NEW YORK--(BUSINESS WIRE)--Nov. 7, 2002-—Loews Corporation (NYSE:LTR;CG) today reported consolidated net income (including both the Loews Group and Carolina Group) for the 2002 third quarter of $240.4 million, compared to $165.7 million in 2001.
The following table summarizes the revenues, net income (loss) and earnings per share information.
 September 30,
-------------------------------------------
 Three Months Nine Months
(In millions, -------------------- ---------------------
except per share data) 2002 2001 2002 2001
--------- --------- --------- ----------
Consolidated:
Revenues(1) $ 4,077.5 $ 4,667.4 $13,512.5 $13,736.5
Net income (loss) $ 240.4 $ 165.7 $ 655.6 $ (777.2)
Per Share:(2) Â Â Â Â
Income (loss) per share
of Loews Common Stock:
Income (loss) from
continuing operations $ 1.06 $ 0.83 $ 3.30 $ (3.71)
Discontinued operations-net 0.02 (0.16) 0.03
Cumulative effect of
changes in accounting
principles-net  (0.21) (0.27)
--------- --------- --------- ---------
Net income
(loss) per share of
Loews Common Stock $ 1.06 $ 0.85 $ 2.93 $ (3.95)
========= ========= ========= =========
Net income per share
of Carolina Group Stock $ 1.10Â $ 2.58 Â
========= ========= ========= =========
(1) Revenue for the three and nine months ended 2001 has been
restated for comparative purposes to reflect the adoption of
new accounting principles related to the classification of
certain sales incentives by Lorillard. Revenue also includes
premiums of $612.0 for the three months ended 2001, and
$1,151.0 and $1,659.0 for the nine months ended 2002 and 2001,
respectively, related to the National Postal Mail Handlers
contract at CNA which was transferred on July 1, 2002.
(2) The Company has two classes of common stock, Loews Common
Stock and Carolina Group Stock, issued in February 2002.
Earnings per share data are presented for each class of Common
Stock for the periods they are outstanding.
Consolidated net operating income, which excludes net investment
gains and discontinued operations, for the quarter ended September 30,
2002 was $231.3 million, compared to $116.3 million in the third
quarter of 2001.
Net income attributable to Loews Common Stock for the third
quarter of 2002 amounted to $196.0 million or $1.06 per share,
compared to $165.7 million or $0.85 per share in the comparable period
of the prior year. Net income in the third quarter of 2002 includes
net investment gains attributable to Loews Common Stock of $5.8
million or $0.03 per share, compared to $44.8 million or $0.23 per
share in the comparable period of the prior year.
Net operating income attributable to Loews Common Stock, which
excludes net investment gains and discontinued operations, for the
quarter ended September 30, 2002, was $190.2 million or $1.03 per
share, compared to $116.3 million or $0.60 per share in the comparable
period of the prior year.
Net income attributable to Carolina Group Stock for the 2002 third
quarter amounted to $44.4 million or $1.10 per Carolina Group share.
The Company is issuing a separate press release reporting the actual
and pro forma results of the Carolina Group for the quarter and nine
months ended September 30, 2002 and 2001.
Nine Months Ended September 30, 2002 compared with 2001
For the nine months ended September 30, 2002 consolidated net
income (including both the Loews Group and Carolina Group) amounted to
$655.6 million, compared to a net loss of $777.2 million in the
comparable period of the prior year.
The first nine months of 2002 included a loss for discontinued
operations at CNA of $31.0 million or $0.16 per share of Loews Common
Stock, compared to income from discontinued operations of $6.7 million
or $0.03 per share of Loews Common Stock in the comparable period of
the prior year. The first nine months of 2002 also included a charge
for accounting changes of $39.6 million or $0.21 per share of Loews
Common Stock, related to accounting for goodwill and other intangible
assets, compared to a charge of $53.3 million or $0.27 per share of
Loews Common Stock in the comparable period of the prior year, related
to accounting for derivative instruments at CNA.
Consolidated net operating income, which excludes net investment
gains (losses), discontinued operations and accounting changes, was
$819.2 million in the first nine months of 2002, compared to a loss of
$1,285.0 million in the comparable period of the prior year.
Net operating income attributable to Loews Common Stock, which
excludes net investment (losses) gains, discontinued operations and
accounting changes, for the first nine months of 2002, was $720.2
million or $3.82 per share, compared to a loss of $1,285.0 million or
$6.54 per share in the comparable period of the prior year.
Net income attributable to Carolina Group Stock for the first nine
months of 2002 amounted to $103.8 million or $2.58 per Carolina Group
share.
At September 30, 2002, the book value per share of Loews Common
Stock was $61.09, compared to $50.39 at December 31, 2001. The
increase in book value per share of Loews Common Stock is primarily
due to proceeds from the issuance of the Carolina Group Stock in
February 2002 and the Loews Group’s net economic interest in the
notional intergroup debt receivable from the Carolina Group.
As of September 30, 2002, there were 185,441,200 shares of Loews
Common Stock outstanding. During the three and nine months ended
September 30, 2002, the Company purchased 664,000 and 6,065,600 shares
of Loews Common Stock at an aggregate cost of $33.4 and $343.5
million, respectively. During the three and nine months ended
September 30, 2002, the Company purchased 53,500 and 2,717,876 shares
of CNA common stock at an aggregate cost of $1.4 and $73.1 million,
respectively. The Company also purchased 340,000 shares of Carolina
Group stock during the three months ended September 30, 2002, for the
account of the Carolina Group, at an aggregate cost of $7.7 million.
Depending on market conditions, the Company from time to time
purchases shares of its, and its subsidiaries’, outstanding common
stock in the open market or otherwise.
In February 2002 the Company created a second class of common
stock, called Carolina Group Stock, a tracking stock intended to
reflect the economic performance of a group of the Company’s assets
and liabilities, called the Carolina Group, principally consisting of
the Company’s subsidiary Lorillard, Inc., and in an initial public
offering the Company issued shares of Carolina Group Stock
representing 23.17% of the economic performance of the Carolina Group.
Loews Common Stock will continue to represent the economic performance
of the Company’s remaining assets, including the interest in the
Carolina Group not represented by Carolina Group Stock.
A conference call to discuss the third quarter results of Loews
Corporation has been scheduled for 11:00 a.m. EST, Thursday, November
7, 2002. The call can be accessed by dialing (888) 307-7192 or by
visiting the Loews Corporation website (www.loews.com), where the
Company will provide an online, real-time broadcast of this call.
Please go to the website at least 10 minutes before the event begins
to register and to download and install any necessary audio software.
An online replay will be available at the Company’s website for one
week following the call.
A conference call to discuss the third quarter results of CNA has
been scheduled for 10:00 a.m. EST, Thursday, November 7, 2002. The
call can be accessed by dialing (800) 289-0493 or by visiting the CNA
website (http://investors.cna.com), where CNA will provide an online,
real-time broadcast of its call. Please go to the website at least 10
minutes before the event begins to register and to download and
install any necessary audio software. An online replay will be
available at CNA’s website for one week following the call or by
dialing (888) 203-1112, passcode 360508.
Loews Corporation and Subsidiaries
Financial Review
September 30,
------------------------------------------
Three Months Nine Months
------------------------------------------
2002 2001 2002 2001
--------- --------- --------- ---------
(Amounts in millions, except per share data)
Revenues:
Insurance premiums and
net investment income(a) $ 2,684.7 $ 3,102.1 $ 9,177.6 $ 9,224.9 Manufactured products(b) 1,004.1 1,093.6 3,076.4 3,052.7 Other 388.7 471.7 1,258.5 1,458.9
--------- --------- --------- --------- Total 4,077.5 4,667.4 13,512.5 13,736.5
--------- --------- --------- --------- Expenses: Insurance claims
& policyholders' benefits 1,850.1 2,420.3 6,542.4 8,765.9 Cost of manufactured
products sold(b) 552.7 612.0 1,760.0 1,765.4 Other(c) 1,259.7 1,349.0 3,970.6 4,383.5
--------- --------- --------- --------- Total 3,662.5 4,381.3 12,273.0 14,914.8
--------- --------- --------- ---------
415.0 286.1 1,239.5 (1,178.3)
--------- --------- --------- ---------
Income tax expense (benefit) 157.6 113.7 453.6 (326.2)
Minority interest 17.0 11.3 59.7 (121.5)
--------- --------- --------- --------- Total 174.6 125.0 513.3 (447.7)
--------- --------- --------- --------- Income (loss) from
continuing operations 240.4 161.1 726.2 (730.6) Discontinued
operations-net 4.6 (31.0) 6.7 Cumulative effect of
change in accounting
principles-net(d) (39.6) (53.3)
--------- --------- --------- --------- Net income (loss) $ 240.4 $ 165.7 $ 655.6 $ (777.2)
======== ========= ========= ========= Net income (loss)
attributable to: Loews Common Stock: Income (loss) from
continuing operations $ 196.0 $ 161.1 $ 622.4 $ (730.6) Discontinued operations-net 4.6 (31.0) 6.7 Cumulative effect of
change in accounting
principles-net(d) (39.6) (53.3)
--------- --------- --------- --------- Loews Common Stock 196.0 165.7 551.8 (777.2) Carolina Group Stock (e) 44.4 103.8
--------- --------- --------- ---------
$ 240.4 $ 165.7 $ 655.6 $ (777.2)
======== ========= ========= =========
Income (loss) per
Loews common stock(f): Income (loss) from
continuing operations $ 1.06 $ 0.83 $ 3.30 $ (3.71) Discontinued operations-net 0.02 (0.16) 0.03 Cumulative effect of
changes in
accounting principles-net(d) (0.21) (0.27)
--------- --------- --------- --------- Net income (loss) $ 1.06 $ 0.85 $ 2.93 $ (3.95)
======== ========= ========= ========= Net income per Carolina
Group common stock(f) $ 1.10 $ 2.58
======== ========= ========= ========= Weighted number
of shares outstanding: Loews Common Stock 185.71 195.41 188.31 196.62 Carolina Group Stock 40.19 40.23
(a) Includes investment gains (losses) of $26.5, $72.2, $(145.0)
and $1,063.8 for the respective periods.
(b) Includes excise taxes of $161.5, $165.3, $518.0 and $476.4
paid on sales of manufactured products for the respective
periods.
(c) Includes a $200.0 charge related to an agreement with the
Engle class for the nine months ended September 30, 2001.
(d) Adoption of SFAS No. 142, accounting for goodwill and other
intangible assets in 2002 and SFAS No. 133, accounting for
derivative instruments and hedging activities in 2001, at the
CNA subsidiary.
(e) Represents 23.14% and 23.16% of the economic interest in the
Carolina Group for the three month and eight month period
ended September 30, 2002 from the February 2002 initial public
offering of Carolina Group Stock.
(f) Earnings per common share-assuming dilution is not presented
because securities that could potentially dilute basic
earnings per common share in the future would have been
insignificant or antidilutive for the periods presented.
Loews Corporation and Subsidiaries
Additional Financial Information
September 30,
------------------------------------------
Three Months Nine Months
-------------------- --------------------
2002 2001 2002 2001
--------- --------- --------- ---------
(In millions)
Revenues:
CNA Financial $ 2,767.1 $ 3,125.3 $ 9,693.9 $ 8,464.2
Lorillard (a) 977.8 1,078.4 3,000.0 3,027.1
Loews Hotels 70.4 71.1 229.6 247.1
Diamond Offshore 180.4 244.1 572.3 707.8
Bulova 40.9 35.4 114.5 100.0
Investment income-net
and other (b) 14.4 40.9 47.2 126.5
--------- --------- --------- ---------
4,051.0 4,595.2 13,657.5 12,672.7
--------- --------- --------- ---------
Investment (losses) gains:
CNA Financial 23.9 0.3 (137.4) 938.1
Corporate and other 2.6 71.9 (7.6) 125.7
--------- --------- --------- ---------
26.5 72.2 (145.0) 1,063.8
--------- --------- --------- ---------
Total $ 4,077.5 $ 4,667.4 $13,512.5 $13,736.5
========= ========= ========= ========= Income (Loss) Before Taxes: CNA Financial (c) $ 58.1 $ (235.7) $ 440.9 $(3,232.3) Lorillard (d) (e) 277.0 376.8 791.8 781.2 Loews Hotels (0.4) (0.4) 19.4 23.4 Diamond Offshore 8.3 71.4 44.6 175.7 Bulova 4.5 2.7 12.1 10.3 Investment
income-net and other (b) (27.5) (0.9) (88.4) (0.4)
--------- --------- --------- ---------
320.0 213.9 1,220.4 (2,242.1)
--------- --------- --------- ---------
Investment (losses) gains:
CNA Financial 23.9 0.3 (137.4) 938.1
Corporate and other (2.5) 71.9 (15.0) 125.7
--------- --------- --------- ---------
21.4 72.2 (152.4) 1,063.8
--------- --------- --------- ---------
Loews Common Stock 341.4 286.1 1,068.0 (1,178.3)
Carolina Group Stock (f) 73.6 171.5
--------- --------- --------- --------- Total $ 415.0 $ 286.1 $ 1,239.5 $(1,178.3)
========= ========= ========= ========= Net Income (Loss): CNA Financial (c) $ 36.9 $ (137.3) $ 266.1 $(1,835.4) Lorillard (d) (e) 165.9 229.9 478.6 474.4 Loews Hotels (0.1) 0.1 12.6 15.2 Diamond Offshore 2.8 22.7 13.2 55.2 Bulova 2.3 1.5 6.5 5.7 Investment income-net
and other (b) (17.6) (0.6) (56.8) (0.1)
--------- --------- --------- ---------
190.2 116.3 720.2 (1,285.0)
--------- --------- --------- ---------
Investment (losses) gains:
CNA Financial 14.8 0.1 (76.9) 478.7
Corporate and other (9.0) 44.7 (20.9) 75.7
--------- --------- --------- ---------
5.8 44.8 (97.8) 554.4
--------- --------- --------- ---------
Income (loss) from
continuing operations 196.0 161.1 622.4 (730.6) Discontinued operations-net 4.6 (31.0) 6.7 Cumulative effect of
changes in accounting
principles-net (39.6) (53.3)
--------- --------- --------- --------- Loews Common Stock 196.0 165.7 551.8 (777.2) Carolina Group Stock (f) 44.4 103.8
--------- --------- --------- --------- Total $ 240.4 $ 165.7 $ 655.6 $ (777.2)
========= ========= ========= =========
(a) Includes excise taxes of $161.5, $165.3, $518.0 and $476.4
paid on sales of manufactured products for the respective
periods.
(b) Consists primarily of corporate investment income, interest
expenses and other unallocated expenses.
(c) Includes charges of $467.7 ($264.6 after taxes and minority
interest) for the three and nine months ended September 30,
2001 related to the World Trade Center attack, and $3,200.0
($1,809.8 after taxes and minority interest) for the nine
months ended September 30, 2001 related to a change in
estimate of prior year net loss and allocated loss adjustment
expense reserves and retrospective premium accruals.
(d) Represents the Loews Group's intergroup interest in the
earnings of the Carolina Group.
(e) Includes a $200.0 charge ($121.0 after taxes) related to an
agreement with the Engle class for the nine months ended
September 30, 2001.
(f) Represents 23.14% and 23.16% of the economic interest in the
Carolina Group for the three month and eight month period
ended September 30, 2002 from the February 2002 initial public
offering of Carolina Group Stock.
--30--mj/ny*
| CONTACT: | Loews Corporation, New York |
|---|---|
| Peter W. Keegan, 212/521-2950 | |
| Candace Leeds, 212/521-2416 | |
| or | |
| For Investor Relations: | |
| Joshua E. Kahn, 212/521-2788 | |