Tobacco Documents Online

9 LORILLAFD, INC. AND SUBSIDIARI ES CONSOLIDATED CONDENSED BALANCZE SHEEP DF>rEMBER 31, 1988 (AMOUN'I`S IN TFiO(JSANDS) PRELIMINA' UAP,UDITED ASSETS CURRENT ASSE'PS: Cash $225,027 Receivables 172,339 Inventories 228,356 Total Current Assets $625,722 Investments in securities, at cost 71,513 Total Current Assets and Investments in Securities $697,235 Property, Pland and Equipment - Net 105,653 OTHER ASSETS Intangible Assets 64,050 Deferred Charges and Other Assets 62,195 Total Other Assets $126,245 $929,133 LIABILITIES AND SHAREHOLDER'S EQUITY CURRENT LIABILITIES: Accoants Payable $92,292 Other Current Liabilities 74,920 Accured Taxes Payable 75,054 J Total Current Liabilities $242,266 Long-Term Debt, Less Current Maturities and Unamortized Discount $219,454 Deferred Credits and Other Liabilities $18,683 ~ Shareholder's Equity: Common Stock, authorized and outstanding - 100 shares; par value - $1 per share, $100 aggregate Addii.ional Paid-In Capital 11,099 V/ Earn:i.ngs Retained in the Business 237,631 ,/ Total Shareholder's Equity $448,730 Total Liabilities and Shareholder's Equity $929,133

LORILLAFd) DIVISION BALAICE SFEEI' ANALYSIS DECEDMER 31, 1988 ($000) INCREASE (DECREASE) ASH BALANCE 12/31/88 FRCM PRIOR MONIH 11/30/88 BALANCE 12/31/87 Domestic - Regular 4,920 1,317 3,528 Domestic -• Invested 202,639 29,731 99,134 Foreign (].) 17,297 0 16,739 Foreign - Regular 171 (5) 155 TOTAL 225,027 31,043 119,556 AOCOIJN'I'S RE{';EIVABLE Trade - G]tOSS 176,892 79,055 131,016 LA:ss: Allowance for Doubtful Accts. 4,666 141 4,485 Allowance for Cash Discount 5,487 2,503 4,233 TOTAL TRADE RECEIVABLE (NEI') $166,739 $76,411 $122,298 Advances to Affiliate 0 (43,461) 0 Other - Salesmen Travel 3,480 3 3,143 Coiranissioner of I.R 35 16 13 Interest 852 344 2,848 Other 578 (831) 10,286 Advance to Suppliers 0 (60) 18 5ecurtities Trade (Dividends) 355 (507) 99,782 Tax Refund 300 (29) 58,187 Securities 0 0 0 TOTAL $5,600 ($44,525) $174,277 T4'1'AL ACC®UNTS RECEIVABLE $172, 339 $31,886 $296,575 (1) Foreign Cash in 1988 includes $17,297 invested at 6.9%. 1987 includes $16,739 invested at 7.1%.

LORILLAFU DIVISION BALAICE S= ANALYSIS DEvEMBER 31, 1988 ($000) IW-REASE (DECREASE) BALAICE FRCM PRIOR MONTH BALA2CE INVENI'ORIES 12/31/88 11/30/88 12/31/87 Leaf Tobacco at Average Cost $406,620 $17,968 $430,923 Less: LIFO Reserve 209,069 (9,800) 218,869 Leaf Tobacco on LIFO Basis $197,551 $27,768 $212,054 Manufactured Stock 46,835 (46,721) 38,283 Less: LIFO Reserve 17,544 (953) 18,497 Manufactured Stock on LIFO Basis (See Schedule "A" For Inventory Levels) $29,291 ($45,768) $19,786 Materials & Supplies 5,080 (351) 6,626 Less: LIFO Reserve 3,566 (197) 3,763 Materials & Supplies on LIFO Basis $1,514 ($154) $2,863 Total Inventory $458,535 ($29,104) $475,832 Less: LIFO Reserve 230,179 (10,950) 241,129 TOTAL INVEN'I'OW ON LIFO BASIS PROPERTY, PLANT & EQUIPMENT $228,356 ($18,154) $234,703 Land 1,173 0 1,414 Buildings 43,484 359 48,231 Machinery & Inprovements 154,093 568 157,243 TD'TAG $198,750 $927 $206,888 Less: Accumzlated Depr. 93,097 819 98,471 -a w NET - PROPERTi', PLANT & EQUIPMENT $105,653 $108 $108,417 ~ w -4 V 4~1

IARILL,AFU DIVISION BAIrANCE SHEET ANALYSIS DECIIMBER 31, 1988 ($000) INCREASE (DEvREASE) BALANCE FRC1i PRIOR MONTH BALAICE 12/31/88 11/30/88 12/31/87 TRADIIMAFKS Kent 26,043 (217) 28,645 Newport 7,322 (47) 7,884 True 8,582 (58) 9,282 Old Gold 4,853 (41) 5,345 Spring 109 (2) 133 Beechnut 0 0 1,102 Micronite Filter 2,687 (23) 2,965 Other 142 (1) 571 TOU~L $49,738 ($389) $55,927 Cds T ) ,~ rxC,4 5 PREPAID & DITERRED r, :r. ~ ~}'c~ Advertis:ing 89 (359) 527 Sales Promotion 20,695 (2,620) 4,443 Insurance 23,690 18,731 18,221 Taxes - Cont. I. C. 71 0 71 Other 3,221 (7,494) 14,196 M & E Parts 4,949 (9) 5,065 Loan to National Tobacco Co. 9,480 0 0 ZC)TAL $62,195 v' $8, 249 $42, 523

LORILLAFd) DIVISION BALAIJCE SHEET ANALYSIS DE1CIIyBER 31, 1988 ($000) INCREASE (DErREASE) BALAICE FRCM PRIOR MON'I'H SALAIC E LIABILITY & EQUITY 12/31/88 11/31/88 12/31/ 87 ACCOIJNTS PAYABLE & ACCRUED LIABILITIES Payable •to Affiliates - 12,732 8,467 10,842 Lvl. Closing Cost 0 (2,999) 4,225 Trade - 6,538 (3,671) 6,472 Employee Benefits & Taxes 7,299 ~ (1,589) 4,925 Travel Letter V 407 131 420 Interest 1,797- 1,797 2,252 Charge In-Transit 3,605 (924) 4,012 Advertising 5,826 658 4,960 Legal 4,0041./ 2,297 2,720 Sales Promotion Gift Star 308 ~ 0 308 n n Coupon 21,985 1,566 21,368 n n Vend ing % 849 78 7 87 n n Chain 6,533 170 5,184 n n Supermarket 14,078 4,626 12,690 n n Invoices `17,202 2,887 15,752 Vacation, Holiday & Salaries 11,613~/ (2,775) 13,667 Profit Sharing 11,300'-/ 960 12,634 Green Leaf Advances 12 (1,197) 65 Construction Maintenance 0 0 0 Market RE:search Expenses 527 ~ 30 1,058 Freight 1,600 ~ 0 1,600 Donation 571 -/ 147 310 Cigarette Sample Tax v1 608 415 755 Allowances for Increased Distribution 1,286 f 495 1,408 Hourly Pension Plan 31,976 -' 509 26,861 Other / 3,750 1,191 18,694 Meirbership & Dues 806 ~ (125) 202 ZCmAL $167,212 $13,144 $174,171

LORILLARD DIVISION BALANCE SHEE.P ANALYSIS DECIlMBER 31, 1988 ($000) INCREASE (DECREASE) BALAICE FROM PRIOR MON.PH BALAICE LIABILITY & EQUITY 12/31/88 11/30/88 12/31/87 ACCRUED TAXES ~v Federal $24,683 ($37,200) $0 Foreign 1 250 (18) 616 TO'I•AL FEDERAL & FOREIGN $24,933 ($37,218) $616 ~o Excise 9,599 (7,906) 10,897 ~ State Income 39,579 (11,403) 42,302 Other 0 0 0 YSales & Use 179 120 504 ~ ~Personal Property 444 (830) 31 Real Property 320 (31) 55 f,f TOTAL EXCISE & OTHERS $50,121 ($20,050) $53,789 TO'1'AL P.CCRUED TAXES $75,054 ($57,268) $!~4,40_5 DEFERRED CRIDIT RESERVE & OTHER LIABILITIES Deferred Federal Income Taxes 18,865- 18,865 5,916 Unfunded portion of Hourly Pension (2) 0 0 308 Other (182) (967) 0 ZOTAL $18,683 $17,898 $6,224 SHAREHOLDER'S EQUITY Paid - In Capital 211,099, 0 211,099 Surplus Acquired 139,485 0 139,485 Retained Earnings 119,983 0 22,471 Net Income 368,163, 57,593 367,511 DIVIDEND PAID 'Ib LOEWS (390,000) 0 (270,000) TOTAL SHAREHOLDER°S EQUITY $448,730 $57,593 $331,081 (2) Being .Amortized over 15 years at $486 per year