Richmond, va.: tobacco cos. make payments under state settlement

RICHMOND, Va. The nation’s top cigarette makers said Tuesday they have made about $6 billion in annual payments as part of a longstanding settlement in which some companies are paying states for smoking related health care costs.

Under the 1998 Master Settlement Agreement, participating tobacco companies agreed to make billions in payments to 46 states, Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam, the U.S. commonwealth of the Northern Mariana Islands and the District of Columbia over more than two decades. States first received full payments under the settlement in 1999. It was estimated that the companies would pay up to $246 billion over 25 years. Future annual payments also will continue in perpetuity.

The billions in annual payments come amid criticism from public health officials that states are using only a small amount of the money to fund tobacco prevention programs, making it harder to reduce death and disease caused by tobacco use. The settlement did not mandate that the money was to be used for anti tobacco and stop smoking programs.

While states on average have never spent as much the U.S. Centers for Disease Control and Prevention would like, the total has declined dramatically in recent years as states have grappled with budget deficits. Many also have raised tobacco taxes in order to increase revenue and supplement funds provided by the tobacco industry.

Philip Morris USA, the nation’s largest cigarette maker owned by Altria Group Inc., said Tuesday that it made its payment of about $3.3 billion as part of the settlement.

The Richmond based maker of Marlboro, Virginia Slims and Parliament cigarettes said the payment includes an undisclosed amount that it says it doesn’t owe that was deposited into a separate account. The company will try to get it back through negotiations or arbitration, as allowed under the settlement.

No. 2 R.J. Reynolds Tobacco Co., owned by Reynolds American Inc., based in Winston Salem, N.C., paid $1.77 billion this year. The maker of Camel, Pall Mall, Kool and other brands deposited a portion it disputes&#x2014 $421 million &#x2014 into a separate account.

No. 3 Lorillard Inc., Greensboro, N.C. based maker of Newport, True and Maverick brand cigarettes, paid $1.1 billion this year, including $93 million it disputes.

Philip Morris USA said it has paid more than $66 billion under the settlement and previous agreements since 1997. RJR has paid more than $33 billion under the agreements, and Lorillard has paid more than $16 billion.

Michael Felberbaum can be reached at

Lorillard praises new kentucky law barring electronic cigarette sales to minors — press release — digital journal

FRANKFORT, Ky., April 14, 2014 /PRNewswire/ Murray S. Kessler, Chairman, President and CEO of Lorillard, Inc. (NYSE LO), the parent company of blu eCigs, today praised legislation signed into law by Kentucky Gov. Steve Beshear, which will bar minors from buying electronic cigarettes, as an example of responsible regulation.

«Legislation that prevents the sale or distribution of electronic cigarettes to minors is the right thing to do,» said Mr. Kessler, who attended the bill signing today in Frankfort with Gov. Beshear, leading members of the Kentucky state legislature, and others. «Lorillard is pleased that Kentucky has joined the growing number of states that are adopting responsible legislation to prohibit the sale or distribution of electronic cigarettes to minors.»

Mr. Kessler singled out for their leadership Sen. Paul Hornback, the bill sponsor, and Rep. Joni L. Jenkins, a key supporter.

«The Kentucky law demonstrates that it is possible to find common ground and sell responsibly to adults,» Mr. Kessler said. «It would be a mistake to let old divisions affect the development of electronic cigarettes, a new product with the potential to play a critical role in the national harm reduction discussion. Lorillard has actively supported age of purchase legislation in the states and encourages states that have not passed similar legislation to do so.»

Responsible e cigarette manufacturers, including blu eCigs, the largest manufacturer in the United States, already prohibit the sale of e cigarettes to minors through strict age verification and third party certification procedures on websites. However, Lorillard and blu eCigs believe that it is also necessary to pass state laws prohibiting the sale of e cigarettes to minors because many state do not prohibit selling, furnishing and distributing electronic cigarettes to minors.

About Lorillard, Inc.

Lorillard, Inc. (NYSE LO), through its Lorillard Tobacco Company subsidiary, is the third largest manufacturer of cigarettes in the United States. Founded in 1760, Lorillard is the oldest continuously operating tobacco company in the U.S. Newport, Lorillard’s flagship premium cigarette brand, is the top selling menthol and second largest selling cigarette in the U.S. In addition to Newport, the Lorillard product line has four additional cigarette brand families marketed under the Kent, True, Maverick and Old Gold brand names. These five brands include 43 different product offerings which vary in price, taste, flavor, length and packaging. Lorillard, through its other subsidiaries, is also a leading global electronic cigarette company, marketed under the blu eCigs and SKYCIG brands. Newport, Kent, True, Maverick, Old Gold, blu eCigs and SKYCIG are the registered trademarks of Lorillard and its subsidiaries. Lorillard maintains its corporate headquarters and manufactures all of its traditional cigarette products in Greensboro, North Carolina.

Forward Looking Statements

Certain statements made in this press release are «forward looking statements» within the meaning of the Private Securities Litigation Reform Act of 1995, or the Reform Act. Forward looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements, and may contain the words «expect,» «intend,» «plan,» «anticipate,» «estimate,» «believe,» «may,» «will be,» «will continue,» «will likely result» and similar expressions. In addition, any statement that may be provided by management concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects and possible actions by Lorillard, Inc. are also forward looking statements as defined by the Reform Act.

Forward looking statements are based on current expectations and projections about future events and are inherently subject to a variety of risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those anticipated or projected. Information describing factors that could cause actual results to differ materially from those in forward looking statements is available in Lorillard, Inc.’s filings with the Securities and Exchange Commission (the «SEC»), including but not limited to, our Annual Report on Form 10 K and Quarterly Reports on Form 10 Q. These filings are available from the SEC over the Internet or in hard copy, and are available on our website at . Forward looking statements speak only as of the time they are made, and we expressly disclaim any obligation or undertaking to update these statements to reflect any change in expectations or beliefs or any change in events, conditions or circumstances on which any forward looking statement is based.

SOURCE Lorillard, Inc.


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