LORILLARD, INC. REPORTS FIRST QUARTER RESULTS

Contact: Robert Bannon
Director, Investor Relations
(336) 335-7665
LORILLARD, INC. REPORTS FIRST QUARTER RESULTS
GREENSBORO, NC, April 24, 2014 – Lorillard, Inc. (NYSE: LO) announced today its results for the quarter ended
March 31, 2014.
First Quarter Highlights
 Reported (GAAP) diluted earnings per share decreased $0.12 per share compared to the first quarter of 2013
primarily due to lower non-recurring benefits related to certain MSA payment disputes.
 Adjusted (Non-GAAP) diluted earnings per share increased 4.5% over last year to $0.69.
 Cigarettes adjusted operating income (Non-GAAP) increased 4.9% over last year behind a 100 basis point increase
in adjusted gross margin.
 Total Lorillard retail market share of cigarettes exceeded 15% for the first time ever, increasing 0.3 share points
from last year to 15.2%.
 Newport retail market share reached 13.0% for the first time ever, increasing 0.4 share points versus last year.
 Results reflect continuing investments in electronic cigarettes, both domestically and internationally.
 blu eCigs remains the clear U.S. electronic cigarette category leader, achieving a 45% dollar market share, up 10
share points versus last year.
 blu eCigs began its expansion efforts in the United Kingdom.
 Lorillard repurchased 3.2 million shares during the quarter at a cost of $158 million.
Lorillard Financial Results Summary*
(Amounts in Millions, Except Per Share Data)
Three Months
Ended March 31,
2014 2013 % Chg
Net sales $1,592 $1,577 1.0%
Operating income
Reported (GAAP) $472 $561 (15.9)%
Adjusted (Non-GAAP) 447 438 2.1%
Net income
Reported (GAAP) $271 $328 (17.4)%
Adjusted (Non-GAAP) 252 251 0.4%
Diluted earnings per share
Reported (GAAP) $0.74 $0.86 (14.0)%
Adjusted (Non-GAAP) 0.69 $0.66 4.5%
*See Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Results table included with this release.
Page 2 of 11
Consolidated Results
Net sales increased by $15 million, or 1.0%, to $1.592 billion in the first quarter of 2014 due to a 1.4% increase in net sales
of cigarettes.
Reported diluted earnings per share decreased $0.12, or 14.0%, to $0.74 in the first quarter of 2014 compared to the first
quarter of 2013 due primarily to the $0.23 per share favorable impact of the settlement to resolve certain MSA payment
adjustment disputes on tobacco settlement expense in the first quarter of 2013 which did not recur in the first quarter of
2014. In addition, reported diluted earnings per share for the first quarter of 2014 include a favorable impact of $0.05 per
share on tobacco settlement expense and $0.01 per share on investment income related to the 2003 non-participating
manufacturer arbitration award.
Adjusted diluted earnings per share increased $0.03, or 4.5%, to $0.69 in the first quarter of 2014, due primarily to the
strong operating performance in the Cigarettes segment and the impact of share repurchases. As detailed in the
reconciliation table, adjusted diluted earnings per share exclude the favorable impacts of the settlement to resolve certain
MSA payment adjustment disputes in the first quarter of 2013 and the 2003 non-participating manufacturer arbitration
award in the first quarter of 2014.
“Lorillard delivered strong underlying fundamental performance and record high cigarette market share results to start the
year, despite some unusual events that occurred in the quarter,” stated Murray S. Kessler, Lorillard Chairman, President and
CEO. “Reduced promotions, a tax increase in Puerto Rico and severe weather affecting our core markets had a
disproportionate impact on Lorillard cigarette volume during the quarter. The company also continued to incrementally
invest in our blu electronic cigarette business. Despite these headwinds and incremental investments, very good pricing
realization and continued tight cost controls in our Cigarettes Segment allowed us to deliver robust adjusted Cigarette
operating income growth of almost 5 percent in the quarter.”
Mr. Kessler concluded, “The ability to grow profits and market share in a quarter with some unusual challenges is yet
another demonstration of why we remain confident in our ability to deliver a double-digit shareholder return as measured
by EPS growth and the dividend yield over the long-term.”
The following is a discussion of first quarter 2014 performance of Lorillard’s two operating segments, Cigarettes and
Electronic Cigarettes.
Cigarettes Segment Results*
Three Months
Ended March 31,
2014 2013 % Chg
Net sales $1,541 $1,520 1.4%
Gross profit
Reported (GAAP) $603 $692 (12.9)%
Adjusted (Non-GAAP) 572 549 4.2%
Selling, general and
administrative
Reported (GAAP) $120 $138 (13.0)%
Adjusted (Non-GAAP) 120 118 1.7%
Operating income
Reported (GAAP) $483 $554 (12.8)%
Adjusted (Non-GAAP) 452 431 4.9%
*See Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) results table included with this release.
First Quarter 2014 Page 3 of 11
Cigarette net sales increased $21 million, or 1.4%, to $1.541 billion in the first quarter of 2014, compared to $1.520 billion
in the first quarter of 2013. The increase in cigarette net sales resulted primarily from higher average net cigarette selling
prices, partially offset by lower cigarette unit sales volume.
Total Lorillard wholesale cigarette unit volume, which includes Puerto Rico and U.S. Possessions, decreased 2.9% for the
first quarter of 2014 compared to the corresponding period of 2013. Domestic wholesale cigarette unit volume, which
excludes Puerto Rico and U.S. Possessions, decreased 2.3% for the first quarter of 2014 compared to the corresponding
period of 2013. The Company estimates total cigarette industry domestic wholesale shipments decreased 2.7% for the first
quarter of 2014 compared to the first quarter of 2013. Changes in wholesale inventory patterns during the quarter had a
negative impact on first quarter wholesale shipments for Lorillard in contrast to a positive impact for the balance of the
industry. Adjusting for the impact of changes in wholesale inventory patterns, Lorillard domestic wholesale shipments
declined approximately 1.8% in the first quarter of 2014 versus year ago, significantly outperforming adjusted total
cigarette industry domestic wholesale shipments which decreased an estimated 4% during the quarter compared to first
quarter of 2013.
Total wholesale unit volume for Newport, the Company’s flagship brand, decreased 2.2% for the first quarter of 2014
compared to the corresponding period of 2013. Domestic wholesale cigarette unit volume for Newport, which excludes
Puerto Rico and U.S. Possessions, decreased 1.5% for the quarter versus year ago. Adjusting for inventory fluctuations,
Newport domestic volume declined approximately 0.9% versus year ago. Domestic wholesale shipments for Maverick, the
Company’s leading discount brand, decreased 6.0% for the first quarter of 2014 compared to the first quarter of 2013.
Based on Lorillard’s proprietary retail shipment database administered by Management Science Associates, Inc., which
measures shipments from wholesale to retail and is unaffected by wholesale inventory changes, Lorillard’s first quarter
2014 domestic retail market share increased 0.3 share points versus year ago to 15.2%, its highest level ever and first full
quarter over 15%. Newport’s domestic retail market share reached 13.0%, an increase of 0.4 share points compared to the
first quarter of 2013. Lorillard’s domestic retail share of the menthol market was flat versus the first quarter of 2013 at
40.7%. Gains in Newport’s domestic retail market share were primarily attributable to the continued strengthening of
Newport Menthol in its core geographies, continued success in expansion markets and the volume impact resulting from the
introductions of Newport Smooth Select and Newport Non-Menthol Gold in 2013.
Reported gross profit was $603 million, or 39.1% of net sales, in the first quarter of 2014 and $692 million, or 45.5% of net
sales, in the first quarter of 2013. Adjusted gross profit was $572 million, or 37.1% of net sales, in the first quarter of 2014
and $549 million, or 36.1% of net sales, in the first quarter of 2013. As detailed in the reconciliation table, adjusted gross
profit for the first quarter of 2014 excludes the $31 million favorable impact on Lorillard’s tobacco settlement expense of
the 2003 non-participating manufacturer award as a result of the September 2013 arbitration panel determination that six
states failed to diligently enforce escrow provisions applicable to non-participating manufacturers. Adjusted gross profit
for the first quarter of 2013 excludes the $143 million favorable impact on Lorillard’s tobacco settlement expense of the
reduction in Lorillard’s April 15, 2013 MSA payment as a result of the settlement to resolve certain MSA payment
adjustment disputes approved by the arbitration panel in March 2013.
Reported selling, general and administrative costs decreased $18 million to $120 million in the first quarter of 2014
compared to the first quarter of 2013. Adjusted selling, general and administrative costs remained relatively flat at $120
million in the first quarter of 2014 compared to $118 million in the first quarter of 2013. As detailed in the reconciliation
table, first quarter 2013 adjusted selling, general and administrative costs exclude $20 million in estimated costs to comply
with the U.S. Government Case judgment.
Reported operating income for the Cigarettes segment decreased $71 million, or 12.8%, to $483 million in the first quarter
of 2014 from $554 million in the first quarter of 2013. Adjusted operating income for the Cigarettes segment increased $21
million, or 4.9%, to $452 million in the first quarter of 2014 from $431 million in the first quarter of 2013.
Electronic Cigarettes Segment Results*

Three Months
Ended March 31,**
2014 2013 % Chg
Net sales $51 $57 (10.5)% Page 4 of 11
Gross profit
Reported (GAAP) $16 $21 (23.8)%
Adjusted (Non-GAAP) 16 21 (23.8)%
Selling, general and administrative
Reported (GAAP) $27 $14 92.9%
Adjusted (Non-GAAP) 21 14 50.0%
Operating income (loss)
Reported (GAAP) $(11) $7 n/m
Adjusted (Non-GAAP) (5) 7 n/m
*See Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) results table included with this
release.
**Results for the quarter ended March 31, 2014 provided above are not comparable to the results for the quarter
ended March 31, 2013 as Lorillard purchased SKYCIG on October 1, 2013.
First Quarter 2014
Net sales for the Electronic Cigarettes segment were $51 million for the first quarter ended March 31, 2014, compared to
$57 million for the first quarter ended March 31, 2013, respectively. The decline in sales of blu eCigs in the U.S. versus
year ago reflects an increase in unit volume offset by the estimated $7 million mix impact of a lower price on rechargeable
kits that were introduced in the third quarter of 2013. The year ago quarter was also favorably impacted by significant
pipeline inventory as the brand was in its initial phase of national expansion. As of March 31, 2014, blu eCigs’ products
were carried in approximately 149,000 retail outlets in the U.S. SKYCIG, based in the U.K., was acquired on October 1,
2013 and generated $2 million in net sales during the first quarter.
Lorillard will be reporting Nielsen ScanTrack Database dollar share results for blu and the e-cig category going forward.
According to Nielsen, blu’s all-outlet dollar market share of electronic cigarettes increased 10 share points to 45% for the
13 weeks ending March 15, 2014 versus the year ago 13 week period. blu’s robust share growth at retail is attributed to
strong consumer pull through from brand equity building activities and increased distribution.
Gross profit was $16 million, or 31.4% of net sales, for the first quarter ended March 31, 2014. This compares to gross
profit of $21 million, or 36.8% of net sales, for the first quarter ended March 31, 2013. Gross profit and gross profit margin
for the first quarter ended March 31, 2014 were negatively impacted by the mix impact of the new, lower priced
rechargeable kits as well as higher retail distribution costs.
Reported selling, general and administrative costs were $27 million for the first quarter ended March 31, 2014, compared to
$14 million for the first quarter ended March 31, 2013. Adjusted selling, general and administrative costs were $21 million
for the first quarter ended March 31, 2014, compared to $14 million for the first quarter ended March 31, 2013 and reflect
incremental investment to build the blu brand in the U.S. as well as to prepare for the launch of blu in the U.K. As detailed
in the reconciliation table, first quarter 2014 adjusted selling, general and administrative costs exclude amortization of the
SKYCIG brand totaling $6 million. The fair value ascribed to the SKYCIG brand in connection with the acquisition of $34
million is being amortized over an estimated life of 18 months beginning October 1, 2013, after which amortization charges
related to the brand will cease.
Reported operating income/(loss) for the Electronic Cigarettes segment was $(11) million for the first quarter of 2014,
compared to $7 million for the first quarter of 2013. Adjusted operating income/(loss) for the Electronic Cigarettes segment
was $(5) million for the first quarter of 2014, compared to $7 million for the first quarter of 2013. SKYCIG’s reported and
adjusted operating loss was $9 million and $3 million, respectively, for the quarter.
Additional News
On March 10, 2014, Lorillard, Inc. increased its quarterly dividend on its common stock by 12% to $0.615 per share, which
was paid to shareholders of record as of February 28, 2014.
In April 2014, the Company paid $1.065 billion under the State Settlement Agreements, primarily based on 2013 volume. Page 5 of 11
Included in the payment was $93 million deposited in an interest-bearing escrow account in accordance with procedures
established in the MSA pending resolution of a claim by the Company and the other Original Participating Manufacturers
that they are entitled to reduce their MSA payments based on a loss of market share to non-participating manufacturers. In
addition, in April 2014, the Company directed the release of $62 million from the disputed payments account to Lorillard
associated with the 2003 arbitration award.
During the first quarter of 2014, the Company repurchased approximately 3.2 million shares at a cost of $158 million under
the amended $1 billion share repurchase program announced in March 2013 and amended in May 2013. As of March 31,
2014, the maximum dollar value of shares that could yet be purchased under the $1 billion share repurchase program was
$156 million.
Conference Call
A conference call to discuss first quarter 2014 results of Lorillard, Inc. has been scheduled for 1:00 p.m. Eastern Time on
April 24, 2014. A live broadcast of the call will be available online at the Lorillard, Inc. website (www.lorillard.com).
Please go to the website at least ten minutes before the event begins to register and to download and install any necessary
audio software.
Those interested in participating in the question and answer session of the conference call should dial (888) 239-6824
(domestic) or (706) 902-3787 (international). The passcode for this event is 28927750.
An online replay will be available at the Company’s website following the call. If you wish to listen to the replay of this
conference call, please visit Lorillard’s website at www.lorillard.com or dial (855) 859-2056 (domestic) or (404) 537-3406
(international) and enter passcode 28927750. The conference call will be available for replay in its entirety through May 1,
2014.
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 Tobacco 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, Inc., 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 (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
www.lorillard.com. 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.
Page 6 of 11
Lorillard, Inc. and Subsidiaries
Consolidated Condensed Statements of Income
Three Months
Ended March 31,
2014 2013
(Unaudited)
(Amounts in millions, except per share data)

Net sales (a) $1,592 $1,577
Cost of sales (a) (b) 973 864
Gross profit 619 713
Selling, general and administrative 147 152
Operating income 472 561
Investment income 8 1
Interest expense (45) (41)
Income before income taxes 435 521
Income taxes 164 193
Net income $ 271 $ 328

Earnings per share:
Basic $0.75 $0.86
Diluted $0.74 $0.86
Weighted average number of shares outstanding:
Basic 362.12 378.62
Diluted 362.71 379.42
Segment data:
Net sales
Cigarettes (a) $1,541 $1,520
Electronic Cigarettes 51 57
$1,592 $1,577

Operating income (loss):
Cigarettes $ 483 $ 554
Electronic Cigarettes (11) 7
$ 472 $ 561
Supplemental information:
(a) Includes excise taxes. $445 $455
(b) Cost of sales includes:
 Charges to accrue obligations under the
State Settlement Agreements 286 176

 Charges to accrue obligations under the
Federal Assessment for Tobacco Growers 28 27

 Charges to accrue Food and Drug
Administration user fees 19 17 Page 7 of 11
Lorillard, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets

March 31,
2014
December 31,
2013
(Unaudited)

(In millions, except share and per share data)
Assets:
Cash and cash equivalents $ 1,535 $ 1,454
Short-term investments 297 157
Accounts receivable, less allowances of $4 and $3 26 19
Other receivables 33 29
Inventories 552 499
Deferred income taxes 546 555
Other current assets 27 23
Total current assets 3,016 2,736
Plant and equipment, net 311 316
Long-term investments 191 93
Goodwill 102 102
Intangible assets 81 87
Deferred income taxes 56 51
Other assets 155 151
Total assets $ 3,912 $ 3,536

Liabilities and Shareholders’ Deficit:
Accounts and drafts payable $ 29 $ 42
Accrued liabilities 448 377
Settlement costs 1,508 1,224
Income taxes 134 8
Total current liabilities 2,119 1,651
Long-term debt 3,561 3,560
Postretirement pension, medical and life insurance benefits 306 305
Other liabilities 87 84
Total liabilities 6,073 5,600
Commitments and Contingent Liabilities
Shareholders’ Deficit:
Preferred stock, $0.01 par value, authorized 10 million shares  
Common stock:
Authorized – 600 million shares; par value – $0.01 per share
Issued – 383 million and 382 million shares (outstanding
363 million and 365 million shares) 4 4
Additional paid-in capital 267 256
Accumulated deficit (1,391) (1,438)
Accumulated other comprehensive loss (127) (130)
Treasury stock at cost, 20 million and 17 million shares (914) (756)
Total shareholders’ deficit (2,161) (2,064)
Total liabilities and shareholders’ deficit $ 3,912 $ 3,536
Page 8 of 11
Lorillard, Inc. and Subsidiaries
Wholesale Cigarette Shipments
Information regarding unit volume shipped by Lorillard Tobacco Company to its direct buying customers by brand follows:

Three Months
Ended March 31,
(All units in thousands) 2014 2013 % Chg

Full Price Brands

Newport 7,550,721 7,663,764 -1.5
Kent 31,554 36,978 -14.7
True 34,662 38,712 -10.5

Total Full Price Brands 7,616,937 7,739,454 -1.6
Price/Value Brands
Old Gold 90,054 101,532 -11.3
Maverick 1,131,162 1,203,329 -6.0

Total Price/Value Brands 1,221,216 1,304,861 -6.4
Total Domestic Cigarettes 8,838,153 9,044,315 -2.3
Total Puerto Rico and U.S. Possessions 117,972 178,356 -33.9
Grand Total Cigarettes 8,956,125 9,222,671 -2.9
Notes:

1. This information is not adjusted for returns or the impact of wholesale trade inventory fluctuations.
2. Domestic unit volume includes units sold as well as promotional units and excludes volumes for
Puerto Rico and U.S. Possessions.
3. Unit volume for a quarter is not necessarily indicative of unit volume for any subsequent period.
4. Unit volume is not necessarily indicative of the level of revenues for any period. Page 9 of 11
Lorillard, Inc. and Subsidiaries
Selected Domestic Retail Cigarette Unit Market Share Data (1)
Three Months
Ended March 31,

2014 2013 Pt Chg

Lorillard 15.2% 14.9% 0.3
Newport 13.0% 12.6% 0.4
Total Industry Menthol 31.8% 31.2% 0.6
Lorillard Share of Menthol Segment 40.7% 40.7% 0.0
Newport Share of Menthol Segment 37.5% 37.5% 0.0
(1) Based on Lorillard’s proprietary retail shipment database, administered by Management Science Associates, Inc.
blu Domestic Retail Electronic Cigarette Dollar Market Share Data (2)
13 Week Reporting Periods Ended:

March 23, 2013 35.3%
June 22, 2013 42.0%
September 21, 2013 45.3%
December 21, 2013 45.8%
March 15, 2014 45.0%
(2) Based on Nielsen, ScanTrack Database – All Outlets Combined. Page 10 of 11
Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Results
(Amounts in millions, except per share data)
The reconciliation provided below reconciles the non-GAAP financial measures adjusted gross profit, adjusted operating
income, adjusted net income and adjusted diluted earnings per share with the most directly comparable GAAP financial
measures, reported gross profit, reported operating income, reported net income and reported diluted earnings per share
available to Lorillard common stockholders, for the three months ended March 31, 2014 and 2013. Lorillard management
uses adjusted (non-GAAP) measurements to set performance goals and to measure the performance of the overall company,
and believes that investors’ understanding of the underlying performance of the company’s continuing operations is
enhanced through the disclosure of these metrics. Adjusted (non-GAAP) results are not, and should not be viewed as,
substitutes for reported (GAAP) results.
The adjustments to reported results summarized below remove the following items: (1) the favorable impact of the 2003
non-participating manufacturer award as a result of the September 2013 arbitration panel determination that six states failed
to diligently enforce escrow provisions applicable to non-participating manufacturers included as an offset to tobacco
settlement expense in cost of sales; (2) amortization of the SKYCIG brand included in selling, general and administrative
expenses; (3) the favorable impact of the reduction in Lorillard’s April 15, 2013 MSA payment as a result of the settlement
to resolve certain MSA payment adjustment disputes approved by the arbitration panel in March 2013 included as an offset
to tobacco settlement expense in cost of sales; and (4) estimated costs to comply with the U.S. Government Case judgment
included in selling, general and administrative expenses.
Three months ended March 31, 2014
Gross Operating Net Diluted
Profit Income Income EPS
Reported (GAAP) results $619 $472 $271 $0.74

GAAP results include the following:
(1) 2003 non-participating manufacturer
arbitration award (31) (31) (24) (0.06)

(2) Amortization of SKYCIG brand
– 6 5 0.01

Adjusted (Non-GAAP) results $588 $447 $252 $0.69
Three months ended March 31, 2013
Gross Operating Net Diluted
Profit Income Income EPS
Reported (GAAP) results $713 $561 $328 $0.86
GAAP results include the following:
(3) Settlement to resolve certain MSA
payment adjustment disputes (143) (143) (89) (0.23)

(4) Estimated costs to comply with the U.S.
Government Case judgment – 20 12 0.03
Adjusted (Non-GAAP) results $570 $438 $251 $0.66
Page 11 of 11
Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Operating Income by Segment
(Amounts in millions)
Lorillard has two reportable segments, Cigarettes and Electronic Cigarettes.
The Cigarettes segment consists principally of the operations of Lorillard Tobacco Company and related entities. Lorillard
Tobacco is the third largest manufacturer of cigarettes in the United States. Founded in 1760, Lorillard is the oldest
continuously operating tobacco company in the United States. Newport, Lorillard’s flagship menthol-flavored premium
cigarette brand, is the top selling menthol and second largest selling cigarette overall in the United States based on gross
units sold during the quarters ended March 31, 2014 and 2013. In addition to the Newport brand, the Lorillard product line
has four additional brand families marketed under the Kent, True, Maverick and Old Gold brand names. These five
cigarette brands include 43 different product offerings which vary in price, taste, flavor, length and packaging.
The Electronic Cigarettes segment consists of the operations of LOEC (d/b/a blu eCigs), Cygnet Trading (t/a SKYCIG) and
related entities. blu eCigs is a leading electronic cigarette company in the United States. Lorillard acquired the blu eCigs
brand and other assets used in the manufacture, distribution, development, research, marketing, advertising and sale of
electronic cigarettes on April 24, 2012. Lorillard acquired all of the assets and operations of SKYCIG, a United Kingdom
based electronic cigarette business, on October 1, 2013.
Three months ended March 31, 2014
Electronic
Cigarettes Cigarettes Total
Reported (GAAP) operating income (loss) $483 $ (11) $472

GAAP results include the following:
(1) 2003 non-participating manufacturer
arbitration award (31) – (31)

(2) Amortization of SKYCIG brand
– 6 6

Adjusted (Non-GAAP) operating income (loss) $452 $ (5) $447
Three months ended March 31, 2013
Electronic
Cigarettes Cigarettes Total
Reported (GAAP) operating income $554 $7 $561

GAAP results include the following:
(3) Settlement to resolve certain MSA
payment adjustment disputes (143) – (143)
(4) Estimated costs to comply with the U.S.
Government Case judgment 20 – 20

Adjusted (Non-GAAP) operating income $431 $7 $438