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Lorillard Tobacco Company Makes Full Annual Master Settlement Agreement Payment 

Lorillard Tobacco Company has this morning fulfilled its full annual payment obligation of $666 million under the Master Settlement Agreement (MSA) with respect to payments due the signatory states. The MSA is an agreement reached in 1998 with 46 states and the major tobacco companies, and calls for annual payments to the states, subject to certain adjustments and credits.

Lorillard paid approximately $558 million of its total payment on March 31, and completed its payment obligations today by paying an additional $108 million. This last part of the payment is the subject of a dispute between the company and the states under a provision of the MSA that provides a credit against the company's annual payment for market share losses to tobacco manufacturers not bound by the agreement. Lorillard fulfilled its contractual obligations by paying the amount in dispute into an account established under the MSA for such purpose.

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