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zbStUOOo TO OUR SHAREHOLDERS & EMPLOYEES: It is my pleasure and privilege to report to you that the fiscal year ended August 31, 1966 was another year of progress and growth for your Company. Loew's eight New York City hotels and two resort hotels enjoyed high rates of occupancy despite the adverse effects of this past summer's prolonged airline strike. Our Hotels Ambassador, East and West, in Chicago, have been com- pletely restored to their original elegance and are rapidly rebuilding clientele, reputation and occupancy rates. A luxurious five-hundred room hotel, presently under con- struction on Paradise Island, Nassau, Bahamas, scheduled for opening in December of 1967, will be under Loew's management. Your Company has under consideration sev-l eral ncw hotel projects which will complement our exist- ing facilities. Attendance in our theatres continues to increase. During the past fiscal year we opened six new Loew's Theatres in various parts of the country. We are actively pursuing addi- tional new theatre locations in major shopping centers, and several new theatres are_ presently under construction. The results of this past year and our development activity support our continuing belief in the bright future of the motion picture exhibition industry. Your Company's expansion and diversification program has been augmented by several important real estate devel- opments which are reported on page four. In addition, Westchester Forum Associates,a limited partnership owned eighty per cent by one of your Company's subsidiaries, and twenty per cent by Charles B. Benenson, nationally respected in the real estate field and a Director of your Company, has been designated by the White Plains Urban Renewal Agency as the Redeveloper of a 20-acre business and shopping area in downtown White Plains, New York. approximately 10 large office buildings with promenades, shops, plazas and underground parking. Movement of major corporations to White Plains and Westchester County evi- dence that the planned development is a sound investment. At August 31, 1966, your Company owned 714,911 shares of its common stock. Further purchases have since been made. We note once again that these shares are available for acquisitions and for other corporate purposes and may be used in transactions which take cognizance of the value of the shares at the time of use. The actual and projected capital commitments of your Company, the determination of management to pursue diversified investment and acquisition opportunities, and the present "tight money" situation mandate the mainte- nance and conservation of a favorable cash position. It is our belief that this is especially true in view of the suspen- sion of investment tax credits and anticipated tax increases. During the past fiscal year your Company continued to invest the funds so maintained in marketable securities, and short-term or other income-producing media, in order to utilize productively these funds pending application to other corporate purposes. My fellow executives and our loyal employees have earned my gratitude for their dedicated cooperation and support in making possible the continuing growth and stability of your Company. n Sincerely, c1t A •-7~0 A, Laurence A. Tisch Chairman of the Board The new development contemplates the construction of November16,1966 ,

Loew's Hotels and Motels in New York City, the Ambassadors in Chicago, and your two resort properties, the Americanas of Bal Harbour and San Juan, continue as favorites of the discriminating guest. Contributing to their popularity are their restaurants, which maintain high standards in food, serv- ice and decor. Each attracts, in addition to guests and residents, a great number of diners from outside. A ASEPO H1 O153 L 1) E WS I I OTE L31 (above, left) A view of the new Raleigh Room in New York's Hotel Warwick, a favorite gathering spot for radio and TV stars and executives. The famed Dean Cornwall murals are featured. (above, right) The new Greenery of the Hotels Ambassador, Chicago. "Stool No. 7 in The Greenery is Chicago's newest status symbol," says Irv Kupcinet, well-known columnist. (below) The luxurious Prince of Wales lounge area of Chicago's Hotels Ambassador. Interior designer Richard Himmef has won applause for his imaginative and tasteful decor.

V6t3I0000 For the seeker of nighttime diversion, the entertainment rooms at Loew's Hotels have become the "in" spots in their communities. The Royal Box at the Americana in New York City has become world-famous as a result of its continuing big-name entertainment policy. Stars who appeared recently include: Rosemary Clooney, Tony Martin, Phyllis Diller, Edie Adams, Pearl Bailey, Ella Fitzgerald, Myron Cohen and Jack Carter. Shepheard's, in New York's Hotel Drake, won renown as the original "discotheque." _ Current policy features a combination of "Disco-Jazz" expertly tailored to the mood of each audience. The Americana of Bal Harbour features the Bal Masque, where_ stars appear in Parisian revues, and the intimate Carioca Lounge. The nightlife of San Juan, Puerto Rico is enlivened by the Americana's La Copa Supper Club, the Port O'Call and the Carioca Lounge. (above, left) Celebrated Gaucho Steak Houses attract gourmets to the Americana of Bal Harbour, the Americana of San Juan and the Summit of New York. (below, left) The lovely dining room of The Regency on New York's Park Avenue. Here, unequalled French cuisine is accented by gracious service in luxurious surroundings. (below) The popular Royal Box, intimate supper club of the Americana of New York.

As part of your company's diversified growth program, it is engaged in several major real estate projects, in New York City. ' ~ ~ ~ _ ` U-1 ' . .., ~ ~,r~ ,. n ' •.~ • -r L Mr °~-_- w ' -~ IC~. ~... .zce [[[C ~ nea=w., ~ L9 = C ~ - ~ ~ - r;[~ ., ~ 0 ~ c7C~ ~ ~ C?== I`~ l cc ~i ' ' t; ESk ~ ~ ~[C ~ ? ;ii L~ o n ~ R. r ER Fm su ~ ~ r%F+ iiE tYSx ~? -~e -~-- F'+' E~=? FZ~ ~~.. Etg[_ Ectr F77i SSS3 Cia II4R C:: ria •F=R F-== rii;~V_a-If:-th : 3 F3?'y sca; TOWER FIFTY THREE (left), a 39-story com- bination commercial and apartment build- ing, is rising on the N.E. corner of Seventh Avenue and 53rd Street, with occupancy scheduled for the summer of 1967. A ground floor bank and eight stories of office space will be topped by a residential tower containing 213 apartments. Separate en- trances, lobbies and elevators will serve the commercial and residential sections. An underground garage will be provided. Another apartment building of thirty-three stories, comprising 169 apartments, four floors of commercial space and an under- ground garage, is planned for 49 WEST 57th STREET (right), running through to West 58th Street. Your Company, in a joint venture, is plan- ning a thirty-story, luxury apartment complex of 276 units to be erected on Eighty-Ninth Street at Madison Avenue. Ground floor commercial space will include a bank. Underground garage space will be provided. UQU41&~5 1 I

LOEW'S HOTELS COLORADO DENVER North Glen (Opens 1967) South Glen (Opens 1968) CONNECTICUT NEW HAVEN Poli College WATERBURY Loew's Poli DISTRICT OF COLUMBIA WASHINGTON Embassy Palace FLORIDA FORT LAUDERDALE Lauderhill (Opens 1967) CORAL GABLES Westchester (Opens early 1967) MIAMI BEACH 170th Street SOUTH MIAMI Riviera ST. PETERSBURG Loew's GEORGIA ATLANTA Grand INDIANA EVANSVILLE Majestic Victory INDIANAPOLIS Loe W's NEWS THEIRli'HES IN THE U.S.A. AI9U CtiNAUA LOUISIANA NEW ORLEANS State New Loew's (Opens 1967) MARYLAND OXON HILL Loew's MASSACHUSETTS BOSTON Orpheum MISSOURI ST. LOUIS State Mid-City NEW JERSEY CAMDEN Loew's (Opens 1967) HAZLET Loew's "35" Drive-In JERSEY CITY Loew's NEWARK State PARSIPPANY•TROY HILLS Loew's NEW YORK BAY SHORE, L. I. Loew's (0_p_ens1967) BUFFALO Shea's Buffalo Teck ROCHESTER Loew's SYRACUSE_ State NEW YORK CITY Manhattan Capitol Delancey 83rd Street Orpheum 175th Street Sheridan State Tower East Victoria Bronx American National Paradise Spooner Brooklyn Alpine Gates Kings Metropolitan Oriental Queens Triboro Valencia NEW ROCHELLE Loew's WHITE PLAINS Loew's State OHIO CLEVELAND Ohio State Loew's East Loew's West COLUMBUS Ohio Arlington (Opens Christmas 1966) Morse Road (Opens Christmas 1966) DAYTON Loew's ( Downtown ) Ames RHODE ISLAND PROVIDENCE State TENNESSEE MEMPHIS Palace NASHVILLE Vendome TEXAS HOUSTON State Magic Circle (Opens 1967) Sharpstown Drive-In VIRGINIA FAIRFAX CIRCLE Loew's NORFOLK State RICHMOND Loew's CANADA TORONTO, ONTARIO Yonge Street Uptown 7 & 27 Drive-In (Opens April 1967) NEW YDRK CITY AMERICANA 7th Avenue at 53rd Street (2,000 rooms) CITY SQUIRE MOTOR INN Broadway at 52nd Street (727 rooms) THE DRAKE Park Avenue at 56th Street (678 rooms) HOWARD JOHNSON'S MOTOR LODGE_ 8th Avenue at 51st Street (300 rooms) LOEW'S MIDTOWN MOTOR INN 8th Avenue at 48th Street (366 rooms) THE REGENCY Park Avenue at 61st Street (500 rooms) THE SUMMIT Lexington Avenue at 51st Street (800 rooms) THE WARWICK Avenue of the Americas and 54th Street (500 rooms) CHICAGO HOTELS AMBASSADOR 1300 No. State Parkway (650 rooms) FLDRIDA MIAMI BEACH AMERICANA OF BAL HARBOUR R Oceanfront at 98th Street (720 rooms) PUERTO RICO AMERICANA OF SAN JUAN On the Ocean at Isla Verde (450 rooms) BAHAMAS PARADISE ISLAND PARADISE ISLAND HOTEL (500 rooms) (Opens Christmas 1967) 9~3stoooo

A H e11 P P'l ", H UIVI.I'~ Til1F, A-1'HFP~ Six new Loew's Theatres, five in flourishing shopping centers and one in a commercial complex, were opened during the 1965-66 fiscal year. Each was launched with exten- sive promotion in all media. The new show- places are: Loew's St. Petersburg, Fla.; Loew's Fairfax, Fairfax Circle, Va.; Loew's Oxon Hill, Md.; Loew's in Parsippany-Troy Hills, N. J.; and Loew's East and Loew's West in Greater Cleveland. A second theatre in Dayton, 0., The Ames, was acquired by purchase in October, 1966. These additions bring the present circuit total to 63 theatres. Meanwhile, eleven more theatres are under construction or in the planning stage. The prestige of Loew's Theatres has been greatly enhanced by the extraordinary suc- cess of such films as DR. ZHIVAGO at Loew's Capitol, New York and the world premiere of THE BIBLE at Loew's State. THE SOUND OF MUSIC and other important films high- lighted our programs nationally. (Above) Architect's rendering of lovely new 1,650=scat Loew's East Theatre in the Richmond Mafl Shopping Center, in Richmond Heights, an eastern suburb of Cleveland, Ohio. (Center) Ava Gardner and actor-producer-direc- tor John Huston were among many stars who attended the world premiere of "THE BIBLE" at Loew's State in New York City. Mayor of Rocky River, Ohio joins Loew's executives in tape-cut- ting, officially opening Loew's New West Theatre in a Cleveland suburb. Part of inaugural fanfare opening Loew's New East Theatre in Cleveland. (Below) Architect Drew Eberson's rendering of Loew's New Westchester, located in the West- chester Shopping Center, which serves both Miami and Coral Cables, Florida.

A . ., .., i . _ .... .. .!~,t~tl'. ... _.t - 99910000 The accent is on luxury, comfort, color and modernity in all of Loew's new Theatres. Each provides acres of free parking, rock- ing-chair seats, giant 60-foot screen, stereo sound, all-weather air conditioning, art gal- lery and attractive concession services. (Above, left) Scheduled for a Christmas opening is Loew's 1,200-seat new Arlington Theatre in the Northwest Shopping Center of Columbus, Ohio. A companion theatre on Morse Road in Columbus will debut on the same day. (Left) Rendering of Loew's new 1,200 seat theatre in the South Shore Mall of Bayshore, L. f., where Macy's and /. C. Penney are major neighbors. (Above) Each new Loew s Theatre features an Art Gallery, in which the works of outstanding local artists are displayed. These galleries attract great interest. 7

00001889 ASSETS 1966 1965 CURRENT ASSETS: Cash ............................................................. ::::::..:.. :.:::::..::.. $ 3,974,299 $ 4,332,298 Marketable securities and time deposits, at cost, less reserve in 1966 (Note 1) .............................................. 28,626,966 19,402,592 Accounts receivable ................................................:.:........:.: 6,178,626 4,790,615 Total current assets ............................................. 38,779,891 28,525,505 CONSOLIDATED BALANCE SHEETS August 31, 1966 and 1965 FIXED ASSETS (Note 2): Land ...................................................................................... 39,728,732 37,586,999 Buildings ..:.........:.:..........::................................................... 121,751,859 112,788,132 Equipment ....................................................................:::::::. 31,411,976 29,854,358 Leaseholds ............................................................................ 6,879,973 6,849,333 199, 772, 540 187,078,822 Less, Allowance for depreciation and amortization .......................................................... LOEW'S THEATRES, INC. and Subsidiary Companies 14,950,176 18,655,420 j $195,034,801 $182,387,603 The accompanying notes are an Integral part of the financial statements. 58,467,806 51,872,144 141,304, 734 135,206,678 INVESTMENTS AND OTHER ASSETS: Land, mortgages and other investments, at cost ....: ..:::.:...... ... 9,422,216 14,240,145 Miscellaneous assets .............................................................. 5,527,960 4,415,275 8

LIABILITIES 1966 1965 CURRENT LIABILITIES: Notes payable to bank ............................................................ $ $ 6,000,000 Accounts payable and accrued liabilities 12 361 951 9 914 027 .................................. , , , , - United States and Canadian income taxes ................................ 3,331,890 3,453,828 Long-term debt due within one year (Note 3) ............................ 4,032,086 5,397,212 Total current liabilities .......................................... 19,725,927 24,765,067 LONG-TERM DEBT, less portion due within one year (Note 3) ................................ 90,895,821 77,620,736 DEFERRED INCOME AND OTHER LIABILITIES: Deferred income .................................................................... 968,092 716,717 Provision for deferred income taxes ........................................ 4,130,000 5,565,000 Other noncurrent liabilities .................................................... 1,669,271 1,601,377 6,767,363 7,883,094 MINORITY INTERESTS IN SUBSIDIARY COMPANIES ............................... 850,728 982,498 STOCKHOLDERS' EQUITY (Note 4): Common stock, authorized 3,000,000 shares, issued shares stated at par value of $1 each (Note 5).......... 2,697,389 2,689,389 Additional paid-in capital (Note 5) .......................................... 13,356,637 13,258,637 Earnings retained in the business ............................................ 73,668,221 67,849,582 89,722,247 83,797,608 Less, Treasury stock (714,911 shares and 701,711 shares, respectively), at cost .................. 12,927,285 12,661,400 76,794,962 71,136,208 $195,034,801 $182,387,603 OGBZ000Q The accompanying notes are an integral part of the financial statements. 9

CONSOLIDATED STATEMENTS OF INCOME AND EARNINGS RETAINED IN THE BUSINESS INCOME: Theatre and hotel operations .................................................. Rent, interest and other income .............................................. EXPENSES: Operating .............................................................................. General and administrative ............ ...... :.................................. Depreciation and amortization ................................................ Interest on debt ................................................................:..:.. Other .......................................... United States and Canadian income taxes ................................ Income from theatres, hotels, etc. .::.... ....::.:.:::::::: NET GAIN ON SECURITIES AND FIXED ASSETS, less related provision for income taxes in 1965 of $430,000 (Note 1) ........................ Net income :....................................:.................... EARNINGS RETAINED IN THE BUSINESS, at beginning of year ................................................. .-...::.:...,, Earnings retained in the business, at end of year .... The accompanying notes are an integral part of the financial statements. 00001891 YEARS ENDED AUGUST 31 1966 1965 $108,043,187 $ 89,973,206 6,217,102 5,387,341 114,260,289 95,360,547 85,427,684 69,330,253 4,635,169 4,123,479 8,093,994 7,076,322 5,600,709 4,934,144 994,094 674,208 104,751,650 86,138,406 9,508,639 9,222,141 3,690,000 3,740,000 5,818,639 5,482,141 1,107,293 5,818,639 6,589,434 67,849,582 61,260,148 $ 73,668,221 $ 67,849,582 • 10