Page 3 - GULF OIL CORPORATION ANNUAL REPORT DECEMBER 31, 1946

The more important 1946 deparinental activities are discussed in
detail under their respective divisions later in the report. The financial
section, starting on page 20, contains the Consolidated Balance Sheet,
Income and Earned Surplus Statements, and supplementary information
comprising the independent auditors' I`eport.

It should be borne in mind that Gulf's net earnings for 1946 wel.e
made possible by the reinvestment of a substantial portion of the earnings
realized in fomer years. The expanding demand for products of the
petroleum industry and the necessity of more completely integrating the
producing, refining and transportation facilities of the Company have for
some years necessitated such reinvesinent of current earnings and con-
sequent limitation on dividends. Nevertheless, in 1946, as in prior years,
the Company has paid substantial dividends to its stockholders.
9R-

[ARNINGS
Consolidated net income was $58,284,830 compared with $45,213,640
in 1945. This net income is equal to $6.42 a share on the 9,076,202 shares
outstanding against $4.98 a share in the preceding year. Net sales reve-
nues and all other income totaled $571,000,000 compared with
$510,800,000 in 1945.

The higher net earnings came from much larger gross revenues, a
dividend of Sl,126,948 from a European marketing subsidiary, and the
fact that, in contrast with 1945, nothing was set aside from earnings for
contingencies.

Foreign operations in the Western Hemisphere produced net eal`nings
Of S14,loo,000 or $3,000,000 above 1945. They are included in con-
solidated net earnings.
Earnings of subsidiaries and associated companies in the Eastern
Hemisphere are not included in the consolidated income. This group in-
cludes the European marketing subsidiaries, and companies engaged in
exploratory and development operations in Kuwait end elsewhere.

DIVIDENDS
Cash dividends paid to stockholders in 1946 were $22,690,505 com-
pared with $18,152,404 in 1945. The balance of current earnings,
$35,594,325, was retained in the busines; in the form of additional invest-
ments in properties, plant, equipment and other assets. In 1945 current

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