NEW YORK, Nov 02, 2009 (BUSINESS WIRE) -- Loews Corporation (NYSE:L) today reported income from operations before investment losses for the 2009 third quarter of $530 million compared to $235 million in the 2008 third quarter. Income from continuing operations for the 2009 third quarter was $469 million, or $1.08 per share, compared to a loss of $144 million, or $0.33 per share, in the 2008 third quarter.
Book value per common share increased to $39.54 at September 30, 2009, as compared to $34.60 at June 30, 2009 and $30.18 at December 31, 2008. The increase during the third quarter of 2009 was primarily driven by a $1.7 billion (after tax and noncontrolling interests) improvement in the fair value of our insurance subsidiary's fixed maturities investment portfolio reflecting a further narrowing of credit spreads which began in the second quarter.
Net income (loss) and earnings (loss) per share information attributable to Loews common stock and the former Carolina Group stock is summarized in the table below:
| September 30, | ||||||||||||||||
| Three Months | Nine Months | |||||||||||||||
| (In millions, except per share data) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
| Net income (loss) attributable to Loews common stock: | ||||||||||||||||
| Income before net investment losses | $ | 530 | $ | 235 | $ | 712 | $ | 1,248 | ||||||||
| Net investment losses | (61 | ) | (379 | ) | (549 | ) | (472 | ) | ||||||||
| Income (loss) from continuing operations | 469 | (144 | ) | 163 | 776 | |||||||||||
| Discontinued operations, net (a) | (1 | ) | 7 | (2 | ) | 4,501 | ||||||||||
| Net income (loss) attributable to Loews common stock | 468 | (137 | ) | 161 | 5,277 | |||||||||||
| Net income attributable to former Carolina Group stock - | ||||||||||||||||
| Discontinued operations, net (b) | 211 | |||||||||||||||
| Net income (loss) attributable to Loews Corporation | $ | 468 | $ | (137 | ) | $ | 161 | $ | 5,488 | |||||||
| Net income (loss) per share: | ||||||||||||||||
| Loews common stock: | ||||||||||||||||
| Income (loss) from continuing operations | $ | 1.08 | $ | (0.33 | ) | $ | 0.37 | $ | 1.58 | |||||||
| Discontinued operations, net (a) | 0.02 | 9.14 | ||||||||||||||
| Net income (loss) attributable to Loews common stock | $ | 1.08 | $ | (0.31 | ) | $ | 0.37 | $ | 10.72 | |||||||
| Former Carolina Group stock - Discontinued | ||||||||||||||||
| operations, net | $ | - | $ | 1.95 | ||||||||||||
| Book value per share of Loews common stock at: | ||||||||||||||||
| September 30, 2009 | $ | 39.54 | ||||||||||||||
| December 31, 2008 | $ | 30.18 | ||||||||||||||
|
(a) |
Includes a tax-free non-cash gain of $4,287 million related to the separation of Lorillard, Inc. and an after tax gain of $75 million from the sale of Bulova Corporation for the nine months ended September 30, 2008. |
|
|
(b) |
The Carolina Group and Carolina Group stock were eliminated effective June 10, 2008 as part of the separation of Lorillard, Inc. |
Income from Continuing Operations
Three Months Ended September 30, 2009 Compared with 2008
Income from continuing operations primarily reflects improved net investment income and significantly lower impairment losses at CNA Financial Corporation, compared to a loss from continuing operations in the prior year. Net investment income benefited from higher limited partnership results, partially offset by the impact of lower short-term interest rates. In addition, continued strong results at Diamond Offshore Drilling, Inc. and higher investment income at the holding company contributed to the improved results. Results were lower at Boardwalk Pipeline Partners, LP due to remediation of pipeline anomalies, and at Loews Hotels due to impairment charges related to two properties.
Income from continuing operations includes net investment losses of $61 million (after tax and noncontrolling interests) in the third quarter of 2009 compared to net investment losses of $379 million in the comparable prior year period. Net investment losses in the third quarter of 2008 were primarily driven by other-than-temporary impairment losses recognized in CNA's available-for-sale portfolio driven by credit related issues.
Nine Months Ended September 30, 2009 Compared with 2008
The decline in income from continuing operations in 2009 primarily reflects a non-cash impairment charge of $660 million (after tax) recorded in the first quarter of 2009, related to the carrying value of HighMount Exploration & Production LLC's natural gas and oil properties, reflecting declines in natural gas prices. There were no comparable impairment charges in the prior year period. Excluding this impairment charge, results improved over the comparable period of the prior year due to the reasons discussed in the three months comparison above, partially offset by increased impairment losses recorded in CNA's investment portfolio.
Net investment losses were $549 million (after tax and noncontrolling interests) in the nine months ended September 30, 2009, compared to losses of $472 million in the comparable prior year period.
Discontinued Operations
In June of 2008, the Company disposed of its entire ownership interest in Lorillard, Inc. through the redemption of Carolina Group stock in exchange for Lorillard common stock and an exchange of our remaining Lorillard common stock for Loews common stock. The Carolina Group and Carolina Group stock have been eliminated. The Company also sold Bulova Corporation in January 2008. Lorillard's results of operations and the gain on disposal of Lorillard and Bulova have been classified as discontinued operations.
SHARE REPURCHASES
At September 30, 2009, there were 430,614,160 shares of Loews common stock outstanding. During the third quarter, the Company acquired 3,516,200 shares of its common stock for approximately $111 million. From October 1, 2009 through October 28, 2009, the Company acquired an additional 991,500 shares of its common stock for approximately $33 million. Depending on market conditions, the Company may from time to time purchase shares of its and its subsidiaries' outstanding common stock in the open market or otherwise.
CONFERENCE CALLS
A conference call to discuss the third quarter results of Loews Corporation has been scheduled for 11:00 a.m. EST, Monday, November 2, 2009. A live webcast of the call will be available online at the Loews Corporation website (www.loews.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 should dial (877) 692-2592, or for international callers, (973) 582-2757. The conference ID number is 33491991.
A conference call to discuss the third quarter results of CNA has been scheduled for 10:00 a.m. EST, Monday, November 2, 2009. A live webcast of the call will be available online at http://investor.cna.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 should dial (888) 378-4369, or for international callers, (719) 785-1754.
A conference call to discuss the third quarter results of Boardwalk Pipeline was held on Monday, October 26, 2009. An online replay is available on Boardwalk Pipeline's website (www.bwpmlp.com).
A conference call to discuss the third quarter results of Diamond Offshore was held on Thursday, October 22, 2009. An online replay is available on Diamond Offshore's website (www.diamondoffshore.com).
ABOUT LOEWS CORPORATION
Loews Corporation, a holding company, is one of the largest diversified corporations in the United States. Its principal subsidiaries are CNA Financial Corporation (NYSE: CNA), a 90% owned subsidiary; Diamond Offshore Drilling, Inc. (NYSE: DO), a 50.4% owned subsidiary; HighMount Exploration & Production LLC, a wholly owned subsidiary; Boardwalk Pipeline Partners, LP (NYSE: BWP), a 72% owned subsidiary; and Loews Hotels, a wholly owned subsidiary.
FORWARD-LOOKING STATEMENTS
Statements contained in this press release which are not historical facts are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are inherently uncertain and subject to a variety of risks that could cause actual results to differ materially from those expected by management of the Company. A discussion of the important risk factors and other considerations that could materially impact these matters as well as the Company's overall business and financial performance can be found in the Company's reports filed with the Securities and Exchange Commission and readers of this release are urged to review those reports carefully when considering these forward-looking statements. Copies of these reports are available through the Company's website (www.loews.com). Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Any such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.
| Loews Corporation and Subsidiaries | |||||||||||||||||
| Financial Review | |||||||||||||||||
| September 30, | |||||||||||||||||
| Three Months | Nine Months | ||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||
| (Amounts in millions, except per share data) | |||||||||||||||||
| Revenues: | |||||||||||||||||
| Insurance premiums | $ | 1,707 | $ | 1,799 | $ | 5,035 | $ | 5,385 | |||||||||
| Net investment income | 726 | 355 | 1,908 | 1,531 | |||||||||||||
| Investment losses | (100 | ) | (650 | ) | (928 | ) | (810 | ) | |||||||||
| Contract drilling revenues | 885 | 882 | 2,664 | 2,589 | |||||||||||||
| Other | 520 | 584 | 1,616 | 1,809 | |||||||||||||
| Total | 3,738 | 2,970 | 10,295 | 10,504 | |||||||||||||
| Expenses: | |||||||||||||||||
| Insurance claims & policyholders' benefits (a) | 1,282 | 1,519 | 3,919 | 4,380 | |||||||||||||
| Contract drilling expenses | 307 | 314 | 907 | 872 | |||||||||||||
| Impairment of natural gas and oil properties (b) | 1,036 | ||||||||||||||||
| Other | 1,191 | 1,178 | 3,586 | 3,324 | |||||||||||||
| Total | 2,780 | 3,011 | 9,448 | 8,576 | |||||||||||||
| Income (loss) before income tax | 958 | (41 | ) | 847 | 1,928 | ||||||||||||
| Income tax (expense) benefit | (266 | ) | 56 | (68 | ) | (537 | ) | ||||||||||
| Income (loss) from continuing operations | 692 | 15 | 779 | 1,391 | |||||||||||||
| Discontinued operations: | |||||||||||||||||
| Results of operations | (1 | ) | 7 | (2 | ) | 350 | |||||||||||
| Gain on disposal (c) | 4,362 | ||||||||||||||||
| Net income (loss) | 691 | 22 | 777 | 6,103 | |||||||||||||
| Amounts attributable to noncontrolling interests | (223 | ) | (159 | ) | (616 | ) | (615 | ) | |||||||||
| Net income (loss) attributable to Loews Corporation | $ | 468 | $ | (137 | ) | $ | 161 | $ | 5,488 | ||||||||
| Net income (loss) attributable to: | |||||||||||||||||
| Loews common stock: | |||||||||||||||||
| Income (loss) from continuing operations | $ | 469 | $ | (144 | ) | $ | 163 | $ | 776 | ||||||||
| Discontinued operations, net | (1 | ) | 7 | (2 | ) | 4,501 | |||||||||||
| Net income (loss) attributable to Loews common stock | 468 | (137 | ) | 161 | 5,277 | ||||||||||||
| Former Carolina Group stock - Discontinued Operations, net | 211 | ||||||||||||||||
| Net income (loss) attributable to Loews Corporation | $ | 468 | $ | (137 | ) | $ | 161 | $ | 5,488 | ||||||||
| Income (loss) per share attributable to Loews common stock: | |||||||||||||||||
| Income (loss) from continuing operations | $ | 1.08 | $ | (0.33 | ) | $ | 0.37 | $ | 1.58 | ||||||||
| Discontinued operations, net | 0.02 | 9.14 | |||||||||||||||
| Diluted net income (loss) attributable to Loews common stock | $ | 1.08 | $ | (0.31 | ) | $ | 0.37 | $ | 10.72 | ||||||||
| Diluted net income per share of former Carolina Group stock | |||||||||||||||||
| - Discontinued operations, net | $ | - | $ | 1.95 | |||||||||||||
| Weighted diluted number of shares: | |||||||||||||||||
| Loews common stock | 433.48 | 436.32 | 434.89 | 492.40 | |||||||||||||
| Former Carolina Group stock | - | 108.60 | |||||||||||||||
| (a) | Includes a gain of $94 million ($55 million after tax and noncontrolling interest), net of reinsurance for the three and nine months ended September 30, 2009, related to a legal settlement pertaining to the placement of personal accident reinsurance. | |
| (b) | The non-cash impairment charge ($660 million after tax) relates to the carrying value of HighMount's natural gas and oil properties. | |
| (c) | Includes a tax-free non-cash gain of $4,287 million related to the separation of Lorillard, Inc. and an after tax gain of $75 million from the sale of Bulova Corporation for the nine months ended September 30, 2008. |
| Loews Corporation and Subsidiaries | ||||||||||||||||
| Additional Financial Information | ||||||||||||||||
| September 30, | ||||||||||||||||
| Three Months | Nine Months | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| (In millions) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| CNA Financial | $ | 2,440 | $ | 2,310 | $ | 7,003 | $ | 7,075 | ||||||||
| Diamond Offshore | 919 | 868 | 2,762 | 2,630 | ||||||||||||
| HighMount | 144 | 200 | 466 | 590 | ||||||||||||
| Boardwalk Pipeline | 206 | 222 | 631 | 641 | ||||||||||||
| Loews Hotels | 67 | 90 | 213 | 292 | ||||||||||||
| Investment income and other | 62 | (70 | ) | 148 | 86 | |||||||||||
| 3,838 | 3,620 | 11,223 | 11,314 | |||||||||||||
| Investment gains (losses): | ||||||||||||||||
| CNA Financial | (100 | ) | (651 | ) | (929 | ) | (813 | ) | ||||||||
| Corporate and other | - | 1 | 1 | 3 | ||||||||||||
| (100 | ) | (650 | ) | (928 | ) | (810 | ) | |||||||||
| Total | $ | 3,738 | $ | 2,970 | $ | 10,295 | $ | 10,504 | ||||||||
| Income (Loss) Before Income Tax: | ||||||||||||||||
| CNA Financial (a) | $ | 490 | $ | 113 | $ | 1,121 | $ | 797 | ||||||||
| Diamond Offshore | 474 | 446 | 1,445 | 1,441 | ||||||||||||
| HighMount (b) | 66 | 74 | (894 | ) | 225 | |||||||||||
| Boardwalk Pipeline | 16 | 73 | 85 | 226 | ||||||||||||
| Loews Hotels (c) | (26 | ) | 7 | (49 | ) | 57 | ||||||||||
| Investment income, net | 64 | (87 | ) | 149 | 69 | |||||||||||
| Other (d) | (26 | ) | (17 | ) | (82 | ) | (77 | ) | ||||||||
| 1,058 | 609 | 1,775 | 2,738 | |||||||||||||
| Investment gains (losses): | ||||||||||||||||
| CNA Financial | (100 | ) | (651 | ) | (929 | ) | (813 | ) | ||||||||
| Corporate and other | - | 1 | 1 | 3 | ||||||||||||
| (100 | ) | (650 | ) | (928 | ) | (810 | ) | |||||||||
| Total | $ | 958 | $ | (41 | ) | $ | 847 | $ | 1,928 | |||||||
| Net Income (Loss) Attributable to Loews Corporation: | ||||||||||||||||
| CNA Financial (a) | $ | 304 | $ | 76 | $ | 722 | $ | 503 | ||||||||
| Diamond Offshore | 170 | 145 | 514 | 475 | ||||||||||||
| HighMount (b) | 40 | 47 | (572 | ) | 142 | |||||||||||
| Boardwalk Pipeline (e) | 9 | 31 | 39 | 98 | ||||||||||||
| Loews Hotels (c) | (15 | ) | 6 | (30 | ) | 36 | ||||||||||
| Investment income, net | 41 | (57 | ) | 97 | 45 | |||||||||||
| Other (d) | (19 | ) | (13 | ) | (58 | ) | (51 | ) | ||||||||
| 530 | 235 | 712 | 1,248 | |||||||||||||
| Investment gains (losses): | ||||||||||||||||
| CNA Financial | (61 | ) | (379 | ) | (549 | ) | (473 | ) | ||||||||
| Corporate and other | 1 | |||||||||||||||
| (61 | ) | (379 | ) | (549 | ) | (472 | ) | |||||||||
| Income (loss) from continuing operations | 469 | (144 | ) | 163 | 776 | |||||||||||
| Discontinued operations, net (f) | (1 | ) | 7 | (2 | ) | 4,501 | ||||||||||
| Net income (loss) attributable to Loews common stock | 468 | (137 | ) | 161 | 5,277 | |||||||||||
| Former Carolina Group stock - Discontinued operations, net | 211 | |||||||||||||||
| Net income (loss) attributable to Loews Corporation | $ | 468 | $ | (137 | ) | $ | 161 | $ | 5,488 | |||||||
| (a) | Includes a gain of $94 million ($55 million after tax and noncontrolling interest), net of reinsurance for the three and nine months ended September 30, 2009, related to a legal settlement pertaining to the placement of personal accident reinsurance. | |
| (b) | Reflects a non-cash impairment charge of $1,036 million ($660 million after tax) for the nine months ended September 30, 2009 related to the carrying value of HighMount's natural gas and oil properties. | |
| (c) | Includes an impairment charge of $27 million ($16 million after tax) for the nine months ended September 30, 2009 related to the writedown of Loews Hotels' entire investment in a hotel property. Also reflects a $20 million ($12 million after tax) charge related to two hotel properties for the three and nine months ended September 30, 2009. | |
| (d) | Consists primarily of corporate interest expense and other unallocated expenses. | |
| (e) | Represents a 73.1%, 70.3%, 73.6% and 70.3% ownership interest in Boardwalk Pipeline for the respective periods. | |
| (f) | Includes a tax-free non-cash gain of $4,287 million related to the separation of Lorillard, Inc. and an after tax gain of $75 million from the sale of Bulova Corporation for the nine months ended September 30, 2008. |
SOURCE: Loews Corporation
Loews Corporation
Peter W. Keegan, 212-521-2950
Chief Financial Officer
or
Darren Daugherty, 212-521-2788
Investor Relations
or
Candace Leeds, 212-521-2416
Public Affairs