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Payment Due

NEW YORK -- Philip Morris Cos. Inc., R.J. Reynolds Tobacco Holdings Inc. and other U.S. cigarette makers are due to make a $5-billion payment today under a 1998 settlement with the states.

The payment, with about half the money coming from Philip Morris, is the latest installment under the 25-year agreement. Under the accord, the tobacco industry agreed to curb advertising and pay $206 billion to 46 states. The companies settled with four states separately for an additional $40 billion, Bloomberg News reported.

Following months of negotiations, the tobacco companies agreed in November 1998 to settle state lawsuits seeking reimbursement for treatment of sick smokers. The companies agreed to tear down billboards, end the use of cigarette logos on merchandise, fund about $1.5 billion in anti-tobacco ads and pay for a foundation dedicated to reducing teen smoking.

The states in turn gave up the right to sue the industry over its past behavior, the industry's biggest legal threat. Mississippi Attorney General Mike Moore filed the first state lawsuit in May 1994. That lawsuit was effectively copied by the other states, driving the tobacco industry to negotiate a settlement, the report said.

Including today's payment, Philip Morris, the number-one tobacco company, said it will have paid more than $11.5 billion. Other companies in the settlement include Loews Corp.'s Lorillard Inc. and British American Tobacco plc's Brown & Williamson Tobacco Corp.
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