NEW YORK--(BUSINESS WIRE)--May 2, 2006--Loews Corporation (NYSE:LTR;CG) today reported consolidated net income (including both the Loews Group and Carolina Group) for the 2006 first quarter of $541.0 million, compared to $346.3 million in the 2005 first quarter.
Net income and earnings per share information attributable to Loews common stock and Carolina Group stock is summarized in the following table:
Three Months Ended
March 31,
-----------------------
(In millions, except per share data) 2006 2005
---------- ----------
(Restated)
Net income attributable to Loews common stock:
Income before net investment losses $482.0 $308.0
Net investment losses (3.6) (14.8)
---------- ----------
Income from continuing operations 478.4 293.2
Discontinued operations, net (5.0) 6.6
---------- ----------
Net income attributable to Loews common stock 473.4 299.8
Net income attributable to Carolina Group
stock (a) 67.6 46.5
---------- ----------
Consolidated net income $541.0 $346.3
========== ==========
Net income per share:
Loews common stock:
Income from continuing operations $2.57 $1.58
Discontinued operations, net (0.03) 0.04
---------- ----------
Net income $2.54 $1.62
========== ==========
Carolina Group stock $0.86 $0.68
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Book value per share of Loews common stock at:
March 31, 2006 $72.11
December 31, 2005 $70.93
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(a) Reflects Loews Corporation's sale of 10,000,000 shares of Carolina
Group stock in November of 2005. Net income per share of Carolina
Group stock was not impacted by this sale.
Net income attributable to Loews common stock for the first quarter of 2006 amounted to $473.4 million, or $2.54 per share, compared to $299.8 million, or $1.62 per share, in the comparable period of the prior year. The increase in net income was primarily due to improved results at the Company's 54% owned subsidiary, Diamond Offshore Drilling, Inc. and increased investment income.
Net income attributable to Loews common stock includes net investment losses of $3.6 million (after tax and minority interest) compared to net investment losses of $14.8 million (after tax and minority interest) in the comparable period of the prior year.
Net income attributable to Carolina Group stock for the first quarter of 2006 was $67.6 million, or $0.86 per Carolina Group share, compared to $46.5 million, or $0.68 per Carolina Group share, in the first quarter of 2005. The increase in net income attributable to Carolina Group stock for the first quarter of 2006 is due to improved overall results of the Carolina Group and reflects the increase in the amount of Carolina Group shares. The Company is issuing a separate press release reporting the results of the Carolina Group for the first quarter of 2006.
Consolidated revenues in the first quarter of 2006 amounted to $4.2 billion, compared to $3.7 billion in the comparable 2005 quarter.
At March 31, 2006, there were 185,395,033 shares of Loews common stock outstanding and 78,278,496 shares of Carolina Group stock outstanding. During the three months ended March 31, 2006, the Company purchased 558,400 shares of Loews common stock at an aggregate cost of $55.7 million. Depending on market conditions, the Company purchases, from time to time in the open market or otherwise, shares of its and its subsidiaries' outstanding common stock.
On April 11, 2006, the Company announced that its Board of Directors declared a three-for-one stock split of Loews common stock, by way of a stock dividend, to shareholders of record on April 24, 2006. Each holder of record on that date will receive two additional shares of Loews common stock for each share owned. The new shares are expected to be distributed on or about May 8, 2006. The stock split will increase the number of shares of common stock outstanding from approximately 185.4 million shares to approximately 556.2 million shares. The pro forma earnings per share of Loews common stock, giving retroactive effect to the stock split, is as follows:
Three Months
Ended
March 31,
--------------
2006 2005
------ ------
Diluted net income per share of Loews common stock - as
reported $2.54 $1.62
Diluted net income per share of Loews common stock -
after stock split 0.85 0.54
============================================================== ======
The Company has two classes of common stock, 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 Loews common stock, representing the economic performance of the Company's remaining assets, including the interest in the Carolina Group not represented by Carolina Group stock. At March 31, 2006, the outstanding Carolina Group stock represented a 45.06% interest in the economic performance of the Carolina Group.
A conference call to discuss the first quarter results of Loews Corporation has been scheduled for 11:00 a.m. EDT, Tuesday, May 2, 2006. 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.
A conference call to discuss the first quarter results of CNA has been scheduled for 10:00 a.m. EDT, Tuesday, May 2, 2006. A live broadcast of the call will be available online at the CNA website (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 of the conference call should dial (800) 811-0677. An online replay will be available at CNA's website following the call.
FORWARD-LOOKING STATEMENTS
Statements contained in this press release that 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. 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.
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
---------------------
Three Months Ended
March 31,
---------------------
2006 2005 (d)
---------------------
(Restated)
(Amounts in millions,
except per share data)
Revenues:
Insurance premiums and net investment income (a) $2,574.7 $2,330.5
Manufactured products (b) 898.4 834.2
Other 771.4 576.5
--------- ----------
Total 4,244.5 3,741.2
--------- ----------
Expenses:
Insurance claims & policyholders' benefits 1,492.0 1,433.2
Cost of manufactured products sold (b) 533.3 505.7
Other 1,234.6 1,250.4
--------- ----------
Total 3,259.9 3,189.3
--------- ----------
Income from continuing operations before income
taxes and minority interest 984.6 551.9
--------- ----------
Income tax expense 334.2 177.3
Minority interest 104.4 34.9
--------- ----------
Total 438.6 212.2
--------- ----------
Income from continuing operations 546.0 339.7
Discontinued operations, net (5.0) 6.6
--------- ----------
Net income $541.0 $346.3
========= ==========
Net income attributable to:
Loews common stock:
Income from continuing operations $478.4 $293.2
Discontinued operations, net (5.0) 6.6
--------- ----------
Loews common stock $473.4 $299.8
Carolina Group stock (c) 67.6 46.5
--------- ----------
$541.0 $346.3
========= ==========
Income per Loews common stock:
Income from continuing operations $2.57 $1.58
Discontinued operations, net (0.03) 0.04
--------- ----------
Diluted net income $2.54 $1.62
========= ==========
Diluted net income per share of Carolina Group
stock $0.86 $0.68
========= ==========
Weighted diluted number of shares:
Loews common stock 186.08 185.84
Carolina Group stock 78.33 68.07
(a)Includes investment gains (losses) of $2.0 and ($22.8) for the
respective periods.
(b)Includes excise taxes of $163.9 and $156.2 on sales of manufactured
products for the respective periods.
(c)Represents 45.04% and 39.20% of the economic interest in the
Carolina Group for the respective periods.
(d)Restated to correct the accounting for the periodic results of
CNA's discontinued operations.
Loews Corporation and Subsidiaries
Additional Financial Information
---------------------
Three Months Ended
March 31,
---------------------
2006 2005 (f)
--------- ----------
(Restated)
(In millions)
Revenues:
CNA Financial $2,491.7 $2,383.8
Lorillard (a) 879.6 808.3
Boardwalk Pipeline 175.0 151.3
Diamond Offshore 458.7 264.7
Loews Hotels 93.4 92.1
Investment income-net and other (b)
Income from trading portfolio 70.6 8.2
Other 73.5 55.6
--------- ----------
4,242.5 3,764.0
--------- ----------
Investment gains (losses):
CNA Financial 8.8 (16.7)
Corporate and other (6.8) (6.1)
--------- ----------
2.0 (22.8)
--------- ----------
Total $4,244.5 $3,741.2
========= ==========
Income Before Taxes:
CNA Financial $346.3 $264.4
Lorillard (c) 164.6 154.9
Boardwalk Pipeline 69.4 62.8
Diamond Offshore 205.3 43.0
Loews Hotels 13.9 21.3
Investment income-net and other (b)
Income from trading portfolio 70.6 8.2
Other (d) 2.0 (56.7)
--------- ----------
872.1 497.9
--------- ----------
Investment gains (losses) :
CNA Financial 8.8 (16.7)
Corporate and other (6.5) (5.4)
--------- ----------
2.3 (22.1)
--------- ----------
Loews common stock 874.4 475.8
Carolina Group stock (e) 110.2 76.1
--------- ----------
Total $984.6 $551.9
========= ==========
Net Income:
CNA Financial $217.1 $180.0
Lorillard (c) 101.0 94.7
Boardwalk Pipeline 35.7 37.9
Diamond Offshore 72.3 14.2
Loews Hotels 8.5 13.2
Investment income-net and other (b)
Income from trading portfolio 45.9 5.4
Other (d) 1.5 (37.4)
--------- ----------
482.0 308.0
--------- ----------
Investment gains (losses):
CNA Financial 0.5 (11.7)
Corporate and other (4.1) (3.1)
--------- ----------
(3.6) (14.8)
--------- ----------
Income from continuing operations 478.4 293.2
Discontinued operations, net (5.0) 6.6
--------- ----------
Loews common stock 473.4 299.8
Carolina Group stock (e) 67.6 46.5
--------- ----------
Total $541.0 $346.3
========= ==========
(a)Includes excise taxes of $163.9 and $156.2 on sales of manufactured
products for the respective periods.
(b)Consists primarily of corporate investment income, interest
expenses, the operations of Bulova Corporation and other
unallocated expenses.
(c)Represents the Loews Group's intergroup interest in the earnings of
the Carolina Group.
(d)Includes additional interest expense of $35.5 ($23.1 after taxes)
related to charges from the early redemption of the Company's
long-term debt for the three months ended March 31, 2005.
(e)Represents 45.04% and 39.20% of the economic interest in the
Carolina Group for the respective periods.
(f)Restated to correct the accounting for the periodic results of
CNA's discontinued operations.
Carolina Group Reports Net Income for the First Quarter Of 2006
Loews Corporation (NYSE:LTR;CG) today reported Carolina Group net income for the 2006 first quarter of $150.1 million, compared to $118.5 million in the 2005 first quarter. Net income attributable to Carolina Group stock for the first quarter of 2006 was $67.6 million, or $0.86 per share of Carolina Group stock, compared to $46.5 million, or $0.68 per share in the comparable period of the prior year.
The increase in net income attributable to Carolina Group stock for the first quarter of 2006, as compared to the comparable period of the prior year, is due to improved overall results of the Carolina Group and reflects an increase in the amount of Carolina Group shares. Carolina Group stock represents a 45.04% and 39.20% economic interest in the Carolina Group for the three months ended March 31, 2006 and 2005, respectively.
Loews Corporation sold 10,000,000 shares of Carolina Group stock in November of 2005. Net income per share of Carolina Group stock was not impacted by the sale of Carolina Group shares.
Net sales for the Carolina Group were $854.8 million in the first quarter of 2006, compared to $795.1 million in the 2005 first quarter, reflecting a decrease in sales promotion expenses (accounted for as a reduction in net sales) and an increase in unit sales volume of 3.3%.
Results of operations of the Carolina Group include interest expense of $19.3 million and $22.4 million, net of taxes, for the three months ended March 31, 2006 and 2005, respectively, on notional intergroup debt. At March 31, 2006, $1.53 billion principal amount of notional intergroup debt was outstanding.
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 March 31, 2006, there were 78,278,496 shares of Carolina Group stock outstanding representing a 45.06% economic interest. Depending on market conditions, the Company may purchase, from time to time in the open market or otherwise, shares of Carolina Group stock for the Carolina Group account.
A separate press release reporting Loews Corporation's consolidated results for the first quarter of 2006 is being issued contemporaneously with this report.
A conference call to discuss the first quarter results of Loews Corporation has been scheduled for 11:00 a.m. EDT, Tuesday, May 2, 2006. 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
Three Months Ended
March 31,
-------------------
2006 2005
-------------------
(Amounts in millions,
except per share data)
Net sales (a) $854.8 $795.1
Cost of sales (a) (b) 511.7 486.7
Selling, advertising and administrative 92.9 90.0
--------- -------
Total operating costs and expenses 604.6 576.7
--------- -------
Operating income 250.2 218.4
Investment income and other (c) 26.0 12.2
Interest expense (31.5) (36.6)
--------- -------
Income before income taxes 244.7 194.0
Income taxes 94.6 75.5
--------- -------
Net income 150.1 118.5
Earnings attributable to the Loews Group intergroup
interest (d) 82.5 72.0
--------- -------
Income attributable to Carolina Group
shareholders (e) $67.6 $46.5
========= =======
Per share of Carolina Group stock $0.86 $0.68
========= =======
Weighted diluted number of shares 78.33 68.07
========= =======
Notional intergroup debt owed by the Carolina Group
to the Loews Group
March 31, 2006 $1,525.3
December 31, 2005 1,626.9
(a)Includes excise taxes of $163.9 and $156.2 for the respective
periods.
(b)Includes charges of $217.0 and $198.7 ($133.1 and $121.4 after
taxes) to accrue obligations under the State Settlement Agreements for
the respective periods.
(c)Includes income from limited partnership investments of $6.6
and $3.9 ($4.0 and $2.4 after taxes) for the respective periods.
(d)The Loews Group's intergroup interest in the earnings of the
Carolina Group reflects share equivalents amounting to 95,445,000
shares of 173,723,496 share and share equivalents outstanding at March
31, 2006 and share equivalents amounting to 105,445,000 shares of
173,472,309 share and share equivalents outstanding at March 31, 2005.
As of March 31, 2006, there were 78,278,496 shares of Carolina Group
stock outstanding.
(e)Represents 45.04% and 39.20% of the economic interest in the
Carolina Group for the respective periods presented.
Carolina Group
Supplemental Information
The following information regarding unit volume shipped by Lorillard
Tobacco Company to its direct buying customers by brand follows (all
units in thousands):
Three Months Ended
-----------------------
March 31,
-----------------------
2006 2005
-----------------------
Full Price Brands
Total Newport 7,777,665 7,521,694
Total Kent Family 146,016 174,495
Total True 120,918 137,592
Total Max 8,157 9,591
Total Satin 1,188 1,596
---------- ----------
Total Full Price Brands 8,053,944 7,844,968
---------- ----------
Price/Value Brands
Total Old Gold 183,816 191,319
Total Maverick 230,352 177,432
---------- ----------
Total Price/Value Brands 414,168 368,751
---------- ----------
Total Domestic Cigarettes 8,468,112 8,213,719
Total Puerto Rico and U.S. Possessions 187,968 166,764
---------- ----------
Grand Total 8,656,080 8,380,483
========== ==========
Notes:
1. This information is unaudited and is not adjusted for returns.
2. Domestic unit volume includes units sold as well as promotional
units, and excludes volumes for Puerto Rico and U.S. Possessions.
3. Unit volume for a quarter is not necessarily indicative of unit
volume for any subsequent period.
4. Unit volume is not necessarily indicative of the level of
revenues for any period.
CONTACT: Loews Corporation
Peter W. Keegan, 212-521-2950
or
Candace Leeds, 212-521-2416
or
Investor Relations
Darren Daugherty, 212-521-2788
SOURCE: Loews Corporation