, is no~ without douht the largest ,tiling American Iilter cigarette exported fi-om the United State~: Old Gold is u nmjor ~cllcr in several parts ol the world, most notably the Far Pacific area: Newport foreign sales are growing steadily; and Embassy continues to sell well in Italy and Sweden. Lorillard activities outside the United States fall into two major categories: Export, from the United States. of product~ mnnu- factured and packaged here: Licett.vittg agreemeuts, whereby our brands are pro- duced~under our guidance and to otn" specifications~ by reliable manufacturers abroad. Direct export is the older and more traditional method of handling foreign sales and. for many areas of the world, it is still the more efficient and profitable way. During the year. more than 31) countries were added to our export roster, r:mging from Aden and Afghanistan to India. Samoa and Singapore. Substantial progress also was made during 1960 in two other important export areas: sales to military personnel stationed abroad and to sea stores, each of which provides a sizable volume outlet. In many sections of the world, foreign licensing agreements have proved more profitable or practical for your Company than export. Under such agrec- ment.~. Lorillard's Internatitmal Department must work closely with the licensees and o~cr.~ce the entire foreign operation to ensure that it meets our requirements and spccilications at all le, els: the qualit) of the tobacco leaf used. the manufacturing techniques employed, the quality of the linished cigarette~its packaging, distribu- tion. advertising-promotion-marketing~ali must meet our standards. This program was initiated in i 952. when your Corn- pan)' became the first leading American cigarette nmnufacturer to venture abroad on a manufacturing basis by signing a licensing agreement with a Philippine firm. Evidence of the growth and importance of this licensing method can be gauged from the fact that more Lorillard cigarettes are no~ manufactured and sold in President Temple and Vice President Cromer review [oreign operations. Even Hong Kong [ilms pla.v brand pro~**otion role in international area. Lorillard brand advertisbtg abroad ties ht- to local scene: i.e. street car signs bt Peru. Singapore delivery trucks bring Lorillard brands to nunzerous Oriental retail outlets. Advertising to our military ts typified by typhoon-proo] Kent ,lisphty bt Okinawa. Dutch tobacconL~t it, Rotterdam features Kent b~ dispho's sh~ffktr to those in U. S. TI54.230528

foreign countries than are exported to foreign countries from the United States. During 1960, your Company added the home mar- kets of two more countries, Finland and Switzerland, to this foreign licensing program, which currently includes (in addition to the Philippines) such other countries as Panama. Venezuela, Mexico. Belgium, Luxembourg and Holland. Thus. through our licensing program, Lorillard brands arc now firmly established in such economically-integrated areas as the European Com- mon Market. the Outer Seven. and--should the Sc~m- din:tvian countries combine to form another marketing area~your Company's products can be marketed there by virtue of our agreement in Finhmd. In 1961. Lorillard expects to add the markets of addi- tional countries as part of the continuing expansion of our licensing program. To meet the increasing burden of international opera- tions, your Company in 1960 established P. Lorillard International S.A., a wholly-owned Lorillard subsidiary, in Zug, Switzerland. This subsidiary eventually will handle the majority of Lorillard's international sales outside the Western Hemisphere. P. Lorillard Pan American, Inc., the wholly-owned Loriilard subsidiary that was set up in 1959, services your Company's sales in South and Central America. West Indies and Canada. To ]oct~s interntttional attention on Kent, ht~ge billboards are btdlt on metier highways in Sottth American co,mtries. In Spain. where non-filters are biggest sellers, Old Gold Straights ttsed Madrid trolley cars to attract cttstomers. KENT T154.230529

FAOTURING In the Manufacturing Department during 1960, major emphasis was placed on reducing operating costs and improving production efficiencies, compatible with Lorillard's high standard of quality. With our widely expanded production facilities, we wereMafter 3 years of continual straining to keep up with rising consumer demand for our productsmat last sutliciently enlarged to meet them and effect economies in the process. New advanced, automatic production and materials- handling equipment was purchased and installed to replace older, slower equipment and less efficient proc- esses. This new equipment already is making a con- tribution to more economic production and helping to offset rising costs of tobacco, other inventory items and labor. Typical of the new production machinery installed in 1960 is a new cigarette-making production line at our Greensboro plant featuring the fastest cigarette machines made (capable of producing 1,500 cigarettes a minute vs. 1,200 for older machines). This new production line contributes to producing a cigarette having unparalleled qualities of feel, appearance, uni- formity and smoking characteristics. Further, suett new machinery and equipment permits operation of our cigarette plants on a highly efficient, stabilized two-shift, five-day per week basis, instead of on the costly over- time basis previously necessary. Since achieving the highest possible quality in its products is a Company tradition, Lorillard in the past year also acquired a number and variety of quality con- trol devices. Among these is the newly-developed electronic analyzer which measures the density, weight and overall quality o~ Lorillard cigarettes on a minute° by-minute production basis. At our Louisville, Ky. plant, new machinery and equipment were installed to upgrade this production facility and increase your Company's output of smoking tobacco to meet increased demand for these Lorillard products. For improved Management control over our produc- tion facilities, your Company in the past year made a number of key executive appointments, all from within the Manufacturing Department and all men who had proved their abilities and skills in Lorillard's production operations. Lf~rilhJrd-designed Jmit cantrz~ls the mixtm'e o~ l'ireb~ht. Bm'h'y, Ma~vlaml ~tnd T.rMsh tobacco~ into the riqht blend. tlX" IOhtlt't'O ix £Otlt'eyt'd IO ('onll~ally'~" t'iV:l~'t'll¢-IlltlkJll~ t't~OlH, Mummodl "making rooJl£" house~ most nloderl! machine~ ob- tainable. To maintain qtutlity tJ~ltl improve production, equip- meat added in 1960 inchMes Jamous Mark VIII machines. Parade of Kent cigarettes marches ([rom machhzes where they are packaged and sealed) via automatic conreyors to next area ]or packing b~ [amiliar white and gold-striped cartons. T!5423053

For the Leaf Department, 1960 was a year of particular significance on two counts: 1--Construction began on our new $7 million "expandable" facility in Danville, Va., which will in- crease the Company's tobacco processing and storage capacity by approximately 50 per cent; and 2--Costs for flue-cured tobacco were the highest in history, while those for burley held at the near-record level of 1959. During the year, several executive appointments were made and an intensified two-pronged Leaf Department program implemented: a) to attain superior tobacco quality control; and b) to streamline your Company's techniques of buying, storing, processing and treating tobacco in order to offset spiralling tobacco leaf costs. Despite adverse weather conditions, construction of the new Danville plant continued on schedule and its ten storage warehouses have been completed and are already being used to house Lorillard tobaccos~and at considerable cost savings to your Company. The major part of the Danville facility--the new leaf processing plant--is expected to be completed and operational by late summer of 1961. Equipment and machinery for the new plant--much ot~ it unique and Lorillard-designed--will be the most modern available. By effecting substantial savings in Lorillard leaf process- ing costs, the new tobacco processing plant is expected to make an important contribution to Company progress in years to come. To implement the Lorillard tradition of buying only the finest tobacco grown, your Company has developed a coordinated program among our tobacco leaf, re- search and manufacturing experts to locate and buy the best available tobacco leaf. For example, while the tobacco plants are still seedlings, your Company's leaf experts examine them and report on their potential quality. When the tobacco plants are fully grown and harvested, samples are studied by our research scien- tists and manufacturing experts, whose evaluations are repotted to Lodllard's leaf buyers. Armed with this information, the Leaf Department is then in a position to accept or reject, based on scientific tests and manu- facturing requirements, and to make comprehensive plans for buying activities at the marketing points. Following its purchase, Lorillard's leat~ tobacco is then sent to our processing plants. "I'here the tobacco is stemmed, dried, packed in hogsheads and then left to "rest" for the all-important aging process. To a.vxL~-t leaf t'.~pt'rls i~l seh trim,, only tht" fitlt,.vt natw'al tobacco leaves ]m" Lorilhtrd prod,t't~. ('Omlmny scientist tests qtudity and stmlies the textttl't, (the port ~- tltttl vt'tl[l! ] of sample tobacco lea[. Turkish tobaccos, which arc mixed with American-grown leaf to e]lhatlce aroma trod flavor ol Lorilhtrd cigarettes, are care/tally examined before going to the proce.vsin,~ and blending areas. TI54230531

ASSETS December 3 ! 1960 1959 CURRENT ASSETS: Cash .................... S Accounts receivable--customers (less SI.053.785 in 1960 and $907.420 in 1959 for doubtful accounts and cash discounts) 26.177.736 Other accounts receivable and deposits ......... 678.512 Inventories (at average cost): Leaf tobacco ................ 211.876.667 Manufactured stock .............. 18,686.819 Materials and supplies ............. 5.864.017 Total current assets .......... 272,174.522 ,R.890.771 S 10.056.780 22.895.900 2.122.937 187.342.806 25.451.725 5.818,814 253,688.962 PROPERTY, PLANT, AND EQUIPMENT: Land .................... Buildings and building equipment .......... Machinery and equipment ............. Total ............... Less accumulated depreciation ............ Total property, plant, and equipment--net 703,996 18.263,389 32,699,497 51,666,882 14,084,033 37,582,849 620.758 15,241,372 29,828,603 45.690,733 ll,941.800 33,748,933 OTHER ASSETS: Prepaid expenses and deferred charges ......... 5.714,157 Unamortized debenture discount and expense ....... 557,468 Mortgage note receivable ............. 264,2 i 9 Brands, trade marks, and goodwill .......... 1 Total other assets ........... 6,535,845 TOTAL ............. $316,293,216 4,078,218 608,340 271,956 1 4,958,51~ $292,396,410 TI5423053~

LIABILITIES CL:RRE.~T LIABILITIES: Notes payable ( banks ) .............. Accounls payable ................ Long-term debt due within one year (less held by Company) Accrued taxes ................. Accrued payrolls ................ Accrued interest ................ Other accrued liabilities .............. Total current liabilities ......... 1960 S 84.600.000 5.287.327 2,267.664 20.693.327 2.406.989 415.911 1,307.881 116.979.099 LONG-TERM DEBT (exclusive of amount due within one year) : Notes, 3~'3.%, due serially to July 1, 1963 ........ Twenty Year 3% Debentures, due October I, 1963 ($600,000 to be retired annually to 1962) ....... Twenty-five Year 3% Debentures. due March 1, 1976 ($350.000 to be retired annually to 1975) ....... Twenty-five Year 3~ % Debentures, due April 1. 1978 ($675,000 to be retired annually to 1977) ....... Total long-term debt .......... RESERVES FOR PENSIONS AND CONTINGENT INCENTIVE CO~vIPENSATION 2,916.678 10,600.000 12.200,000 18,423,000 44,139,678 3,229,220 SHAREHOLDERS' EQUITY: 7% Cumulative Preferred Stock (par value $100 per share)-- authorized 99,576 shares; issued 98,000 shares ...... 9,800,000 Common Stock (par value $5 per share)-- authorized 10,000,000 shares; issued 6,564,048 shares 32,820,240 Additional paid-in capital (premiums less e.xpenses on common stock issued) ................ 29,643,735 Earnings retained for use in the business ........ 79,681,244 Total shareholders' equity ........ 151,945,219 TOTAt. ............. $316,293,216 December 1959 S 8.025,708 1.731.664 20.496.393 4,094.609 439.693 1.322.997 I03.111,064 4,583.342 11.200.000 12.550,000 19,125,000 47,458.342 2.136.136 9,800,000 32,820,240 29,643,735 67,426,893 139,690,868 $292,396,410 TI54230533

LC LLARD ,ATED ED EARNINGS EARNINGS AND SUBSIDIARY COMPANIES Year Ended December 31 1960 REVENUES: Net Sales .................. $487.329.716 Other ................... 505,123 Total ............... 487.834,839 COSTS AND EXPENSES: Cost of Goods Sold, Selling, Advertising, and Administrative Expenses ................. 424.534,719 Interest ................... 4.563.863 Federal and State Income Taxes ........... 31,355,000 Total ............... 460,453,582 NET EARNINGS ................. 27,381,257 DIVIDENDS ON PREFERRED STOCK ($7 per share in each year) . 686,000 EARNINGS APPLICABLE TO COMMON STOCK ($4.06 per share in 1960; $4.20 per share in 1959) ............. 26,695,257 RETAINED EARNINGS, beginning of year .......... 67.426,893 Total ............... 94,122,150 DIVIDENDS ON COMMON STOCK ($2.20 per share in each year) 14,440,906 RETAINED EARNINGS, end of year ........... $ 79,681,244 1959 $490.873.749 582,199 491.455.948 427,770,278 3,578.513 31,842,000 463,190,791 28.265,157 686,000 27,579,157 54,288,642 81,867,799 14,440,906 $ 67,426,893 NOTES: (1) Provision for depreciation amounted to $2,742,983 in 1960 and to $2,576,293 in 1959. (2) At both December 31, 1959 and December 31, 1960, under the Restricted Stock Option Plan for Employees, 26,200 shares of common stock were subject to purchase by employees at any time up to September 18, 1969 at $39.50 per share, and 44,800 shares were available for the granting of additional options under the Plan. The foregoing price was more than 95% of the market price at date of grant. No optlons were granted in 1960. (3) Property, plant, and equipment is stated at cost with the exception of certain properties acquired prior to December 31, 1932 which are stated at values, lower than cost, determined as of that date. T154.230534

TEN YEAR C OF FINANOIAL RI=LATINB TO Year l'.uded Dec. 31 Net 1960 ! $487.329.716 $58.736.257 1959 ~ 491L873.749 611.107,157 1958 ~ 479.120.409 57,630,083 1957 293.415.430 24.882.412 1956 203.280.417 8.618,758 1955 228.268.392 13,098,500 1954 231.046,695 12.629,143 1953 253.933.462 18.787.571 1952 214.508.482 11.640.942 195 ! 188.447.430 1 I).943.472 OPERATIONS Eartting$ beJore Income a~d Excess S31.355.000 31,842.000 30.593.000 13.398.000 4,099.000 6,502.500 6.287.1100 11.594.000 5.940.000 5,817,000 RELATINI3 TO BALANCE SHEET Vet ~.urolng$ $27.381 .'2-57 28.265.157 27.037.083 I 1.484.412 4.519,758 6.596,000 6,342.143 7.193,571 5,700,942 5.126.472 Dec, 31 Toted ht rentt~rie.+ I$'urkittg Capital Gro#,~ A ut oltnt s%'et a/tcr Depreciation Earning,s per Dlvidend.~ per $4.tl6 S2.2(1 4.2(I 2.20 4.(} I 2.00 1.89 .67 .~0 1.03 .67 .99 .81~ I. 14 1 .Of) t ,75 .89 ] .75 Shart'h+~hh,tx" F..quity 1960 1959 1958 1957 1956 1955 1954 1953 1952 1951 $236.427.503 218.613.345 197,069,209 161,449.360 136,652.281 140,988,335 144,189,440 135,727,170 125.008,096 101,995,679 $155,195,423 150,577,898 143,916,484 109,803,777 110,245,323 112,451,576 108.876,796 !11,269,498 81,369,651 81.658,130 $51,666,882 45,690,733 41,037,558 37,495,633 35,079,590 34,292,757 27.518.065 24,392,884 22,605,222 21,342,441 $37,582,849 33,748,933 30,927,133 28,513,852 26,399,561 25,488.791 18,675~23 16.218,639 15~85,844 14.200,835 $151.945.219 139,690,868 126,552.617 86,674.232 81,438.885 81,028.497 78,969,754 77,878,061 67.820,512 66,549,877 $21.65 19.79 17.78 13.47 12.55 12.48 12.12 II.93 11,62 11.36 IJtl.sed o~11lxtmber o1 shares ottlst*tndDlg, tit eltd o] e#ch )'ear. 19.58 and prior )'ears adjnsted to give effect retrrmctirely to 2 fi~r I commo0 stock split hi 19.'i9. ACCOUNTANTS' OPINION To the Board o~ Directors and Shareholders o~ P. Lorillard Company: We have examined the consolidated balance sheet of P. Lorillard Company and its subsidiary companies as of December 31, 1960 and the related statement of consolidated earnings 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 records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying consolidated balance sheet and statement of consolidated earnings and retained earnings present fairly the financial position of the companies at December 31, 1960 and the results of their operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. New York, February 3, 1961. Ti54230535

IN OOM PANY Federal Tin Company, founded in 1916 as a wholly- owned Lodllard subsidiary, for over 40 years special- ized in metal lithography and container manufacturing. It supplies our requirements of tin packages for smok- ing tobaccos and Between-the-Acts Little Cigars and makes similar metal containers for other tob:~cco lirms together with a complete line of other style cans and displays. In 1959, an expansion and diversification program was instituted at Federal Tin to augment its traditional metal container business with paper packaging. Setting up its nc~ million-dollar Gravure Depart- mcnt in one of its present buildings in Baltimore, Mary- land. Federal Tin in 1959 installed a six-color gravure press (to manufacture cartons and boxesL and in 1960 added a live-color gravure press ~to make labels and paper packages). Federal Tin now produces over 800,000 cartons and live million labels daily and is supplying Lorillard with a sizable portion o[" the Com- pany's carton and cigarette package requirements. Plan.., arc now being made to expand this Department ,o that a wide range of paper products can be produced for the packaging industry. .Meanwhile. despite a general contraction in the mar- kct for traditional tin packaging. Federal Tin continues as a .~ubstantial manufacturer of n~etal containers and is more than holding its own in this field. New Fedvrttl Till Grtn'lo'e l~epttrl#letlt fealllres ]IlGIe ltttits ]or pritllittg paper, cartm~. ANNUAL MEETING AND PROXY The Annt,al Meeting of Lorillard shtu'eholders will be held on April 4, 196l at the Hotel Biltmore h~ New York City. Meeting time will be 11:00 a. m. and doors will be closed promptly at 10:45 to keep the session lree ol interruption. Notice o~ the Meeting, along with proxy and pro.ry statement, is beh~g mailed to yott under separate cover. ~'our pro.ry is your way to ap- prove or tlis~pprove o~ Mam~gement's stewardship. Your vole is therefore important personally to Manage- meat, whether it be h~r 5 shares or 5,000 shares. I[ yoll are unable to attend ottr Anmtal Meeth~g on April 4th ht New York, please sign told return yottr pro.ry be]ore you put it aside. It will let tts know of your contintted htterest. T!54.230536

OFFICERS Lewis Gruber ................ Harold F. Temple .... Manuel Yellen ............... George O. Davies .. Dr. Harris B. Parmele Morgan ]. Cramer .... J. Edgar Bennett .... Anna F. Woessner... John J. Darby .... ................................................................ Chairman of the Board ......... President 8: Chief Executive Officer ......... Vice President & Director of Sales Vice President. Treasurer & Director of Finance .... Vice Pr~ident & Director of Research .... .Vice President & Director of International Operations • Vice President & Director of Manufacturing .... Secretary ................................... Comptroller OTHER CORPORATE INFOR General Counsel -, Auditors ............................. Transfer Agent ........ Registrar ................... Advertising Agencies ........ ....................................... Perkins, Daniels, MeCorr¢ & Collins .............................................................. Hasklns & Sells ..... Chemical Bank New York Trust Company, New York, N. Y. ......... .The First National City Bank of New York, New York, N. Y. ....................................................................... Lennen & Neweli, Inc. Grey Advertising Agency, Ino. Albert Frank-Guenther Law, Inc. (Financial) Public Relations Counsel .................................................................................. Sidney J. Wain, Inc. Exeeutlve Ofllees ......................................................... 200 East 42nd Street, New York 17, N. Y. Corporate Offices .................................................................... 15 Exchange Place, Jersey City, N. J, Manufacturing Plants .................................. Greensboro, N. C.; Louisville, Ky.; Richmond, Ya. Research Laboratories ............................................................. Greensboro, N. C.; Louisville, Ky. Leaf-Storage Warehouses ........... Louisville, Ky.; Richmond, Ya.; Lexington, Ky.; Danville, Ya.; Lancaster, Pa.; Madison, Wis.; LaCrosse, Wis.; Evansville, Wis. Stemmeries .................................................... Louisville, Ky.; Lexington, Ky.; Danville, Va. Field and Division Sales Oftiees ............................................................. In all Principal Cities Subsidiaries ........................................................ Federal Tin Company, Inc., Baltimore, Md. P. Lorillard Pan American, Inc., New York, N. Y. P. Lorillard International S.A., Zug, Switzerland Ti54230537