NEW YORK--(BUSINESS WIRE)--Oct. 27, 2008--Loews Corporation
(NYSE:L) today reported a loss from continuing operations for the 2008
third quarter of $144 million, or $0.33 per share, compared to income
from continuing operations of $309 million, or $0.58 per share, in the
2007 third quarter. Income from continuing operations for the nine
months ended September 30, 2008 was $776 million, or $1.58 per share,
compared to $1,292 million, or $2.40 per share, in the comparable
period of the prior year.
Net income (loss) and earnings (losses) per share information
attributable to Loews common stock and our former Carolina Group stock
is summarized in the table below:
September 30,
---------------------------
Three Months Nine Months
------------- -------------
(In millions, except per share data) 2008 2007 2008 2007
----------------------------------------------------------------------
Net income (loss) attributable to Loews
common stock:
Income before net investment losses $ 235 $ 341 $1,248 $1,307
Net investment losses (a) (379) (32) (472) (15)
----------------------------------------------------------------------
Income (loss) from continuing
operations (144) 309 776 1,292
Discontinued operations, net (b) 7 100 4,501 280
----------------------------------------------------------------------
Net income (loss) attributable to Loews
common stock (137) 409 5,277 1,572
Net income attributable to Carolina Group
stock-
Discontinued operations (c) 146 211 405
----------------------------------------------------------------------
Consolidated net income (loss) $ (137) $ 555 $5,488 $1,977
======================================================================
Net income (loss) per share:
Loews common stock:
Income (loss) from continuing
operations $(0.33) $0.58 $ 1.58 $ 2.40
Discontinued operations, net 0.02 0.19 9.14 0.52
----------------------------------------------------------------------
Loews common stock $(0.31) $0.77 $10.72 $ 2.92
======================================================================
Carolina Group stock-Discontinued
operations $ - $1.34 $ 1.95 $ 3.73
======================================================================
Book value per share of Loews common
stock at:
September 30, 2008 $ 36.10
December 31, 2007 $ 32.40
======================================================================
(a) Includes a gain of $92 for the nine months ended September 30,
2007 related to a reduction in the Company's ownership interest
in Diamond Offshore from the conversion of Diamond Offshore's
1.5% convertible debentures into Diamond Offshore common stock.
(b) Includes a tax-free non-cash gain of $4,287 related to the
Separation of Lorillard and an after tax gain of $75 from the
sale of Bulova Corporation for the nine months ended September
30, 2008.
(c) The Carolina Group and Carolina Group stock were eliminated
effective June 10, 2008 upon completion of the Separation of
Lorillard.
Investments in Subsidiaries
To assist our CNA subsidiary in strengthening the statutory
capital of its principal insurance subsidiary Continental Casualty
Company, which has been adversely impacted by the ongoing disruption
in the capital markets, the Company agreed to purchase $1.25 billion
of a new series of non-voting cumulative senior preferred stock from
CNA. The new preferred stock will accrue cumulative dividends at the
rate of 10% per annum, payable quarterly, for the first five years
after issuance, with the dividend rate resetting thereafter and on
each subsequent five year anniversary to the higher of 10% or the
10-year U.S. Treasury rate at such time plus 7%. No dividends may be
declared on CNA's common stock while the new preferred stock is
outstanding. CNA will use $1.0 billion of the proceeds from the new
preferred stock to increase the statutory surplus of Continental
Casualty Company. The Company expects to complete the purchase of the
new preferred stock during the fourth quarter of 2008, subject to
customary closing conditions.
The Company's Board of Directors also approved a commitment to
purchase up to $1.0 billion of equity securities from its Boardwalk
Pipeline subsidiary to facilitate the funding of the anticipated costs
to complete its pipeline expansion projects. The Company would provide
that equity capital to the extent that external funds are not
available to Boardwalk Pipeline on acceptable terms. Boardwalk
Pipeline anticipates that it will require a portion of this equity
capital prior to the end of this year and the balance during the first
half of 2009.
Income (Loss) from Continuing Operations
Three Months Ended September 30, 2008 Compared with 2007
The loss from continuing operations for the third quarter of 2008
primarily resulted from a decline in results at CNA reflecting higher
net investment losses described below, a $145 million (after tax and
minority interest) increase in catastrophe losses primarily from
hurricanes and a reduction in investment income reflecting losses from
limited partnership investments. Investment income at the holding
company also included losses in 2008, as compared to gains in the
prior year period. These declines were partially offset by
significantly improved results at Diamond Offshore due to higher
dayrates in 2008 and improved results at HighMount and Boardwalk
Pipeline. Results in 2007 also included a $96 million charge at CNA
(after tax and minority interest) in connection with a settlement of
an arbitration proceeding related to a run-off book of business.
Net investment losses included in loss from continuing operations
amounted to $379 million (after tax and minority interest) in the
third quarter of 2008 compared to net investment losses of $32 million
(after tax and minority interest) in the comparable period of the
prior year. For the three months ended September 30, 2008, the Company
recorded net realized investment losses of $178 million related to
securities issued by Federal National Mortgage Association and Federal
Home Loan Mortgage Corporation, $58 million related to securities
issued by Washington Mutual, $57 million related to securities issued
by Icelandic banks and $21 million related to securities issued by
American International Group.
Consolidated revenues in the third quarter of 2008 amounted to
$3.0 billion, compared to $3.5 billion in the comparable period of the
prior year.
Nine Months Ended September 30, 2008 Compared with 2007
The decline in income from continuing operations primarily
reflects a decline in results at CNA, the increased investment losses
and the reduced investment income discussed above. These decreases
were partially offset by improved results at Diamond Offshore,
HighMount and Boardwalk Pipeline.
Consolidated revenues in the first nine months of 2008 amounted to
$10.5 billion, compared to $10.7 billion in the comparable period of
the prior year.
Discontinued Operations
In June 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, collectively
referred to as the Separation. The Carolina Group and Carolina Group
stock have been eliminated. The Company also sold Bulova Corporation
in January 2008. Bulova and Lorillard's results of operations and the
gain on disposal have been classified as discontinued operations.
At September 30, 2008, there were 436,088,567 shares of Loews
common stock outstanding. During the nine months ended September 30,
2008, as part of the Separation the Company acquired 93,492,857 shares
of Loews common stock in exchange for 65,445,000 shares of Lorillard
common stock. In addition, the Company repurchased 314,000 shares of
Loews common stock at an aggregate cost of $12 million in the three
months ended September 30, 2008. 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. EDT, Monday, October 27,
2008. 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 67472825.
A conference call to discuss the third quarter results of CNA has
been scheduled for 10:00 a.m. EDT, Monday, October 27, 2008. 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 (866) 409-1563, or for
international callers, (913) 312-0842.
A conference call to discuss the third quarter results of
Boardwalk Pipeline Partners, LP has been scheduled for 9:00 a.m. EDT,
Monday, October 27, 2008. A live webcast of the call will be available
online at the Boardwalk Pipeline website (www.bwpmlp.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 (866) 831-5605, or for international callers, (617)
213-8851. The PIN number to access the call is 14522621.
A conference call to discuss the third quarter results of Diamond
Offshore was held on Thursday, October 23, 2008. An online replay is
available at the Diamond Offshore 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 70% 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
-----------------------------------
2008 2007 2008 2007
-----------------------------------
(In millions, except per share
data)
Revenues:
Insurance premiums $ 1,799 $ 1,882 $ 5,385 $ 5,616
Net investment income 355 647 1,531 2,165
Investment losses (a) (650) (54) (810) (44)
Contract drilling revenues 882 628 2,589 1,854
Other 584 422 1,809 1,119
-----------------------------------
Total 2,970 3,525 10,504 10,710
-----------------------------------
Expenses:
Insurance claims &
policyholders' benefits 1,519 1,575 4,380 4,496
Contract drilling expenses 314 281 872 715
Other 1,178 1,031 3,324 2,951
-----------------------------------
Total 3,011 2,887 8,576 8,162
-----------------------------------
Income (loss) before income tax
and minority interest (41) 638 1,928 2,548
-----------------------------------
Income tax expense (benefit) (56) 182 537 774
Minority interest 159 147 615 482
-----------------------------------
Total 103 329 1,152 1,256
-----------------------------------
Income (loss) from continuing
operations (144) 309 776 1,292
Discontinued operations:
Results of operations 7 246 350 685
Gain on disposal (b) 4,362
-----------------------------------
Net income (loss) $ (137) $ 555 $ 5,488 $ 1,977
===================================
Net income (loss) attributable to:
Loews common stock:
Income (loss) from
continuing operations $ (144) $ 309 $ 776 $ 1,292
Discontinued operations, net 7 100 4,501 280
-----------------------------------
Loews common stock (137) 409 5,277 1,572
Carolina Group stock -
Discontinued operations 146 211 405
-----------------------------------
$ (137) $ 555 $ 5,488 $ 1,977
====================================
Income (loss) per share of Loews
common stock:
Income (loss) from
continuing operations $ (0.33) $ 0.58 $ 1.58 $ 2.40
Discontinued operations, net 0.02 0.19 9.14 0.52
-----------------------------------
Diluted net income (loss) $ (0.31) $ 0.77 $ 10.72 $ 2.92
===================================
Diluted net income per share of
Carolina Group stock
- Discontinued operations $ - $ 1.34 $ 1.95 $ 3.73
===================================
Weighted diluted number of shares:
Loews common stock 436.32 533.19 492.40 537.71
Carolina Group stock - 108.58 108.60 108.55
(a) Includes a gain of $142 ($92 after tax), for the nine months ended
September 30, 2007, related to a reduction in the Company's
ownership interest in Diamond Offshore from the conversion of
Diamond Offshore's 1.5% convertible debentures into Diamond
Offshore common stock.
(b) Includes a tax-free non-cash gain of $4,287 related to the
Separation of Lorillard and an after tax gain of $75 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
---------------------------------
2008 2007 2008 2007
---------------------------------
(In millions)
Revenues:
CNA Financial $2,310 $2,541 $ 7,075 $ 7,687
Diamond Offshore 868 655 2,630 1,935
HighMount 200 100 590 100
Boardwalk Pipeline 222 141 641 490
Loews Hotels 90 90 292 285
Investment income and other (70) 52 86 257
---------------------------------
3,620 3,579 11,314 10,754
---------------------------------
Investment gains (losses):
CNA Financial (651) (57) (813) (217)
Corporate and other (a) 1 3 3 173
---------------------------------
(650) (54) (810) (44)
---------------------------------
Total $2,970 $3,525 $10,504 $10,710
=================================
Income (Loss) Before Taxes and
Minority Interest:
CNA Financial $ 113 $ 306 $ 797 $ 1,236
Diamond Offshore 446 285 1,441 945
HighMount 74 30 225 30
Boardwalk Pipeline 73 40 226 156
Loews Hotels 7 7 57 47
Investment income, net (87) 58 69 263
Other (b) (17) (34) (77) (85)
---------------------------------
609 692 2,738 2,592
---------------------------------
Investment gains (losses):
CNA Financial (651) (57) (813) (217)
Corporate and other (a) 1 3 3 173
---------------------------------
(650) (54) (810) (44)
---------------------------------
Total $ (41) $ 638 $ 1,928 $ 2,548
=================================
Net Income (Loss):
CNA Financial $ 76 $ 189 $ 503 $ 749
Diamond Offshore 145 95 475 320
HighMount 47 19 142 19
Boardwalk Pipeline (c) 31 19 98 74
Loews Hotels 6 4 36 29
Investment income, net (57) 39 45 172
Other (b) (13) (24) (51) (56)
---------------------------------
235 341 1,248 1,307
---------------------------------
Investment gains (losses):
CNA Financial (379) (33) (473) (126)
Corporate and other (a) 1 1 111
---------------------------------
(379) (32) (472) (15)
---------------------------------
Income (loss) from continuing
operations (144) 309 776 1,292
Discontinued operations, net (d) 7 100 4,501 280
---------------------------------
Loews common stock (137) 409 5,277 1,572
Carolina Group stock -
Discontinued operations 146 211 405
---------------------------------
Total $ (137) $ 555 $ 5,488 $ 1,977
=================================
(a) Includes a gain of $142 ($92 after tax), for the nine months ended
September 30, 2007, related to a reduction in the Company's
ownership interest in Diamond Offshore from the conversion of
Diamond Offshore's 1.5% convertible debentures into Diamond
Offshore common stock.
(b) Consists primarily of corporate interest expense and other
unallocated expenses.
(c) Represents a 70.3%, 74.8%, 70.3% and 76.3% ownership interest in
Boardwalk Pipeline for the respective periods.
(d) Includes a tax-free non-cash gain of $4,287 related to the
Separation of Lorillard and an after tax gain of $75 from the
sale of Bulova Corporation for the nine months ended September
30, 2008.
CONTACT: 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
SOURCE: Loews Corporation
