NEW YORK--(BUSINESS WIRE)--July 28, 2005--Loews Corporation (NYSE:LTR;CG) today reported consolidated net income (including both the Loews Group and Carolina Group) for the 2005 second quarter of $433.8 million, compared to $410.5 million in the 2004 second quarter. Net income attributable to Loews common stock includes net investment gains of $19.5 million (after tax and minority interest) compared to $100.0 million (after tax and minority interest) in the comparable period of the prior year. The results for the second quarter of 2005 include a benefit of $109.2 million related to a federal income tax settlement due primarily to net refund interest and the release of federal income tax reserves at its CNA Financial subsidiary.
Net income and earnings per share information attributable to Loews common stock and Carolina Group stock is summarized in the table below:
June 30,
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Three Months Six Months
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(In millions, except per
share data) 2005 2004 2005 2004
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(Restated) (Restated)
Net income attributable to
Loews common stock:
Income before net
investment gains
(losses) $ 358.6 $ 269.9 $ 666.6 $ 580.7
Net investment gains
(losses) (a) 19.5 100.0 4.7 (200.3)
-------------------------------------------
Net income attributable
to Loews common stock 378.1 369.9 671.3 380.4
Net income attributable
to Carolina Group stock 55.7 40.6 102.2 75.0
-------------------------------------------
Consolidated net income $ 433.8 $ 410.5 $ 773.5 $ 455.4
===========================================
Net income per share:
Loews common stock $ 2.03 $ 1.99 $ 3.61 $ 2.05
Carolina Group stock $ 0.82 $ 0.70 $ 1.50 $ 1.29
======================================================================
Book value per share of
Loews common stock at:
June 30, 2005 $ 70.32
December 31, 2004 $ 66.56
=====================================================================
(a) Includes a loss of $352.9 (after tax and minority interest) for
the six months ended June 30, 2004 related to CNA's sale of its
individual life insurance business.
Net income attributable to Loews common stock for the second quarter of 2005 amounted to $378.1 million or $2.03 per share, compared to $369.9 million or $1.99 per share in the comparable period of the prior year.
Net income attributable to Carolina Group stock for the second quarter of 2005 was $55.7 million or $0.82 per Carolina Group share, compared to $40.6 million or $0.70 per Carolina Group share in the second quarter of 2004. The Company is issuing a separate press release reporting the results of the Carolina Group for the second quarter of 2005.
Consolidated revenues in the second quarter of 2005 amounted to $4.0 billion compared to $3.9 billion in the comparable 2004 quarter.
Six Months Ended June 30, 2005 Compared With 2004
Loews consolidated net income (including both the Loews Group and Carolina Group) for the first half of 2005 was $773.5 million, compared to $455.4 million in the comparable period of the prior year. Income before net investment gains (losses) attributable to Loews common stock amounted to $666.6 million in the first half of 2005 compared to $580.7 million in the comparable period of the prior year. Net income attributable to Loews common stock includes net investment gains of $4.7 million (after tax and minority interest) compared to net investment losses of $200.3 million (after tax and minority interest) in the comparable period of the prior year due primarily to a 2004 loss of $352.9 million (after tax and minority interest) for CNA's sale of its individual life insurance business. The results for the six months ended June 30, 2005 include a benefit of $109.2 million from a federal income tax settlement discussed above.
Net income attributable to Loews common stock for the first half of 2005 amounted to $671.3 million or $3.61 per share, compared to $380.4 million or $2.05 per share in the comparable period of the prior year.
Net income attributable to Carolina Group stock for the first half of 2005 was $102.2 million or $1.50 per Carolina Group share, compared to $75.0 million or $1.29 per Carolina Group share in the comparable period of the prior year.
Consolidated revenues in the first half of 2005 amounted to $7.8 billion compared to $7.4 billion in the comparable period of the prior year. The increase in revenues is primarily due to the acquisition of Gulf South during December 2004, improved results at Diamond Offshore and the absence of a loss recorded in 2004 related to CNA's sale of its individual life business.
At June 30, 2005, there were 185,688,595 shares of Loews common stock outstanding and 68,034,559 shares of Carolina Group stock outstanding. 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.
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 June 30, 2005, the outstanding Carolina Group stock represents a 39.22% economic interest in the economic performance of the Carolina Group.
A conference call to discuss the second quarter results of Loews Corporation has been scheduled for 11:00 a.m. EDT, Thursday, July 28, 2005. 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 second quarter results of CNA has been scheduled for 10:00 a.m. EDT, Thursday, July 28, 2005. A live broadcast of the call will be available online at the CNA website (http://investors.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) 289-0518. An online replay will be available at CNA's website following the call.
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 and CNA. 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
June 30,
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Three Months Six Months
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2005 2004 (e) 2005 2004 (e)
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(Restated) (Restated)
(Amounts in millions, except per share data)
Revenues:
Insurance premiums and
net investment income(a) $ 2,350.5 $ 2,608.2 $ 4,681.0 $ 4,854.7
Manufactured products (b) 968.7 899.3 1,802.9 1,707.5
Other (c) 711.5 408.2 1,288.0 846.8
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Total 4,030.7 3,915.7 7,771.9 7,409.0
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Expenses:
Insurance claims &
policyholders' benefits 1,581.8 1,620.5 3,015.0 3,258.7
Cost of manufactured
products sold (b) 594.1 547.4 1,099.8 1,034.9
Other 1,216.1 1,186.5 2,466.5 2,473.7
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Total 3,392.0 3,354.4 6,581.3 6,767.3
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638.7 561.3 1,190.6 641.7
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Income tax expense 164.7 125.0 342.0 171.2
Minority interest 40.2 25.8 75.1 15.1
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Total 204.9 150.8 417.1 186.3
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Net income $ 433.8 $ 410.5 $ 773.5 $ 455.4
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Net income attributable to:
Loews common stock $ 378.1 $ 369.9 $ 671.3 $ 380.4
Carolina Group stock (d) 55.7 40.6 102.2 75.0
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$ 433.8 $ 410.5 $ 773.5 $ 455.4
===========================================
Diluted net income per
share of Loews common
stock $ 2.03 $ 1.99 $ 3.61 $ 2.05
===========================================
Diluted net income per
share of Carolina Group
stock $ 0.82 $ 0.70 $ 1.50 $ 1.29
===========================================
Weighted diluted number of
shares:
Loews common stock 185.90 185.63 185.87 185.62
Carolina Group stock 68.10 57.98 68.08 57.99
(a) Includes investment gains (losses) of $32.5, $92.2, $9.7 and
$(359.8) for the respective periods. The six months ended June 30,
2004 includes a loss of $618.6 related to CNA's sale of its
individual life business.
(b) Includes excise taxes of $179.0, $169.5, $335.2 and $325.7 paid on
sales of manufactured products for the respective periods.
(c) Includes net refund interest of $129.7 from a federal income tax
settlement in the second quarter of 2005.
(d) Represents 39.22%, 33.43%, 39.21% and 33.43% of the economic
interest in the Carolina Group for the respective periods.
(e) Restated to correct CNA's accounting for several reinsurance
contracts, primarily with a former affiliate, and CNA's equity
accounting for that affiliate.
Loews Corporation and Subsidiaries
Additional Financial Information
June 30,
-------------------------------------------
Three Months Six Months
-------------------------------------------
2005 2004 (i) 2005 2004 (i)
-------------------------------------------
(Restated) (Restated)
(In millions)
Revenues:
CNA Financial $ 2,543.5 $ 2,559.2 $ 4,927.3 $ 5,283.9
Lorillard (a) 945.7 873.8 1,754.0 1,649.5
Boardwalk Pipelines 119.4 52.1 270.7 138.1
Diamond Offshore 298.2 187.7 562.9 373.6
Loews Hotels 93.8 86.3 185.9 167.0
Investment income-net and
other (b)
Income (loss) from
trading portfolio (c) (61.0) 11.9 (52.8) 53.1
Other 58.6 52.5 114.2 103.6
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3,998.2 3,823.5 7,762.2 7,768.8
-------------------------------------------
Investment (losses) gains:
CNA Financial (d) 25.9 105.8 9.2 (349.2)
Corporate and other 6.6 (13.6) 0.5 (10.6)
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32.5 92.2 9.7 (359.8)
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Total $ 4,030.7 $ 3,915.7 $ 7,771.9 $ 7,409.0
===========================================
Income Before Taxes:
CNA Financial $ 310.8 $ 228.9 $ 575.2 $ 520.2
Lorillard (f) 180.3 171.8 335.2 324.2
Boardwalk Pipelines 22.8 8.4 85.6 51.5
Diamond Offshore 54.1 (14.4) 97.1 (30.5)
Loews Hotels 18.3 13.0 39.6 24.3
Investment income-net and
other (b)
Income (loss) from
trading portfolio (c) (61.0) 11.9 (52.8) 53.1
Other (e) (13.0) (17.1) (69.7) (64.3)
-------------------------------------------
512.3 402.5 1,010.2 878.5
-------------------------------------------
Investment (losses) gains:
CNA Financial (d) 25.9 105.8 9.2 (349.2)
Corporate and other 6.6 (13.6) 1.2 (10.6)
-------------------------------------------
32.5 92.2 10.4 (359.8)
-------------------------------------------
Loews common stock 544.8 494.7 1,020.6 518.7
Carolina Group stock (g) 93.9 66.6 170.0 123.0
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Total $ 638.7 $ 561.3 $ 1,190.6 $ 641.7
===========================================
Net Income:
CNA Financial (h) $ 251.3 $ 162.3 $ 431.3 $ 357.8
Lorillard (f) 106.9 104.8 201.6 197.8
Boardwalk Pipelines 13.7 5.0 51.6 31.0
Diamond Offshore 19.9 (6.7) 34.1 (13.6)
Loews Hotels 15.8 7.9 29.0 14.8
Investment income-net and
other (b)
Income (loss) from
trading portfolio (c) (39.7) 7.8 (34.3) 34.5
Other (e) (9.3) (11.2) (46.7) (41.6)
-------------------------------------------
358.6 269.9 666.6 580.7
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Investment (losses) gains:
CNA Financial (d) 15.2 108.8 3.5 (193.4)
Corporate and other 4.3 (8.8) 1.2 (6.9)
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19.5 100.0 4.7 (200.3)
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Loews common stock 378.1 369.9 671.3 380.4
Carolina Group stock (g) 55.7 40.6 102.2 75.0
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Total $ 433.8 $ 410.5 $ 773.5 $ 455.4
===========================================
(a) Includes excise taxes of $179.0, $169.5, $335.2 and $325.7 paid on
sales of manufactured products for the respective periods.
(b) Consists primarily of corporate investment income, interest
expenses, the operations of Bulova Corporation, equity earnings of
Majestic Shipping Corporation and other unallocated expenses.
(c) Includes a loss on interest rate swaps of $43.4 ($28.2 after
taxes) for the three and six months ended June 30, 2005.
(d) Includes an impairment loss of $618.6 ($352.9 after tax and
minority interest) related to CNA's sale of its individual life
insurance business for the six months ended June 30, 2004.
(e) Includes additional interest expense of $35.5 and $17.0 ($23.1 and
$11.1 after taxes) related to charges from the early redemption of
the Company's long-term debt for the six months ended June 30,
2005 and 2004, respectively.
(f) The Loews Group's intergroup interest in the earnings of the
Carolina Group declined from 66.57% in 2004 to 60.78% in 2005 due
to the sale of Carolina Group stock by Loews in December of 2004.
(g) Represents 39.22%, 33.43%, 39.21% and 33.43% of the economic
interest in the Carolina Group for the respective periods.
(h) Includes a benefit of $104.4, in the second quarter of 2005,
relating primarily to net refund interest and the release of
federal income tax reserves.
(i) Restated to correct CNA's accounting for several reinsurance
contracts, primarily with a former affiliate, and CNA's equity
accounting for that affiliate.
Carolina Group Reports Net Income for the Second Quarter of 2005
NEW YORK--Loews Corporation (NYSE:LTR) today reported Carolina Group net income for the 2005 second quarter of $142.1 million, compared to $121.4 million in the 2004 second quarter. Net income attributable to Carolina Group stock (NYSE:CG) for the second quarter of 2005 was $55.7 million, or $0.82 per share of Carolina Group stock, compared to $40.6 million, or $0.70 per share in the comparable period of the prior year.
The increase in net income attributable to Carolina Group stock for the second quarter of 2005, as compared to the corresponding period of the prior year, reflects the sale by Loews Corporation of 10,000,000 shares of Carolina Group stock in December of 2004. Net income per share of Carolina Group stock was not impacted by the sale of Carolina Group stock in December of 2004. Carolina Group stock represents a 39.22% and 33.43% economic interest in the Carolina Group for the three months ended June 30, 2005 and 2004, respectively.
Net sales for the Carolina Group were $928.3 million in the second quarter of 2005, compared to $868.1 million in the 2004 second quarter, reflecting an increase in unit sales volume of 5.3%.
Carolina Group net income for the first half of 2005 was $260.6 million, compared to $224.4 million in the 2004 first half. Net income attributable to Carolina Group stock for the first half of 2005 was $102.2 million, or $1.50 per share of Carolina Group stock, compared to $75.0 million, or $1.29 per share in the comparable period of the prior year. The increase in net income attributable to Carolina Group stock reflects the December of 2004 sale by Loews Corporation of Carolina Group stock discussed above.
Net sales for the Carolina Group were $1.723 billion in the first half of 2005, compared to $1.636 billion in the comparable period of the prior year. The increase in net sales reflects an increase in unit sales volume of 2.9% and reduced sales promotion expenses (accounted for as a reduction in net sales).
Results of operations of the Carolina Group include interest expense of $21.0, $24.3, $43.4 and $48.9 million, net of taxes, for the three and six months ended June 30, 2005 and 2004, respectively, on notional intergroup debt. At June 30, 2005, $1.76 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 June 30, 2005, there were 68,034,559 shares of Carolina Group stock outstanding representing a 39.22% 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.
A separate press release reporting Loews Corporation's consolidated results for the second quarter of 2005 is being issued contemporaneously with this report.
A conference call to discuss the second quarter results of Loews Corporation has been scheduled for 11:00 a.m. EDT, Thursday, July 28, 2005. 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
June 30,
--------------------------------------------
Three Months Six Months
--------------------------------------------
2005 2004 2005 2004
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(Amounts in millions, except per share data)
Net sales (a) $ 928.3 $ 868.1 $ 1,723.4 $ 1,636.0
Cost of sales (a) (b) 574.4 532.3 1,061.1 999.6
Selling, advertising and
administrative 97.2 103.3 187.2 203.3
--------------------------------------------
Total operating costs and
expenses 671.6 635.6 1,248.3 1,202.9
--------------------------------------------
Operating income 256.7 232.5 475.1 433.1
Investment income and
other (c) 18.3 6.5 30.5 15.0
Interest expense (35.6) (39.8) (72.2) (80.1)
--------------------------------------------
Income before income
taxes 239.4 199.2 433.4 368.0
Income taxes 97.3 77.8 172.8 143.6
--------------------------------------------
Net income 142.1 121.4 260.6 224.4
Earnings attributable to
the Loews Group
intergroup interest (d) 86.4 80.8 158.4 149.4
--------------------------------------------
Income attributable to
Carolina Group
shareholders (e) $ 55.7 $ 40.6 $ 102.2 $ 75.0
============================================
Per share of Carolina
Group stock (f) $ 0.82 $ 0.70 $ 1.50 $ 1.29
============================================
Weighted diluted shares 68.10 57.98 68.08 57.99
============================================
Notional, intergroup debt
owed by the Carolina
Group to the Loews Group
June 30, 2005 $ 1,764.7
December 31, 2004 1,871.2
(a) Includes excise taxes of $179.0, $169.5, $335.2 and $325.7 for the
respective periods.
(b) Includes charges of $235.6, 234.3, $434.3 and $435.4 ($139.8,
$142.8, $261.2 and $265.5 after taxes) to accrue obligations under
the State Settlement Agreements for the respective periods.
(c) Includes $6.1 of interest income, in the second quarter of 2005,
relating to a federal income tax settlement.
(d) The Loews Group's intergroup interest in the earnings of the
Carolina Group reflected share equivalents amounting to
105,445,000 shares of 173,478,759 share and share equivalents
outstanding in 2005 and share equivalents amounting to 115,445,000
shares of 173,411,750 share and share equivalents outstanding in
2004. As of June 30, 2005, there were 68,034,559 shares of
Carolina Group stock outstanding.
(e) Represents 39.22%, 33.43%, 39.21% and 33.43% of the economic
interest in the Carolina Group for the respective periods
presented.
(f) 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
The following information regarding unit volume shipped by Lorillard
Tobacco Company to its direct buying customers by brand follows (all
units in thousands):
June 30,
----------------------------------------------
Three Months Six Months
----------------------------------------------
2005 2004 2005 2004
----------------------------------------------
Full Price Brands
Total Newport 8,603,782 8,102,336 16,125,476 15,482,294
Total Kent Family 188,805 225,173 363,300 435,622
Total True 150,900 173,459 288,492 334,223
Total Max 10,348 12,006 19,939 23,313
Total Satin 1,617 2,133 3,213 4,227
Total Triumph 358 886
----------------------------------------------
Total Full Price Brands 8,955,452 8,515,465 16,800,420 16,280,565
----------------------------------------------
Price/Value Brands
Total Old Gold 221,103 234,240 412,422 453,054
Total Maverick 218,892 182,244 396,324 337,806
----------------------------------------------
Total Price/Value Brands 439,995 416,484 808,746 790,860
----------------------------------------------
Total Domestic
Cigarettes 9,395,447 8,931,949 17,609,166 17,071,425
Total Puerto Rico and
U.S. Possessions 220,620 199,476 387,384 411,340
----------------------------------------------
Grand Total 9,616,067 9,131,425 17,996,550 17,482,765
==============================================
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
Candace Leeds, 212-521-2416
or
Investor Relations:
Joshua E. Kahn, 212-521-2788
SOURCE: Loews Corporation