NEW YORK--(BUSINESS WIRE)--Oct. 28, 2004--Loews Corporation
(NYSE:LTR) today reported Carolina Group net income for the 2004 third
quarter of $159.9 million, compared to $116.4 million in the 2003
third quarter. Net income attributable to Carolina Group stock
(NYSE:CG) for the third quarter of 2004 was $53.4 million, or $0.92
per share of Carolina Group stock, compared to $26.8 million, or $0.67
per share in the comparable period of the prior year.
Net income attributable to Carolina Group stock for the third
quarter of 2004 increased by $26.6 million, as compared to the
comparable period of the prior year. $16.6 million of this increase
reflects the increased economic interest (from 23.01% to 33.43%) of
the Carolina Group stock in the Carolina Group as a result of the sale
by Loews Corporation of 18,055,000 shares of Carolina Group stock in
November of 2003. Net income per share of Carolina Group stock was not
impacted by this sale of Carolina Group stock.
Net sales for the Carolina Group were $879.3 million in the third
quarter of 2004, compared to $842.8 million in the 2003 third quarter.
The increase in net sales reflects lower sales promotion expenses
(accounted for as a reduction in net sales) offset by a decrease in
unit sales volume of 3.5%.
Results of operations of the Carolina Group include interest
expense of $24.3 and $27.9 million, net of taxes, for the three months
ended September 30, 2004 and 2003, respectively, on notional
intergroup debt. At September 30, 2004, $1.94 billion principal amount
of notional intergroup debt was outstanding.
Carolina Group net income for the first nine months of 2004 was
$384.3 million, compared to $349.2 million in the comparable period of
the prior year. Net income for the first nine months of 2003 included
a $26.0 million charge ($16.8 after taxes) to settle litigation with
tobacco growers and a $28.0 million charge ($17.1 million after taxes)
to resolve indemnification claims and trademark matters in connection
with the 1977 sale by Lorillard of its international business. Net
income attributable to Carolina Group stock for the first nine months
of 2004 was $128.4 million, or $2.21 per share of Carolina Group
stock, compared to $80.4 million, or $2.01 per share in the comparable
period of the prior year. The $48.0 million increase in net income
attributable to Carolina Group stock includes an increase of $40.0
million due to the November of 2003 sale by Loews Corporation of
Carolina Group stock discussed above.
Net sales for the Carolina Group were $2.515 billion in the first
nine months of 2004, compared to $2.468 billion in the comparable
period of the prior year. The increase in net sales reflects a
decrease in sales promotion expenses (accounted for as a reduction in
net sales) offset by a decrease in unit sales volume of 0.4%.
Results of operations of the Carolina Group include interest
expense of $73.3 and $87.8 million, net of taxes, for the nine months
ended September 30, 2004 and 2003, respectively, on notional
intergroup debt.
The Carolina Group stock, commonly called a tracking stock, is
intended to reflect the economic performance of a defined group of the
Company's assets and liabilities, referred to as the Carolina Group,
principally consisting of the Company's subsidiary Lorillard, Inc. The
Carolina Group, a notional group, is not a separate legal entity. The
purpose of this financial information is to provide investors with
additional information to use in analyzing the results of operations
and financial condition of the Carolina Group, and this financial
information should be read in conjunction with the consolidated
financial information of Loews Corporation.
As of September 30, 2004, there were 57,966,750 shares of Carolina
Group stock outstanding representing a 33.43% economic interest.
Depending on market conditions, the Company, for the account of the
Carolina Group, from time to time may purchase shares of Carolina
Group stock in the open market or otherwise.
Loews Corporation has issued a separate press release reporting
its consolidated results for the third quarter of 2004, which
accompanies this press release.
A conference call to discuss the third quarter results of Loews
Corporation has been scheduled for 11:00 a.m. EST, Thursday, October
28, 2004. A live broadcast 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 of the conference
call should dial (877) 692-2592. An online replay will be available at
the Company's website following the call.
Carolina Group
Financial Review
September 30,
--------------------------------
Three Months Nine Months
--------------------------------
2004 2003 2004 2003
--------------------------------
(Amounts in millions, except per
share data)
Net sales (a) $879.3 $842.8 $2,515.3 $2,467.9
Cost of sales (a) (b) 504.8 514.0 1,504.4 1,435.4
Selling, advertising and
administrative (c) 85.1 98.0 288.4 352.8
--------------------------------
Total operating costs and expenses 589.9 612.0 1,792.8 1,788.2
--------------------------------
Operating income 289.4 230.8 722.5 679.7
Investment income 8.1 2.9 23.1 20.6
Interest expense (39.3) (45.2) (119.4) (140.7)
--------------------------------
Income before income taxes 258.2 188.5 626.2 559.6
Income taxes 98.3 72.1 241.9 210.4
--------------------------------
Net income 159.9 116.4 384.3 349.2
Earnings attributable to the Loews
Group intergroup interest 106.5 89.6 255.9 268.8
--------------------------------
Income attributable to Carolina Group
shareholders (d) $ 53.4 $ 26.8 $ 128.4 $ 80.4
================================
Per share of Carolina Group stock (e) $ 0.92 $ 0.67 $ 2.21 $ 2.01
================================
Weighted number of shares outstanding 57.97 39.91 57.97 39.91
================================
(a) Includes excise taxes of $167.9, $173.1, $493.6 and $493.4 for the
respective periods.
(b) Includes charges of $213.6, $214.6, $649.0 and $592.2 ($132.8,
$132.5, $398.3 and $369.6 after taxes) to accrue obligations under the
State Settlement Agreements for the respective periods.
(c) Includes a $26.0 charge ($16.8 after taxes) to settle litigation
with tobacco growers and a $28.0 charge ($17.1 after taxes) to resolve
indemnification claims and trademark matters in connection with the
1977 sale by Lorillard of its international business in the nine
months ended September 30, 2003.
(d) Represents 33.43%, 23.01%, 33.43% and 23.01% of the economic
interest in the Carolina Group for the respective periods.
(e) Earnings per common share- assuming dilution is not presented
because securities that could potentially dilute basic earnings per
share in the future would have been insignificant or antidilutive for
the periods presented.
Carolina Group
Supplemental Information
Information regarding unit volume shipped by Lorillard Tobacco Company
to its direct buying customers by brand follows
(all units in thousands):
September 30,
------------------------------------------
Three Months Nine Months
------------------------------------------
2004 2003 2004 2003
------------------------------------------
Full Price Brands
Total Newport 8,040,274 8,296,648 23,522,568 23,468,155
Total Kent Family 215,505 268,584 651,127 817,012
Total True 167,970 199,086 502,193 594,384
Total Max 11,364 13,410 34,677 41,499
Total Satin 1,959 2,637 6,186 8,334
Total Triumph - 993 886 2,955
------------------------------------------
Total Full Price Brands 8,437,072 8,781,358 24,717,637 24,932,339
------------------------------------------
Price/Value Brands
Total Old Gold 233,650 269,552 686,704 787,472
Total Maverick 178,734 161,927 516,540 362,750
------------------------------------------
Total Price/Value Brands 412,384 431,479 1,203,244 1,150,222
------------------------------------------
Total Domestic Cigarettes 8,849,456 9,212,837 25,920,881 26,082,561
Total Puerto Rico and U.S.
Possessions 187,519 153,017 598,859 554,758
------------------------------------------
Grand Total 9,036,975 9,365,854 26,519,740 26,637,319
==========================================
Notes:
1. This information is unaudited and is not adjusted for returns.
2. Unit volume for a quarter is not necessarily indicative of unit
volume for any subsequent period.
3. Unit volume is not necessarily indicative of the level of revenues
for any period.
CONTACT: Loews Corporation
Peter W. Keegan, 212-521-2950
Candace Leeds, 212-521-2416
Investor Relations:
Joshua E. Kahn, 212-521-2788
KEYWORD: NEW YORK
INDUSTRY KEYWORD: FOODS/BEVERAGES RETAIL CONFERENCE CALLS
SOURCE: Carolina Group
Copyright Business Wire 2004