Tobacco Documents Online

Greatest ' jY12pr02'enZ212t i n 30 1 ea rs B A. The electronic brain, which calculates adjustments to millionths of a degree and controls ... B. The tobacco feed box, which feeds tobacco in just the right amount into ... C. The moving cigarette paper strip; - which is rolled and sealed into the cigarette rod as it continues to pass through ... D. The Accu-Ray box with its electronic beam continuously measuring the density and distribution of the tobacco and correcting errors to one-ten millionth of a degree. TIMN 446301 ITOBA CCO'S MOST RESPECTED NAMES ~

I Factories The principal factories of Liggett & Myers are at Durham, N. C., and Richmond, Va., where , all the company's cigarettes are r;] ~- chewing tobacco brands and a "1w' t large number of smoking tobaccos are manufactured. The Durham and Richmond factories are great tourist attractions and are annually visited by thousands of people who take the guided tours. All of them comment favorably on the size, efficiency and cleanliness of your Company's man- ufacturing operations and on the evident emphasis on quality. The Company also operates mod- ern processing plants at Danville, Va.; Durham, N. C.; Lexington and Paris, Ky.; Rocky Mount, N. C.; and Water- town, Wis.-all, important tobacco cen- ters. Huge storage facilities covering hundreds of acres are located in the bright and burley tobacco-growing States. In the Near East, Liggett & Myers buys and prepares the spicy and deli- cate Turkish tobaccos used in its cigar- ette blends at its plants in Izmir and Samsun, Turkey, and Cavalla and Xanthi, Greece. Evnployees Your Company has about 10,000 employees whose interest in and rela- tionship with the Company is typified by the fact that the average length of service per employee is well over ten years. A complete benefits program for Liggett & Myers' employees has been operating for some time and includes a retirement plan, group life insurance, hospital, surgical and sickness benefits. TIMN 446302 L I G G E T T & .ll Y E R S .-00~ O N E

Spur N Cigarettes 0 Products LIGGETT & .ll YEd2S D on these pages are twenty-five of the best-known and most active of the tobacco products manufactured by your Company. Liggett & Myers has registered ~ R By.S Vff~GINIA WRA ea ,:' ~r ; SMHING TOBACCC+ TIMN 446304 O N E O F : 10

Liabilities ,tANCE SHEET DECEMBER 31, 1955 AND 1954 CZf YYen t Liabilities Funded Debt Capital Stock and Surplais 1955 1954 Notes payable to banks ................................ $ 52,000,000 $ 95,220,000 Accounts payable ........................................ 5,855,755 4,041,183 Dividend payable on preferred stock............ 365,297 365,297 Accrued interest on debentures .................... 907,812 929,687 Funded debt payable within one year.......... 5,750,000 2,000,000 Taxes payable and accrued .......................... 27,575,043 26,478,195 TOTAL CURRENT LIABILITIES.......... 92,453,907 129,034,362 25/s % Sinking Fund Debentures, $5,750,000 payable annually during the years 1957 through 1964, $23,750,000 payable in 1965, and $37,500,000 payable in 1966 Preferred stock 7% cumulative, par value $100.00 Shares - authorized 341,398, issued = 225,141, in treasury 16,400 .................. Common stock, par value $25.00 Shares - authorized 5,000,000, issued 3,911,521 .................................. Paid-in surplus ............................................ Earned surplus (see statement annexed)........ TOTAL CAPITAL STOCK AND SURPLUS TOTAL ........................................ 107,250,000 113,000,000 20,874,100 20, 874,100 97,788,025 97,788,025 19,364,550 19,364,550 120,861,562 111,247,861 258,888,237 249,274,536 $458,592,144 $491,308,898 TIMN 446309 TOB.~CCO'S 1/1OST RESPECTED Na.t11ES 15

Assets LIGGETT & MYERS TOBACCO COMPANY CONSOLIDATE 1955 1954 Czcrren t A ssets Property, Plant and Equipment - at Cost Other Assets Cash ............................................................ $ 11,652,010 $ 11.592,982 Accounts receivable, customers .................... 23,410,069 23,131.291 Accounts receivable, others .......................... 1,176,001 982,339 Leaf tobacco, at average cost ...................... 360,197,288 393,193,579 Manufactured stock and operating supplies, at average cost ........................................ 28,816,721 30,245,807 TOTAL CURRENT ASSETS ........................ 425.252,089 459,145.998 Land and buildings ...................................... 19,185,180 Machinery and equipment ............................ 20,024,589 43,823,000 41,054,224 63,008,180 61,078,8 13 Less reserves for depreciation ................ 32,374,575 32,386,362 NET PROPERTY, PLANT AND EQUIPMENT 30,633,605 28,692,451 1 compan ies .............................................. 627,004 627,004 Stocks in foreian tobacco companies, less reserve of S-1,473,163 in 1954........ 4,000 4,001 Deferred char-e~ .......................................... 2,075,445 2,839,443 Brands, trade-marks and good will .............. 1 Stocks in unconsolidated subsidiary TOTAL 01111 RAtitiFTS ............................ 2,706,450 3,470.449 Tt)r \E ............................ $458,592,144 $491,308,898 TIMN 446308 L I G G E T T & tl 1"ERS -.000"', O N E O F 14

a TOBACCO'S R1OST RESPECTED NAMES TIMN 446315

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Certificate of Certlfred Public Acco 1 f 11 tC7YZ tS HASKINS & SELLS CERTIFIED PUBLIC ACCOUNTANTS BOATMEN'S BANK BUILDING SAINT LOUIS 2 January 20, 1956 To the Directors and Stockholders of Liggett & Myers Tobacco Company: We have examined the consolidated balance sheet of Liggett & Myers Tobacco Company and its wholly-owned subsidiary as of December 31, 1955 and the related statements of consolidated income and earned surplus 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 statements of consolidated income and earned surplus present fairly the financial position of the companies at December 31, 1955 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. TIMN 446312 18 L I G G E T T & ,11 Y E R S __..00-- n.`"I: nF

•' Consolidated Earned Slcrplczs FOR THE YEARS ENDED DECEMBER 31, 1955 AND 1954 1955 1954 EARNED SURPLUS AT BEGINNING OF YEAR.. $111,247,861 $110,065,289 ADD Net Income for the Year ........................ 26,720,972 22.201,364 137,968,833 132,266,653 DEDUCT CASH DIVIDENDS OF $7.00 PER SHARE ON PREFERRED STOCK .................... 1,461,187 1,461,187 CASH DIVIDENDS ON COMMON STOCK $4.00 per share in 1955 and $5.00 per share in 1954 .................... 15,646,084 19,557,605 17,107,271 21,018,792 EARNED SURPLUS AT END OF YEAR (see note) ........................................ $120,861,562 $111,247,861 NOTE: Under the terms of the Indenture covering each issue of 25/s% Sinking Fund Deben_ tures $58,898,960.47 of earned surplus is restricted as to payment of cash dividends on Common Stock. This limitation does not apply to stock dividends on Common Stock, nor does it restrict payment of dividends on Preferred Stock. TOBACCO'S 1t7OST RESPECTED NA:11ES TIMN 446311 17

I Consolidated Income FOR THE YEARS ENDED DECEMBER 31, 1955 AND 1954 1955 1954 NET SALES .................................................. $546,964,616 $548,861,959 OTHER INCOME Interest and dividends received .............. 166,990 160,617 Profit from sale of land and buildings...... 839,184 - Balance of reserve after deducting loss on sale of stock in a foreign tobacco company (see page 3) ...................... 1,066,124 - Miscellaneous ........................................ 82,666 74,451 TOTAL INCOME ........................ 549,119,580 549,097,027 DEDUCTIONS Cost of goods sold, selling, administrative and general expenses 484,049,950 492,771,480 Provision for depreciation ...................... 2,780,604 2,497,855 Interest and amortization on funded debt 3,020,313 3,042,188 Interest on bank loans ............................ 2,535,541 2,925,243 Miscellaneous ........................................ 55,200 24,897 Provision for Federal income tax............ 27,275,000 23,595,000 Provision for State income and franchise taxes ................................ 2,682,000 2,039,000 TOTAL DEDUCTIONS .................. 522,398,608 526.895,663 NET INCOME FOR THE YEAR ........................ 26,720,972 22,201,364 DIVIDENDS ON PREFERRED STOCK ................ 1,461,187 1,461,187 NET INCOME APPLICABLE TO COMMON STOCK .................................... $ 25,259,785 $ 20,740,177 16 L I G G E T T & .11 YERS .~.-. OA'E OF TIMN 446310