 Morgan Stanley Global Consumer Conference November 13, 2012 Morgan Stanley Global Consumer Conference Morgan Stanley Global Consumer Conference November 13, 2012 November 13, 2012 Exhibit 99.2 |
 Presenter Presenter Murray S. Kessler Murray S. Kessler Chairman, President and Chief Executive Officer 1 |
 Safe Harbor Disclaimer Safe Harbor Disclaimer You are cautioned that certain statements made in this presentation are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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”, “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 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 the control of Lorillard, Inc., and 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 various filings with the Securities and Exchange Commission (“SEC”). These filings are available from the SEC over the Internet or on hard copy, and are, in some cases, available from Lorillard, Inc. as well. Forward-looking statements speak only as of the time they are made, and Lorillard, Inc. expressly disclaims 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. This forward-looking statements disclaimer is only a brief summary of Lorillard, Inc.’s statutory forward-looking- statements disclaimer. You are urged to read that disclaimer, which is included in Lorillard Inc.’s Form 10-K and Form 10-Q filings with the SEC. 2 |
 Regulation G Compliance Regulation G Compliance You are also reminded that during this presentation, certain non-GAAP financial measures, such as Adjusted Earnings Per Share may be discussed. These measures should not be considered an alternative to net income, or any other measure of financial performance or liquidity presented in accordance with generally accepted accounting principles (GAAP). These measures are not necessarily comparable to a similarly titled measure of another company. Please refer to Appendix A for information that reconciles these measures with the most comparable GAAP measures. 3 |
 Lorillard is the #3 Tobacco Company in the U.S. Lorillard is the #3 Tobacco Company in the U.S. Source: Lorillard proprietary retail database (“EXCEL”). As of full year ended 12/31/2011. • Over $10 Billion in Retail Sales • The #2 U.S. Cigarette Brand - Newport ® • The #1 U.S. Menthol Brand - Newport ® • 40% Share of Menthol Market • Growing Discount Brand - Maverick ® 4 |
 • Acquired April 2012 • $50 Million Revenue Run-Rate • Leading Technology • Gives Lorillard a Seat at the Harm Reduction Table • Lorillard’s First Acquisition in 50 years And the Leading e-Cigarette Brand - blu eCigs ® And the Leading e-Cigarette Brand - blu eCigs ® 5 |
 Strong Historical Fundamental Performance vs. Competition Strong Historical Fundamental Performance vs. Competition 2011 Cigarette Net Sales (Ex-FET) 2011 Total Company Adjusted E.P.S. 2011 Cigarette Volume Source: Company reports. 6 6.8% 7.9% 16.2% 0% 5% 10% 15% 20% Reynolds Altria Lorillard +9.8% +0.4% -0.7% -2% 0% 2% 4% 6% 8% 10% 12% RJ Reynolds PM USA Lorillard +6.9% -4.0% -6.0% -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 RJ Reynolds PM USA Lorillard |
 While Still Growing, 2012 Performance has Slowed While Still Growing, 2012 Performance has Slowed Net Sales (Ex-FET) Earnings Per Share* 7 * Adjusted. Source: Lorillard filings. Lorillard YTD performance as of September 30 versus year ago 9.7% 2.4% 2011 2012 + + 12.9% 7.2% 2011 2012 + + |
 Two Factors Contributing to a Lower Level of Growth in 2012 Two Factors Contributing to a Lower Level of Growth in 2012 1. Delay in Our Strategic Plan Implementation 2. Increased Competitive Environment 8 |
 15.4 B Packs/Cans 15.4 B Packs/Cans Source: Lorillard proprietary retail database (“EXCEL”). 2011 U.S. Cigarette Market Segmentation 2011 U.S. Cigarette Market Segmentation Strategic Plan Targets Adjacent Growth Opportunities Strategic Plan Targets Adjacent Growth Opportunities 80% of 2011 Volume Growth Resulted from Strategic Initiatives 9 e-Cigs Altria RJR Altria RJR Altria RJR Altria RJR Altria RJR All Others Altria RJR Others 91.4% 8.0% 0.3% 0.3% Full Flavor Non-Menthol Non-Full Flavor Non-Menthol Full Flavor Menthol NFF Menthol Discount MST Snus |
 Delay Traces to FDA Inaction on Substantial Equivalence (SE) Applications Delay Traces to FDA Inaction on Substantial Equivalence (SE) Applications 10 • SE applications required after March 23, 2011 • Tobacco Control Act indicates SE applications must be submitted “at least 90 days prior to marketing a product” • Some SE applications have waited more than 18 months for authorization – none yet approved • FDA Stance is that there is no deadline for response/action • Lorillard has Submitted a Citizens Petition requesting enforcement discretion • Some light at the end of the tunnel, process is moving |
 Increased Competition Has Affected Results Increased Competition Has Affected Results Competitive Premium* Menthol Percent of Specially Marked Factory Packs – YTD as of 9/30/2012 Competitive Premium* FF Menthol +18% from Year-Ago +48% from Year-Ago * Competitive brands include Marlboro and Camel. Source: Lorillard proprietary retail database (“EXCEL”). 11 +900MM FF Menthol SMP Sticks 27% 32% |
 Despite These Factors, Lorillard is Still Gaining Market Share in All Key Cigarette Segments Despite These Factors, Lorillard is Still Gaining Market Share in All Key Cigarette Segments Share of the Cigarette Market* Share of the Menthol Market* Newport +0.1 pts, Lorillard +0.2 pts Source: Lorillard proprietary retail database (“EXCEL”). 12 Newport +0.2 pts, Lorillard +0.5 pts * Year-to-Date as of 9/30/2012 14.4% 0 Newport Other Lorillard Newport Other Lorillard 39.7% |
 On Track for 10 th Consecutive Year Of Market Share Gains On Track for 10 th Consecutive Year Of Market Share Gains Lorillard Retail Market Share of U.S. Cigarettes Lorillard Retail Market Share of U.S. Cigarettes Source: Lorillard proprietary retail database (“EXCEL”). 13 * Year-to-Date as of 9/30/2012 0% 2% 4% 6% 8% 10% 12% 14% 16% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD* Newport Total Lorillard 8.7% 9.0% 9.2% 9.6% 10.0% 10.4% 11.0% 11.8% 12.9% 14.1% 14.4% |
 And Still Delivering Business Results At or Near the Top of the U.S. Cigarette Market And Still Delivering Business Results At or Near the Top of the U.S. Cigarette Market Cigarette Net Sales (Ex-FET) Total Company Adjusted E.P.S. Source: Company reports. 14 YTD performance as of September 30 versus year ago YTD performance as of September 30 versus year ago +2.4% +0.7% -5.6% -7% -5% -3% -1% 1% 3% RJ Reynolds PM USA Lorillard 5.7% 7.8% 7.2% 0% 5% 10% Reynolds Altria Lorillard |
 • #1 e-Cigarette Brand • Q4 National Retail Roll-out • National TV and Print Advertising Campaign • Product Enhancements • Increased Manufacturing Capacity & Inventory No Delay on e-Cigs, Lorillard is Investing in blu! No Delay on e-Cigs, Lorillard is Investing in blu! 15 |
 e-Cigarettes Is an Attractive Fast-Growing Category e-Cigarettes Is an Attractive Fast-Growing Category 16 Source: UBS Research estimates, research note dated 9/23/2012 e-Cigarette U.S. Sales (millions) e-Cigarette U.S. Sales (millions) $5 $20 $50 $100 $250 $500 $0 $200 $400 $600 2007 2008 2009 2010 2011 2012 E |
 And Is a Business Worth Investing In And Is a Business Worth Investing In 17 Expect to be EPS Accretive By End of First Full Year • 94% awareness among adult smokers • 23% trial among adult smokers • 5% (or 22% of those who try) become regular users • Likelihood to buy more than doubled from 35% to 75% between 2010 and 2011 • 20% of users indicate they completely replaced cigarette smoking, 36% smoke less, and 99% are previous tobacco consumers • blu eCigs has the highest brand equity as measured by Net Promoter Score methodology (46%) * Source: Lorillard survey of 3,000 adult tobacco consumers, October 2011. blu eCigs – blu eCigs – Key Statistics Key Statistics |
 Investment is Primarily in Advertising Investment is Primarily in Advertising 18 |
 Significant National Retail Expansion Underway Significant National Retail Expansion Underway 19 Retail roll-out to 50,000 storefronts by end of 2012 Retail roll-out to 50,000 storefronts by end of 2012 |
 Increased Transparency During this Unique Period Increased Transparency During this Unique Period • Heightened promotion environment (1%-3% pricing) • No new products • Share repurchases from free cash flow • Limited contribution from blu eCigs Low-Double Digit High-Single Digit Mid-Single Digit • Normal historical pricing (4%-5%) • No new products • Share repurchases from free cash flow • Limited contribution from blu eCigs • Normal historical pricing (4%-5%) • New incremental products • Additional leverage-driven share repurchases • Meaningful contribution from blu eCigs 20 Potential Long-Term EPS Growth Rate Scenarios Potential Long-Term EPS Growth Rate Scenarios |
 Stock Split Also Provides More Comparable Benchmarks Stock Split Also Provides More Comparable Benchmarks Lorillard 3-for-1 Stock Split Announced Today Lorillard 3-for-1 Stock Split Announced Today Pre-Split Lorillard Post-Split Lorillard S&P 500 Consumer Staples Index Average (ex-LO) Share Price $116 $39 $50 Market Capitalization $15 B $15 B $38 B Shares Outstanding 130 MM 390 MM 740 MM Earnings Per Share (TTM) $8.30 $2.77 $2.52 Source: Bloomberg, as of October 31, 2012 21 |
 As Always, Lorillard is Focused on Returning Cash to Shareholders As Always, Lorillard is Focused on Returning Cash to Shareholders 173.9 130.0 100 125 150 175 200 Q2 2008 Q3 2012 $3.68 $4.00 $4.50 $5.20 $6.20 $2.50 $5.00 $7.50 Q3 2008 Q3 2009 Q3 2010 Q1 2011 Q1 2012 Cash Returned to Shareholders Since June 2008 Spin-out Cash Returned to Shareholders Since June 2008 Spin-out -25% +68% Total Shares Outstanding Annualized Dividend Per Share Source: Lorillard filings. $3.9 Billion in Repurchases 70% - 75% Payout Target 22 |
 Goal of Consistent Delivery of a Double Digit Total Shareholder Return Over the Long-Term - Unchanged Goal of Consistent Delivery of a Double Digit Total Shareholder Return Over the Long-Term - Unchanged Industry Leading Fundamentals Lean Cost Structure Focus on Returning Cash to Shareholders 23 |
 Summary Summary 1. Delivering superior results despite increased competitive environment 2. Gaining market share for the 10 th consecutive year 3. Investing in blu e-Cigs and poised to launch adjacent new products 4. Remaining focused on tight cost control 5. As always, focused on rewarding shareholders with cash returns and double-digit shareholder return 24 |
 Questions Questions Murray S. Kessler Chairman, President and Chief Executive Officer David H. Taylor Executive Vice President and Chief Financial Officer 25 |
 Appendix A Regulation G Reconciliations Appendix A Regulation G Reconciliations Year ended December 31, 2011 Gross Profit Operating Income Net Income Diluted EPS Reported (GAAP) results $2,343 $1,892 $1,116 $7.99 GAAP results include the following: Impact of RAI mark-to-market adjustments on Lorillard’s tobacco settlement expense included in cost of sales (25) (25) (15) (0.11) Adjusted (Non-GAAP) results $2,318 $1,867 $1,101 $7.88 Nine months ended September 30, 2012 Gross Profit Operating Income Net Income Diluted EPS Reported (GAAP) results $1,738 $1,356 $790 $6.03 GAAP results include the following: 1) Expenses incurred in conjunction with the acquisition of blu eCigs - 6 4 0.03 2) Impact of RJRT adjustments to its 2011-2005 operating income and restructuring charges on Lorillard’s tobacco settlement expense included in cost of sales 7 7 5 0.04 Adjusted (Non-GAAP) results $1,745 $1,369 $799 $6.10 26 Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Results (Amounts in millions, except per share data) (Unaudited) |
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