['Notes', 'toConsolidated', 'Financial', 'Statements', 'SUMMARY', 'OF', 'SIGNIFICANT', 'ACCOUNTING', 'POLICIES', 'Principles', 'of', 'consolidation—The', 'consolidated', 'financial', 'statements', 'include', 'all', 'subsidiaries', 'and', 'the', 'assets,', 'liabil-', 'ities:', 'and', 'results', 'of', 'operations', '(including', 'provision', 'for.', 'co-venturer’s', 'participation', 'in', 'profits', 'and', 'losses)', 'ofiunin-', 'corporated', 'residential', 'development', 'joint', 'ventures', 'for,', 'which:', 'the', 'Company', 'has', 'provided', 'or', 'guaranteed', 'prin-', 'cipaily', 'all', 'the', 'required', 'working', 'capital.', 'Certain', 'amounts', 'applicable', 'to:1972', 'have', 'been', 'reclassi-', "fied:'to", 'conform', 'to', 'the', 'classifications', 'followed', 'in', '1973:', 'Inventories—inventories', 'are', 'valued', 'at', 'the', 'lower', 'of', 'aver-', 'age', 'cost', 'or,', 'market.', 'The', 'entire', 'inventory.', 'of', 'leaf', 'tobacco', 'has', 'been', 'classified', 'as', 'a', 'current', 'asset', 'in', 'accordance', 'with', 'generally', 'recognized', 'trade', 'practice', 'aithough,', 'due', 'to', 'the', 'duration', 'of', 'the', 'aging', 'processes,', 'the', 'tobacco', 'on', 'handi', 'includes', 'requirements', 'beyond', 'the', 'period', 'ofione', 'year.', 'tt', 'is', 'not', 'practicable', 'to', 'determine', 'the', 'amount', 'not', 'realizable', 'within', 'one', 'year.', 'Real', 'estate', 'held', 'for', 'development', 'and', 'sale—Rea!', 'estate', 'held', 'for', 'development', 'and', 'sale', 'is', 'valued', 'at', 'the', 'lower', 'of', 'cost', 'or', 'estimated', 'realizable', 'value.', 'Interest,', 'property', 'taxes', "and'", 'other', 'expenses', 'incurred', 'in', 'connection', 'with', 'the', 'Holding', 'and', 'development', 'of', 'real', 'estate', 'are', 'capital-', 'ized', 'until', 'the', 'projects', 'are', 'sold.', 'Reallestate', 'held', 'for', 'development', 'and', 'sale', 'and', 'other', 'assets', 'held', 'as', 'investments', 'in', 'the', 'amount', 'of', '$65,101,000:', 'at', 'Augusti31,', '1973', 'have', 'been', 'pledged', 'to', 'secure', 'certain', 'notes', 'payable', 'and', 'longterm', 'debt.', 'Investment', 'in', 'securities—The', 'cost', 'of', 'securities.sold', 'is', 'determined', 'on', 'the', 'identified', 'certificate', 'or', 'first-in,', 'first-', 'out', 'method.', 'The', 'Company', 'has', 'invested', 'in', 'securities.in', 'order', 'to', 'secure', 'a', 'return', 'on', 'funds', 'it', 'is', 'holding', 'for', 'develop-', 'ment', 'and', 'expansion', 'opportunities.', 'The:', 'Company,', 'regu-', 'larly', 'and', 'actively', 'seeks', 'development', 'and', 'expansion', 'Opportunities', 'which', 'may', 'require', 'application', 'of', 'such', 'funds.', 'Ih', 'view', 'ofithe', 'uncertainty:as', 'to', 'when', 'such', 'oppor-', 'tunities', 'may.', 'arise,', 'the', 'investment', 'in', 'securities', 'has', 'been', 'classified', 'as', 'a', 'non-current', 'asset.', 'Property,', 'plant', 'and', 'equipment—Depreciation', 'is:', 'com-', 'puted', 'principaily', 'on', 'the', 'straight-line', 'method', 'over', 'the', 'estimated', 'useful', 'lives', 'of', 'the', 'various', 'classes', 'ofi', 'proper-', 'ties.', "LeaseHolds.and'improvements", 'are', 'amortized', 'over', 'the:', 'related', 'leases', '(including', 'optional', 'renewal', 'periods', 'where', 'appropriate)', 'or', 'the', 'estimated', 'lives:', 'of.', 'improve-', 'ments,', 'if', 'less', 'thanithe', 'lease', 'term.', 'Cost', 'in', 'excess', 'of', 'net', 'assets', 'acquired—Lorillard', 'Corpo-', 'ration', '(Lorillard)', 'was', 'acquired', 'in\\November', '1968,', 'liqui-', 'dated', 'and.', 'merged', 'into', "Loew's", 'Theatres,', 'inc.', '(a', 'wholly-', 'owned', 'subsidiary', 'ofithe', 'Company):in', 'July', '1969', 'andicon-', 'tinued', 'operations', 'as', 'a', 'division', 'of', 'such', 'subsidiary,', 'The', 'cost', 'in.', 'excess', 'ofinet', 'assets', 'acquired’', 'related', 'to', 'this.', 'acquisition,', 'amounting', 'to', '$128,944,000', 'as.', 'adjusted', 'to', 'date', "and'‘before", 'deduction.', 'of', 'the', 'estimated', 'tax', 'benefits.', 'referred', 'to', 'below,', 'has', 'been', 'attributed', 'to', 'other', 'intangi-', 'bles', 'which,', 'in', 'the', 'opinion', 'of', 'Management)', 'have', 'continu-', 'ing', 'value.', 'Itis', 'the', "Company's", 'policy', 'not', 'to', 'amortize', 'such', 'excess', 'as', 'fong:as', 'there', 'is', 'no', 'diminution', 'in.value', 'of', 'the', 'investment.', 'ery', 'As', 'a', 'resultiof', 'the', 'aforementioned', 'liquidation,', 'the', 'Com-', 'pany', 'will', 'realize', 'certain', 'income', 'tax', 'benefits', 'which', 'will', 'be', 'consideredias', 'a', 'partial', 'recovery', 'of', 'the', 'costiin', 'excess', 'of', 'net', 'assets', 'acquired.', 'The', 'estimated', 'tax', 'benefits', 'real-', 'ized:', '(which', 'are', 'presently', 'under', 'examination', 'by', 'the', 'Internall', 'Revenue', 'Service):', 'amounted', 'to:', '$61,829,000', 'at', 'August', '31,', '1973.', 'Excise', 'taxes', '—', 'Excise', 'taxes', 'of', '$197,054,000', 'and:', '$194,752,000', 'paid', 'on:sales', 'of', 'manutacturedipraducts', 'in', '1973', "and'", '1972,', 'respectively,', 'are', 'included', 'in', '“sales', 'of', 'manufactured', 'products', 'and', 'revenues', 'of', 'theatre', 'and', 'hotel', 'operations’', 'and', '‘‘cost', 'of', 'sales', 'and', 'operating', 'costs”', 'in', 'the', 'accompanying', 'statementiof', 'consolidated', 'earnings', 'and', 'earnings', 'retained', 'in', 'the', 'business.', '2', 'EXTRAORDINARY', 'ITEMS', '.', 'Extraordinary', 'itemsin', '1972', 'consisted', 'of', 'the', 'following:', 'Gain', 'on', 'sate', 'of', 'forty-eight', 'theatres', 'locatediprinc:pally', '.', ' ', ' ', 'in', 'California', 'and', 'Florida:.', '2.0.0...', 'ce', 'ee', 'eee', '$8,049,000', 'Loss', 'on', 'sale', 'ofiinvestment', 'in', 'tormer', 'associated', 'com-', 'pany', '(see', 'Note', '4).......', '00.00', 'c', 'ee', 'eee', '(2,650,000):', '5,399,000', 'Less', 'applicable:', 'income', 'taxes,', 'including', 'deferred', 'of', '$2,328,000', '2,470,000', 'LS)', '$2,929,000', 'The', 'sales', 'and', 'operating', 'revenues', 'and', 'net', 'earnings', 'applicable', 'to', 'the', 'theatres', 'sold', 'were.', 'not', 'significant', 'in', 'relation:', 'to', 'consolidated', 'sales', 'and:', 'operating', 'revenues', 'and', "net'", 'earnings', 'of', 'continuing', 'operations:', 'LEASING', 'OF', 'CERTAIN', 'HOTELS', 'On', 'August', '1,', '1972', 'the', 'Company', 'leasedito', 'subsidi-', 'aries', 'of', 'American', 'Airlines,', 'Inc..', 'four', "of'its.hoteis", 'under', 'long-term', 'lease', 'agreements', 'expiring', 'from', '1995', 'to:2002,', 'While', 'sales:', 'of:', 'manufactured', 'products', '(principally', 'tobacco)', 'increased', 'ini1973,', 'the', 'total', 'operating', 'revenues', 'and', 'costs', 'of', 'the', 'Company', 'declined,', 'in', 'part,', 'due', 'to', 'this', 'transaction.', 'A', 'INVESTMENTS', 'The', 'quoted', 'market', 'value', 'of', 'the', 'investment', 'in', 'securi-', 'ties', 'aggregated', 'approximately.', '$412,300,000', 'and', '$443,400,000', 'at', 'August', '31,', '1973.and', '1972,,', 'respectively.', 'Securities', 'withia', 'quoted', 'market’', 'value', 'of', 'approximately.', '$14,600,000', 'are', 'pledged', 'as', 'collateral', 'in', 'connection', 'with', 'the', 'retirement', 'plan', 'covering', 'production', 'employees', 'and', 'to', 'secure', 'other', 'liabilities.', 'tn', 'July.', '1972,', 'the.', 'Company.', 'sold!', 'substantially', 'all', 'of:', 'its', 'investment', 'in', 'its', 'former', 'associated', 'company,', 'Franklin', 'New', 'York', 'Corporation', '(Franklin),', 'which', 'investment', 'had', 'been', 'accounted', 'for', 'under', 'the', 'equity', 'method', 'of', 'G3', 'accounting.', 'The', 'Company', 'received', '$1,751,000', 'of', 'cash', 'dividends', 'from', 'Franklin:from', 'September', '1,', '1971', 'through', 'the', 'date', 'of', 'sale.', 'investments', 'in', 'and', 'advances', 'to', 'unconsolidated', 'com-', 'panies', 'include', 'the', "Company's", 'investments', 'in', '50%', 'owned', 'companies', 'which', 'are', 'stated', 'at', 'cost,', 'adjusted', 'to', 'give', 'effect', 'to:', 'subsequent', 'earnings', 'and', 'dividends', 'received,', 'less,', "in'1972,", 'allowance', 'for', 'losses', 'of', '$1,958,000.', '-—', 'a', '>', '|', '©', '|', 'a', 'YQ']