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Loews Corporation Annual Report 1982 FINANCIAL HIGHLIGHTS . .4 Results of Operations: Revenues ............. . . . . . . . . . . . . . . . . . . . . . Income from operations ................ Per share-Income from operations: Primary .................................. Assuming full dilution ................ Net income ............................... Per share-Net income: Primary .................................. Assuming full dilution ................ Financial Position: Total assets ............................... Long-term debt .......................... Shareholders' equity .................... Cash dividends per share ............... Years Ended December 31, 1982 1981 1980 1979 1978 (Amounts in thousands, except per share data) $ 4,747,085 $4,776,219 $4,535,098 $4,065,475 $3,455,644 221,023 264,348 221,973 181,972 147,670 18.53 20.66 17.99 15.87 12.70 14.82 11.47 8.86 215,824 253,213 206,099 208,580 168,165 18.10 19.79 16.70 18.19 14.47 13.88 13.08 10.02 10,402,247 9,914,071 9,125,112 8,842,683 7,745,867 745,349 765,218 848,713 968,276 950,315 1,425,941 1,356,641 1,194,589 1,040,754 856,053 1.20 1.20 1.20 1.20 1.20 PRICE RANGE OF COMMON STOCK Loews Corporation's common stock is listed on the New York Stock Exchange. The following table sets forth the reported consolidated tape high and low sales prices in each calendar quarter of 1982 and 1981: First Quarter ................................................................... Second Quarter ............................................................... Third Quarter ... . . .. . . .. . . .... . ... . ... . . . .... . .. ... . .. .. .. .. .. .. . .... . . ... . . . . Fourth Quarter ................................................................ DIVIDEND INFORMATION 1982 1981 High Low High Low 933/8 791/4 863/4 73 99 847/8 1077/s 83i/2 1231/2 813/4 1033/8 783/8 1591/2 120 921/8 823/4 The Company has paid quarterly cash dividends on its common stock in each year since 1967. Dividends of $.30 per share on common stock outstanding were paid in each calendar quarter of 1982 and 1981. APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS As of February 28, 1983 the Company had approximately 6,200 record holders of Common Stock. CONTENTS Letter to Shareholders and Employees .................................................................................. 2 Business Segments .................................................................................................... ...... 8 Management's Discussion and Analysis of Financial Condition and Results of Operations .................... 10 Financial Statements .................................................................................................... ... 13 Directory: Directors . . . .. ... . . . . . . . . . . . . . .... .... . .. .... . ... ... .. ... ... .. ... .... . . . . . .... . . . . .. . . . . ... . . . . . . . . . . . . ... . ... . . . . . . . ... . . . . 3 5 Officers .................................................................................................... ................ 36 1

TO OUR SHAREHOLDERS AND EMPLOYEES Loews Corporation reported more than satisfactory results for 1982, particularly considering difficult economic conditions and the state of competition in the marketplace. Assets exceeded $10 billion for the first time in the Corporation's history, and shareholders' equity grew to a record $1.43 billion. Income from operations for 1982 amounted to $221.0 million, or $18.53 per share, compared with $264.3 million, or $20.66 per share, for the prior fiscal year. Income from operations for the 1981 year included gains totaling $58.3 million, or $4.51 per share, on sales of real property and of the Drake Hotel in New York City. Net income for 1982 amounted to $215.8 million, or $18.10 per share, compared to net income, which included the gains on sales of the hotel and other real property, of $253.2 million, or $19.79 per share, for 1981. Net income in 1982 includes realized investment losses amounting to $5.2 million, or $.43 per share. Net income for the prior year included realized investment losses of $11. 1 million, or $.87 per share. Revenues mi!lionr of dollars 5000 Earnings Per Share dollarr 20.00 4000 16.00 3 2 I1I1E 11111 12.00 8.00 1 I 4.00 0 0 '78 '79 '80 '81 '82 '78 '79 '80 '81 '82 Shareholders' Equity millionr of dollars III '78 '79 '80 '81 '82 2 1982 consolidated revenues amounted to $4.7 billion, compared to $4.8 billion in the prior year. Lorillard For the seventh consecutive year Lorillard achieved record sales and earnings, aided by cost-cutting efforts and price increases. These strong results were achieved in spite of the unfavorable economic climate, intense competition, increased tax burdens in several states and continued pressures from anti- smoking groups. The most significant event affecting the industry in 1982 was the passage of a bill doubling the Federal excise tax on cigarettes from eight to sixteen cents per package, effective January 1, 1983. Faced with that increase, some cigarette manufacturers encouraged their wholesale and retail customers to stockpile inventories, while Lorillard and others allowed their wholesale trade inventories to decline towards year-end. Consequently, while not affecting consumption, these actions significantly distorted industry statistics for the year. Lorillard market share experienced a slight decline, and unit volume for the year decreased. Industry executives acknowledge that 1983 will be an uncertain year. The full impact of the Federal tax increase, along with a number of state tax increases passed in 1982 and pending in 1983, cannot be accurately gauged. However, John C. Maxwell, Jr., tobacco analyst with Lehman Brothers Kuhn Loeb Research, estimates that "full-year consumption may be down about 1 % - 2 % . " Net Income millionr of dollarr Total Assets 1500 275 billionr of dollarr 10.5 1250 220 9.0 1 ~ 1000 1 7.5 W ~ Cil 0 6 750 :: . N i i i i V-D 5 .A 4 500 . .PA 3.0 250 1.5 0 M i ! M 0 0 '78 '79 '80 '81 '82 '78 '79 '80 '81 '82 i

Lorillard has confronted that uncertainty by mounting the most aggressive new product launch in its history. After a two and a half year development program that included successful market testing, in January 1983 Lorillard began national distribution of SATIN, a low-tar 100-millimeter cigarette available in regular and menthol. Featuring a filter that looks and feels like satin, the new brand is aimed at women, who now account for 49 percent of cigarette purchases, though only 11 percent of industry unit sales are specifically targeted to women. During the six-month test period, the two packings of SATIN maintained a combined one percent market share. On a national basis, one percent of the market represents approximately $160 million in factory sales. Lorillard has long been a leader in the low-tar (15 mg. or less) segment of the tobacco industry, which now accounts for more than 61 percent of total U.S. cigarette sales. More than 70 percent of Lorillard's sales are in this category. NEWPORT, a menthol variety, is assuming even greater prominence. Fastest growing among the industry's major brands, Business Week reported that NEWPORT "is having phenomenal success expanding its popularity from its Northeast and upper Midwest strongholds into the South." NEWPORT ranks second among Lorillard's brands-KENT, KENT III, TRIUMPH, GOLDEN LIGHTS, TRUE, OLD GOLD, MAX and now SATIN. The KENT family is the company's best selling brand. Tobacco Ad Revenues $1,173,290,000 24.72% In fall 1982, Lorillard joined KENT (low- tar-12 mg.) and KENT III (ultra low-tar-3 mg.) in a'`family" advertising campaign that provides significantly increased brand exposure per advertising dollar. Both brands, with a common heritage and market positioning, share the same advertising format. A variety of promotional events was launched during the year, and test marketing of new brands or brand extensions was undertaken in a number of geographic aseas. Lorillard's success rate in new product introductions and brand extensions is evidenced by the fact that 45 percent of its current volume comes from brands that are less than eight years old. The prospect of restrictive Federal, state and local legislation and regulation with respect to cigarette marketing, production and excise taxes continue to be of grave concern to our Lorillard Division. From time-to-time, employees, shareholders and customers express their views on these and related subjects directly to legislators and regulators. Because such expressions are an effective means of communicating important interests to our elected and appointed officials, we encourage you to keep abreast of issues which affect your company, and to communicate your views on them to those officials. Lorillard is actively involved in industry programs to counter adverse legislative pressures on U.S. cigarette sales. Lorillard's Presidtnt currently chairs the executive committee of The Tobacco Institute, the industry's principal trade group, and has a leadership role in efforts to stem unfair tax increases and other anti-tobacco legislation. ~ c~,a ~ cJt N ~ .t.i tA 3 1[ a

CNA Financial Although 1982 was one of the most difficult years the insurance industry has experienced, CNA Financial continued to generate increased revenues and earnings and to exert a strong presence in the marketplace. Competition intensified throughout the industry and tended to inhibit price increases and keep profit margins low. The property- casualty industry incurred the worst underwriting loss in its history in 1982. Economic and marketplace pressures clearly demonstrated during the year that the insurance business is in a time of great change and that only the most efficient and productive companies will prosper. In recent years, CNA has taken a number of anticipatory actions to enhance its ability to compete successfully in this demanding environment. One of the most important of these actions has been to maintain a conservative reserving position, thus assuring the company of a firm financial base. Other key strategies include a strong business partnership with the independent agents who represent CNA, competitive products in all lines of insurance, and superior backup support for their sales force. The deepest commitment CNA makes to its agents is the High Performance Agency Program. Established in 1978, it was the first in the industry to provide independent agents with genuine stability through substantial marketing, underwriting and commission guarantees. In 1982, CNA introduced improvements to the program that can significantly increase the management skills of participating agencies. High Performance is dramatically heightening the productivity of both CNA and its agents. Insurance 4 At the same time, unlike programs of some companies, it respects the right of independent agents to represent other carriers. Production from High Performance agencies in 1982 accounted for nearly one-quarter of CNA's field volume of business. This share should grow, since High Performance is the cornerstone of the company's drive for competitive excellence in the 1980s. In 1982 CNA joined in commemorating the 15th anniversary of PACER, its property- casualty agents' advisory council. PACER is one of the oldest active organizations of its kind in the industry. Practical advice and assistance to agents through PACER programs have been extremely useful in enabling CNA to respond to the needs of the marketplace with programs such as High Performance. CNA's emphasis on competitive products and pricing resulted in a number of new or revised policies and packages last year. Among them were commercial packages for contractors and manufacturers, both as part of CNA's Encompass series. Recognizing the sweeping changes in life insurance buying patterns of recent years, CNA also introduced several flexible premium products. One of these, CNA Universal Life, combines insurance with an investment. Initial sales indicate high acceptance of this product by agents and consumers. A reduced expense ratio is critical in achieving greater competitiveness. CNA in 1982 conducted the most stringent cost/efficiency campaign the company has ever known. This ongoing program affects every level of the company and has produced substantial savings. In the interests of efficiency, for example, much

of the company's printing is being done within CNA and other in-house technical facilities have been expanded. In addition, there are now nearly 20 word processing centers in the CNA organization. General Finance Corporation, CNA's consumer finance subsidiary, had a profitable year in 1982 after reporting a net loss in 1981. Much of General Finance's improved results is attributable to management's restructuring of the company's debt and portfolio positions. This restructuring reduced short-term debt considerably and put General Finance on a more balanced basis. CNA proved again in 1982 that it has the resources, strategies and commitment to remain a premier competitor, despite a generally unfavorable marketing climate. Loews Hotels The Loews Hotels Division achieved excellent results during 1982, despite the troubled economy and a soft travel year. Travelers were more selective in their choices and there was less disposable income for travel. Loews Hotels can attribute its consistent success to an impeccable standard of excellence in service, selective properties and expertise in management and sales. As you read this report, the magnificent Loews La Napoule Hotel and Casino, on the French Riviera, should be entertaining its first guests. The stunning four-star hotel-the only one in France with an in-hotel casino-has 220 elegant guest rooms and suites with sweeping views of the Mediterranean Sea and the world famous Cannes-Mandelieu golf course. Loews La Napoule's convention facilities offer 20,000 square feet of attractively appointed banquet, conference and exhibit space. The bilingual staff includes a trained conference service group with the ability to handle audio- visual equipment and provide simultaneous translations. Loews La Napoule Hotel, with its own private beach, is just 10 minutes from the new Cannes Convention Center and 20 minutes from the Nice Airport. The Hotels Division moved forward on a number of other exciting projects. Construction began on Loews Paradise Valley Resort-a luxury hotel and resort in Paradise Valley, Arizona, which will be managed by the Division. When completed in the spring of 1984 this resort hotel, spread over a lavishly landscaped 20-acre site, will be unsurpassed in recreational facilities. There will be two outdoor swimming pools, indoor and outdoor tennis courts, nearby golf and a full-service health and fitness center. The Resort will include eight meeting rooms with more than 16,000 square feet of function space, a variety of dining facilities and a nightclub large enough to accommodate 200 guests. In the fall of 1982 ground was broken for a major expansion program at the Loews Anatole Hotel in Dallas which is managed by the Division. The addition will nearly double present capacity. When completed early in 1984, Loews Anatole Hotel will be the largest convention hotel in the Southwest, with 1,620 guest rooms, including 145 suites, 18 restaurants and lounges, and an ultra modern health and fitness facility. 5

6 The Hotel's expanded conference center will provide 165,000 square feet of meeting and catering space, and a 30,000 square foot ballroom-the city's largest. In addition, there will be two cinemas, four other theatre/ lecture halls, plus a lush seven-acre park with formal gardens and a restaurant by a reflecting pond. Since its opening in January 1979, Loews Anatole has been the recipient of numerous awards and honors. Construction has also begun for the Loews Glenpointe Hotel, in Teaneck, New Jersey, the Division's first entry into the suburban hotel market. Loews Glenpointe, which will be managed by the Division, will be a world-class hotel with 350 guest rooms in a 14-story tower, a variety of restaurants and a major full-service conference and event center. Construction at Loews Glenpointe Hotel is right on schedule to open in November of 1983. As part of a mini-city complex the hotel will be connected to a 40-shop mall and two office buildings and will be served by a 20,000 square foot health spa and swimming pool. Loews Representation International, L.R.I., Inc. which supports the Loews Hotels Division and represents more than 250 other hotels worldwide, is on an electronic computer system, linked with airline reservation systems. LRI is available to 40,000 terminals at travel agents and corporate travel offices all over the world. In 1983 the Loews Hotels Division will continue to explore major expansion possibilities around the world. The Division is currently engaged in negotiating hotel opportunities in the United States as well as abroad. Loews Hotels continues to hold its position as a leader in the hotel industry. Loews Theatres 1982 proved to be another record-setting year for the Theatre Division, with increased receipts, admissions and profit. During 1982 the Division added seventeen new screens in three ultra-modern complexes. Our new theatres, featuring spacious lobbies with giant refreshment centers, and large, wide auditoriums with wall-to-wall screens, which our research indicates the public prefers, have met with great acceptance. In the fast-growing Houston suburbs, a five- screen complex was opened in the exclusive Southpoint Center. A six-screen free-standing building was constructed opposite New Jersey's mammoth shopping center, Willowbrook Mall, and another six-screen theatre is the focal point of the Harmon Meadow complex of shops, hotel, restaurants and office buildings located within sight of the New Jersey Meadowlands sports complex. Two large complexes are presently under construction, one in the most luxurious shopping center in Arlington, Texas, midway between Dallas and Ft. Worth, which will have six screens. Another, in suburban Rochester, New York, will contain eight screens. Our highly successful Nassau Quad in Levittown, Long Island has plans for two additional auditoriums, and other complexes are in various stages of development throughout the country. The Theatre Division continues to pursue its successful program of building multiple-screen theatre complexes with large auditoriums equipped with state-of-the-art projection and sound systems, providing a comfortable environment in which to view quality motion pictures.

'Bulova Bulova Watch Company made substantial progress in its revitalization program in 1982, a year which saw the U.S. watch and clock industry depressed by oversupply, substantially increased competition from the Far East and a restrained level of consumer spending. However, significant losses for the year were sustained. Bulova took a number of major steps to position itself for an upturn in its industry, although many of those factors which affected 1982 are expected to continue to have an impact in 1983. Among the steps taken by Bulova were the following: The company introduced its new Millenia collection of men's watches. The Millenia collection is the first to result from the company's relationship with ETA SA Fabrique D'Ebauches, of Switzerland, one of the world's leading manufacturers of watch movements. Initial response from the trade to the dramatically new designs has been positive. The retailers also have responded favorably to a completely redesigned, contemporary Caravelle line of 91 styles, suggested for sale between $40 and $100. Bulova substantially heightened its profile in the heart of its target market-young consumers-with a television and magazine advertising campaign featuring endorsements by admired personalities: Muhammad Ali, Morgan Fairchild, Cathy Lee Crosby, Bernadette Peters, Johnny Cash and Roger Daltrey. Bulova has launched a national public rela- tions program which will bring the Bulova story to an audience of many millions in 1983. American Watch Case Corporation, a Bulova subsidiary, was formed to design and manufacture cases for other American watch producers and importers, as well as for Bulova. This company will operate as a new profit center in the Providence, R.I. plant previously operated as a Bulova division. Bulova Systems and Instruments Corporation, which serves the military defense industry, grew substantially in 1982 and once again operated profitably. We anticipate continued growth in this company. In this annual report, on pages 32 through 34, you will find balance sheets, statements of income, and statements of changes in financial position, accounting for CNA as an investment under the equity method of accounting, as compared to its consolidation in our financial statements in accordance with generally accepted accounting principles. We think these statements will aid you in assessing your company's inherent strengths. On behalf of the Board of Directors, we thank you, our employees and shareholders, for your commitment and support. Sincerely, /Co.~ VruaaJ t~ . ~' Laurence A. Tisch Preston R. Tisch Chairman of the Board President February 22, 1983 7

BUSINESS SEGMENTS Loews Corporation, through its subsidiaries, is engaged primarily in insurance (property, casualty and life), the production and sales of cigarettes and of watches and other timing devices, the operation of hotels, the exhibition of motion pictures and consumer finance. The following table sets forth, for the periods indicated, the major sources of the Company's consolidated revenues and income before interest and corporate expenses, income taxes and minority interest. Years Ended December 31, (Amounts in thousands) 1982 1981 1980 Audited Revenues: Property and casualty insurance (f) ..................... $ 1,881,690 $1,892,606 $1,640,721 Life insurance (f) .......................................... 1,132,117 1,088,531 1,152,079 Cigarettes (a) ............................................... 1,173,290 1,108,637 1,053,022 Hotels (b) ................................................... 161,423 240,256 228,704 Theatres ..................................................... 64,199 59,956 54,738 Watches and other timing devices ...................... 151,217 179,523 197,280 Consumer finance ......................................... 135,480 145,344 150,216 Investment income-net (c) ............................. 36,735 24,805 27,425 Other (d) ................................................... 10,934 36,561 30,913 Total revenues ....................................... $ 4,747,085 $4,776,219 $4,535,098 Income Contribution: Property and casualty insurance ......................... $ 35,390 $ 80,290 $ 85,738 Life insurance .............................................. 23,733 25,805 30,819 Cigarettes .................................................. 228,967 178,157 158,594 Hotels (b) ................................................... 33,621 101,783 82,436 Theatres ..................................................... 14,482 12,923 11,749 Watches and other timing devices ...................... (17,408) 4,710 3,330 Consumer finance ......................................... 48,770 32,167 49,713 Investment income-net (c) ............................. 36,735 24,805 27,425 Other (d) ................................................... 2,817 18,560 20,991 Realized investment losses ............................... (17,406) (19,769) (31,064) Income Before Interest and Corporate Expenses, Income Taxes and Minority Interest .................... 389,701 459,431 439,731 Interest and Corporate Expenses, Income Taxes and Minority Interest (e) ................................. 173,877 206,218 233,632 Netincome ........................................... $ 215,824 $ 253,213 ~ 206,099 Identifiable Assets: Property and casualty insurance ......................... $ 4,830,031 $4,779,363 $4,001,646 Life insurance .............................................. 3,755,550 3,346,267 3,213,813 Cigarettes ................................................... 558,379 576,748 576,121 Hotels ....................................................... 178,738 181,629 196,000 Theatres ..................................................... 42,554 41,671 33,444 Watches and other timing devices ...................... 136,660 165,144 152,929 Consumer finance ......................................... 464,186 503,820 586,300 Investment income ........................................ 320,024 278,049 224,107 Other ........................................................ 102,414 27,068 132,161 Corporate ................................................... 13,711 14,312 8,591 Total identifiable assets ............................ $10,402,247 $9,914,071 $9,125,112 8

(a) Includes tobacco excise taxes of $213,394, $227,580 and $239,115 paid on sales of manufactured products for the respective periods. (b) Includes gains on sales of hotel properties and, in 1981, a lease surrender payment, of $63,293 and $29,864 for the years ended December 31, 1981 and 1980, respectively. (c) Consists of investment income of non-insurance operations. Investment income of insurance operations is included in the Revenues and Income Contribution of the related insurance operations. (d) Includes gain on sale of certain subsidiaries (whose principal assets were two commercial and residential buildings) of $24,624 for the year ended December 31, 1981. (e) Includes interest expense of $35,704, $52,909 and $48,734 for the respective years related to the consumer finance industry segment. (f) The following information relating to insurance business segment revenues and pre-tax operating income (loss), in millions of dollars by product line, is reflected on the basis of CNA's historical costs and does not include the effect of purchase value adjustments: The property and casualty insurance business segment includes revenues of $1,534.9, $1,571.9 and $1,436.7 for the respective years applicable to commercial lines, and $353.4, $330.3 and $214.6 for the respective years applicable to personal lines. Pre-tax operating income (loss) for commercial lines amounted to $85.1, $121.0 and 884.0, respectively, and for personal lines amounted to $(52.4), $(36.2) and $(10.2), respectively. The life insurance business segment includes revenues of $298.5, $294.6 and $358.0 for the respective years, applicable to individual life products, and $912.8, $802.2 and $800.5 for the respective years, applicable to group life products. Pre-tax operating income (loss) for individual life products for the respective years amounted to $17.9, $23.9 and $26.8, and for group life products amounted to $8.6, $(.5) and $2.6, respectively. Individual life products include revenues of $67.7 and pre-tax operating income of $2.0 in 1980, representing accident and health insurance business ceded by the personal property and casualty lines under a quota share agreement in effect prior to 1981. Group life products include revenues of $76.2 and pre-tax operating income of $2.3 in 1980, representing accident and health insurance business ceded by the commercial property and casualty lines under such agreements. v? w J-" Cn N ~ ut A- 9 i1