SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K/A
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Date
of report: |
|
February
15, 2005 |
|
(Date
of earliest event reported): |
|
February
10, 2005 |
|
LOEWS
CORPORATION |
(Exact
name of registrant as specified in its charter)
|
|
Delaware |
|
1-6541 |
|
13-2646102 | |
|
(State
or other jurisdiction of |
|
(Commission |
|
(I.R.S.
Employer | ||
|
incorporation
or organization) |
|
File
Number) |
|
Identification
No.) | ||
|
667
Madison Avenue, New York, N.Y. |
10021-8087 |
|
(Address
of principal executive offices)
|
(Zip
Code) |
|
Registrant’s
telephone number, including area
code: |
(212)
521-2000 |
|
NOT
APPLICABLE |
|
(Former
name or former address, if changed since last
report.) |
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|
[ ] |
Written
communications pursuant to Rule 425 under the Securities Act (17 CRF
230.425) |
|
[ ] |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
|
[ ] |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
|
[ ] |
Pre-commencement
communications pursuant to rule 13e-4 (c) under the Exchange Act (17 CFR
240.13e-4(c)) |
1
|
Item
2.02 |
Results
of Operations and Financial Condition. |
On
February 10, 2005, Registrant issued a press release for Loews Corporation and a
separate press release for the Carolina Group providing information on their
results of operations for the fourth quarter of 2004. The press releases are
furnished as Exhibits 99.1 and 99.2 to this Form 8-K.
|
Item
9.01 |
Financial
Statements and Exhibits |
|
(a) |
Not
applicable. |
|
(b) |
Not
applicable. |
|
(c) |
Exhibits: |
|
Exhibit
Reference |
|||||||
|
Number |
Exhibit
Description |
||||||
|
99.1 |
Loews
Corporation press release, issued February 10, 2005, providing information
on fourth quarter results of operations. | ||||||
|
99.2 |
Carolina
Group press release, issued by Loews Corporation February 10, 2005,
providing information on fourth quarter results of
operations. | ||||||
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
|
LOEWS
CORPORATION | |
|
|
(Registrant) | |
|
|
||
|
|
||
|
|
||
|
Dated: February
15, 2005 |
By: |
/s/
Gary W. Garson |
|
|
Gary
W. Garson | |
|
|
Senior
Vice President | |
|
General
Counsel | ||
|
and
Secretary | ||
2
Exhibit
99.1
|
Contact: |
Peter
W. Keegan | |||
|
Senior
Vice President | ||||
|
(212)
521-2950 | ||||
|
LOEWS |
||||
|
CORPORATION |
Candace
Leeds | |||
|
NEWS
RELEASE |
V.P.
of Public Affairs | |||
|
(212)
521-2416 | ||||
|
Joshua
E. Kahn | ||||
|
Investor
Relations | ||||
|
(212)
521-2788 | ||||
FOR
IMMEDIATE RELEASE
LOEWS
CORPORATION REPORTS NET INCOME FOR 2004
NEW YORK,
February 10, 2005—Loews Corporation (NYSE:LTR;CG) today reported consolidated
net income (including both the Loews Group and Carolina Group) for the 2004
fourth quarter of $502.8 million, compared to $367.4 million in the 2003 fourth
quarter. Consolidated net income for the year ended December 31, 2004 was
$1,231.3 million, compared to a net loss of $610.7 million in the prior
year.
Net
income (loss) and earnings per share information attributable to Loews common
stock and Carolina Group stock is summarized in the table below:
|
December
31, |
|||||||||||||
|
Three
Months |
Years
Ended |
||||||||||||
|
(In
millions, except per share data) |
2004 |
2003 |
2004 |
2003 |
|||||||||
Net
income (loss) attributable to Loews common stock: |
|||||||||||||
Income
(loss) before net investment gains (losses) (a) |
$ |
361.1 |
$ |
345.4 |
$ |
1,191.7 |
$ |
(1,044.4 |
) | ||||
|
Net
investment gains (losses) (b) |
85.6 |
(12.8 |
) |
(144.9 |
) |
263.1 |
|||||||
Income
(loss) from continuing operations |
446.7 |
332.6 |
1,046.8 |
(781.3 |
) | ||||||||
|
Discontinued
operations-net |
- |
- |
- |
55.4 |
|||||||||
Net
income (loss) attributable to Loews common stock |
446.7 |
332.6 |
1,046.8 |
(725.9 |
) | ||||||||
|
Net
income attributable to Carolina Group stock |
56.1 |
34.8 |
184.5 |
115.2 |
|||||||||
|
Consolidated
net income (loss) |
$ |
502.8 |
$ |
367.4 |
$ |
1,231.3 |
$ |
(610.7 |
) | ||||
Per
share: |
|||||||||||||
Income
(loss) per share of Loews common stock: |
|||||||||||||
Income
(loss) from continuing operations |
$ |
2.41 |
$ |
1.79 |
$ |
5.64 |
$ |
(4.21 |
) | ||||
|
Discontinued
operations-net |
- |
-
|
- |
0.30 |
|||||||||
|
Net
income (loss) per share of Loews common stock |
$ |
2.41 |
$ |
1.79 |
$ |
5.64 |
$ |
(3.91 |
) | ||||
|
Net
income per share of Carolina Group stock |
$ |
0.93 |
$ |
0.74 |
$ |
3.15 |
$ |
2.76 |
|||||
Book
value per share of Loews common stock: |
|||||||||||||
December
31, 2004 |
$ |
66.71 |
|||||||||||
|
December
31, 2003 |
$ |
60.92 |
|||||||||||
|
(a) |
Includes
income of $116.5 (after tax) for the year ended December 31, 2004 from an
investee’s sale of four ultra-large crude oil
tankers. |
|
(b) |
Includes
a loss of $352.9 (after tax and minority interest) for the year ended
December 31, 2004 related to CNA's sale of its individual life insurance
business and a loss of $116.4 (after tax and minority interest) for the
three months and year ended December 31, 2003 related to CNA’s sale of its
Group Benefits business. |
Page 1 of
6
Quarter
Ended December 31, 2004 Compared With 2003
Net
income attributable to Loews common stock for the fourth quarter of 2004
amounted to $446.7 million or $2.41 per share, compared to $332.6 million or
$1.79 per share in the comparable period of the prior year.
Income
before net investment gains attributable to Loews common stock amounted to
$361.1 million in the fourth quarter of 2004 compared to $345.4 million in the
comparable 2003 quarter. In 2004, investment gains (losses) related to the
Corporate trading portfolio were reclassified to net investment income. Earlier
years have been reclassified to conform to the current presentation. This
reclassification had no impact on net income (loss).
Net
income attributable to Loews common stock includes net investment gains of $85.6
million (after tax and minority interest) compared to net investment losses of
$12.8 million (after tax and minority interest) in the comparable period of the
prior year. This increase was due primarily to a loss recorded in 2003 of $116.4
million (after tax and minority interest) from the sale by CNA Financial
Corporation, the Company’s 91%-owned subsidiary, of its Group Benefits business
to Hartford Financial Services Group, Inc.
Net
income attributable to Carolina Group stock for the fourth quarter of 2004 was
$56.1 million or $0.93 per Carolina Group share, compared to $34.8 million or
$0.74 per Carolina Group share in the fourth quarter of 2003. The increase in
net income attributable to Carolina Group stock for the fourth quarter of 2004,
as compared to the comparable period of the prior year, is due to improved
overall results of the Carolina Group and reflects the increased economic
interest to 34.68% for the three months ended December 31, 2004, as compared to
29.23% for the comparable period of the prior year, due to 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. The Company is issuing a separate press release reporting
the results of the Carolina Group for the year ended December 31,
2004.
Consolidated
revenues in the fourth quarter of 2004 amounted to $4.1 billion compared to $4.3
billion in the comparable 2003 quarter. The decline in revenues reflects CNA’s
sale of its Group Benefits business in December of 2003 and individual life
insurance business in April of 2004.
Year
Ended December 31, 2004 Compared With 2003
Net
income attributable to Loews common stock for the year ended 2004 amounted to
$1,046.8 million or $5.64 per share, compared to a loss of $725.9 million or
$3.91 per share in the prior year.
Income
before net investment gains (losses) attributable to Loews common stock amounted
to $1,191.7 million in the year ended 2004 compared to a loss of $1,044.4
million in the prior year. Results for 2004 include charges at CNA of $158.8
million (after tax and minority interest) due to the impact of the Hurricanes
Charley, Frances, Ivan and Jeanne, partially offset by income of $116.5 million
(after taxes) from Hellespont Shipping Corporation, a 49%-owned company,
following the sale of its four ultra-large oil tankers. The 2003 results include
charges by CNA for net prior year development of $1,667.4 million (after tax and
minority interest) and an increase in bad debt reserves for insurance and
reinsurance receivables of $356.9 million (after tax and minority
interest).
Page 2 of
6
Net
income attributable to Loews common stock includes net investment losses of
$144.9 million (after tax and minority interest), compared to net investment
gains of $263.1 million (after tax and minority interest) in the prior year. Net
investment losses in 2004 are due primarily to a loss of $352.9 million (after
tax and minority interest) from CNA’s sale of its individual life insurance
business.
Net
income attributable to Carolina Group stock for the year ended 2004 was $184.5
million or $3.15 per Carolina Group share, compared to $115.2 million or $2.76
per Carolina Group share in the prior year.
Consolidated
revenues for the year ended 2004 amounted to $15.2 billion compared to $16.5
billion in the prior year. The decline in revenues reflects CNA’s sale of its
Group Benefits business in December of 2003 and the sale of the individual life
insurance business in April of 2004.
# #
#
At
December 31, 2004, there were 185,584,575 shares of Loews common stock
outstanding and 67,967,250 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 December 31,
2004, the outstanding Carolina Group stock represents a 39.19% economic interest
in the economic performance of the Carolina Group.
A
conference call to discuss the fourth quarter results of Loews Corporation has
been scheduled for 11:00 a.m. EDT, Thursday, February 10, 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 fourth quarter results of CNA has been scheduled
for 10:00 a.m. EDT, Thursday, February 10, 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) 810-0924. An online replay will be available at CNA’s website
following the call.
Page 3 of
6
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. 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.
Page 4 of
6
Loews
Corporation and Subsidiaries
Financial
Review
|
December
31, |
|||||||||||||
|
Three
Months |
Years
Ended |
||||||||||||
|
2004 |
2003 |
2004 |
2003 |
||||||||||
|
(Amounts
in millions, except per share data) | |||||||||||||
Revenues: |
|||||||||||||
Insurance
premiums and net investment income (a) |
$ |
2,676.4 |
$ |
3,044.4 |
$ |
9,818.3 |
$ |
11,523.8 |
|||||
Manufactured
products (b) |
889.7 |
840.4 |
3,515.2 |
3,418.8 |
|||||||||
|
Other
(c) |
485.1 |
450.9 |
1,908.8 |
1,518.4 |
|||||||||
|
Total |
4,051.2 |
4,335.7 |
15,242.3 |
16,461.0 |
|||||||||
Expenses: |
|||||||||||||
Insurance
claims & policyholders’ benefits |
1,586.3 |
1,966.9 |
6,445.6 |
10,286.5 |
|||||||||
Cost
of manufactured products sold (b) |
486.8 |
483.2 |
2,045.4 |
1,972.8 |
|||||||||
|
Other
(d) |
1,192.7 |
1,298.4 |
4,929.3 |
5,580.1 |
|||||||||
|
Total |
3,265.8 |
3,748.5 |
13,420.3 |
17,839.4 |
|||||||||
|
785.4 |
587.2 |
1,822.0 |
(1,378.4 |
) | |||||||||
Income
tax expense (benefit) |
244.4 |
201.2 |
533.8 |
(534.1 |
) | ||||||||
|
Minority
interest |
38.2 |
18.6 |
56.9 |
(178.2 |
) | ||||||||
|
Total |
282.6 |
219.8 |
590.7 |
(712.3 |
) | ||||||||
Income
(loss) from continuing operations |
502.8 |
367.4 |
1,231.3 |
(666.1 |
) | ||||||||
|
Discontinued
operations-net (e) |
55.4 |
||||||||||||
|
Net
income (loss) |
$ |
502.8 |
$ |
367.4 |
$ |
1,231.3 |
$ |
(610.7 |
) | ||||
Net
income (loss) attributable to: |
|||||||||||||
Loews
common stock: |
|||||||||||||
Income
(loss) from continuing operations |
$ |
446.7 |
$ |
332.6 |
$ |
1,046.8 |
$ |
(781.3 |
) | ||||
|
Discontinued
operations-net (e) |
55.4 |
||||||||||||
Loews
common stock |
446.7 |
332.6 |
1,046.8 |
(725.9 |
) | ||||||||
|
Carolina
Group stock (f) |
56.1 |
34.8 |
184.5 |
115.2 |
|||||||||
$ |
502.8 |
$ |
367.4 |
$ |
1,231.3 |
$ |
(610.7 |
) | |||||
Income
(loss) per share of Loews common stock (g): |
|||||||||||||
Income
(loss) from continuing operations |
$ |
2.41 |
$ |
1.79 |
$ |
5.64 |
$ |
(4.21 |
) | ||||
|
Discontinued
operations-net (e) |
0.30 |
||||||||||||
|
Net
income (loss) |
$ |
2.41 |
$ |
1.79 |
$ |
5.64 |
$ |
(3.91 |
) | ||||
|
Net
income per share of Carolina Group stock (g) |
$ |
0.93 |
$ |
0.74 |
$ |
3.15 |
$ |
2.76 |
|||||
Weighted
average number of shares outstanding: |
|||||||||||||
Loews
common stock |
185.55 |
185.45 |
185.50 |
185.45 |
|||||||||
Carolina
Group stock |
60.03 |
47.17 |
58.49 |
41.74 |
|||||||||
|
(a) |
Includes
investment gains (losses) of $153.4, $1.3, ($256.0) and $464.1 for the
respective periods. The year ended December 31, 2004 includes a loss of
$618.6 related to CNA’s sale of its individual life insurance business and
the three months and year ended December 31, 2003 includes a loss of
$172.9 related to CNA’s sale of its Group Benefits
business. |
|
(b) |
Includes
excise taxes of $164.5, $158.0, $658.1 and $651.4 paid on sales of
manufactured products for the respective periods. |
|
(c) |
Includes
income of $179.3 ($116.5 after taxes) in the year ended December 31, 2004
from an affiliate’s sale of four ultra-large crude oil
tankers. |
|
(d) |
Includes
a $27.5 charge in the year ended December 31, 2003 ($17.1 after taxes) to
settle litigation with tobacco growers and a $28.0 charge in the year
ended December 31, 2003 ($17.5 after taxes) to resolve indemnification
claims and trademark matters in connection with the 1977 sale by Lorillard
of its international business. |
|
(e) |
Includes
a gain of $56.7 in the year ended December 31, 2003 from the sale of a
hotel property. |
|
(f) |
Represents
34.68%, 29.23%, 33.80% and 24.59% of the economic interest in the Carolina
Group for the respective periods. |
|
(g) |
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. |
Page 5 of
6
Loews
Corporation and Subsidiaries
Additional
Financial Information
|
December
31, |
|||||||||||||
|
Three
Months |
Years
Ended |
||||||||||||
|
2004 |
2003 |
2004 |
2003 |
||||||||||
|
(In
millions) | |||||||||||||
Revenues: |
|||||||||||||
CNA
Financial |
$ |
2,518.3 |
$ |
3,053.3 |
$ |
10,178.1 |
$ |
11,256.0 |
|||||
Lorillard
(a) |
848.2 |
798.0 |
3,384.4 |
3,295.4 |
|||||||||
Loews
Hotels |
81.3 |
72.5 |
315.2 |
286.0 |
|||||||||
Diamond
Offshore |
252.3 |
190.0 |
835.6 |
694.9 |
|||||||||
Boardwalk
Pipelines |
79.8 |
75.1 |
265.1 |
143.2 |
|||||||||
|
Investment
income-net and other (b) (c) |
117.9 |
145.5 |
519.9 |
321.4 |
|||||||||
|
3,897.8 |
4,334.4 |
15,498.3 |
15,996.9 |
||||||||||
Investment
gains (losses): |
|||||||||||||
CNA
Financial (d) |
166.9 |
(3.5 |
) |
(244.5 |
) |
473.4 |
|||||||
|
Corporate
and other |
(13.5 |
) |
4.8 |
(11.5 |
) |
(9.3 |
) | ||||||
|
153.4 |
1.3 |
(256.0 |
) |
464.1 |
|||||||||
|
Total |
$ |
4,051.2 |
$ |
4,335.7 |
$ |
15,242.3 |
$ |
16,461.0 |
|||||
Income
(loss) before taxes: |
|||||||||||||
CNA
Financial |
$ |
255.2 |
$ |
264.3 |
$ |
759.2 |
$ |
(2,789.6 |
) | ||||
Lorillard
(e) (f) |
205.3 |
176.6 |
740.3 |
755.1 |
|||||||||
Loews
Hotels |
8.1 |
1.0 |
31.2 |
18.6 |
|||||||||
Diamond
Offshore |
19.3 |
2.9 |
(9.8 |
) |
(53.2 |
) | |||||||
Boardwalk
Pipelines |
27.8 |
30.9 |
81.1 |
37.6 |
|||||||||
|
Investment
income-net and other (b) (c) (g) |
27.5 |
54.3 |
178.1 |
1.9 |
|||||||||
|
543.2 |
530.0 |
1,780.1 |
(2,029.6 |
) | |||||||||
Investment
gains (losses): |
|||||||||||||
CNA
Financial (d) |
166.9 |
(3.5 |
) |
(244.5 |
) |
473.4 |
|||||||
|
Corporate
and other |
(13.8 |
) |
4.6 |
(12.0 |
) |
(7.1 |
) | ||||||
|
153.1 |
1.1 |
(256.5 |
) |
466.3 |
|||||||||
Loews
common stock |
696.3 |
531.1 |
1,523.6 |
(1,563.3 |
) | ||||||||
|
Carolina
Group stock (h) |
89.1 |
56.1 |
298.4 |
184.9 |
|||||||||
|
Total |
$ |
785.4 |
$ |
587.2 |
$ |
1,822.0 |
$ |
(1,378.4 |
) | ||||
Net
income (loss): |
|||||||||||||
CNA
Financial |
$ |
187.9 |
$ |
184.3 |
$ |
558.1 |
$ |
(1,523.9 |
) | ||||
Lorillard
(e) (f) |
128.8 |
109.7 |
457.1 |
470.9 |
|||||||||
Loews
Hotels |
7.4 |
21.4 |
11.2 |
||||||||||
Diamond
Offshore |
4.2 |
(0.7 |
) |
(9.3 |
) |
(27.2 |
) | ||||||
Boardwalk
Pipelines |
16.8 |
18.7 |
48.8 |
22.5 |
|||||||||
|
Investment
income-net and other (b) (c) (g) |
16.0 |
33.4 |
115.6 |
2.1 |
|||||||||
|
361.1 |
345.4 |
1,191.7 |
(1,044.4 |
) | |||||||||
Investment
gains (losses): |
|||||||||||||
CNA
Financial (d) |
94.5 |
(15.5 |
) |
(137.1 |
) |
265.7 |
|||||||
|
Corporate
and other |
(8.9 |
) |
2.7 |
(7.8 |
) |
(2.6 |
) | ||||||
|
85.6 |
(12.8 |
) |
(144.9 |
) |
263.1 |
||||||||
Income
(loss) from continuing operations |
446.7 |
332.6 |
1,046.8 |
(781.3 |
) | ||||||||
|
Discontinued
operations-net (i) |
55.4 |
||||||||||||
Loews
common stock |
446.7 |
332.6 |
1,046.8 |
(725.9 |
) | ||||||||
|
Carolina
Group stock (h) |
56.1 |
34.8 |
184.5 |
115.2 |
|||||||||
|
Total |
$ |
502.8 |
$ |
367.4 |
$ |
1,231.3 |
$ |
(610.7 |
) | ||||
|
(a) |
Includes
excise taxes of $164.5, $158.0, $658.1 and $651.4 paid on sales of
manufactured products for the respective periods. |
|
(b) |
Consists
primarily of corporate investment income and investment gains (losses)
from the corporate trading portfolio, corporate interest expense,
operations of Bulova Corporation and other unallocated
expenses. |
|
(c) |
Includes
income of $179.3 ($116.5 after taxes) in the year ended December 31, 2004
from an affiliate’s sale of four ultra-large crude oil
tankers. |
|
(d) |
Includes
a loss of $618.6 ($352.9 after tax and minority interest) related to CNA’s
sale of its individual life insurance business for the year ended December
31, 2004 and a loss of $172.9 ($116.4 after tax and minority interest) in
the three months and year ended December 31, 2003 related to CNA’s sale of
its Group Benefits business. |
|
(e) |
Represents
the Loews Group’s intergroup interest in the earnings of the Carolina
Group. |
|
(f) |
Includes
a $27.5 charge in the year ended December 31, 2003 ($17.1 after taxes) to
settle litigation with tobacco growers and a $28.0 charge in the year
ended December 31, 2003 ($17.5 after taxes) to resolve indemnification
claims and trademark matters in connection with the 1977 sale by Lorillard
of its international business. |
|
(g) |
Includes
additional interest expense of $17.0 ($11.1 after taxes) in the year ended
December 31, 2004 related to charges from the early redemption of $300.0
principal amount of the Company’s 7.625% notes. |
|
(h) |
Represents
34.68%, 29.23%, 33.80% and 24.59% of the economic interest in the Carolina
Group for the respective periods. |
|
(i) |
Includes
a gain of $56.7 in the year ended December 31, 2003 from the sale of a
hotel property. |
Page 6 of
6
Exhibit
99.2
|
Contact: |
Peter
W. Keegan | |||
|
Senior
Vice President | ||||
|
(212)
521-2950 | ||||
|
CAROLINA
GROUP |
||||
|
LOEWS
CORPORATION |
Candace
Leeds | |||
|
NEWS
RELEASE |
V.P.
of Public Affairs | |||
|
(212)
521-2416 | ||||
|
Joshua
E. Kahn | ||||
|
Investor
Relations | ||||
|
(212)
521-2788 | ||||
FOR
IMMEDIATE RELEASE
CAROLINA
GROUP REPORTS
NET
INCOME FOR 2004
NEW YORK,
February 10, 2005—Loews Corporation (NYSE:LTR) today reported Carolina Group net
income for the 2004 fourth quarter of $161.6 million, compared to $119.1 million
in the 2003 fourth quarter. Net income attributable to Carolina Group stock
(NYSE:CG) for the fourth quarter of 2004 was $56.1 million, or $0.93 per share
of Carolina Group stock, compared to $34.8 million, or $0.74 per share in the
comparable period of the prior year.
The
increase in net income attributable to Carolina Group stock for the fourth
quarter of 2004, as compared to the comparable period of the prior year, is due
to improved overall results of the Carolina Group and reflects the increased
economic interest to 34.68% for the three months ended December 31, 2004, as
compared to 29.23% for the comparable period of the prior year, due to 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.
Net sales
for the Carolina Group were $832.5 million in the fourth quarter of 2004,
compared to $787.7 million in the 2003 fourth quarter. The increase in net sales
reflects an increase in unit sales volume of 2.9%, partially offset by an
increase in sales promotion expenses.
Results
of operations of the Carolina Group include interest expense of $23.9 and $26.2
million, net of taxes, for the three months ended December 31, 2004 and 2003,
respectively, on notional intergroup debt. At December 31, 2004, $1.871 billion
principal amount of notional intergroup debt was outstanding.
Carolina
Group net income for the year ended 2004 was $545.9 million, compared to $468.3
million in the prior year. Net income for the year ended 2003 included a $27.5
million charge ($17.1 million after taxes) to settle litigation with tobacco
growers and a $28.0 million
Page 1 of
4
charge
($17.5 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 year ended
2004 was $184.5 million, or $3.15 per share of Carolina Group stock, compared to
$115.2 million, or $2.76 per share in the comparable period of the prior year.
The increase in net income attributable to Carolina Group stock is primarily due
to improved overall results of the Carolina Group.
Net sales
for the Carolina Group were $3.348 billion in 2004, compared to $3.256 billion
in 2003. The increase in net sales reflects a 0.4% increase in unit sales volume
and a decrease in sales promotion expenses.
Results
of operations of the Carolina Group include interest expense of $97.3 and $114.0
million, net of taxes, for the years ended 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
December 31, 2004, there were 67,967,250 shares of Carolina Group stock
outstanding representing a 39.19% 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 fourth quarter of 2004, which accompanies this press
release.
A
conference call to discuss the fourth quarter results of Loews Corporation has
been scheduled for 11:00 a.m. EDT, Thursday, February 10, 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.
Page 2 of
4
Carolina
Group
Financial
Review
|
December
31, |
|||||||||||||
|
Three
Months |
Years
Ended |
||||||||||||
|
2004 |
2003 |
2004 |
2003 |
||||||||||
|
(Amounts
in millions, except per share data) | |||||||||||||
Net
sales (a) |
$ |
832.5 |
$ |
787.7 |
$ |
3,347.8 |
$ |
3,255.6 |
|||||
Cost
of sales (a) (b) |
461.2 |
457.7 |
1,965.6 |
1,893.1 |
|||||||||
|
Selling,
advertising and administrative (c) |
92.7 |
107.8 |
381.1 |
460.6 |
|||||||||
|
Total
operating costs and expenses |
553.9 |
565.5 |
2,346.7 |
2,353.7 |
|||||||||
Operating
income |
278.6 |
222.2 |
1,001.1 |
901.9 |
|||||||||
Investment
income |
16.9 |
11.5 |
40.0 |
32.1 |
|||||||||
|
Interest
expense |
(38.1 |
) |
(42.1 |
) |
(157.5 |
) |
(182.8 |
) | |||||
Income
before income taxes |
257.4 |
191.6 |
883.6 |
751.2 |
|||||||||
|
Income
taxes |
95.8 |
72.5 |
337.7 |
282.9 |
|||||||||
Net
income |
161.6 |
119.1 |
545.9 |
468.3 |
|||||||||
Earnings
attributable to the Loews Group intergroup |
|||||||||||||
|
interest
(d) |
105.5 |
84.3 |
361.4 |
353.1 |
|||||||||
|
Income
attributable to Carolina Group shareholders (e) |
$ |
56.1 |
$ |
34.8 |
$ |
184.5 |
$ |
115.2 |
|||||
|
Per
share of Carolina Group stock (f) |
$ |
0.93 |
$ |
0.74 |
$ |
3.15 |
$ |
2.76 |
|||||
|
Weighted
number of shares outstanding |
60.03 |
47.17 |
58.49 |
41.74 |
|||||||||
|
(a) |
Includes
excise taxes of $164.5, $158.0, $658.1 and $651.4 for respective
periods. |
|
(b) |
Includes
charges of $196.9, $193.0, $845.9 and $785.2 ($124.3, $119.9, $522.6 and
$489.5 after taxes) to accrue obligations under the State Settlement
Agreements for the respective periods. |
|
(c) |
Includes
a $27.5 charge in the year ended December 31, 2003 ($17.1 after taxes) to
settle litigation with tobacco growers and a $28.0 charge in the year
ended December 31, 2003 ($17.5 after taxes) to resolve indemnification
claims and trademark matters in connection with the 1977 sale by Lorillard
of its international business. |
|
(d) |
Prior
to December 13, 2004, the Loews Group's intergroup interest in the
earnings of the Carolina Group reflected share equivalents amounting to
115,445,000 shares of 173,412,250 shares equivalents outstanding.
Subsequent to the Loews Group's sale of 10,000,000 shares of Carolina
Group stock, the Loews Group's intergroup interest in the earnings of the
Carolina Group reflected share equivalents amounting to 105,445,000 shares
of 173,412,250 share and share equivalents outstanding. As of December 31,
2004, there were 67,967,250 shares of Carolina Group stock
outstanding. |
|
(e) |
Represents
34.68%, 29.23%, 33.80% and 24.59% of the economic interest in the Carolina
Group for the respective periods. |
|
(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. |
Page 3 of
4
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):
|
December
31, |
|||||||||||||
|
Three
Months |
Years
Ended |
||||||||||||
|
2004 |
2003 |
2004 |
2003 |
||||||||||
Full
Price Brands |
|||||||||||||
Total
Newport |
7,812,616 |
7,508,067 |
31,335,184 |
30,976,222 |
|||||||||
Total
Kent Family |
204,264 |
246,597 |
855,391 |
1,064,086 |
|||||||||
Total
True |
160,998 |
183,297 |
663,191 |
777,681 |
|||||||||
Total
Max |
10,848 |
12,471 |
45,525 |
53,970 |
|||||||||
Total
Satin |
1,728 |
2,496 |
7,914 |
10,830 |
|||||||||
|
Total
Triumph |
- |
772 |
886 |
3,731 |
|||||||||
|
Total
Full Price Brands |
8,190,454 |
7,953,700 |
32,908,091 |
32,886,520 |
|||||||||
Price/Value
Brands |
|||||||||||||
Total
Old Gold |
216,469 |
243,108 |
903,173 |
1,030,580 |
|||||||||
|
Total
Maverick |
175,067 |
151,590 |
691,607 |
514,341 |
|||||||||
|
Total
Price/Value Brands |
391,536 |
394,698 |
1,594,780 |
1,544,921 |
|||||||||
Total
Domestic Cigarettes |
8,581,990 |
8,348,398 |
34,502,871 |
34,431,441 |
|||||||||
|
Total
Puerto Rico and U.S. Possessions |
225,072 |
212,508 |
823,931 |
766,784 |
|||||||||
|
Grand
Total |
8,807,062 |
8,560,906 |
35,326,802 |
35,198,225 |
|||||||||
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. |
Page 4 of
4