Tobacco Documents Online

Contents Financial Highlights 2 Price Range of Common Stock 2 Dividend Information 2 Letter to Shareholders 4 Operations Section: Tobacco 6 Insurance 8 Hotels 10 Theatres 12 Management's Discussion and Analysis of Summary of Operations 14 Summary of Operations 16 Lines of Business 18 Financial Statements: Consolidated Balance Sheet 20 Statement of Consolidated Earnings 22 Statement of Consolidated Shareholders' Equity 23 Statement of Consolidated Changes in Financial Position 24 IVotes to Consolidated Financial Statements 25 Auditors' Opinions 47 Directory 48 TIMN 446963 i

~OQp~aQ00~1 TIMN 446962

Total Assets billions o f dollars Shareholders' Equity millions o f dollars 6.5 650 5.2 520 3.9 390 2.6 260 1.3 130 0 0 1972 1973 1974 1975 1976 1972 1973 1974 1975 1976 Note: Figures are as of August 31, except for 1976 and 1975, which are as of December 31. Revenues millions o f dollars Net Earnings Per Share-Primary dollars 3500 7.50 2800 6.00 2100 4.50 1400 3.00 700 1.50 ' 0 0 1972 1973 1974 1975 1976 1972 1973 1974 1975 1976 Note • Figures are for fiscal year ended August 31, except for 1976 and 1975, which are for the years ended December 31. TIMN 446965 3

Financial Highlights Years Ended December 31, 1976 1975 (Amounts in thousands, except per share data) Results of operations: Revenues ................................................ Net Earnings ............................................ Earnings Per Share-Primary ..••••••••••••••••••••••.•••••. Earnings Per Share-Assuming Full Dilution .................. Financial position: Total Assets .............................................. Shareholders' Equity ....................................... Shareholders' Equity Per Share .............................. Cash Dividends Per Share .................................. Price Range of Common Stock $2,901,454 $2,701,836 91,327 66,422 7.05 5.14 5.22 4.44 6,225,475 5,799,218 584,102 493,005 45.17 38.16 1.20 1.20 Loews Corporatiori 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 1976 and 1975: 1976 1975 High Low High Low First Quarter .............................................. Second Quarter ........................................... Third Quarter ............................................ Fourth Quarter ........................................... Dividend Inf ormation 31~/8 21 215/8 141/2 31 253/4 251/4 19 291/2 243/4 261/2 19 363/4 251/8 223/4 183/4 The Company has paid quarterly cash dividends on its common stock in each year since 1967. Dividend payments of $.30 per share of common stock outstanding were paid in each calendar quarter of 1976 and 1975. 2 TIMN 446964

To Our Shareholders and Employees 1976 was another excellent year for Loews Corporation. Revenues and net earnings were the highest in the Company's history. Assets grew to a record $6,225,475,000. For the year ended December 31,1976, net earnings increased 37.5%, to a record $91,327,000 or $7.05 per share, compared to $66,422,000 or $5.14 per share, for the year before. Earnings from operations for 1976 were $66,346,000, or $5.12 per share, compared to $59,964,000 or $4.64 per share for 1975. 1976 consolidated revenues were also a record, increasing 7.4%, to $2,901,454,000 from $2,701,836,000 a year ago. Total assets grew by $426,257,000, or 7.4%, during the year 1976. At the same time, short-term debt was reduced by $98,308,000 and shareholders' equity increased by $91,097,000. These achievements represented an 18.5% return on shareholders' equity. All of these results have served to further strengthen Loews Corporation and provide for continued growth. Operationally, significant highlights of 1976 included: • Lorillard's achievement of a dramatic gain in revenues and earnings- Lorillard's performance and increased profitability reflect its successful participation as a leader in the continuing industry trend toward low tar cigarette brands. A significant portion of Lorillard's production is now concentrated in the rapidly growing low tar market. Kent Golden Lights has achieved substantial market penetration. Introduced nationally last year, it has become one of America's fastest growing cigarette brands. During 1976, more than five and a half billion Kent Golden Lights cigarettes were sold. Lorillard's True brand, reformulated with only 5 milligrams of tar, met with broad market acceptance. In the important menthol category, Newport continued its growth, ending the year 7.6% ahead of 1975. • CNA Financial's significant progress- Both CNA's financial position and organizational structure were strengthened during 1976. CNA Insurance placed heavy emphasis on development and marketing of new and improved products. CNA Insurance also initiated programs to enhance the quality of service to its nationwide agency force and its policyholders. TIMN 446966 4

General Finance Corporation, CNA Financial's consumer finance subsidiary, also performed well, reporting a 63% increase in operating earnings. • The Loews Hotel Divisiori s record results of operations for 1976- Earnings of the Loews Hotel Division increased by over 100% for the year. Two new hotels opened successfully. The Loews Dominicana in Santo Domingo, Dominican Republic; and the Loews La Cite in Montreal, Canada. The first full year of operations for Loews Monte Carlo Hotel exceeded the Division's highest expectations. • The Loews Theatre Division's profit contribution in the face of a particularly difficult period for the motion picture industry- A lack of successful motion picture product in the industry during 1976 impacted the performance of the Loews Theatre Division. The Loews Theatre Division intensified its ongoing programs designed to realize economies of scale while responding to the demand for varied forms of motion picture entertainment. We extend the appreciation of the Board and the Corporation to Simon H. Rifkind, who has resigned from the Board of Directors after 17 years of service as a Director. The Corporation will miss his untiring guidance and counsel. The Board of Directors elected Alfred P. Slaner to the Board on March 16, 1977. Mr. Slaner's extensive business experience will provide a meaningful contribution to the Board. We look forward to continued progress in 1977. On behalf of the Board of Directors, we thank our employees and our shareholders for their continued support. Sincerely, Laurence A. Tisch Chairman of the Board March 16,1977 Preston Robert Tisch President TIMN 446967 ~

Tobacco Lorillard achieved a dramatic increase in both revenues and earn- ings during 1976. All major brands closed the year with growing shares of market over the previous year. Lorillard's performance and increased profitability reflect its successful participation as a leader in the continuing industry trend toward low tar cigarette brands. Kent Golden Lights is now one of America's fastest growing brands. Introduced nationally in early 1976, Kent Golden Lights enabled Lorillard to significantly enhance its share of the cigarette market. As a result, sales of the total Kent franchise increased substantially over 1975 levels. In an effort to further penetrate the low tar market, Lorillard repositioned its True brand-reducing its tar content to 5 milli- grams. This move resulted in broad market acceptance and important sales increases. In addition, Lorillard's Newport brand registered another year of continued growth. Overall, Lorillard results substantially exceeded original operating plans and market share projections. The results also reflect price increases instituted in late 1975 and 1976 and somewhat less significant increases in leaf tobacco costs. Aside from the successful marketing of True 5's and Kent Golden Lights, Lorillard has improved nearly all aspects of its operations. Refined planning activities, improved operational control and more rapid mobilization against goals are reflective of a more efficient and competitive organization. Measurement of manpower utilization led to a programmed expan- sion of the sales force and increased frequency of retail coverage in 1976. This program will be accellerated in 1977. Lorillard's 1976 sales momentum continued into the first quarter of 1977. The primary objectives for the current year are to increase domestic cigarette sales, improve profit margins and enhance market share.

Lines of Business Loews Corporation, primarily through its subsidiaries, is engaged in insurance (property, casualty and life), the production and sale of cigarettes and other tobacco products, the operation of hotels, the exhibition of motion pictures, residential real estate development and related projects, financial services and asset management. The following table sets forth for the periods indicated the major sources from which the Company's consolidated revenues and earnings were derived before interest expense, income taxes, minority interest, extraordinary items and accounting changes. 1$ TIMN 446980

Hotels In 1976, the Loews Hotel Division enjoyed one of the most profit- able periods in its history. Today the Loews Hotel Division consists of 13 hotels and motor hotels representing an unusually diversified group of luxury, resort and business facilities. The Division operates four hotels and two motor hotels in New York City and hotels in Washington, D.C., London, Ehgland, and Quebec City and Montreal, Canada. In addi- tion, resort hotels are located in Monte Carlo, Monaco; Paradise Island, Nassau, The Bahamas; and Santo Domingo, Dominican Republic. During 1976, Loews opened two new and exciting hotels: The Loews La Cite in Montreal, Canada; and the Loews Dominicana in Santo Domingo, Dominican Republic. The Loews Monte Carlo, which opened in 1975, continued to generate extremely gratifying financial results during its first full year of operation. The Division's success can be attributed in a major part to Loews' continued reputation for providing quality service and consistent attention to the particular needs of its guests. In 1976, Loews' reservation service, L.R.I., Inc., performed well. The L.R.I. reservation network supports the Loews Hotel Division through 17 reservation offices in the United States and abroad, and also represents over 100 other hotels worldwide. A fully computer- ized reservation system, presently in the process of installation in all domestic and Canadian offices, will provide L.R.I. with vastly increased capability and growth potential. In 1977, the Loews Hotel Division will continue to actively pursue hotel opportunities in prime markets located in major cities and resort areas of the world. 10

I i Theatres Today, the Loews Theatre Division operates 114 screens in 69 facilities throughout the United States. The facilities vary in size and include suburban as well as deluxe showcase theatres. The Division exhibits feature motion pictures primarily on a first-run basis appealing to a general audience of all age groups. The Division strives to base selection of films on community preference. During 1976, a new three screen complex in Inverarry, Florida, and a new quad cinema in Harmon Cove, New Jersey, were opened. Five existing theatres were multiplexed, creating two or more screens at existing locations-two in Brooklyn and two in the Bronx, New York City, and one in New Rochelle, New York. Last year was a particularly difficult period for the entire motion picture industry, as studios released fewer quality films geared to popular tastes. While earnings did not meet the very satisfactory levels of the prior year, management's response to conditions in the industry reflected its ability to meet and capitalize on ever-changing circumstances. In 1977, the Loews Theatre Division will continue its ongoing pro- gram of multiplexing existing facilities in order to realize economies of scale while responding to the demand for more varied forms of motion picture entertainment. At the same time, the Divi- sion will continue to assess the long-term potential of existing theatres in all areas while planning for selective growth in commu- nities in which the Division is established. The Loews Theatre Division's primary objectives will be to consoli- date its operations in order to position itself to meet present trends in the industry and increase profitability through further control of operating expenses as well as programmed growth. 12