L&M Annual Report AD Little Mentioned

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Annual Report /1960

Liggett & Myers

Tobacco Company, Inc.



Stockholders

Annual Meeting

The Annual Meeting of Stockholders

will be held on Tuesday, March 23, 1961

at Hotel Plaza, Journal Square, JerseyCity, New Jersey, at 2 :30 P.M

Formal notice of this meeting, together

with the proxy and proxy statement,

will be mailed to stockholders on Feb-

ruary 24, 1961. Those of you who are

unable to attend the meeting are urged

to sign your proxies and return them

promptly to the Company so that the

stock of the Company will be represented

as fully as possible at the meeting

Today your Company is owned by

approximately 48,200 stockholders. About

82% of the total Common and Preferred

stock was voted by person or proxy at

the last annual stockholders' meeting on

March 29, 1960 .

FC ( - t7GG77



Contents page 2 Highlights of Operations

3 President's Letter

4 Officers and Directors

5 Sales, Earnings and DividendRecord

6 Financial Condition and CapitalExpenditures

7 Taxes and Manufacturing

8 Export and Leaf Tobacco

9 Research

12 Disposition of Total Earnings

13 Opinion of Certified PublicAccountants

14 Consolidated Balance Sheet

18 Consolidated Earnings

17 Consolidated Retained Earnings and

Notes to Financial Statement s

18 Ten Years in Review

20 Advertising and Sales Promotion

Liggett & Myers

Tobacco Company

1960

Annual Report

LG0073392



Liggett Sr Myers, Tobacmc) Company

Highlights of Operations

1960 1969

Vet Sales . . . - . . . . . _ . . . . _ $543,172,58 7 $554,936,026

Earnings before taxes . _ . . . - . . . . 62,712,895 85,0T4,689

Income and franchise taxes 34,004,000 35,036,000

Faraiags before preferred dividends . 28, 708,895 30,038,689

Net earnings after preferred dividends . 27,407,640 28,608,582

Percentage of net sales . . ̀ . 5.05 0 5.16%

Net earnings per share of common stock . $6.96 $7.28

Dividends per share of common stock . . $5.00 $5.75

Current assets . . . . . . . . . . _ . . . $354,845,972 $365,063,763

Current liabilities. . . . . . . . . . _ _ 21,463,405 32,906,832

Ratio _ . . . . . . . . . . . . . . . . 16 .5 to 1 11.1 to 1

Funded debt . . . . . . . . . . . . . . 73,500,000 84,250,000

Capital stock. . . . . . . . . . . . . . . . 116,262,425 117,854,650

Additional paid-ia capital . . . . . . . . 20,534,676 20 .211,080

Retained earnings . . . . . . . . . . . . 156,071,334 149,168,514

Approximate number of stockholders . . 48,200 47,000

rZ . 'C - 6 0 o h ,

LG0073393



%VUJJAM A: BLOUNT

To the Stockholders :

This 1960 Annual Report, the 50th report of Liggett & Myers Tobacco

Company, presents the operations and audited financial statements of the

Company for the year 1960, with comparative figures for the previous

year .

Research has long been an important activity of our Company . One of

the most significant developments during the past year was the com-

pletion of the new wing and dedication of the Company's Research Center

in Durham, North Carolina. This expansion should provide the necessary

space for our growing research program over the next decade . In the

following pages we give you a more detailed report about our research

activities which we hope will be of interest .

There is good reason for an optimistic outlook in the cigarette industry

today. Domestic consumption of cigarettes reached a new high level in

1960 for the sixth consecutive year . The outlook for the next several years

should be equally promising .

While the Company is unable to report an increase in sales for last year,

there are encouraging signs in our business for the future . The sale of

CHESTERFIELD king size cigarettes continued its upward trend. The decline

in sales of CHESTERFIELD regular size, which has persisted for several years,

continued in 1960 but at a reduced rate .

The sale of L&M king size cigarettes also showed a healthy increase

during the past year. We have strengthened the OASIS advertising and

redesigned the package and carton in an effort to gain a larger share of

the menthol cigarette market. We are hopeful that these changes will

produce results.-n behalf of the entire organization, I wish to express appreciation to

the shareowners for their continued confidence, interest and helpfulnessduring the past year.

February 3, 1961WILLIAM A. BLOUNT

President

LG0073394



Lggett &Myers Tobacco Company

Executive Offices -630 Fifth Avenue New Y ork 20, N .Y

Officers

WaauAbr A. BLouNT' President. & -chief Executive Oficer

Zacs Toms Executive Vice Presiden t

Wrri rtcL.PEBRY VicePresident&Chaismamof Executive Committee

WII.u. BLEwrs, Ja . Vice President, Sales

FRaNCrs H . HORAN Vice President & General Counsel

Lor D. THObPsoN Vice President.,, Production

M1LroN E.HL4RBINCION Vice President, Lea f

Fx ,xaxcx R D.axs Vice President l: Director of Research

J. BowLiNc A.=SsoN Treasurer

RussEL.VI. CBE: SowErs Secretary

RALPK B Moor z Assistant Treasurer

RussELL G. Cu rr a Auditor

FBmEiucL J. GR Azrr Assistant Secretary

RUFus H . Hosz . Assistant Secretary

CSniLFS B. MoRcEwrr tr.Ea Assistant Secretary

Drectors

J . Bowrnvc ANDERSON

Wa. r aANz A.BLOVNr

L&wRENcE WBRUFr

FRmERnc R. D AB xis

M ILTON E. HARRINGTON

FRANCS EL HoRA zi

J. CAbmE,r Hwnc .E Y

GRAYDON B . LEAxE

WmLLmm B . LEwis, JR.

C GRICE M C 2 vIuuA .Y

EDWARD JPARRZSH

W ri.i LPEnur

Loy D. TBoNasoN

ZAca ToNrs

Transfer Agent - Chemical Bank New York Trust Co ,30 Broad Street, New York 15, N . Y.

Registrar - The First National City Bank of New York,55 Wall Street, New York 15, N.I

4

Executive Personnel

At its meeting on March 30, 1960, the Boardof Directors voted to increase the number of

Directors. of the Company from 12 to 14.

C. Grice McMullan, Manager of the Richmond

Branch and Edward J. Parrish, Manager of the

Export Department of the Company were

elected to fill the new positions on the Board .

Two new Vice Presidents were elected by

the Board of Directors at the March 30, 1960meeting. These were Dr. Frederick R . Darkis.

Director of Research and Milton E. Harring-

ton, Leaf Department Manager. At the same

meeting Russell M. Chenoweth was elected

Secretary of the Company to succeed Zach

Toms who resigned from that position.

LG0073395



Operations 1960

Net Sales

000

5 0 0

:00

:00

200

:00

455565758595

Net Earnings

There is presented on the following pages some of the

accomplishments of your Company for the year 1960.

For the industry, it was a year of intense activity char-

acterized by increasing competition and further switch-ing of brand loyalties among the consumers.

Sales

Net sales of the Company declined from S554,936,026

in 1959 to $543,172,387 in 1960, or about 2 .1 0 . The

major portion of this decline took place during the first

nine months of the year. For the year as a whole the

sale Of CHESTERFIELD king size and L&- ' l king size

cigarettes each showed a substantial gain from the pre-

vious year and offer encouragement for the months

ahead. CHESTERFIELD regular size continued to decline,

however, the rate of decline was considerably reduced .

Earnings

Earnings after taxes amounted to $28,708,895 as com-

pared with $30,038,689 in 1959. Based on 3,939.053

common shares outstanding at the end of the year, net

earnings amounted to $6.96 per share as compared with

$7?8 in 1959. Earnings in the fourth quarter were equal

to $1.76 per share whereas earnings in the comparable

period of the previous year were $1 .47 per share.

Dividend Record

The Company's record of continuous dividend pay-

ments on the Common Stock was extended for the 49th

consecutive year. Total payments in 1960 amounted to

2 C Cv Uv d7 ~$~

5

LG0073396



$5.00 per share, consisting of four quarterly dividends

of $1 .25 each .

The total amount of dividends paid in 1960 on both

Common and Preferred stock was $20,987,746. The

balance of 1960 earnings amounting to $7,721,149 was

retained for use in the business .

On January 18, 1961, a regular dividend of $1 .25 per

Common share was declared, to be paid on March 1,

1961, to stockholders of record February 17, 1961 .

Net Wrth Compared

Wth Long-TermDebt

Net Woli n

,„ag- term peat

300

.c0

6

Financial Condition

The financial condition of the Company continued

to grow stronger in 1960. For the second successive year

there were no short-term borrowings at the year end .

The investment in United States Government securi-

ties, including tax anticipation notes, amounted to

$14,932,468 on December 31, 1960 compared with

$4,992,485 at the end of the previous year .

Long-term debt was $5,730,000 lower at the end of

1960 as a result of retirement of debentures through

operation of the Sinking Funds. This reduction, together

with the addition of $5,634,191 to net worth, produced

a further improvement in the ratio of funded debt to

net worth. At the end of 1960 funded debt was only

26.8%a of net worth compared with 45 .31x, at the end

Further steps were taken to reduce the number of

shares of non-callable 7 o Preferred stock of the Com-

pany outstanding. During the year your Management

succeeded in reacquiring 17,820 shares of such stock .

As of December 31, 1960 there was held in the treasury

a total of 47,280 shares .

In the absence of unusual developments no need for

new long-term financing is anticipated in the foresee-

able future.

of 1954 .

Capital Expenditures

The construction of the new addition to the Com-

pany's research building in Durham, North Carolina,

was completed on schedule during the past summer and

appropriate dedication ceremonies took place on Sep-

tember 30, 1960.t -6aa

LG0073397



Taxes

70

FMaral anC 5tat. Incomeand fnncn,,. ra»

Yet Income Ato rain

54555657363960

The program of maintaining plant and equipment

at maximum efficiency was continued during the year

1960 . Capital expenditures amounted to approximately

$2,800,000 or slightly more than the amount of pur-

chases in 1959. No major capital expenditures appear

necessary in the near future. Depreciation charged to

cost and expense in 1960 amounted to $3,909,369 .

Taxes

Taxes continued to be an important factor in the

Company's operations. Excise taxes in 1960 totaled

$232,786,174. Although the Treasury Department

adopted in June 1959 a semi-monthly method for pay-ment of such taxes instead of a daily basis formerly in

effect, it has not resulted in any material savings to the

Company. The excise taxes must still be paid several

weeks prior to the time when the Company receives

payment from its customers . The industry has every

right to expect that further adjustments will be granted

in the future.

Federal and State income and franchise taxes in 1960

amounted to $34,004,000. Such taxes alone came to

$8 .63 per share of common- stock compared with net

income of $6.96 per share.

Manufacturing

Our factories are strategically located near the source

of supply of leaf tobacco and are considered to be

among the most modern in the industry. The up-to-date

machinery used in all departments is the finest equip-

ment available. Our cigarette factories are located in

Durham, North Carolina and Richmond, Virginia . You

are cordially invited to visit either of them whenever

you are in the vicinity.

Since the manufacturing methods used in producing

the finished product contribute greatly to quality and

consumer acceptance of the product, the Company is

constantly exploring the possibility of making furthe r

almost 800,000 people have visited

our modern cigarette factoriesin Durham. V. C. and Richmond, Va.

LG0073398



improvements in manufacturing methods that will pro-

tect the standards of quality and at the same time pro-

duce greater efficiency in operations.

Lr'' gett [ yers buyersbid at auctions for mild,

top quality tobaccos

8

Export

The export sales of the Company's products, prin-

cipally its cigarette brands, continue to make an impor-

tant contribution to the Company's over-all business .

We have engaged in trade with many loyal, well estab-

lished customers throughout the world for a long num-

ber of years and through a mutually cooperative and

satisfactory relationship with them we have been able

to develop good markets for our products. Wherever

American cigarettes are sold, whether to foreign tobacco

monopolies, ship's-stores, U . S. military overseas, air

lines, diplomatic corps or other outlets, we are adver-

tising and actively promoting the sale of the Company's

brands.

Leaf Tobacco

Our tobacco buyers are present on every important

tobacco market, selecting only the choicest tobaccos to

meet the exacting standards set for all Liggett & Myers'

products .

The 1960 crop of flue-cured tobacco totalled 1,368,-

000,000 pounds, compared with 1,185,000,000 pounds in

1959 . The season average price was 59.9¢ per pound, the

highest on record and more than 20 per pound above

the average for the 1959 crop . The Government support

price for the 1960 crop was 55.5¢ per pound. The U . S.

Department of Agriculture has announced a national

marketing quota of 1,1221,000,000 pounds for the 1961

crop.

The burley markets had sold approximately 800/70 of

the 1960 crop before the end of the year. The crop

is estimated at approximately 500,000,000 pounds, or

slightly lower than the previous crop. Market prices

through the end of the year averaged 652c per pound,

just a shade lower than the all-time high average of

66 .2c established for sales of the 1958 crop. The support

price for the 1960 crop was 57.20, the same as the

previous year 2C 6&Uc

LQ0073399



Research

GEN. J .4-MES M . G .+ V tN

The new Liggett & )leers Research Center

is more than twice the sireof the ori-ginal building .

At dedication ceremonies for the new Liggett & Myers

Research Center on September 30, 1960, Governor

Luther H . Hodges of North Carolina said: "I would

like to commend Liggett & Myers Tobacco Companyon the wisdom and initiative they have displayed in

expanding their research activities . . . we gather here

to dedicate a great research establishment second to

none in its field." In his dedication address, General

James M. Gavin stated: "We look upon Liggett & Myers

as being outstanding in its awareness of the importance

of research." General Gavin, famous for his World War

II combat record and his scientific roles in the United

States defense program after the War, is today Presi-

dent of Arthur D. Little, Inc., one of the nation's leading

engineering and research firms.

When Liggett & Mvers was incorporated in 1911,

scientific research was conducted at the Company's

St . Louis plant. In 1950, the Company completed the

most modem research laboratory in the industry in

Durham, North Carolina, primary location of the Com-

pany's leaf buying and cigarette manufacturing opera-

tions. By 1958, it had become apparent that the "new"

research building, despite its generous size and modern

design, would soon be inadequate for the Company's

rapidly expanding research program. A new wing tha t

LG0073400



would more than double the size of the building was

planned, and construction was completed on schedule

in 1960. This 100 percent increase in capacity should

provide for the Company's needs in the next decade .

The new Liggett & Myers Research Center represents

an investment of more than $2,250,000 and contains

over 48,000 square feet of floor space, largely devoted

to laboratory work space. Included in these amounts are

27,00 square feet of floor space in the new wing, which

was constructed at a cost of approximately 51,250,000 ;

and it has been constructed so that a third level can be

added when further expansion is needed.

The upper level of the new wing houses a 120-seat

auditorium, five new organic chemistry laboratories andseven new specialized laboratories, including a Tracer

Laboratory, an Instrumentation Laboratory, Hood and

Chromatography rooms and a Cold Laboratory. The

lower level is primarily devoted to engineering research

and development. It contains two conventional chem-

ical laboratories, an explosion-proof laboratory, two

Temperature and Humidity Controlled laboratories, an

Electronics Laboratory, a Dust Controlled Laboratory,

a drafting room and a machine shop .

Occupying both levels of the new wing at the North

end, is a 90-foot by 67-foot Engineering Pilot Plant

Area, which will house the facilities necessary to

perform all cigarette manufacturing operations, thus

making it possible to investigate all variables in these

operations under controlled conditions. With these

facilities, the Company's research engineers are now

better equipped to improve present manufacturing

processes, to develop new ones and to test all changes

and innovations before they are incorporated into the

production line .

The original building now contains four large physi-

cal chemistry laboratories on the ground floor. In the

basement, there is a new glass blowing shop, three Tem-perature and Humidity Controlled laboratories, a pho-

tographic dark room, Preparation and Grinding rooms

and a new, expanded area specially equipped for flavor

investigations, including a new Flavor Laboratory and

new Flavor Storage and Smoking Panel rooms . The top

floor now houses six modern analytical chemistry labo-

LG0073401



ratories, standard Kjeldahl and Titration rooms an

an expanded area, for the growing research librar

facilities .

At the dedication of the Company's new Researc

Center, Dr. Frederick R. Darkis, Vice President an

Director of Research, made the following remarks abo

the Company's research program. "During the past se

eral centuries, tobacco in the form of numerous man

factured products has been used in ever increasin

quantities by a continuously greater number of peopl

The use of tobacco has made a significant contributio

to the pleasure, satisfaction and sense of well-being o

those who use it .

"Beginning with the period when tobacco was fir

used in Europe, many people have vigorously opposeits use. Over the years, many criticisms of it have be

made and numerous impediments to its use, includin

legislation, have emerged from time to time. In larg

part, these accusations and impediments have falle

by the wayside, due to the unreliable information o

which they were based. During the first half of th

20th century, the use of tobacco became rather gen

erally accepted and was subject to less criticism . How

ever, during the past decade, the use of tobacco ha

experienced its most severe opposition. This oppositio

is based on the contention that using tobacco in th

form of cigarettes will seriously impair the health of th

smoker .

"Those medical and statistical investigators who hav

produced the information that has led to the most ser

ous indictments ever leveled against tobacco have bee

quite vigorous in their attack on its use. They ha

drawn and given wide circulation to many conclusio

from their findings that most people trained in the sam

disciplines fail to find justifiable. Some of their findin

merit consideration and they should not be ignored .

"We have carried on cooperative work with gover

ment agencies over the years, and have contributfinancially and otherwise to the programs of resear

carried on by governmental and private organization

"We have devoted much effort to fundamental r

search and have and are publishing informatio

obtained as a result of this work. We have not restricte

Vacuum system for handlingr

6-00gaseous materials in a Physical ̀ - 6a~f Sr

Chemistry Lahoratory U

LG0073402



our research program to that necessary developmental

work so pertinent to the everyday operations of the

Company

"We have organized and developed what we believe

is the most inclusive program in existence directed

toward the separation, identification and the quantita-

tive determination of the numerous constituents that

make up those two complex materials, namely tobacco

tissue and tobacco smoke. This program goes even

further in that the biological activity of the component

parts as well as that of the whole are being studied by

the best available techniques . It is hoped that these

findings will help to clarify the maze of opinion that

exists at present in respect to the problem of tobacco

and health."

Disposition of Total Earnings for 1960

The Company received for goods sold to customers and

from dividends and interest a total of S344,06_°,000 .

This is how it was used or set aside .

7-N 7 .

Federal andsatRerincGiswtzxes

. ~Earnngs retained

04 ~-y$7721000~I.$232a86000: ' .~ • ate, r, ?

-o" 0Dividends

•- ~~~~~.f Y_r $20,988000

Federal and State income and

~̀,~s~~:'.,̀ •~~.;,~_ franchse taxe

Leaf Tobaccoq.wages others

manufacturing Costs and freight

s 181,2e3;ono i .

12

$34,004,000

Sefiing.advertising, administrative

LG0073403



Ffnancia1

Section

Opinion. of Certified Public Accountants

HASKtNS &- SELLS

CZM7R15 IU .UC ACCOUNTANTS

TWO eRO*OWAY

N[W YORK4

To the Dftwtorsand Stockholders at

Liggett &r Myers Tobacco Company:

We have examined the consolidated balance sheet of Liggett &Myers Tobacco- Company and its wholly-owned consolidated subsidiary

as of December 31, 1960 and the related statements of consolidatedearnings. and retained earnings for the year then ended ., Our examina-

tion was made is accordance with generally accepted auditing stand-

ards, and accordingly included such tests of the accounting records and

such other auditing procedures as we considered necessary in thecircumstances.

In our opinion, the accompanying consolidated balance sheet andstatements of consolidated earnings and retained earnings present

fairly the financial position of the companies at December 31, 1960and the results of their operations for the year then ended. in con-formity with generally accepted accounting principles applied on a

basis consistent with that of the preceding year .

Januay25 1961~vCU

13

LG0073404



Liggett & Myers Tobacco Company

Assets

CURRENT ASSETS :

Cash . . . . . . . . . . . . . . . . . . . . .

U . S. Government securities - at cost plus accruedinterest (quoted market value : 1960, $4,999,750

1959, $4,992,485) . . . . . . . . . . . . . . .

Accounts receivable, customers . . . . . . . . . .

Accounts receivable, others . . . . . . . . . . .

Leaf tobacco, at average cost . . . . . . . . . .

Manufactured stock and operating supplies ,

at average cost . . . . . . . . . . . . . . . .

TOTAL CURRENT ASSETS . . . . . . . . . .

PROPERTY, PL. 1DNT ND EQUIPMENT - AT COST :

Land and buildings . . . . . . . . . . . . . .

Machinery and equipment . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . .

Less accumulated depreciation . . . . . . .

NET PROPERTY, PLANT AND EQu1 1E.-rT . . .

OTHERASSETS :

Brands, trade-marks and good will . . . . . . . .

Investments in unconsolidated subsidiary companies,at cost . . . . . . . . . . . . . . . . . . . .

Investment in foreign tobacco company, at cost . . .

Foreign currency deposits subject to withdrawalrestrictions . . . . . . . . . . . . . . . . . .

Prepaid expenses and deferred charges . . . . . .

TOTAL OTHER ASSETS . . . . . . . . . . .

TOTAL . . . . . . . . . . . . . . . .

14

1960

$ 11,059,994

4,998,05523,223,130

1,151,657

282,169,184

32,243,932

354,845,972

20,378,09458,170,734

78,748,828

43,626,750

35,122,078

1

919.004

4,000

1 .005 .034

1,153 .911

3,111 .9 5 0

3393,080.000

1959

8 7,328.2 4 1

4,992,48521,189,902

1,159,595

292,005,364

38 .388,176

365,063,763

20.229,331

37,361,69 1

77,591,042

41,390,536

36,200,506

1

887.004

4,000

1 .025.0761 .210. 7 2 _ 6

3,126 .5 0 7

5404,391 .076

LG0073405



J onsoLdated

Balance Sheet

as of December31

Liabilities

CuBRL'n LL-.BU.rri s:

Accounts payable . . . . . . . . . . . . . . . .

Dividend payable on preferred stock . . . . . . .

Accrued interest on debentures . . . . . . . . . .

Funded debt payable within one year . . . . . . .

Taxes payable and accrued (less, for 1960, U . S .

Treasury tax anticipation notes, $9,934,413) . . .

TOTAL CURRENT LL .Ba1TIES . . . . . . . .

Fuin DEBT

75/%.Sinking Fund Debentures, $5,750,000 payable

annually during the years 1962 through 1964,

$23,750,000 payable in 1965, and 537,300,000 pay-able in 1966 . . . . . . . . . . . . . . . .

RESERVE:

For deferred contingent compensation (net of esti-

mated future income tax reductions) . . . . . .

STOCKHOLDERS EQurrY :

Preferred stock 7010 cumulative, par value $100 -authorized, 341,398 shares; issued, 225,141 shares

in treasury, 1960, 47,280 shares, and 1959, 29,460shares . . . . . . . . . . . . . . . . . . . .

Common stock, par value $25 - authorized, 5 .000.000shares; issued, 1960, 3,939,053 shares, and 1959,3,931,462 shares (Note 1) . . . . . . . . . . .

Paid-in capital in excess of par values of capital stocks

(Note 2) . . . . . . . . . . . . . . . . . .

Retained earnings (Note 3) . . . . . . . . . . .

TOTAL STOCKHOLDERS' EQUITY . . . . . . .

TOTAL. . . . . . . . . . . . . . . .

1960

3,167,198

311,607673,391

5,750,000

11,559,209

21,463,405

78,500,000

248,160

17, 786,100

98,476,325

20,534,676

156,071,334

292,868,4 : 3 5

$393,080,000

1959

3,295,512

345,067721.373

5,750,000

22,794,378

32,906,3 3 2

84, 250, 000

19,568,100

98 .286.550

20211 .080

149 .168.51 4

_ 2 8 7 .234,2 44

S404.391 .076

((6Q)c- , ,15

LG0073406



Statement of

Consolidated Earnings

(for years ended December 31)

NET SALES . . . . . . . . . . . . . . . . . . . . . . .

OTHER EARi'nNcs:

Interest and dividends received . . . . . . . . . . . . .

Profit from sale of land and buildings . . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL EAR. .-ics . . . . . . . . . . . . . . . . .

COSTS A.ND EXPENSES :

Cost of goods sold, selling, administrative

and general expenses. . . . .

.. . . . . . . . . . .

Provision for depreciation . . . . . . . . . . . . . . . .

Interest and amortization on funded debt . . . . . . . . .

Interest on bank loans . . . . . . . . . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . . . .

Provision for Federal income tax . . . . . . . . . . . . .

Provision for State income and franchise taxes . . . . . . .

TOTAL CosTS AND EXPENSES . . . . . . . . . . . .

NET EARNINCS FORTHE YEAR . . . . . . . . . . . . . . . .

DIVIDENDS ON PREFERRED STOCK . . . . . . . . . . . . . . .

NET EARNINGS APPLICABLE TO COMMON STOCK . . . . . . . . .

16

L .iosett 8i Myers Tobacco Compan

1960

$543,172,587

889,330

544,061,917

474,847,617

3,909,1-369

2,341,504

250,532

31,573 .0 0 0

2,431.000

515,353,022

28,708,895

1,301,255

S 27,407,64()

1959

$554,936,02

370.54

100,54

'349 .39

535, 1 57,31

484,407.38

3,705.07

2,466,17

6 .33

27 .65

32,350.00

2 .686.00

525,713,62

30,0:38,68

1,430,10

$ 28,608,38

LG0073407



Liggett &.Myers Tobacco Company

Statement oConsolidated Retained Earnings

(for dears ended December 31)

1960

BALANCE AT BEGINNING OF YEAR . . . . . . . . . . . . . . .

ADD - Net earnings for the year . . . . . . . . . . . . . . .

ToT L . . . . . . . . . . . . . . . . . . . . .

DEDLTCT :

Cash dividends of S7 per share on preferred stock . . . . .

Cash dividends of $5.00 per share for 1960, and $5 .73 pershare for 1959, on common stock . . . . . . . . . . . .

Total dividends . . . . . . . . . . . . . . . . . .

Excess of cost over par value of preferred stock reacquired .

TOTAL . . . . . . . . . . . . . . . . . . .

BA"vcE AT END OF YEAR (Note 3) . . . . . . . . . . . . .

Notes to Financial Statements

December 31 . 1960

1 . At January 1, 1960 there were outstandingoptions granted under the Incentive Stock Op-tion Plan to officers and key employees to pur-chase, subject to certain limitations, 40,359shares of the Company s common stock, and39,700 shares were reserved for the granting of

additional options. During 1960, options for11,600 shares were granted for an aggregate

option price of 3955,550, options for 7,391shares were exercised for an aggregate option

price of 551:3,371, and options for 600 shareswere cancelled. At December 31, 1960, options

were outstanding with respect to 4:3, 7 68 shares

having an aggregate option price of $3,160,799,and 48,7 00 shares were reserved for the grant-ing of additional options on or before March 31,

$149,168,514

28,708,895

171,87 7,40 9

1,301,255

19,686,491

20,987,746

818,329

21,806,075

$156,071,334

1959

$143,729,281

30,038,689

173,767,970

1,430,107

22 .585,258

24,015,365

584.09 1

24 .599,456

$149,168,314

1961. In accordance with the Plan, option prices

represent closing quoted market values of the

shares on the dates the options were granted.

Paid-in capital in excess of par values of

capital stocks increased in 1960 by 5323.396

representing the excess of sales price over par

value cf common stock sold to officers and em-

ployee.- under the Incentive Stock Option Phin .

:3 . Und=r the terms of the Indenture covering the2'+ o Sinking Fund Debentures, S60.282.541

of retained earnings is restricted as to payment

of cash dividends on common stock. This limi-

tation does not apply to stock dividends on

common stock, nor does it restrict payment of

dividends on preferred stock .

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LG0073408



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Advertising

and

Sales Promotion

On these pages you will find all of the principal products

manufactured by Liggett & Myers Tobacco Company .

Notice that the OASIS package and carton have been

redesigned with a new oasis scene. This scene is highly

suggestive of the characteristics of the product : fresh-

ness, coolness, mildness.

The CHESTERFIELD carton has also been given a "new

look." Gold tr im has been added to give a r ichness and

heighten its consumer appeal .

In order to increase the consumer's awareness of the

Company's leading brands, one of the primary objectives

of the advertising and sales departments is to make thesame sales message which is used in print and on TV

and heard on the radio, also visible in hundreds of

thousands of retail outlets. When the Liggett & Myers

salesman goes into the field, he is armed with special

display material and promotion plans to sell the Com-

pany's products to both the wholesale and retail trade .

You may have seen our windproof lighter offer at point

of sale; the "Get Out The Vote" L&M poster, which was

widely distributed prior to Election Day; or the exclu-

sive L&N/I Christmas gift pack offering a free Christmas

Carol record with the purchase of two cartons of L&M .

The media used in the Company's advertising pro-

gram is carefully selected for each brand . We strive to

reach the greatest number of potential consumers with

convincing sales messages. In TV, for example, "Gun-

smoke" for L&M, and "The Untouchables" for CHESTEIn-

FiELD, consistently appear in the top ten of all television

programs, according to the rating surveys .

20

LG0073409

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1911-1960

(- 09pro

Documents

L&M Annual Report AD Little Mentioned