x
|
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|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|
|
|
o
|
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
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|
|
Delaware
|
|
13-2646102
|
(State
or other jurisdiction of
|
|
(I.R.S.
Employer
|
incorporation
or organization)
|
|
Identification
No.)
|
|
Yes
|
X
|
|
No
|
|
Large
accelerated filer
|
X
|
|
Accelerated
filer
|
|
Non-accelerated
filer
|
|
Yes
|
|
No
|
X
|
|
Class
|
|
Outstanding
at July 21, 2006
|
||
Common
stock, $1.00 par value
|
550,712,607
shares
|
|||
Carolina
Group stock, $0.01 par value
|
93,292,746
shares
|
Page
|
||
No.
|
||
Part
I. Financial Information
|
||
Item
1. Financial Statements
|
3
|
|
Consolidated
Condensed Balance Sheets
|
3
|
|
June
30, 2006 and December 31, 2005
|
||
Consolidated
Condensed Statements of Income
|
4
|
|
Three
and six months ended June 30, 2006 and 2005 Restated
|
||
Consolidated
Condensed Statements of Cash Flows
|
6
|
|
Six
months ended June 30, 2006 and 2005 Restated
|
||
Notes
to Consolidated Condensed Financial Statements
|
8
|
|
Item
2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations
|
68
|
|
Item
3. Quantitative and Qualitative Disclosures about Market
Risk
|
116
|
|
Item
4. Controls and Procedures
|
119
|
|
Part
II. Other Information
|
120
|
|
Item
1. Legal Proceedings
|
120
|
|
Item
1A. Risk Factors
|
120
|
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
123
|
|
Item
4. Submission of Matters to a Vote of Security Holders
|
123
|
|
Item
6. Exhibits
|
124
|
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(In
millions)
|
|||||||
Assets:
|
|||||||
Investments:
|
|||||||
Fixed
maturities, amortized cost of $32,423.1 and $32,759.0
|
$
|
32,219.1
|
$
|
33,381.2
|
|||
Equity
securities, cost of $1,207.6 and $903.5
|
1,415.6
|
1,107.2
|
|||||
Limited
partnership investments
|
1,945.0
|
1,769.0
|
|||||
Other
investments
|
25.4
|
32.0
|
|||||
Short-term
investments
|
11,000.0
|
9,106.6
|
|||||
Total
investments
|
46,605.1
|
45,396.0
|
|||||
Cash
|
139.9
|
153.1
|
|||||
Receivables
|
14,796.9
|
15,313.7
|
|||||
Property,
plant and equipment
|
5,142.5
|
4,951.6
|
|||||
Deferred
income taxes
|
1,109.7
|
905.3
|
|||||
Goodwill
and other intangible assets
|
297.2
|
297.4
|
|||||
Other
assets
|
1,901.9
|
1,909.6
|
|||||
Deferred
acquisition costs of insurance subsidiaries
|
1,210.8
|
1,197.4
|
|||||
Separate
account business
|
506.0
|
551.5
|
|||||
Total
assets
|
$
|
71,710.0
|
$
|
70,675.6
|
|||
Liabilities
and Shareholders’ Equity:
|
|||||||
Insurance
reserves:
|
|||||||
Claim
and claim adjustment expense
|
$
|
30,177.4
|
$
|
30,938.0
|
|||
Future
policy benefits
|
6,460.8
|
6,297.2
|
|||||
Unearned
premiums
|
3,907.1
|
3,705.7
|
|||||
Policyholders’
funds
|
1,115.1
|
1,495.3
|
|||||
Total
insurance reserves
|
41,660.4
|
42,436.2
|
|||||
Payable
for securities purchased
|
624.3
|
401.7
|
|||||
Collateral
on loaned securities
|
1,340.7
|
767.4
|
|||||
Short-term
debt
|
554.3
|
598.2
|
|||||
Long-term
debt
|
4,587.3
|
4,608.6
|
|||||
Reinsurance
balances payable
|
1,656.7
|
1,636.2
|
|||||
Other
liabilities
|
4,509.8
|
4,524.8
|
|||||
Separate
account business
|
506.0
|
551.5
|
|||||
Total
liabilities
|
55,439.5
|
55,524.6
|
|||||
Minority
interest
|
2,126.7
|
2,058.9
|
|||||
Shareholders’
equity
|
14,143.8
|
13,092.1
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
71,710.0
|
$
|
70,675.6
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions, except per share data)
|
(Restated
|
(Restated
|
|||||||||||
See
Note 18)
|
See
Note 18)
|
||||||||||||
Revenues:
|
|||||||||||||
Insurance
premiums
|
$
|
1,892.0
|
$
|
1,911.7
|
$
|
3,760.6
|
$
|
3,810.8
|
|||||
Net
investment income
|
640.9
|
406.3
|
1,345.0
|
860.5
|
|||||||||
Investment
gains (losses)
|
(93.3
|
)
|
32.5
|
(91.3
|
)
|
9.7
|
|||||||
Manufactured
products (including excise taxes of
|
|||||||||||||
$176.7,
$179.0, $340.6 and $335.2)
|
1,020.7
|
968.7
|
1,919.1
|
1,802.9
|
|||||||||
Other
|
817.0
|
711.5
|
1,588.4
|
1,288.0
|
|||||||||
Total
|
4,277.3
|
4,030.7
|
8,521.8
|
7,771.9
|
|||||||||
Expenses:
|
|||||||||||||
Insurance
claims and policyholders’ benefits
|
1,432.2
|
1,581.8
|
2,924.2
|
3,015.0
|
|||||||||
Amortization
of deferred acquisition costs
|
371.8
|
374.5
|
742.0
|
752.1
|
|||||||||
Cost
of manufactured products sold
|
574.7
|
594.1
|
1,108.0
|
1,099.8
|
|||||||||
Other
operating expenses
|
818.0
|
755.8
|
1,607.8
|
1,498.8
|
|||||||||
Restructuring
and other related charges
|
(12.9
|
)
|
(12.9
|
)
|
|||||||||
Interest
|
70.7
|
85.8
|
145.3
|
215.6
|
|||||||||
Total
|
3,254.5
|
3,392.0
|
6,514.4
|
6,581.3
|
|||||||||
1,022.8
|
638.7
|
2,007.4
|
1,190.6
|
||||||||||
Income
tax expense
|
337.2
|
164.7
|
671.4
|
342.0
|
|||||||||
Minority
interest
|
114.5
|
40.2
|
218.9
|
75.1
|
|||||||||
Total
|
451.7
|
204.9
|
890.3
|
417.1
|
|||||||||
Income
from continuing operations
|
571.1
|
433.8
|
1,117.1
|
773.5
|
|||||||||
Discontinued
operations, net
|
(2.4
|
)
|
1.8
|
(7.4
|
)
|
8.4
|
|||||||
Net
income
|
$
|
568.7
|
$
|
435.6
|
$
|
1,109.7
|
$
|
781.9
|
|||||
Net
income attributable to:
|
|||||||||||||
Loews
common stock:
|
|||||||||||||
Income
from continuing operations
|
$
|
477.3
|
$
|
378.1
|
$
|
955.7
|
$
|
671.3
|
|||||
Discontinued
operations, net
|
(2.4
|
)
|
1.8
|
(7.4
|
)
|
8.4
|
|||||||
Loews
common stock
|
474.9
|
379.9
|
948.3
|
679.7
|
|||||||||
Carolina
Group stock
|
93.8
|
55.7
|
161.4
|
102.2
|
|||||||||
Total
|
$
|
568.7
|
$
|
435.6
|
$
|
1,109.7
|
$
|
781.9
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions, except per share data)
|
(Restated
|
(Restated
|
|||||||||||
See
Note 18)
|
See
Note 18)
|
||||||||||||
Basic
net income per Loews common share:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.86
|
$
|
0.68
|
$
|
1.71
|
$
|
1.20
|
|||||
Discontinued
operations, net
|
(0.01
|
)
|
0.02
|
||||||||||
Net
income
|
$
|
0.86
|
$
|
0.68
|
$
|
1.70
|
$
|
1.22
|
|||||
Diluted
net income per Loews common share:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.85
|
$
|
0.68
|
$
|
1.71
|
$
|
1.20
|
|||||
Discontinued
operations, net
|
(0.01
|
)
|
0.02
|
||||||||||
Net
income
|
$
|
0.85
|
$
|
0.68
|
$
|
1.70
|
$
|
1.22
|
|||||
Basic
and diluted net income per Carolina Group
|
|||||||||||||
share
|
$
|
1.09
|
$
|
0.82
|
$
|
1.96
|
$
|
1.50
|
|||||
Basic
weighted average number of shares
|
|||||||||||||
outstanding:
|
|||||||||||||
Loews
common stock
|
555.37
|
556.96
|
556.41
|
556.90
|
|||||||||
Carolina
Group stock
|
86.03
|
68.03
|
82.15
|
68.01
|
|||||||||
Diluted
weighted average number of shares
|
|||||||||||||
outstanding:
|
|||||||||||||
Loews
common stock
|
556.16
|
557.70
|
557.21
|
557.62
|
|||||||||
Carolina
Group stock
|
86.11
|
68.10
|
82.24
|
68.08
|
Six
Months Ended June 30
|
2006
|
2005
|
|||||
(In
millions)
|
(Restated
|
||||||
See
Note 18)
|
|||||||
Operating
Activities:
|
|||||||
Net
income
|
$
|
1,109.7
|
$
|
781.9
|
|||
Adjustments
to reconcile net income to net cash
|
|||||||
provided
(used) by operating activities-net
|
360.6
|
234.4
|
|||||
Changes
in operating assets and liabilities-net:
|
|||||||
Reinsurance
receivables
|
454.7
|
1,365.5
|
|||||
Other
receivables
|
(235.0
|
)
|
45.5
|
||||
Federal
income tax
|
207.7
|
327.5
|
|||||
Prepaid
reinsurance premiums
|
(48.7
|
)
|
161.8
|
||||
Deferred
acquisition costs
|
(13.4
|
)
|
20.0
|
||||
Insurance
reserves and claims
|
(370.4
|
)
|
(656.6
|
)
|
|||
Reinsurance
balances payable
|
20.5
|
(198.0
|
)
|
||||
Other
liabilities
|
(202.9
|
)
|
(443.8
|
)
|
|||
Trading
securities
|
261.2
|
4.2
|
|||||
Other,
net
|
51.0
|
(152.6
|
)
|
||||
Net
cash flow operating activities - continuing operations
|
1,595.0
|
1,489.8
|
|||||
Net
cash flow operating activities - discontinued operations
|
(4.4
|
)
|
(24.1
|
)
|
|||
Net
cash flow operating activities - total
|
1,590.6
|
1,465.7
|
|||||
Investing
Activities:
|
|||||||
Purchases
of fixed maturities
|
(35,395.5
|
)
|
(43,261.9
|
)
|
|||
Proceeds
from sales of fixed maturities
|
31,898.3
|
38,604.0
|
|||||
Proceeds
from maturities of fixed maturities
|
4,102.8
|
5,136.0
|
|||||
Purchases
of equity securities
|
(262.6
|
)
|
(204.0
|
)
|
|||
Proceeds
from sales of equity securities
|
119.9
|
134.1
|
|||||
Purchases
of property and equipment
|
(395.6
|
)
|
(213.7
|
)
|
|||
Disposition
of property and equipment
|
1.5
|
10.8
|
|||||
Change
in collateral on loaned securities
|
573.3
|
454.6
|
|||||
Sales
of business
|
11.6
|
||||||
Change
in short-term investments
|
(1,902.2
|
)
|
(213.5
|
)
|
|||
Change
in other investments
|
(172.8
|
)
|
112.6
|
||||
Net
cash flow investing activities - continuing operations
|
(1,432.9
|
)
|
570.6
|
||||
Net
cash flow investing activities - discontinued operations
|
23.5
|
42.7
|
|||||
Net
cash flow investing activities - total
|
(1,409.4
|
)
|
613.3
|
Six
Months Ended June 30
|
2006
|
2005
|
|||||
(In
millions)
|
(Restated
|
||||||
See
Note 18)
|
|||||||
Financing
Activities:
|
|||||||
Dividends
paid
|
$
|
(140.7
|
)
|
$
|
(117.6
|
)
|
|
Dividends
paid to minority interests
|
(111.3
|
)
|
(7.3
|
)
|
|||
Purchases
of treasury shares
|
(244.5
|
)
|
|||||
Issuance
of common stock
|
760.8
|
6.0
|
|||||
Principal
payments on debt
|
(67.5
|
)
|
(3,201.1
|
)
|
|||
Issuance
of debt
|
11.9
|
1,418.0
|
|||||
Receipts
of policyholder account balances on investment contracts
|
1.2
|
||||||
Withdrawals
of policyholder account balances on investment contracts
|
(406.6
|
)
|
(64.3
|
)
|
|||
Excess
tax benefits from share-based payment arrangements
|
2.8
|
3.0
|
|||||
Other
|
4.0
|
2.2
|
|||||
Net
cash flow financing activities - continuing operations
|
(189.9
|
)
|
(1,961.1
|
)
|
|||
Net
change in cash
|
(8.7
|
)
|
117.9
|
||||
Net
cash transactions from:
|
|||||||
Continuing
operations to discontinued operations
|
14.5
|
7.2
|
|||||
Discontinued
operations to continuing operations
|
(14.5
|
)
|
(7.2
|
)
|
|||
Cash,
beginning of period
|
182.0
|
234.0
|
|||||
Cash,
end of period
|
$
|
173.3
|
$
|
351.9
|
|||
Cash,
end of period:
|
|||||||
Continuing
operations
|
$
|
139.9
|
$
|
326.4
|
|||
Discontinued
operations
|
33.4
|
25.5
|
|||||
Total
|
$
|
173.3
|
$
|
351.9
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Net
investment income consisted of:
|
|||||||||||||
Fixed
maturity securities
|
$
|
488.5
|
$
|
414.4
|
$
|
909.8
|
$
|
797.4
|
|||||
Short-term
investments
|
88.4
|
36.6
|
183.7
|
75.9
|
|||||||||
Limited
partnerships
|
57.1
|
37.4
|
137.2
|
123.4
|
|||||||||
Equity
securities
|
11.4
|
8.4
|
19.3
|
13.6
|
|||||||||
Income
(loss) from trading portfolio
|
13.5
|
(44.3
|
)
|
126.4
|
(69.0
|
)
|
|||||||
Interest
expense on funds withheld and other deposits
|
(29.8
|
)
|
(50.4
|
)
|
(54.6
|
)
|
(89.4
|
)
|
|||||
Other
|
25.6
|
36.4
|
49.1
|
55.0
|
|||||||||
Total
investment income
|
654.7
|
438.5
|
1,370.9
|
906.9
|
|||||||||
Investment
expenses
|
(13.8
|
)
|
(32.2
|
)
|
(25.9
|
)
|
(46.4
|
)
|
|||||
Net
investment income
|
$
|
640.9
|
$
|
406.3
|
$
|
1,345.0
|
$
|
860.5
|
|||||
Investment
gains (losses) are as follows:
|
|||||||||||||
Fixed
maturities
|
$
|
(93.2
|
)
|
$
|
26.8
|
$
|
(103.3
|
)
|
$
|
0.1
|
|||
Equity
securities, including short positions
|
4.4
|
25.4
|
11.4
|
40.2
|
|||||||||
Derivative
instruments
|
(1.4
|
)
|
(23.1
|
)
|
5.5
|
(18.7
|
)
|
||||||
Short-term
investments
|
(2.3
|
)
|
0.3
|
(4.8
|
)
|
(3.1
|
)
|
||||||
Other,
including guaranteed separate account business
|
(0.8
|
)
|
3.1
|
(0.1
|
)
|
(8.8
|
)
|
||||||
Investment
gains (losses)
|
(93.3
|
)
|
32.5
|
(91.3
|
)
|
9.7
|
|||||||
Income
tax (expense) benefit
|
32.8
|
(11.5
|
)
|
26.9
|
(5.6
|
)
|
|||||||
Minority
interest
|
5.5
|
(1.6
|
)
|
5.6
|
0.1
|
||||||||
Investment
gains (losses) -
net
|
$
|
(55.0
|
)
|
$
|
19.4
|
$
|
(58.8
|
)
|
$
|
4.2
|
Gross
Unrealized Losses
|
||||||||||||||||
Amortized
|
Unrealized
|
Less
Than
|
Greater
Than
|
|||||||||||||
June
30, 2006
|
Cost
|
Gains
|
12
Months
|
12
Months
|
Fair
Value
|
|||||||||||
(In
millions)
|
||||||||||||||||
Fixed
maturity securities:
|
||||||||||||||||
U.S.
government and obligations
|
||||||||||||||||
of
government agencies
|
$
|
1,652.3
|
$
|
67.1
|
$
|
8.9
|
$
|
2.4
|
$
|
1,708.1
|
||||||
Asset-backed
securities
|
15,171.4
|
14.2
|
283.5
|
122.3
|
14,779.8
|
|||||||||||
States,
municipalities and political
|
||||||||||||||||
subdivisions-tax
exempt
|
5,287.2
|
80.0
|
57.6
|
18.3
|
5,291.3
|
|||||||||||
Corporate
|
6,478.0
|
175.5
|
101.5
|
19.8
|
6,532.2
|
|||||||||||
Other
debt
|
3,193.3
|
130.4
|
45.6
|
1.6
|
3,276.5
|
|||||||||||
Redeemable
preferred stocks
|
313.6
|
5.0
|
10.7
|
1.5
|
306.4
|
|||||||||||
Options
embedded in convertible
|
||||||||||||||||
debt
securities
|
1.0
|
-
|
-
|
-
|
1.0
|
|||||||||||
Fixed
maturities available- for-sale
|
32,096.8
|
472.2
|
507.8
|
165.9
|
31,895.3
|
|||||||||||
Fixed
maturity trading
|
||||||||||||||||
securities
|
326.3
|
0.9
|
2.8
|
0.6
|
323.8
|
|||||||||||
Total
fixed maturities
|
32,423.1
|
473.1
|
510.6
|
166.5
|
32,219.1
|
|||||||||||
Equity
securities:
|
||||||||||||||||
Equity
securities available-
|
||||||||||||||||
for-sale
|
684.9
|
186.2
|
7.7
|
0.2
|
863.2
|
|||||||||||
Equity
securities, trading
|
||||||||||||||||
portfolio
|
522.7
|
56.6
|
15.5
|
11.4
|
552.4
|
|||||||||||
Total
equity securities
|
1,207.6
|
242.8
|
23.2
|
11.6
|
1,415.6
|
|||||||||||
Short-term
investments
|
||||||||||||||||
available-for-sale
|
11,000.0
|
-
|
-
|
-
|
11,000.0
|
|||||||||||
Total
|
$
|
44,630.7
|
$
|
715.9
|
$
|
533.8
|
$
|
178.1
|
$
|
44,634.7
|
Gross
Unrealized Losses
|
||||||||||||||||
Amortized
|
Unrealized
|
Less
Than
|
Greater
Than
|
|||||||||||||
December
31, 2005
|
Cost
|
Gains
|
12
Months
|
12
Months
|
Fair
Value
|
|||||||||||
(In
millions)
|
||||||||||||||||
Fixed
maturity securities:
|
||||||||||||||||
U.S.
government and obligations of
|
||||||||||||||||
government
agencies
|
$
|
1,357.2
|
$
|
119.1
|
$
|
3.4
|
$
|
1.2
|
$
|
1,471.7
|
||||||
Asset-backed
securities
|
12,985.8
|
43.6
|
136.7
|
33.1
|
12,859.6
|
|||||||||||
States,
municipalities and political
|
||||||||||||||||
subdivisions-tax
exempt
|
9,054.3
|
192.5
|
31.2
|
6.9
|
9,208.7
|
|||||||||||
Corporate
|
5,905.7
|
322.2
|
51.9
|
11.0
|
6,165.0
|
|||||||||||
Other
debt
|
2,830.3
|
233.9
|
17.9
|
2.3
|
3,044.0
|
|||||||||||
Redeemable
preferred stocks
|
213.3
|
3.5
|
0.4
|
0.7
|
215.7
|
|||||||||||
Options
embedded in convertible debt
|
||||||||||||||||
securities
|
0.8
|
0.8
|
||||||||||||||
Fixed
maturities available-for-sale
|
32,347.4
|
914.8
|
241.5
|
55.2
|
32,965.5
|
|||||||||||
Fixed
maturity trading securities
|
411.6
|
6.7
|
1.5
|
1.1
|
415.7
|
|||||||||||
Total
fixed maturities
|
32,759.0
|
921.5
|
243.0
|
56.3
|
33,381.2
|
|||||||||||
Equity
Securities:
|
||||||||||||||||
Equity
securities available-for-sale
|
461.7
|
172.6
|
2.0
|
632.3
|
||||||||||||
Equity
securities, trading portfolio
|
441.8
|
58.1
|
15.2
|
9.8
|
474.9
|
|||||||||||
Total
equity securities
|
903.5
|
230.7
|
17.2
|
9.8
|
1,107.2
|
|||||||||||
Short-term
investments available-for-sale
|
9,106.6
|
-
|
-
|
-
|
9,106.6
|
|||||||||||
Total
|
$
|
42,769.1
|
$
|
1,152.2
|
$
|
260.2
|
$
|
66.1
|
$
|
43,595.0
|
June
30, 2006
|
December
31, 2005
|
||||||||||||
Gross
|
Gross
|
||||||||||||
Estimated
|
Unrealized
|
Estimated
|
Unrealized
|
||||||||||
Fair
Value
|
Loss
|
Fair
Value
|
Loss
|
||||||||||
(In
millions)
|
|||||||||||||
Fixed
maturity securities:
|
|||||||||||||
Investment
grade:
|
|||||||||||||
0-6
months
|
$
|
12,281.7
|
$
|
226.3
|
$
|
9,976.0
|
$
|
141.7
|
|||||
7-12
months
|
5,850.6
|
243.3
|
2,739.0
|
61.0
|
|||||||||
13-24
months
|
2,640.0
|
122.0
|
1,400.0
|
45.0
|
|||||||||
Greater
than 24 months
|
592.3
|
38.5
|
219.0
|
7.0
|
|||||||||
Total
investment grade
|
21,364.6
|
630.1
|
14,334.0
|
254.7
|
|||||||||
Non-investment
grade:
|
|||||||||||||
0-6
months
|
1,022.3
|
24.3
|
632.0
|
29.0
|
|||||||||
7-12
months
|
217.0
|
14.0
|
118.0
|
10.0
|
|||||||||
13-24
months
|
54.2
|
4.5
|
122.0
|
3.0
|
|||||||||
Greater
than 24 months
|
11.3
|
0.8
|
2.0
|
||||||||||
Total
non-investment grade
|
1,304.8
|
43.6
|
874.0
|
42.0
|
|||||||||
Total
fixed maturity securities
|
22,669.4
|
673.7
|
15,208.0
|
296.7
|
June
30, 2006
|
December
31, 2005
|
||||||||||||
Gross
|
Gross
|
||||||||||||
Estimated
|
Unrealized
|
Estimated
|
Unrealized
|
||||||||||
Fair
Value
|
Loss
|
Fair
Value
|
Loss
|
||||||||||
(In
millions)
|
|||||||||||||
Equity
securities:
|
|||||||||||||
0-6
months
|
266.1
|
6.6
|
49.0
|
2.0
|
|||||||||
7-12
months
|
27.3
|
1.1
|
1.0
|
||||||||||
13-24
months
|
0.4
|
||||||||||||
Greater
than 24 months
|
3.1
|
0.2
|
3.0
|
||||||||||
Total
equity securities
|
296.9
|
7.9
|
53.0
|
2.0
|
|||||||||
Total
fixed maturity and equity securities
|
$
|
22,966.3
|
$
|
681.6
|
$
|
15,261.0
|
$
|
298.7
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Loews
common stock
|
2,480
|
2,673
|
119,006
|
117,426
|
|||||||||
Carolina
Group stock
|
555
|
109,069
|
279
|
76,416
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions, except %)
|
|||||||||||||
Loews
common stock:
|
|||||||||||||
Consolidated
net income
|
$
|
568.7
|
$
|
435.6
|
$
|
1,109.7
|
$
|
781.9
|
|||||
Less
income attributable to Carolina Group stock
|
93.8
|
55.7
|
161.4
|
102.2
|
|||||||||
Income
attributable to Loews common stock
|
$
|
474.9
|
$
|
379.9
|
$
|
948.3
|
$
|
679.7
|
|||||
Carolina
Group stock:
|
|||||||||||||
Income
available to Carolina Group stock
|
$
|
187.2
|
$
|
142.1
|
$
|
337.3
|
$
|
260.6
|
|||||
Weighted
average economic interest of the Carolina
|
|||||||||||||
Group
|
50.09
|
%
|
39.22
|
%
|
47.85
|
%
|
39.21
|
%
|
|||||
Income
attributable to Carolina Group stock
|
$
|
93.8
|
$
|
55.7
|
$
|
161.4
|
$
|
102.2
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Weighted
average shares outstanding-basic
|
555.37
|
556.96
|
556.41
|
556.90
|
|||||||||
Stock
options and stock appreciation rights
|
0.79
|
0.74
|
0.80
|
0.72
|
|||||||||
Weighted
average shares outstanding-diluted
|
556.16
|
557.70
|
557.21
|
557.62
|
Adjustments
|
|||||||||||||||||||
Carolina
Group
|
Loews
|
and
|
|||||||||||||||||
June
30, 2006
|
Lorillard
|
Other
|
Consolidated
|
Group
|
Eliminations
|
Total
|
|||||||||||||
(In
millions)
|
|||||||||||||||||||
|
|||||||||||||||||||
Assets:
|
|||||||||||||||||||
Investments
|
$
|
1,650.5
|
$
|
101.0
|
$
|
1,751.5
|
$
|
44,853.6
|
$
|
46,605.1
|
|||||||||
Cash
|
3.3
|
0.4
|
3.7
|
136.2
|
139.9
|
||||||||||||||
Receivables
|
25.8
|
25.8
|
14,790.8
|
$
|
(19.7
|
)
(a)
|
14,796.9
|
||||||||||||
Property,
plant and
|
|||||||||||||||||||
equipment
|
203.8
|
203.8
|
4,938.7
|
5,142.5
|
|||||||||||||||
Deferred
income taxes
|
426.1
|
426.1
|
683.6
|
1,109.7
|
|||||||||||||||
Goodwill
and other intangible
|
|||||||||||||||||||
assets
|
297.2
|
297.2
|
|||||||||||||||||
Other
assets
|
384.9
|
384.9
|
1,517.0
|
1,901.9
|
|||||||||||||||
Investment
in combined
|
|||||||||||||||||||
attributed
net assets of the
|
|||||||||||||||||||
Carolina
Group
|
1,451.6
|
(1,462.3
|
)
(a)
|
||||||||||||||||
|
10.7 | (b) | |||||||||||||||||
Deferred
acquisition costs of
|
|||||||||||||||||||
insurance
subsidiaries
|
1,210.8
|
1,210.8
|
|||||||||||||||||
Separate
account business
|
506.0
|
506.0
|
|||||||||||||||||
Total
assets
|
$
|
2,694.4
|
$
|
101.4
|
$
|
2,795.8
|
$
|
70,385.5
|
$
|
(1,471.3
|
)
|
$
|
71,710.0
|
||||||
Liabilities
and Shareholders’ Equity:
|
|||||||||||||||||||
Insurance
reserves
|
$
|
41,660.4
|
$
|
41,660.4
|
|||||||||||||||
Payable
for securities
|
|||||||||||||||||||
purchased
|
624.3
|
624.3
|
|||||||||||||||||
Collateral
on loaned securities
|
1,340.7
|
1,340.7
|
|||||||||||||||||
Short-term
debt
|
554.3
|
554.3
|
|||||||||||||||||
Long-term
debt
|
$
|
1,462.3
|
$
|
1,462.3
|
4,587.3
|
$
|
(1,462.3
|
)
(a)
|
4,587.3
|
||||||||||
Reinsurance
balances payable
|
1,656.7
|
1,656.7
|
|||||||||||||||||
Other
liabilities
|
$
|
1,343.9
|
12.8
|
1,356.7
|
3,172.8
|
(19.7
|
)
(a)
|
4,509.8
|
|||||||||||
Separate
account business
|
506.0
|
506.0
|
|||||||||||||||||
Total
liabilities
|
1,343.9
|
1,475.1
|
2,819.0
|
54,102.5
|
(1,482.0
|
)
|
55,439.5
|
||||||||||||
Minority
interest
|
2,126.7
|
2,126.7
|
|||||||||||||||||
Shareholders’
equity
|
1,350.5
|
(1,373.7
|
)
|
(23.2
|
)
|
14,156.3
|
10.7
|
(b)
|
14,143.8
|
||||||||||
Total
liabilities and
|
|||||||||||||||||||
shareholders’
equity
|
$
|
2,694.4
|
$
|
101.4
|
$
|
2,795.8
|
$
|
70,385.5
|
$
|
(1,471.3
|
)
|
$
|
71,710.0
|
(a)
|
To
eliminate the intergroup notional debt and interest
payable/receivable.
|
(b)
|
To
eliminate the Loews Group’s 46.3% equity interest in the combined
attributed net assets of the Carolina
Group.
|
Adjustments
|
|||||||||||||||||||
Carolina
Group
|
Loews
|
and
|
|||||||||||||||||
December
31, 2005
|
Lorillard
|
Other
|
Consolidated
|
Group
|
Eliminations
|
Total
|
|||||||||||||
(In
millions)
|
|
||||||||||||||||||
Assets:
|
|||||||||||||||||||
Investments
|
$
|
1,747.7
|
$
|
101.0
|
$
|
1,848.7
|
$
|
43,547.3
|
$
|
45,396.0
|
|||||||||
Cash
|
2.4
|
0.1
|
2.5
|
150.6
|
153.1
|
||||||||||||||
Receivables
|
25.5
|
0.2
|
25.7
|
15,310.0
|
$
|
(22.0
|
)
(a)
|
15,313.7
|
|||||||||||
Property,
plant and
|
|||||||||||||||||||
equipment
|
213.9
|
213.9
|
4,737.7
|
4,951.6
|
|||||||||||||||
Deferred
income taxes
|
428.5
|
428.5
|
476.8
|
905.3
|
|||||||||||||||
Goodwill
and other intangible
|
|||||||||||||||||||
assets
|
297.4
|
297.4
|
|||||||||||||||||
Other
assets
|
377.5
|
377.5
|
1,532.1
|
1,909.6
|
|||||||||||||||
Investment
in combined
|
|||||||||||||||||||
attributed
net assets of the
|
|||||||||||||||||||
Carolina
Group
|
1,516.6
|
(1,626.9
|
)
(a)
|
||||||||||||||||
|
110.3 | (b) | |||||||||||||||||
Deferred
acquisition costs of
|
|||||||||||||||||||
insurance
subsidiaries
|
1,197.4
|
1,197.4
|
|||||||||||||||||
Separate
account business
|
551.5
|
551.5
|
|||||||||||||||||
Total
assets
|
$
|
2,795.5
|
$
|
101.3
|
$
|
2,896.8
|
$
|
69,317.4
|
$
|
(1,538.6
|
)
|
$
|
70,675.6
|
||||||
Liabilities
and Shareholders’ Equity:
|
|||||||||||||||||||
Insurance
reserves
|
$
|
42,436.2
|
$
|
42,436.2
|
|||||||||||||||
Payable
for securities
|
|||||||||||||||||||
purchased
|
401.7
|
401.7
|
|||||||||||||||||
Collateral
on loaned securities
|
767.4
|
767.4
|
|||||||||||||||||
Short-term
debt
|
598.2
|
598.2
|
|||||||||||||||||
Long-term
debt
|
$
|
1,626.9
|
$
|
1,626.9
|
4,608.6
|
$
|
(1,626.9
|
)
(a)
|
4,608.6
|
||||||||||
Reinsurance
balances payable
|
1,636.2
|
1,636.2
|
|||||||||||||||||
Other
liabilities
|
$
|
1,455.7
|
14.7
|
1,470.4
|
3,076.4
|
(22.0
|
)
(a)
|
4,524.8
|
|||||||||||
Separate
account business
|
551.5
|
551.5
|
|||||||||||||||||
Total
liabilities
|
1,455.7
|
1,641.6
|
3,097.3
|
54,076.2
|
(1,648.9
|
)
|
55,524.6
|
||||||||||||
Minority
interest
|
2,058.9
|
2,058.9
|
|||||||||||||||||
Shareholders’
equity
|
1,339.8
|
(1,540.3
|
)
|
(200.5
|
)
|
13,182.3
|
110.3
|
(b)
|
13,092.1
|
||||||||||
Total
liabilities and
|
|||||||||||||||||||
shareholders’
equity
|
$
|
2,795.5
|
$
|
101.3
|
$
|
2,896.8
|
$
|
69,317.4
|
$
|
(1,538.6
|
)
|
$
|
70,675.6
|
(a)
|
To
eliminate the intergroup notional debt and interest
payable/receivable.
|
(b)
|
To
eliminate the Loews Group’s 54.97% equity interest in the combined
attributed net assets of the Carolina
Group.
|
Adjustments
|
|||||||||||||||||||
Three
Months Ended
|
Carolina
Group
|
Loews
|
and
|
||||||||||||||||
June
30, 2006
|
Lorillard
|
Other
|
Consolidated
|
Group
|
Eliminations
|
Total
|
|||||||||||||
(In
millions)
|
|
||||||||||||||||||
Revenues:
|
|||||||||||||||||||
Insurance
premiums
|
$
|
1,892.0
|
$
|
1,892.0
|
|||||||||||||||
Net
investment income
|
$
|
19.4
|
$
|
1.8
|
$
|
21.2
|
649.5
|
$
|
(29.8
|
)
(a)
|
640.9
|
||||||||
Investment
losses
|
(93.3
|
)
|
(93.3
|
)
|
|||||||||||||||
Manufactured
products
|
977.3
|
977.3
|
43.4
|
1,020.7
|
|||||||||||||||
Other
|
0.1
|
0.1
|
816.9
|
817.0
|
|||||||||||||||
Total
|
996.8
|
1.8
|
998.6
|
3,308.5
|
(29.8
|
)
|
4,277.3
|
||||||||||||
Expenses:
|
|||||||||||||||||||
Insurance
claims and
|
|||||||||||||||||||
policyholders’
benefits
|
1,432.2
|
1,432.2
|
|||||||||||||||||
Amortization
of deferred
|
|||||||||||||||||||
acquisition
costs
|
371.8
|
371.8
|
|||||||||||||||||
Cost
of manufactured products
|
|||||||||||||||||||
sold
|
552.6
|
552.6
|
22.1
|
574.7
|
|||||||||||||||
Other
operating expenses
|
108.9
|
108.9
|
709.1
|
818.0
|
|||||||||||||||
Restructuring
and other related
|
|||||||||||||||||||
charges
|
(12.9
|
)
|
(12.9
|
)
|
|||||||||||||||
Interest
|
29.8
|
29.8
|
70.7
|
(29.8
|
)
(a)
|
70.7
|
|||||||||||||
Total
|
661.5
|
29.8
|
691.3
|
2,593.0
|
(29.8
|
)
|
3,254.5
|
||||||||||||
335.3
|
(28.0
|
)
|
307.3
|
715.5
|
-
|
1,022.8
|
|||||||||||||
Income
tax expense (benefit)
|
131.1
|
(11.0
|
)
|
120.1
|
217.1
|
337.2
|
|||||||||||||
Minority
interest
|
114.5
|
114.5
|
|||||||||||||||||
Total
|
131.1
|
(11.0
|
)
|
120.1
|
331.6
|
-
|
451.7
|
||||||||||||
Income
(loss) from operations
|
204.2
|
(17.0
|
)
|
187.2
|
383.9
|
-
|
571.1
|
||||||||||||
Equity
in earnings of the
|
|||||||||||||||||||
Carolina
Group
|
93.4
|
(93.4
|
)
(b)
|
||||||||||||||||
Income
(loss) from continuing
|
|||||||||||||||||||
operations
|
204.2
|
(17.0
|
)
|
187.2
|
477.3
|
(93.4
|
)
|
571.1
|
|||||||||||
Discontinued
operations, net
|
(2.4
|
)
|
(2.4
|
)
|
|||||||||||||||
Net
income (loss)
|
$
|
204.2
|
$
|
(17.0
|
)
|
$
|
187.2
|
$
|
474.9
|
$
|
(93.4
|
)
|
$
|
568.7
|
(a)
|
To
eliminate interest on the intergroup notional debt.
|
(b)
|
To
eliminate the Loews Group’s intergroup interest in the earnings of the
Carolina Group.
|
Adjustments
|
|||||||||||||||||||
Three
Months Ended
|
Carolina
Group
|
Loews
|
and
|
||||||||||||||||
June
30, 2005
|
Lorillard
|
Other
|
Consolidated
|
Group
|
Eliminations
|
Total
|
|||||||||||||
(In
millions)
|
|
||||||||||||||||||
Revenues:
|
|||||||||||||||||||
Insurance
premiums
|
$
|
1,911.7
|
$
|
1,911.7
|
|||||||||||||||
Net
investment income
|
$
|
11.3
|
$
|
1.0
|
$
|
12.3
|
429.6
|
$
|
(35.6
|
)
(a)
|
406.3
|
||||||||
Investment
gains (losses)
|
(0.1
|
)
|
(0.1
|
)
|
32.6
|
32.5
|
|||||||||||||
Manufactured
products
|
928.3
|
928.3
|
40.4
|
968.7
|
|||||||||||||||
Other
|
6.1
|
6.1
|
705.4
|
711.5
|
|||||||||||||||
Total
|
945.6
|
1.0
|
946.6
|
3,119.7
|
(35.6
|
)
|
4,030.7
|
||||||||||||
Expenses:
|
|||||||||||||||||||
Insurance
claims and
|
|||||||||||||||||||
policyholders’
benefits
|
1,581.8
|
1,581.8
|
|||||||||||||||||
Amortization
of deferred
|
|||||||||||||||||||
acquisition
costs
|
374.5
|
374.5
|
|||||||||||||||||
Cost
of manufactured products
|
|||||||||||||||||||
sold
|
574.4
|
574.4
|
19.7
|
594.1
|
|||||||||||||||
Other
operating expenses
|
97.1
|
0.1
|
97.2
|
658.6
|
755.8
|
||||||||||||||
Interest
|
35.6
|
35.6
|
85.8
|
(35.6
|
)
(a)
|
85.8
|
|||||||||||||
Total
|
671.5
|
35.7
|
707.2
|
2,720.4
|
(35.6
|
)
|
3,392.0
|
||||||||||||
274.1
|
(34.7
|
)
|
239.4
|
399.3
|
-
|
638.7
|
|||||||||||||
Income
tax expense (benefit)
|
111.5
|
(14.2
|
)
|
97.3
|
67.4
|
164.7
|
|||||||||||||
Minority
interest
|
40.2
|
40.2
|
|||||||||||||||||
Total
|
111.5
|
(14.2
|
)
|
97.3
|
107.6
|
-
|
204.9
|
||||||||||||
Income
(loss) from operations
|
162.6
|
(20.5
|
)
|
142.1
|
291.7
|
-
|
433.8
|
||||||||||||
Equity
in earnings of the
|
|||||||||||||||||||
Carolina
Group
|
86.4
|
(86.4
|
)
(b)
|
||||||||||||||||
Income
(loss) from continuing
|
|||||||||||||||||||
operations
|
162.6
|
(20.5
|
)
|
142.1
|
378.1
|
(86.4
|
)
|
433.8
|
|||||||||||
Discontinued
operations, net
|
1.8
|
1.8
|
|||||||||||||||||
Net
income (loss)
|
$
|
162.6
|
$
|
(20.5
|
)
|
$
|
142.1
|
$
|
379.9
|
$
|
(86.4
|
)
|
$
|
435.6
|
(a)
|
To
eliminate interest on the intergroup notional debt.
|
(b)
|
To
eliminate the Loews Group’s intergroup interest in the earnings of the
Carolina Group.
|
Adjustments
|
|||||||||||||||||||
Six
Months Ended
|
Carolina
Group
|
Loews
|
and
|
||||||||||||||||
June
30, 2006
|
Lorillard
|
Other
|
Consolidated
|
Group
|
Eliminations
|
Total
|
|||||||||||||
(In
millions)
|
|
||||||||||||||||||
Revenues:
|
|||||||||||||||||||
Insurance
premiums
|
$
|
3,760.6
|
$
|
3,760.6
|
|||||||||||||||
Net
investment income
|
$
|
44.2
|
$
|
3.6
|
$
|
47.8
|
1,358.5
|
$
|
(61.3
|
)
(a)
|
1,345.0
|
||||||||
Investment
losses
|
(0.6
|
)
|
(0.6
|
)
|
(90.7
|
)
|
(91.3
|
)
|
|||||||||||
Manufactured
products
|
1,832.1
|
1,832.1
|
87.0
|
1,919.1
|
|||||||||||||||
Other
|
0.1
|
0.1
|
1,588.3
|
1,588.4
|
|||||||||||||||
Total
|
1,875.8
|
3.6
|
1,879.4
|
6,703.7
|
(61.3
|
)
|
8,521.8
|
||||||||||||
Expenses:
|
|||||||||||||||||||
Insurance
claims and
|
|||||||||||||||||||
policyholders’
benefits
|
2,924.2
|
2,924.2
|
|||||||||||||||||
Amortization
of deferred
|
|||||||||||||||||||
acquisition
costs
|
742.0
|
742.0
|
|||||||||||||||||
Cost
of manufactured products
|
|||||||||||||||||||
sold
|
1,064.3
|
1,064.3
|
43.7
|
1,108.0
|
|||||||||||||||
Other
operating expenses
|
201.7
|
0.1
|
201.8
|
1,406.0
|
1,607.8
|
||||||||||||||
Restructuring
and other related
|
|||||||||||||||||||
charges
|
(12.9
|
)
|
(12.9
|
)
|
|||||||||||||||
Interest
|
61.3
|
61.3
|
145.3
|
(61.3
|
)
(a)
|
145.3
|
|||||||||||||
Total
|
1,266.0
|
61.4
|
1,327.4
|
5,248.3
|
(61.3
|
)
|
6,514.4
|
||||||||||||
609.8
|
(57.8
|
)
|
552.0
|
1,455.4
|
-
|
2,007.4
|
|||||||||||||
Income
tax expense (benefit)
|
237.2
|
(22.5
|
)
|
214.7
|
456.7
|
671.4
|
|||||||||||||
Minority
interest
|
218.9
|
218.9
|
|||||||||||||||||
Total
|
237.2
|
(22.5
|
)
|
214.7
|
675.6
|
-
|
890.3
|
||||||||||||
Income
(loss) from operations
|
372.6
|
(35.3
|
)
|
337.3
|
779.8
|
-
|
1,117.1
|
||||||||||||
Equity
in earnings of the
|
|||||||||||||||||||
Carolina
Group
|
175.9
|
(175.9
|
)
(b)
|
||||||||||||||||
Income
(loss) from continuing
|
|||||||||||||||||||
operations
|
372.6
|
(35.3
|
)
|
337.3
|
955.7
|
(175.9
|
)
|
1,117.1
|
|||||||||||
Discontinued
operations, net
|
(7.4
|
)
|
(7.4
|
)
|
|||||||||||||||
Net
income (loss)
|
$
|
372.6
|
$
|
(35.3
|
)
|
$
|
337.3
|
$
|
948.3
|
$
|
(175.9
|
)
|
$
|
1,109.7
|
(a)
|
To
eliminate interest on the intergroup notional debt.
|
(b)
|
To
eliminate the Loews Group’s intergroup interest in the earnings of the
Carolina Group.
|
Adjustments
|
|||||||||||||||||||
Six
Months Ended
|
Carolina
Group
|
Loews
|
and
|
||||||||||||||||
June
30, 2005
|
Lorillard
|
Other
|
Consolidated
|
Group
|
Eliminations
|
Total
|
|||||||||||||
(In
millions)
|
|
||||||||||||||||||
Revenues:
|
|||||||||||||||||||
Insurance
premiums
|
$
|
3,810.8
|
$
|
3,810.8
|
|||||||||||||||
Net
investment income
|
$
|
24.5
|
$
|
1.9
|
$
|
26.4
|
906.3
|
$
|
(72.2
|
)
(a)
|
860.5
|
||||||||
Investment
gains (losses)
|
(2.0
|
)
|
(2.0
|
)
|
11.7
|
9.7
|
|||||||||||||
Manufactured
products
|
1,723.4
|
1,723.4
|
79.5
|
1,802.9
|
|||||||||||||||
Other
|
6.1
|
6.1
|
1,281.9
|
1,288.0
|
|||||||||||||||
Total
|
1,752.0
|
1.9
|
1,753.9
|
6,090.2
|
(72.2
|
)
|
7,771.9
|
||||||||||||
Expenses:
|
|||||||||||||||||||
Insurance
claims and
|
|||||||||||||||||||
policyholders’
benefits
|
3,015.0
|
3,015.0
|
|||||||||||||||||
Amortization
of deferred
|
|||||||||||||||||||
acquisition
costs
|
752.1
|
752.1
|
|||||||||||||||||
Cost
of manufactured products
|
|||||||||||||||||||
sold
|
1,061.1
|
1,061.1
|
38.7
|
1,099.8
|
|||||||||||||||
Other
operating expenses
|
187.0
|
0.2
|
187.2
|
1,311.6
|
1,498.8
|
||||||||||||||
Interest
|
72.2
|
72.2
|
215.6
|
(72.2
|
)
(a)
|
215.6
|
|||||||||||||
Total
|
1,248.1
|
72.4
|
1,320.5
|
5,333.0
|
(72.2
|
)
|
6,581.3
|
||||||||||||
503.9
|
(70.5
|
)
|
433.4
|
757.2
|
-
|
1,190.6
|
|||||||||||||
Income
tax expense (benefit)
|
200.9
|
(28.1
|
)
|
172.8
|
169.2
|
342.0
|
|||||||||||||
Minority
interest
|
75.1
|
75.1
|
|||||||||||||||||
Total
|
200.9
|
(28.1
|
)
|
172.8
|
244.3
|
-
|
417.1
|
||||||||||||
Income
(loss) from operations
|
303.0
|
(42.4
|
)
|
260.6
|
512.9
|
-
|
773.5
|
||||||||||||
Equity
in earnings of the
|
|||||||||||||||||||
Carolina
Group
|
158.4
|
(158.4
|
)
(b)
|
||||||||||||||||
Income
(loss) from continuing
|
|||||||||||||||||||
operations
|
303.0
|
(42.4
|
)
|
260.6
|
671.3
|
(158.4
|
)
|
773.5
|
|||||||||||
Discontinued
operations, net
|
8.4
|
8.4
|
|||||||||||||||||
Net
income (loss)
|
$
|
303.0
|
$
|
(42.4
|
)
|
$
|
260.6
|
$
|
679.7
|
$
|
(158.4
|
)
|
$
|
781.9
|
(a)
|
To
eliminate interest on the intergroup notional debt.
|
(b)
|
To
eliminate the Loews Group’s intergroup interest in the earnings of the
Carolina Group.
|
Adjustments
|
|||||||||||||||||||
Six
Months Ended
|
Carolina
Group
|
Loews
|
and
|
||||||||||||||||
June
30, 2006
|
Lorillard
|
Other
|
Consolidated
|
Group
|
Eliminations
|
Total
|
|||||||||||||
(In
millions)
|
|||||||||||||||||||
Net
cash (used) provided by
|
|||||||||||||||||||
operating
activities
|
$
|
257.0
|
$
|
(37.1
|
)
|
$
|
219.9
|
$
|
1,450.7
|
$
|
(80.0
|
)
|
$
|
1,590.6
|
|||||
Investing
activities:
|
|||||||||||||||||||
Purchases
of property and
|
|||||||||||||||||||
equipment
|
(13.8
|
)
|
(13.8
|
)
|
(381.8
|
)
|
(395.6
|
)
|
|||||||||||
Change
in short-term
|
|||||||||||||||||||
investments
|
107.5
|
107.5
|
(2,009.7
|
)
|
(1,902.2
|
)
|
|||||||||||||
Other
investing activities
|
9.4
|
9.4
|
1,043.5
|
(164.5
|
)
|
888.4
|
|||||||||||||
103.1
|
-
|
103.1
|
(1,348.0
|
)
|
(164.5
|
)
|
(1,409.4
|
)
|
|||||||||||
Financing
activities:
|
|||||||||||||||||||
Dividends
paid
|
(360.0
|
)
|
201.9
|
(158.1
|
)
|
(62.6
|
)
|
80.0
|
(140.7
|
)
|
|||||||||
Reduction
of intergroup
|
|||||||||||||||||||
notional
debt
|
(164.5
|
)
|
(164.5
|
)
|
164.5
|
||||||||||||||
Excess
tax benefits from
|
|||||||||||||||||||
share
based compensation
|
0.8
|
0.8
|
2.0
|
2.8
|
|||||||||||||||
Other
financing activities
|
(52.0
|
)
|
(52.0
|
)
|
|||||||||||||||
(359.2
|
)
|
37.4
|
(321.8
|
)
|
(112.6
|
)
|
244.5
|
(189.9
|
)
|
||||||||||
Net
change in cash
|
0.9
|
0.3
|
1.2
|
(9.9
|
)
|
-
|
(8.7
|
)
|
|||||||||||
Net
cash transactions from:
|
|||||||||||||||||||
Continuing
operations to
|
|||||||||||||||||||
discontinued
operations
|
14.5
|
14.5
|
|||||||||||||||||
Discontinued
operations to
|
|||||||||||||||||||
continuing
operations
|
(14.5
|
)
|
(14.5
|
)
|
|||||||||||||||
Cash,
beginning of period
|
2.4
|
0.1
|
2.5
|
179.5
|
182.0
|
||||||||||||||
Cash,
end of period
|
$
|
3.3
|
$
|
0.4
|
$
|
3.7
|
$
|
169.6
|
$
|
-
|
$
|
173.3
|
Adjustments
|
|||||||||||||||||||
Six
Months Ended
|
Carolina
Group
|
Loews
|
and
|
||||||||||||||||
June
30, 2005
|
Lorillard
|
Other
|
Consolidated
|
Group
|
Eliminations
|
Total
|
|||||||||||||
(In
millions)
|
|||||||||||||||||||
Net
cash (used) provided by
|
|||||||||||||||||||
operating
activities
|
$
|
316.8
|
$
|
55.6
|
$
|
372.4
|
$
|
1,189.3
|
$
|
(96.0
|
)
|
$
|
1,465.7
|
||||||
Investing
activities:
|
|||||||||||||||||||
Purchases
of property and
|
|||||||||||||||||||
equipment
|
(23.0
|
)
|
(23.0
|
)
|
(190.7
|
)
|
(213.7
|
)
|
|||||||||||
Change
in short-term investments
|
182.3
|
(99.9
|
)
|
82.4
|
(295.9
|
)
|
(213.5
|
)
|
|||||||||||
Other
investing activities
|
1,147.0
|
(106.5
|
)
|
1,040.5
|
|||||||||||||||
159.3
|
(99.9
|
)
|
59.4
|
660.4
|
(106.5
|
)
|
613.3
|
||||||||||||
Financing
activities:
|
|||||||||||||||||||
Dividends
paid
|
(309.0
|
)
|
151.1
|
(157.9
|
)
|
(55.7
|
)
|
96.0
|
(117.6
|
)
|
|||||||||
Reduction
of intergroup notional
|
|||||||||||||||||||
debt
|
(106.5
|
)
|
(106.5
|
)
|
106.5
|
||||||||||||||
Other
financing activities
|
(1,843.5
|
)
|
(1,843.5
|
)
|
|||||||||||||||
(309.0
|
)
|
44.6
|
(264.4
|
)
|
(1,899.2
|
)
|
202.5
|
(1,961.1
|
)
|
||||||||||
Net
change in cash
|
167.1
|
0.3
|
167.4
|
(49.5
|
)
|
-
|
117.9
|
||||||||||||
Net
cash transactions from:
|
|||||||||||||||||||
Continuing
operations to
|
|||||||||||||||||||
discontinued
operations
|
7.2
|
7.2
|
|||||||||||||||||
Discontinued
operations to
|
|||||||||||||||||||
continuing
operations
|
(7.2
|
)
|
(7.2
|
)
|
|||||||||||||||
Cash,
beginning of period
|
35.5
|
0.5
|
36.0
|
198.0
|
234.0
|
||||||||||||||
Cash,
end of period
|
$
|
202.6
|
$
|
0.8
|
$
|
203.4
|
$
|
148.5
|
$
|
-
|
$
|
351.9
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(In
millions)
|
|||||||
Reinsurance
receivables related to insurance reserves:
|
|||||||
Ceded
claim and claim adjustment expense
|
$
|
9,995.8
|
$
|
10,605.2
|
|||
Ceded
future policy benefits
|
1,129.4
|
1,192.9
|
|||||
Ceded
policyholders’ funds
|
54.1
|
56.3
|
|||||
Billed
reinsurance receivables
|
802.7
|
582.3
|
|||||
Reinsurance
receivables
|
11,982.0
|
12,436.7
|
|||||
Less
allowance for uncollectible reinsurance
|
527.4
|
519.3
|
|||||
Reinsurance
receivables-net
|
$
|
11,454.6
|
$
|
11,917.4
|
Direct
|
Assumed
|
Ceded
|
Net
|
||||||||||
(In
millions)
|
|||||||||||||
Three
Months Ended June 30, 2006
|
|||||||||||||
Property
and casualty
|
$
|
2,259.0
|
$
|
7.0
|
$
|
534.0
|
$
|
1,732.0
|
|||||
Accident
and health
|
172.0
|
13.0
|
27.0
|
158.0
|
|||||||||
Life
|
22.0
|
20.0
|
2.0
|
||||||||||
Total
|
$
|
2,453.0
|
$
|
20.0
|
$
|
581.0
|
$
|
1,892.0
|
|||||
Three
Months Ended June 30, 2005
|
|||||||||||||
Property
and casualty
|
$
|
2,530.0
|
$
|
1.0
|
$
|
824.0
|
$
|
1,707.0
|
|||||
Accident
and health
|
252.0
|
10.0
|
57.0
|
205.0
|
|||||||||
Life
|
37.0
|
37.0
|
|||||||||||
Total
|
$
|
2,819.0
|
$
|
11.0
|
$
|
918.0
|
$
|
1,912.0
|
Direct
|
Assumed
|
Ceded
|
Net
|
||||||||||
(In
millions)
|
|||||||||||||
Six
Months Ended June 30, 2006
|
|||||||||||||
Property
and casualty
|
$
|
4,453.0
|
$
|
28.0
|
$
|
1,043.0
|
$
|
3,438.0
|
|||||
Accident
and health
|
364.0
|
29.0
|
72.0
|
321.0
|
|||||||||
Life
|
58.0
|
56.0
|
2.0
|
||||||||||
Total
|
$
|
4,875.0
|
$
|
57.0
|
$
|
1,171.0
|
$
|
3,761.0
|
|||||
Six
Months Ended June 30, 2005
|
|||||||||||||
Property
and casualty
|
$
|
5,052.0
|
$
|
59.0
|
$
|
1,670.0
|
$
|
3,441.0
|
|||||
Accident
and health
|
560.0
|
24.0
|
215.0
|
369.0
|
|||||||||
Life
|
82.0
|
81.0
|
1.0
|
||||||||||
Total
|
$
|
5,694.0
|
$
|
83.0
|
$
|
1,966.0
|
$
|
3,811.0
|
Aggregate
|
|||||||||||||
Three
Months Ended June 30, 2006
|
Cover
|
CCC
Cover
|
All
Other
|
Total
|
|||||||||
(In
millions)
|
|||||||||||||
Ceded
earned premium
|
$
|
(10.0
|
)
|
$
|
(10.0
|
)
|
|||||||
Ceded
claim and claim adjustment expense
|
17.0
|
17.0
|
|||||||||||
Ceding
commissions
|
|||||||||||||
Interest
charges
|
$
|
(18.0
|
)
|
(9.0
|
)
|
(27.0
|
)
|
||||||
Pretax
expense
|
$
|
-
|
$
|
(18.0
|
)
|
$
|
(2.0
|
)
|
$
|
(20.0
|
)
|
||
Three
Months Ended June 30, 2005
|
|||||||||||||
Ceded
earned premium
|
$
|
(6.0
|
)
|
$
|
3.0
|
$
|
(3.0
|
)
|
|||||
Ceded
claim and claim adjustment expense
|
2.0
|
2.0
|
|||||||||||
Ceding
commissions
|
3.0
|
3.0
|
|||||||||||
Interest
charges
|
(18.0
|
)
|
$
|
(16.0
|
)
|
(12.0
|
)
|
(46.0
|
)
|
||||
Pretax
expense
|
$
|
(24.0
|
)
|
$
|
(16.0
|
)
|
$
|
(4.0
|
)
|
$
|
(44.0
|
)
|
Six
Months Ended June 30, 2006
|
|||||||||||||
Ceded
earned premium
|
$
|
(12.0
|
)
|
$
|
(12.0
|
)
|
|||||||
Ceded
claim and claim adjustment expense
|
17.0
|
17.0
|
|||||||||||
Ceding
commissions
|
|||||||||||||
Interest
charges
|
$
|
(35.0
|
)
|
(16.0
|
)
|
(51.0
|
)
|
||||||
Pretax
expense
|
$
|
-
|
$
|
(35.0
|
)
|
$
|
(11.0
|
)
|
$
|
(46.0
|
)
|
||
Six
Months Ended June 30, 2005
|
|||||||||||||
Ceded
earned premium
|
$
|
(18.0
|
)
|
$
|
65.0
|
$
|
47.0
|
||||||
Ceded
claim and claim adjustment expense
|
(67.0
|
)
|
(67.0
|
)
|
|||||||||
Ceding
commissions
|
(30.0
|
)
|
(30.0
|
)
|
|||||||||
Interest
charges
|
(42.0
|
)
|
$
|
(32.0
|
)
|
(10.0
|
)
|
(84.0
|
)
|
||||
Pretax
expense
|
$
|
(60.0
|
)
|
$
|
(32.0
|
)
|
$
|
(42.0
|
)
|
$
|
(134.0
|
)
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Standard
Lines
|
$
|
(11.0
|
)
|
$
|
(30.0
|
)
|
$
|
(24.0
|
)
|
$
|
(96.0
|
)
|
|
Specialty
Lines
|
(2.0
|
)
|
(4.0
|
)
|
(7.0
|
)
|
|||||||
Other
Insurance
|
(7.0
|
)
|
(14.0
|
)
|
(18.0
|
)
|
(31.0
|
)
|
|||||
Pretax
expense
|
$
|
(20.0
|
)
|
$
|
(44.0
|
)
|
$
|
(46.0
|
)
|
$
|
(134.0
|
)
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(In
millions)
|
|||||||
Reinsurance
|
$
|
11,982.0
|
$
|
12,436.7
|
|||
Other
insurance
|
2,482.6
|
2,310.6
|
|||||
Security
sales
|
320.0
|
604.9
|
|||||
Accrued
investment income
|
310.3
|
322.2
|
|||||
Other
|
667.7
|
612.6
|
|||||
Total
|
15,762.6
|
16,287.0
|
|||||
Less: allowance
for doubtful accounts on reinsurance receivables
|
527.4
|
519.3
|
|||||
allowance
for other doubtful accounts and cash discounts
|
438.3
|
454.0
|
|||||
Receivables
|
$
|
14,796.9
|
$
|
15,313.7
|
Life
and
|
||||||||||||||||
Standard
|
Specialty
|
Group
|
Other
|
|||||||||||||
June
30, 2006
|
Lines
|
Lines
|
Non-Core
|
Insurance
|
Total
|
|||||||||||
(In
millions)
|
||||||||||||||||
Gross
Case Reserves
|
$
|
6,967.0
|
$
|
1,801.0
|
$
|
2,499.0
|
$
|
2,867.0
|
$
|
14,134.0
|
||||||
Gross
IBNR Reserves
|
7,856.0
|
3,594.0
|
686.0
|
3,907.0
|
16,043.0
|
|||||||||||
Total
Gross Carried Claim and Claim
|
||||||||||||||||
Adjustment
Expense Reserves
|
$
|
14,823.0
|
$
|
5,395.0
|
$
|
3,185.0
|
$
|
6,774.0
|
$
|
30,177.0
|
||||||
Net
Case Reserves
|
$
|
4,761.0
|
$
|
1,335.0
|
$
|
1,472.0
|
$
|
1,312.0
|
$
|
8,880.0
|
||||||
Net
IBNR Reserves
|
6,364.0
|
2,649.0
|
380.0
|
1,908.0
|
11,301.0
|
|||||||||||
Total
Net Carried Claim and Claim
|
||||||||||||||||
Adjustment
Expense Reserves
|
$
|
11,125.0
|
$
|
3,984.0
|
$
|
1,852.0
|
$
|
3,220.0
|
$
|
20,181.0
|
December
31, 2005
|
||||||||||||||||
|
||||||||||||||||
Gross
Case Reserves
|
$
|
7,033.0
|
$
|
1,907.0
|
$
|
2,542.0
|
$
|
3,297.0
|
$
|
14,779.0
|
||||||
Gross
IBNR Reserves
|
8,051.0
|
3,298.0
|
735.0
|
4,075.0
|
16,159.0
|
|||||||||||
Total
Gross Carried Claim and Claim
|
||||||||||||||||
Adjustment
Expense Reserves
|
$
|
15,084.0
|
$
|
5,205.0
|
$
|
3,277.0
|
$
|
7,372.0
|
$
|
30,938.0
|
||||||
Net
Case Reserves
|
$
|
5,165.0
|
$
|
1,442.0
|
$
|
1,456.0
|
$
|
1,554.0
|
$
|
9,617.0
|
||||||
Net
IBNR Reserves
|
6,081.0
|
2,352.0
|
381.0
|
1,902.0
|
10,716.0
|
|||||||||||
Total
Net Carried Claim and Claim
|
||||||||||||||||
Adjustment
Expense Reserves
|
$
|
11,246.0
|
$
|
3,794.0
|
$
|
1,837.0
|
$
|
3,456.0
|
$
|
20,333.0
|
June
30, 2006
|
December
31, 2005
|
||||||||||||
Environmental
|
Environmental
|
||||||||||||
Pollution
and
|
Pollution
and
|
||||||||||||
Asbestos
|
Mass
Tort
|
Asbestos
|
Mass
Tort
|
||||||||||
(In
millions)
|
|||||||||||||
Gross
reserves
|
$
|
2,799.0
|
$
|
603.0
|
$
|
2,992.0
|
$
|
680.0
|
|||||
Ceded
reserves
|
(1,294.0
|
)
|
(229.0
|
)
|
(1,438.0
|
)
|
(257.0
|
)
|
|||||
Net
reserves
|
$
|
1,505.0
|
$
|
374.0
|
$
|
1,554.0
|
$
|
423.0
|
Standard
|
Specialty
|
Other
|
|||||||||||
Three
Months Ended June 30, 2006
|
Lines
|
Lines
|
Insurance
|
Total
|
|||||||||
(In
millions)
|
|||||||||||||
Pretax
unfavorable (favorable) net prior year claim
|
|||||||||||||
and
allocated claim adjustment expense
|
|||||||||||||
development,
excluding the impact of the
|
|||||||||||||
corporate
aggregate reinsurance treaties:
|
|||||||||||||
Core
(Non-APMT)
|
$
|
5.0
|
$
|
(2.0
|
)
|
$
|
5.0
|
$
|
8.0
|
||||
APMT
|
|||||||||||||
Total
|
5.0
|
(2.0
|
)
|
5.0
|
8.0
|
||||||||
Ceded
losses related to corporate aggregate
|
|||||||||||||
reinsurance
treaty
|
|||||||||||||
Pretax
unfavorable (favorable) net prior year
|
|||||||||||||
development
before impact of premium
|
|||||||||||||
development
|
5.0
|
(2.0
|
)
|
5.0
|
8.0
|
||||||||
Unfavorable
(favorable) premium
|
|||||||||||||
development,
excluding impact of corporate
|
|||||||||||||
aggregate
reinsurance treaty
|
(24.0
|
)
|
2.0
|
(3.0
|
)
|
(25.0
|
)
|
||||||
Ceded
premiums related to corporate aggregate
|
|||||||||||||
reinsurance
treaty
|
|||||||||||||
Total
premium development
|
(24.0
|
)
|
2.0
|
(3.0
|
)
|
(25.0
|
)
|
||||||
Total
unfavorable (favorable) net prior year
|
|||||||||||||
development
(pretax)
|
$
|
(19.0
|
)
|
$
|
-
|
$
|
2.0
|
$
|
(17.0
|
)
|
|||
Three
Months Ended June 30, 2005
|
|||||||||||||
Pretax
unfavorable net prior year claim and
|
|||||||||||||
allocated
claim adjustment expense development,
|
|||||||||||||
excluding
the impact of corporate aggregate
|
|||||||||||||
reinsurance
treaties:
|
|||||||||||||
Core
(Non-APMT)
|
$
|
52.0
|
$
|
25.0
|
$
|
62.0
|
$
|
139.0
|
|||||
APMT
|
8.0
|
8.0
|
|||||||||||
Total
|
52.0
|
25.0
|
70.0
|
147.0
|
|||||||||
Ceded
losses related to corporate aggregate
|
|||||||||||||
reinsurance
treaties
|
|||||||||||||
Pretax
unfavorable net prior year development
|
|||||||||||||
before
impact of premium development
|
52.0
|
25.0
|
70.0
|
147.0
|
|||||||||
Favorable
premium development, excluding
|
|||||||||||||
impact
of corporate aggregate reinsurance
|
|||||||||||||
treaties
|
(17.0
|
)
|
(12.0
|
)
|
(6.0
|
)
|
(35.0
|
)
|
|||||
Ceded
premiums related to corporate aggregate
|
|||||||||||||
reinsurance
treaties
|
4.0
|
(1.0
|
)
|
3.0
|
6.0
|
||||||||
Total
premium development
|
(13.0
|
)
|
(13.0
|
)
|
(3.0
|
)
|
(29.0
|
)
|
|||||
Total
unfavorable net prior year development
|
|||||||||||||
(pretax)
|
$
|
39.0
|
$
|
12.0
|
$
|
67.0
|
$
|
118.0
|
Standard
|
Specialty
|
Other
|
|||||||||||
Six
Months Ended June 30, 2006
|
Lines
|
Lines
|
Insurance
|
Total
|
|||||||||
(In
millions)
|
|||||||||||||
Pretax
unfavorable net prior year claim and
|
|||||||||||||
allocated
claim adjustment expense development,
|
|||||||||||||
excluding
the impact of the corporate aggregate
|
|||||||||||||
reinsurance
treaty:
|
|||||||||||||
Core
(Non-APMT)
|
$
|
64.0
|
$
|
3.0
|
$
|
11.0
|
$
|
78.0
|
|||||
APMT
|
1.0
|
1.0
|
|||||||||||
Total
|
64.0
|
3.0
|
12.0
|
79.0
|
|||||||||
Ceded
losses related to corporate aggregate
|
|||||||||||||
reinsurance
treaty
|
|||||||||||||
Pretax
unfavorable net prior year development
|
|||||||||||||
before
impact of premium development
|
64.0
|
3.0
|
12.0
|
79.0
|
|||||||||
Unfavorable
(favorable) premium
|
|||||||||||||
development,
excluding impact of corporate
|
|||||||||||||
aggregate
reinsurance treaty
|
(73.0
|
)
|
(6.0
|
)
|
4.0
|
(75.0
|
)
|
||||||
Ceded
premiums related to corporate aggregate
|
|||||||||||||
reinsurance
treaty
|
|||||||||||||
Total
premium development
|
(73.0
|
)
|
(6.0
|
)
|
4.0
|
(75.0
|
)
|
||||||
Total
unfavorable (favorable) net prior year
|
|||||||||||||
development
(pretax)
|
$
|
(9.0
|
)
|
$
|
(3.0
|
)
|
$
|
16.0
|
$
|
4.0
|
|||
Six
Months Ended June 30, 2005
|
|||||||||||||
Pretax
unfavorable net prior year claim and
|
|||||||||||||
allocated
claim adjustment expense development,
|
|||||||||||||
excluding
the impact of corporate aggregate
|
|||||||||||||
reinsurance
treaties:
|
|||||||||||||
Core
(Non-APMT)
|
$
|
165.0
|
$
|
63.0
|
$
|
58.0
|
$
|
286.0
|
|||||
APMT
|
10.0
|
10.0
|
|||||||||||
Total
|
165.0
|
63.0
|
68.0
|
296.0
|
|||||||||
Ceded
losses related to corporate aggregate
|
|||||||||||||
reinsurance
treaties
|
19.0
|
(25.0
|
)
|
6.0
|
|||||||||
Pretax
unfavorable net prior year development
|
|||||||||||||
before
impact of premium development
|
184.0
|
38.0
|
74.0
|
296.0
|
|||||||||
Unfavorable
(favorable) premium
|
|||||||||||||
development,
excluding impact of corporate
|
|||||||||||||
aggregate
reinsurance treaties
|
(107.0
|
)
|
(15.0
|
)
|
10.0
|
(112.0
|
)
|
||||||
Ceded
premiums related to corporate aggregate
|
|||||||||||||
reinsurance
treaties
|
(5.0
|
)
|
19.0
|
4.0
|
18.0
|
||||||||
Total
premium development
|
(112.0
|
)
|
4.0
|
14.0
|
(94.0
|
)
|
|||||||
Total
unfavorable net prior year development
|
|||||||||||||
(pretax)
|
$
|
72.0
|
$
|
42.0
|
$
|
88.0
|
$
|
202.0
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(In
millions of dollars, except per share data)
|
|||||||
Preferred
stock, $0.10 par value,
|
|||||||
Authorized
- 100,000,000 shares
|
|||||||
Common
stock:
|
|||||||
Loews
common stock, $1.00 par value:
|
|||||||
Authorized
- 600,000,000 shares
|
|||||||
Issued
-556,250,007 and 557,540,667 shares
|
$
|
556.3
|
$
|
557.5
|
|||
Carolina
Group stock, $0.01 par value:
|
|||||||
Authorized
- 600,000,000 shares
|
|||||||
Issued
- 93,631,246 and 78,531,678 shares
|
0.9
|
0.8
|
|||||
Additional
paid-in capital
|
2,630.0
|
1,866.0
|
|||||
Earnings
retained in the business
|
11,285.0
|
10,364.4
|
|||||
Accumulated
other comprehensive income (loss)
|
(131.9
|
)
|
311.1
|
||||
14,340.3
|
13,099.8
|
||||||
Less
treasury stock, at cost (5,548,800 shares of Loews common stock as
of June
|
|||||||
30,
2006 and 340,000 shares of Carolina Group stock as of June 30, 2006
and
|
|||||||
December
31, 2005)
|
196.5
|
7.7
|
|||||
Total
shareholders’ equity
|
$
|
14,143.8
|
$
|
13,092.1
|
Statutory
Capital and Surplus
|
|||||||
June
30, 2006
|
December
31, 2005
|
||||||
(In
millions)
|
|||||||
Property
and casualty companies (a)
|
$
|
7,374.0
|
$
|
6,940.0
|
|||
Life
and group insurance companies
|
669.0
|
627.0
|
(a)
|
Surplus
includes the property and casualty companies’ equity ownership of the life
and group company’s capital and
surplus.
|
Statutory
Net Income
|
|||||||||||||
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Property
and casualty companies
|
$
|
97.0
|
$
|
288.0
|
$
|
263.0
|
$
|
868.0
|
|||||
Life
and group insurance companies
|
32.0
|
32.0
|
42.0
|
54.0
|
Pension
Benefits
|
|||||||||||||
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Service
cost
|
$
|
12.6
|
$
|
12.8
|
$
|
27.7
|
$
|
28.1
|
|||||
Interest
cost
|
51.2
|
52.3
|
105.9
|
105.4
|
|||||||||
Expected
return on plan assets
|
(60.2
|
)
|
(59.7
|
)
|
(120.9
|
)
|
(117.4
|
)
|
|||||
Amortization
of unrecognized net loss
|
1.9
|
1.4
|
3.8
|
2.8
|
|||||||||
Amortization
of unrecognized prior service cost
|
1.7
|
1.8
|
3.4
|
3.7
|
|||||||||
Actuarial
loss
|
5.9
|
3.5
|
16.5
|
10.6
|
|||||||||
Net
periodic benefit cost
|
$
|
13.1
|
$
|
12.1
|
$
|
36.4
|
$
|
33.2
|
Other
Postretirement Benefits
|
|||||||||||||
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Service
cost
|
$
|
1.4
|
$
|
2.8
|
$
|
4.7
|
$
|
5.3
|
|||||
Interest
cost
|
5.3
|
7.7
|
13.5
|
15.4
|
|||||||||
Expected
return on plan assets
|
(1.1
|
)
|
(1.1
|
)
|
(2.3
|
)
|
(2.3
|
)
|
|||||
Amortization
of unrecognized net loss (gain)
|
0.1
|
0.2
|
0.6
|
0.4
|
|||||||||
Amortization
of unrecognized prior service benefit
|
(8.0
|
)
|
(7.4
|
)
|
(16.2
|
)
|
(15.0
|
)
|
|||||
Actuarial
loss
|
0.3
|
1.1
|
1.7
|
2.1
|
|||||||||
Special
termination benefits
|
1.3
|
1.3
|
|||||||||||
Net
periodic benefit cost
|
$
|
(0.7
|
)
|
$
|
3.3
|
$
|
3.3
|
$
|
5.9
|
2006
|
|||||||
Weighted
|
|||||||
Average
|
|||||||
Number
of
|
Exercise
|
||||||
Awards
|
Price
|
||||||
Awards
outstanding, January 1
|
3,856,974
|
$
|
19.340
|
||||
Granted
|
702,600
|
34.072
|
|||||
Exercised
|
(384,540
|
)
|
18.076
|
||||
Canceled
|
(72,030
|
)
|
23.747
|
||||
Awards
outstanding, June 30
|
4,103,004
|
21.904
|
|||||
Awards
exercisable, June 30
|
2,215,947
|
$
|
18.058
|
||||
Shares
available for grant, June 30
|
6,219,189
|
2006
|
|||||||
Weighted
|
|||||||
Average
|
|||||||
Number
of
|
Exercise
|
||||||
Awards
|
Price
|
||||||
Awards
outstanding, January 1
|
536,572
|
$
|
28.526
|
||||
Granted
|
152,500
|
48.573
|
|||||
Exercised
|
(99,568
|
)
|
26.917
|
||||
Canceled
|
(11,250
|
)
|
29.506
|
||||
Awards
outstanding, June 30
|
578,254
|
34.071
|
|||||
Awards
exercisable, June 30
|
132,244
|
27.585
|
|||||
Shares
available for grant, June 30
|
595,500
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Revenues
(a) :
|
|||||||||||||
CNA
Financial :
|
|||||||||||||
Standard
Lines
|
$
|
1,309.5
|
$
|
1,307.1
|
$
|
2,656.9
|
$
|
2,675.1
|
|||||
Specialty
Lines
|
759.3
|
733.9
|
1,510.6
|
1,395.0
|
|||||||||
Life
and Group Non-Core
|
286.9
|
373.7
|
637.1
|
674.4
|
|||||||||
Other
Insurance
|
57.2
|
154.7
|
108.8
|
192.0
|
|||||||||
Total
CNA Financial
|
2,412.9
|
2,569.4
|
4,913.4
|
4,936.5
|
|||||||||
Lorillard
|
996.8
|
945.7
|
1,876.4
|
1,754.0
|
|||||||||
Boardwalk
Pipeline
|
132.5
|
119.4
|
307.5
|
270.7
|
|||||||||
Diamond
Offshore
|
519.3
|
298.2
|
978.0
|
562.9
|
|||||||||
Loews
Hotels
|
101.9
|
93.8
|
195.3
|
185.9
|
|||||||||
Corporate
and other
|
113.9
|
4.2
|
251.2
|
61.9
|
|||||||||
Total
|
$
|
4,277.3
|
$
|
4,030.7
|
$
|
8,521.8
|
$
|
7,771.9
|
|||||
Pretax
income (loss) (a):
|
|||||||||||||
CNA
Financial:
|
|||||||||||||
Standard
Lines
|
$
|
204.9
|
$
|
154.9
|
$
|
410.4
|
$
|
284.3
|
|||||
Specialty
Lines
|
162.2
|
117.1
|
344.6
|
238.0
|
|||||||||
Life
and Group Non-Core
|
(36.8
|
)
|
(2.7
|
)
|
(62.4
|
)
|
(11.2
|
)
|
|||||
Other
Insurance
|
23.3
|
67.4
|
16.1
|
73.3
|
|||||||||
Total
CNA Financial
|
353.6
|
336.7
|
708.7
|
584.4
|
|||||||||
Lorillard
|
335.3
|
274.2
|
610.4
|
505.9
|
|||||||||
Boardwalk
Pipeline
|
32.0
|
22.8
|
101.4
|
85.6
|
|||||||||
Diamond
Offshore
|
240.6
|
54.2
|
445.9
|
97.2
|
|||||||||
Loews
Hotels
|
19.6
|
18.3
|
33.5
|
39.6
|
|||||||||
Corporate
and other
|
41.7
|
(67.5
|
)
|
107.5
|
(122.1
|
)
|
|||||||
Total
|
$
|
1,022.8
|
$
|
638.7
|
$
|
2,007.4
|
$
|
1,190.6
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Net
income (loss) (a):
|
|||||||||||||
CNA
Financial:
|
|||||||||||||
Standard
Lines
|
$
|
130.4
|
$
|
106.3
|
$
|
260.2
|
$
|
191.3
|
|||||
Specialty
Lines
|
92.5
|
78.7
|
198.0
|
153.6
|
|||||||||
Life
and Group Non-Core
|
(16.1
|
)
|
3.3
|
(25.6
|
)
|
1.8
|
|||||||
Other
Insurance
|
16.7
|
78.2
|
8.5
|
88.1
|
|||||||||
Total
CNA Financial
|
223.5
|
266.5
|
441.1
|
434.8
|
|||||||||
Lorillard
|
204.2
|
162.7
|
373.0
|
304.3
|
|||||||||
Boardwalk
Pipeline
|
16.5
|
13.7
|
52.2
|
51.6
|
|||||||||
Diamond
Offshore
|
87.6
|
19.9
|
159.9
|
34.1
|
|||||||||
Loews
Hotels
|
12.0
|
15.8
|
20.5
|
29.0
|
|||||||||
Corporate
and other
|
27.3
|
(44.8
|
)
|
70.4
|
(80.3
|
)
|
|||||||
Income
from continuing operations
|
571.1
|
433.8
|
1,117.1
|
773.5
|
|||||||||
Discontinued
operations
|
(2.4
|
)
|
1.8
|
(7.4
|
)
|
8.4
|
|||||||
Total
|
$
|
568.7
|
$
|
435.6
|
$
|
1,109.7
|
$
|
781.9
|
(a)
|
Investment
gains (losses) included in Revenues, Pretax income (loss) and Net
income
(loss) are as follows:
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Revenues
and pretax income (loss):
|
|||||||||||||
CNA
Financial:
|
|||||||||||||
Standard
Lines
|
$
|
(36.8
|
)
|
$
|
25.5
|
$
|
(23.6
|
)
|
$
|
20.3
|
|||
Specialty
Lines
|
(13.1
|
)
|
8.3
|
(10.1
|
)
|
9.0
|
|||||||
Life
and Group Non-Core
|
(34.1
|
)
|
(1.0
|
)
|
(45.7
|
)
|
(5.7
|
)
|
|||||
Other
Insurance
|
(13.7
|
)
|
(6.9
|
)
|
(9.5
|
)
|
(14.4
|
)
|
|||||
Total
CNA Financial
|
(97.7
|
)
|
25.9
|
(88.9
|
)
|
9.2
|
|||||||
Corporate
and other
|
4.4
|
6.6
|
(2.4
|
)
|
0.5
|
||||||||
Total
|
$
|
(93.3
|
)
|
$
|
32.5
|
$
|
(91.3
|
)
|
$
|
9.7
|
|||
Net
income (loss):
|
|||||||||||||
CNA
Financial:
|
|||||||||||||
Standard
Lines
|
$
|
(21.7
|
)
|
$
|
15.4
|
$
|
(13.6
|
)
|
$
|
7.8
|
|||
Specialty
Lines
|
(7.8
|
)
|
4.9
|
(6.0
|
)
|
7.9
|
|||||||
Life
and Group Non-Core
|
(20.2
|
)
|
(0.6
|
)
|
(27.1
|
)
|
(3.4
|
)
|
|||||
Other
Insurance
|
(8.2
|
)
|
(4.5
|
)
|
(10.7
|
)
|
(8.8
|
)
|
|||||
Total
CNA Financial
|
(57.9
|
)
|
15.2
|
(57.4
|
)
|
3.5
|
|||||||
Corporate
and other
|
2.9
|
4.2
|
(1.4
|
)
|
0.7
|
||||||||
Total
|
$
|
(55.0
|
)
|
$
|
19.4
|
$
|
(58.8
|
)
|
$
|
4.2
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Revenues
:
|
|||||||||||||
Net
investment income
|
$
|
3.9
|
$
|
3.7
|
$
|
7.8
|
$
|
8.1
|
|||||
Other
|
(2.5
|
)
|
1.2
|
(2.6
|
)
|
(5.3
|
)
|
||||||
Total
revenues
|
1.4
|
4.9
|
5.2
|
2.8
|
|||||||||
Insurance
related benefits (expenses)
|
(4.0
|
)
|
(2.8
|
)
|
(13.7
|
)
|
6.4
|
||||||
Income
(loss) before income taxes and minority interest
|
(2.6
|
)
|
2.1
|
(8.5
|
)
|
9.2
|
|||||||
Income
tax expense (benefit)
|
(0.4
|
)
|
(0.1
|
)
|
|||||||||
Minority
interest
|
(0.2
|
)
|
0.3
|
(0.7
|
)
|
0.9
|
|||||||
Net
income (loss) from discontinued operations
|
$
|
(2.4
|
)
|
$
|
1.8
|
$
|
(7.4
|
)
|
$
|
8.4
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(In
millions)
|
|||||||
Assets:
|
|||||||
Investments
|
$
|
316.0
|
$
|
357.8
|
|||
Reinsurance
receivables
|
55.2
|
77.9
|
|||||
Cash
|
33.5
|
28.9
|
|||||
Other
assets
|
27.0
|
6.0
|
|||||
Total
assets
|
431.7
|
470.6
|
|||||
Liabilities:
|
|||||||
Insurance
reserves
|
(321.7
|
)
|
(337.9
|
)
|
|||
Other
liabilities
|
(14.7
|
)
|
(19.4
|
)
|
|||
Total
liabilities
|
(336.4
|
)
|
(357.3
|
)
|
|||
Net
assets of discontinued operations
|
$
|
95.3
|
$
|
113.3
|
CNA
|
Boardwalk
|
Diamond
|
Loews
|
Corporate
|
|||||||||||||||||||||
June
30, 2006
|
Financial
|
Lorillard
|
Pipeline
|
Offshore
|
Hotels
|
and
Other
|
Eliminations
|
Total
|
|||||||||||||||||
(In
millions)
|
|||||||||||||||||||||||||
Assets:
|
|||||||||||||||||||||||||
Investments
|
$
|
40,330.5
|
$
|
1,650.5
|
$
|
55.0
|
$
|
635.5
|
$
|
9.9
|
$
|
3,923.7
|
$
|
46,605.1
|
|||||||||||
Cash
|
98.1
|
3.3
|
2.8
|
10.5
|
12.2
|
13.0
|
139.9
|
||||||||||||||||||
Receivables
|
14,037.1
|
25.8
|
68.1
|
462.2
|
28.8
|
180.6
|
$
|
(5.7
|
)
|
14,796.9
|
|||||||||||||||
Property,
plant and equipment
|
179.6
|
203.8
|
1,886.3
|
2,488.2
|
363.0
|
21.6
|
5,142.5
|
||||||||||||||||||
Deferred
income taxes
|
1,384.5
|
426.1
|
23.8
|
(724.7
|
)
|
1,109.7
|
|||||||||||||||||||
Goodwill
and other intangible assets
|
104.3
|
163.5
|
21.8
|
2.6
|
5.0
|
297.2
|
|||||||||||||||||||
Investments
in capital stocks of
|
|||||||||||||||||||||||||
subsidiaries
|
11,684.0
|
(11,684.0
|
)
|
||||||||||||||||||||||
Other
assets
|
1,009.2
|
384.9
|
270.7
|
125.3
|
76.4
|
83.6
|
(48.2
|
)
|
1,901.9
|
||||||||||||||||
Deferred
acquisition costs of
|
|||||||||||||||||||||||||
insurance
subsidiaries
|
1,210.8
|
1,210.8
|
|||||||||||||||||||||||
Separate
account business
|
506.0
|
506.0
|
|||||||||||||||||||||||
Total
assets
|
$
|
58,860.1
|
$
|
2,694.4
|
$
|
2,446.4
|
$
|
3,743.5
|
$
|
492.9
|
$
|
15,935.3
|
$
|
(12,462.6
|
)
|
$
|
71,710.0
|
||||||||
Liabilities
and Shareholders’ Equity:
|
|||||||||||||||||||||||||
Insurance
reserves
|
$
|
41,660.4
|
$
|
41,660.4
|
|||||||||||||||||||||
Payable
for securities purchased
|
520.5
|
$
|
103.8
|
624.3
|
|||||||||||||||||||||
Collateral
on loaned securities
|
1,340.7
|
1,340.7
|
|||||||||||||||||||||||
Short-term
debt
|
250.2
|
$
|
4.2
|
299.9
|
554.3
|
||||||||||||||||||||
Long-term
debt
|
1,428.7
|
$
|
1,101.7
|
$
|
956.7
|
235.0
|
865.2
|
4,587.3
|
|||||||||||||||||
Reinsurance
balances payable
|
1,656.7
|
1,656.7
|
|||||||||||||||||||||||
Deferred
income taxes
|
16.9
|
457.7
|
48.2
|
201.9
|
$
|
(724.7
|
)
|
||||||||||||||||||
Other
liabilities
|
2,315.5
|
$
|
1,343.9
|
321.6
|
354.6
|
45.6
|
226.8
|
(98.2
|
)
|
4,509.8
|
|||||||||||||||
Separate
account business
|
506.0
|
506.0
|
|||||||||||||||||||||||
Total
liabilities
|
49,678.7
|
1,343.9
|
1,440.2
|
1,769.0
|
333.0
|
1,697.6
|
(822.9
|
)
|
55,439.5
|
||||||||||||||||
Minority
interest
|
943.5
|
284.0
|
899.2
|
2,126.7
|
|||||||||||||||||||||
Shareholders’
equity
|
8,237.9
|
1,350.5
|
722.2
|
1,075.3
|
159.9
|
14,237.7
|
(11,639.7
|
)
|
14,143.8
|
||||||||||||||||
Total
liabilities and shareholders’ equity
|
$
|
58,860.1
|
$
|
2,694.4
|
$
|
2,446.4
|
$
|
3,743.5
|
$
|
492.9
|
$
|
15,935.3
|
$
|
(12,462.6
|
)
|
$
|
71,710.0
|
CNA
|
Boardwalk
|
Diamond
|
Loews
|
Corporate
|
|||||||||||||||||||||
December
31, 2005
|
Financial
|
Lorillard
|
Pipeline
|
Offshore
|
Hotels
|
and
Other
|
Eliminations
|
Total
|
|||||||||||||||||
(In
millions)
|
|||||||||||||||||||||||||
Assets:
|
|||||||||||||||||||||||||
Investments
|
$
|
39,692.9
|
$
|
1,747.7
|
$
|
65.0
|
$
|
819.9
|
$
|
9.5
|
$
|
3,061.0
|
$
|
45,396.0
|
|||||||||||
Cash
|
96.4
|
2.4
|
0.8
|
24.9
|
9.6
|
19.0
|
153.1
|
||||||||||||||||||
Receivables
|
14,722.4
|
25.5
|
106.8
|
357.1
|
21.6
|
145.7
|
$
|
(65.4
|
)
|
15,313.7
|
|||||||||||||||
Property,
plant and equipment
|
148.5
|
213.9
|
1,867.4
|
2,333.7
|
366.6
|
21.5
|
4,951.6
|
||||||||||||||||||
Deferred
income taxes
|
1,140.5
|
428.5
|
16.6
|
22.2
|
(702.5
|
)
|
905.3
|
||||||||||||||||||
Goodwill
and other intangible assets
|
104.5
|
163.5
|
21.8
|
2.6
|
5.0
|
297.4
|
|||||||||||||||||||
Investments
in capital stocks of
|
|||||||||||||||||||||||||
subsidiaries
|
11,645.1
|
(11,645.1
|
)
|
||||||||||||||||||||||
Other
assets
|
1,075.9
|
377.5
|
262.0
|
88.9
|
30.2
|
75.1
|
1,909.6
|
||||||||||||||||||
Deferred
acquisition costs of
|
|||||||||||||||||||||||||
insurance
subsidiaries
|
1,197.4
|
1,197.4
|
|||||||||||||||||||||||
Separate
account business
|
551.5
|
551.5
|
|||||||||||||||||||||||
Total
assets
|
$
|
58,730.0
|
$
|
2,795.5
|
$
|
2,482.1
|
$
|
3,646.3
|
$
|
440.1
|
$
|
14,994.6
|
$
|
(12,413.0
|
)
|
$
|
70,675.6
|
||||||||
Liabilities
and Shareholders’ Equity:
|
|||||||||||||||||||||||||
Insurance
reserves
|
$
|
42,436.2
|
$
|
42,436.2
|
|||||||||||||||||||||
Payable
for securities purchased
|
226.5
|
$
|
175.2
|
401.7
|
|||||||||||||||||||||
Collateral
on loaned securities
|
767.4
|
767.4
|
|||||||||||||||||||||||
Short-term
debt
|
252.4
|
$
|
42.1
|
$
|
3.9
|
299.8
|
598.2
|
||||||||||||||||||
Long-term
debt
|
1,437.9
|
1,101.3
|
$
|
968.3
|
236.2
|
864.9
|
4,608.6
|
||||||||||||||||||
Reinsurance
balances payable
|
1,636.2
|
1,636.2
|
|||||||||||||||||||||||
Deferred
income taxes
|
456.9
|
50.2
|
195.4
|
$
|
(702.5
|
)
|
|||||||||||||||||||
Other
liabilities
|
2,239.9
|
$
|
1,455.7
|
347.0
|
335.8
|
11.5
|
206.2
|
(71.3
|
)
|
4,524.8
|
|||||||||||||||
Separate
account business
|
551.5
|
551.5
|
|||||||||||||||||||||||
Total
liabilities
|
49,548.0
|
1,455.7
|
1,490.4
|
1,761.0
|
301.8
|
1,741.5
|
(773.8
|
)
|
55,524.6
|
||||||||||||||||
Minority
interest
|
936.8
|
276.5
|
845.6
|
2,058.9
|
|||||||||||||||||||||
Shareholders’
equity
|
8,245.2
|
1,339.8
|
715.2
|
1,039.7
|
138.3
|
13,253.1
|
(11,639.2
|
)
|
13,092.1
|
||||||||||||||||
Total
liabilities and shareholders’ equity
|
$
|
58,730.0
|
$
|
2,795.5
|
$
|
2,482.1
|
$
|
3,646.3
|
$
|
440.1
|
$
|
14,994.6
|
$
|
(12,413.0
|
)
|
$
|
70,675.6
|
CNA
|
Boardwalk
|
Diamond
|
Loews
|
Corporate
|
|||||||||||||||||||||
Six
Months Ended June 30, 2006
|
Financial
|
Lorillard
|
Pipeline
|
Offshore
|
Hotels
|
and
Other
|
Eliminations
|
Total
|
|||||||||||||||||
(In
millions)
|
|||||||||||||||||||||||||
Revenues:
|
|||||||||||||||||||||||||
Insurance
premiums
|
$
|
3,760.7
|
$
|
(0.1
|
)
|
$
|
3,760.6
|
||||||||||||||||||
Net
investment income
|
1,122.2
|
$
|
44.2
|
$
|
1.2
|
$
|
16.8
|
$
|
0.4
|
$
|
160.2
|
1,345.0
|
|||||||||||||
Intercompany
interest and dividends
|
561.4
|
(561.4
|
)
|
||||||||||||||||||||||
Investment
gains (losses)
|
(88.9
|
)
|
(0.6
|
)
|
(0.2
|
)
|
(1.6
|
)
|
(91.3
|
)
|
|||||||||||||||
Manufactured
products
|
1,832.1
|
87.0
|
1,919.1
|
||||||||||||||||||||||
Other
|
119.4
|
0.1
|
306.3
|
961.2
|
194.9
|
6.5
|
1,588.4
|
||||||||||||||||||
Total
|
4,913.4
|
1,875.8
|
307.5
|
977.8
|
195.3
|
813.5
|
(561.5
|
)
|
8,521.8
|
||||||||||||||||
Expenses:
|
|||||||||||||||||||||||||
Insurance
claims and policyholders’
|
|||||||||||||||||||||||||
benefits
|
2,924.2
|
2,924.2
|
|||||||||||||||||||||||
Amortization
of deferred acquisition costs
|
742.0
|
742.0
|
|||||||||||||||||||||||
Cost
of manufactured products sold
|
1,064.3
|
43.7
|
1,108.0
|
||||||||||||||||||||||
Other
operating expenses
|
493.4
|
201.7
|
175.3
|
519.6
|
156.0
|
61.9
|
(0.1
|
)
|
1,607.8
|
||||||||||||||||
Restructuring
and other related charges
|
(12.9
|
)
|
(12.9
|
)
|
|||||||||||||||||||||
Interest
|
58.0
|
30.8
|
12.5
|
5.8
|
38.2
|
145.3
|
|||||||||||||||||||
Total
|
4,204.7
|
1,266.0
|
206.1
|
532.1
|
161.8
|
143.8
|
(0.1
|
)
|
6,514.4
|
||||||||||||||||
708.7
|
609.8
|
101.4
|
445.7
|
33.5
|
669.7
|
(561.4
|
)
|
2,007.4
|
|||||||||||||||||
Income
tax expense (benefit)
|
210.1
|
237.2
|
34.5
|
139.2
|
13.0
|
37.4
|
671.4
|
||||||||||||||||||
Minority
interest
|
57.5
|
14.7
|
146.7
|
218.9
|
|||||||||||||||||||||
Total
|
267.6
|
237.2
|
49.2
|
285.9
|
13.0
|
37.4
|
890.3
|
||||||||||||||||||
Income
from continuing operations
|
441.1
|
372.6
|
52.2
|
159.8
|
20.5
|
632.3
|
(561.4
|
)
|
1,117.1
|
||||||||||||||||
Discontinued
operations, net
|
(7.4
|
)
|
(7.4
|
)
|
|||||||||||||||||||||
Net
income
|
$
|
433.7
|
$
|
372.6
|
$
|
52.2
|
$
|
159.8
|
$
|
20.5
|
$
|
632.3
|
$
|
(561.4
|
)
|
$
|
1,109.7
|
CNA
|
Boardwalk
|
Diamond
|
Loews
|
Corporate
|
|||||||||||||||||||||
Six
Months Ended June 30, 2005
|
Financial
|
Lorillard
|
Pipeline
|
Offshore
|
Hotels
|
and
Other
|
Eliminations
|
Total
|
|||||||||||||||||
(In
millions)
|
|||||||||||||||||||||||||
Revenues:
|
|||||||||||||||||||||||||
Insurance
premiums
|
$
|
3,811.4
|
$
|
(0.6
|
)
|
$
|
3,810.8
|
||||||||||||||||||
Net
investment income
|
845.3
|
$
|
24.5
|
$
|
1.4
|
$
|
11.9
|
$
|
5.4
|
$
|
(28.0
|
)
|
860.5
|
||||||||||||
Intercompany
interest and dividends
|
425.1
|
(425.1
|
)
|
||||||||||||||||||||||
Investment
gains (losses)
|
9.2
|
(2.0
|
)
|
(1.3
|
)
|
3.8
|
9.7
|
||||||||||||||||||
Manufactured
products
|
1,723.4
|
79.5
|
1,802.9
|
||||||||||||||||||||||
Other
|
270.6
|
6.1
|
269.3
|
551.0
|
180.5
|
10.5
|
1,288.0
|
||||||||||||||||||
Total
|
4,936.5
|
1,752.0
|
270.7
|
561.6
|
185.9
|
490.9
|
(425.7
|
)
|
7,771.9
|
||||||||||||||||
Expenses:
|
|||||||||||||||||||||||||
Insurance
claims and policyholders’
|
|||||||||||||||||||||||||
benefits
|
3,015.0
|
3,015.0
|
|||||||||||||||||||||||
Amortization
of deferred acquisition costs
|
752.1
|
752.1
|
|||||||||||||||||||||||
Cost
of manufactured products sold
|
1,061.1
|
38.7
|
1,099.8
|
||||||||||||||||||||||
Other
operating expenses
|
517.8
|
187.0
|
155.4
|
440.4
|
141.5
|
57.3
|
(0.6
|
)
|
1,498.8
|
||||||||||||||||
Interest
|
67.2
|
29.7
|
25.3
|
4.8
|
88.6
|
215.6
|
|||||||||||||||||||
Total
|
4,352.1
|
1,248.1
|
185.1
|
465.7
|
146.3
|
184.6
|
(0.6
|
)
|
6,581.3
|
||||||||||||||||
584.4
|
503.9
|
85.6
|
95.9
|
39.6
|
306.3
|
(425.1
|
)
|
1,190.6
|
|||||||||||||||||
Income
tax expense (benefit)
|
107.0
|
200.9
|
34.0
|
29.8
|
10.6
|
(40.3
|
)
|
342.0
|
|||||||||||||||||
Minority
interest
|
42.6
|
32.5
|
75.1
|
||||||||||||||||||||||
Total
|
149.6
|
200.9
|
34.0
|
62.3
|
10.6
|
(40.3
|
)
|
417.1
|
|||||||||||||||||
Income
from continuing operations
|
434.8
|
303.0
|
51.6
|
33.6
|
29.0
|
346.6
|
(425.1
|
)
|
773.5
|
||||||||||||||||
Discontinued
operations, net
|
8.4
|
8.4
|
|||||||||||||||||||||||
Net
income
|
$
|
443.2
|
$
|
303.0
|
$
|
51.6
|
$
|
33.6
|
$
|
29.0
|
$
|
346.6
|
$
|
(425.1
|
)
|
$
|
781.9
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30, 2005
|
June
30, 2005
|
||||||||||||
(In
millions, except per share data)
|
Previously
|
Previously
|
|||||||||||
Reported
|
Restated
|
Reported
|
Restated
|
||||||||||
Consolidated
Condensed Statement of Income:
|
|||||||||||||
Discontinued
operations, net
|
$
|
-
|
$
|
1.8
|
$
|
-
|
$
|
8.4
|
|||||
Net
income
|
433.8
|
435.6
|
773.5
|
781.9
|
|||||||||
Per
Loews common share-basic and diluted
|
|||||||||||||
Discontinued
operations, net
|
$
|
-
|
$
|
-
|
$
|
-
|
$ |
0.02
|
|||||
Net
income
|
0.68
|
0.68
|
1.20
|
1.22
|
·
|
CNA’s
net purchases and sales of trading securities and changes in the
net
receivable/payable from unsettled investment purchases and sales
related
to trading securities, previously classified within investing activities,
have been reclassified to cash flows from operating
activities.
|
·
|
CNA’s
cash flows from equity method investees were reclassified to distinguish
between return on investments, which are reflected within operating
cash
flows, and return of investments, which are reflected within investing
cash flows. Previously all amounts were reflected within investing
cash
flows.
|
·
|
Deposits
and withdrawals related to investment contract products issued by
CNA have
been reflected within financing cash flows. Previously, amounts related
to
certain investment contracts were reflected within operating cash
flows.
|
·
|
The
impact of the cumulative translation adjustment related to CNA, previously
reflected within investing activities, is now classified within operating
activities.
|
Six
Months Ended June 30
|
2005
|
||||||
(In
millions)
|
Previously
|
|
|
|
|
||
|
|
|
Reported
|
Restated
|
|||
Cash
flows from continuing operations provided
|
|||||||
(used)
by:
|
|||||||
Operating
activities
|
$
|
1,355.9
|
$
|
1,489.8
|
|||
Investing
activities
|
650.4
|
570.6
|
|||||
Financing
activities
|
(1,899.8
|
)
|
(1,961.1
|
)
|
Page
|
||
No.
|
||
Overview
|
68
|
|
Restatement
of Prior Year Results
|
69
|
|
Consolidated
Financial Results
|
69
|
|
Classes
of Common Stock
|
70
|
|
Parent
Company Structure
|
71
|
|
Critical
Accounting Estimates
|
71
|
|
Results
of Operations by Business Segment
|
71
|
|
CNA
Financial
|
71
|
|
Reserves-Estimates
and Uncertainties
|
72
|
|
Reinsurance | 77 | |
Terrorism
Insurance
|
78
|
|
Restructuring
|
78
|
|
Standard
Lines
|
79
|
|
Specialty
Lines
|
81
|
|
Life
and Group Non-Core
|
83
|
|
Other
Insurance
|
84
|
|
APMT
Reserves
|
85
|
|
Lorillard
|
90
|
|
Results
of Operations
|
90
|
|
Business
Environment
|
93
|
|
Boardwalk
Pipeline
|
94
|
|
Diamond
Offshore
|
96
|
|
Loews
Hotels
|
98
|
|
Corporate
and Other
|
98
|
|
Liquidity
and Capital Resources
|
99
|
|
CNA
Financial
|
99
|
|
Lorillard
|
102
|
|
Boardwalk
Pipeline
|
103
|
|
Diamond
Offshore
|
104
|
|
Loews
Hotels
|
105
|
|
Corporate
and Other
|
105
|
|
Contractual
Cash Payment Obligations
|
106
|
|
Investments
|
106
|
|
Accounting
Standards
|
113
|
|
Forward-Looking
Statements Disclaimer
|
114
|
·
|
commercial
property and casualty insurance (CNA Financial Corporation (“CNA”), a 91%
owned subsidiary);
|
·
|
production
and sale of cigarettes (Lorillard, Inc. (“Lorillard”), a wholly owned
subsidiary);
|
·
|
operation
of interstate natural gas transmission
pipeline systems
(Boardwalk Pipeline Partners, LP
(“Boardwalk Pipeline”),
an 85% owned subsidiary);
|
·
|
operation
of offshore oil and gas drilling rigs (Diamond Offshore Drilling,
Inc.
(“Diamond Offshore”), a 54% owned subsidiary);
|
·
|
operation
of hotels (Loews Hotels Holding Corporation (“Loews Hotels”), a wholly
owned subsidiary)
and
|
·
|
distribution
and sale of watches and clocks (Bulova Corporation (“Bulova”), a wholly
owned subsidiary).
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions, except per share data)
|
(Restated
|
)
|
(Restated
|
)
|
|||||||||
Net
income attributable to Loews common stock:
|
|||||||||||||
Income
before net investment losses
|
$
|
532.3
|
$
|
358.6
|
$
|
1,014.3
|
$
|
666.6
|
|||||
Net
investment gains (losses)
|
(55.0
|
)
|
19.5
|
(58.6
|
)
|
4.7
|
|||||||
Income
from continuing operations
|
477.3
|
378.1
|
955.7
|
671.3
|
|||||||||
Discontinued
operations, net
|
(2.4
|
)
|
1.8
|
(7.4
|
)
|
8.4
|
|||||||
Net
income attributable to Loews common stock
|
474.9
|
379.9
|
948.3
|
679.7
|
|||||||||
Net
income attributable to Carolina Group stock (a)
|
93.8
|
55.7
|
161.4
|
102.2
|
|||||||||
Consolidated
net income
|
$
|
568.7
|
$
|
435.6
|
$
|
1,109.7
|
$
|
781.9
|
|||||
Net
income per share:
|
|||||||||||||
Loews
common stock
|
|||||||||||||
Income
from continuing operations
|
$
|
0.85
|
$
|
0.68
|
$
|
1.71
|
$
|
1.20
|
|||||
Discontinued
operations, net
|
(0.01
|
)
|
0.02
|
||||||||||
Loews
common stock
|
$
|
0.85
|
$
|
0.68
|
$
|
1.70
|
$
|
1.22
|
|||||
Carolina
Group stock
|
$
|
1.09
|
$
|
0.82
|
$
|
1.96
|
$
|
1.50
|
(a)
|
Reflects
the Company’s sale of 15 million shares of Carolina Group stock in May of
2006 and 10 million shares in November of 2005. Net income per share
of
Carolina Group stock was not impacted by these
sales.
|
·
|
our
100% stock ownership interest in Lorillard,
Inc.;
|
·
|
notional,
intergroup debt owed by the Carolina Group to the Loews Group ($1.5
billion outstanding at June 30, 2006), bearing interest at the annual
rate
of 8.0% and, subject to optional prepayment, due December 31, 2021;
and
|
·
|
any
and all liabilities, costs and expenses arising out of or related
to
tobacco or tobacco-related
businesses.
|
·
|
Insurance
Reserves
|
·
|
Reinsurance
|
·
|
Tobacco
and Other Litigation
|
·
|
Valuation
of Investments and Impairment of
Securities
|
·
|
Long
Term Care Products
|
·
|
Pension
and Postretirement Benefit
Obligations
|
·
|
coverage
issues, including whether certain costs are covered under the policies
and
whether policy limits apply;
|
·
|
inconsistent
court decisions and developing legal
theories;
|
·
|
continuing
aggressive tactics of plaintiffs’
lawyers;
|
·
|
the
risks and lack of predictability inherent in major
litigation;
|
·
|
changes
in the volume of APMT claims which cannot now be
anticipated;
|
·
|
the
impact of the exhaustion of primary limits and the resulting increase
in
claims on any umbrella or excess policies CNA has
issued;
|
·
|
the
number and outcome of direct actions against CNA;
and
|
·
|
CNA’s
ability to recover reinsurance for APMT
claims.
|
·
|
increases
in the number and size of claims relating to injuries from medical
products, and exposure for alleged bodily injury and property damage
due
to lead pigment;
|
·
|
the
effects of accounting and financial reporting scandals and other
major
corporate governance failures, which have resulted in an increase
in the
number and size of claims, including director and officer and errors
and
omissions insurance claims;
|
·
|
class
action litigation relating to claims handling and other practices;
|
·
|
construction
defect claims, including claims for a broad range of additional insured
endorsements on policies; and
|
·
|
increases
in the number of claims alleging abuse by members of the clergy,
including
passage of legislation to reopen or extend various statutes of
limitations.
|
·
|
Paid
Development,
|
·
|
Incurred
Development,
|
·
|
Loss
Ratio,
|
·
|
Bornhuetter-Ferguson
Using Premiums and Paid Loss,
|
·
|
Bornhuetter-Ferguson
Using Premiums and Incurred Loss,
and
|
·
|
Average
Loss.
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions, except %)
|
|||||||||||||
Net
written premiums
|
$
|
1,163.0
|
$
|
1,134.0
|
$
|
2,273.0
|
$
|
2,305.0
|
|||||
Net
earned premiums
|
1,096.0
|
1,084.0
|
2,182.0
|
2,253.0
|
|||||||||
Net
investment income
|
238.0
|
171.1
|
466.3
|
353.7
|
|||||||||
Net
operating income before net realized
|
|||||||||||||
investment
gains
|
152.1
|
90.9
|
273.8
|
183.5
|
|||||||||
Net
realized investment gains (losses)
|
(21.7
|
)
|
15.4
|
(13.6
|
)
|
7.8
|
|||||||
Net
income
|
130.4
|
106.3
|
260.2
|
191.3
|
|||||||||
Ratios:
|
|||||||||||||
Loss
and loss adjustment expense
|
67.6
|
%
|
71.2
|
%
|
69.7
|
%
|
71.1
|
%
|
|||||
Expense
|
31.1
|
31.4
|
31.1
|
31.8
|
|||||||||
Dividend
|
0.4
|
0.8
|
0.4
|
0.6
|
|||||||||
Combined
|
99.1
|
%
|
103.4
|
%
|
101.2
|
%
|
103.5
|
%
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(In
millions)
|
|||||||
Gross
Case Reserves
|
$
|
6,967.0
|
$
|
7,033.0
|
|||
Gross
IBNR Reserves
|
7,856.0
|
8,051.0
|
|||||
Total
Gross Carried Claim and Claim Adjustment Expense Reserves
|
$
|
14,823.0
|
$
|
15,084.0
|
|||
Net
Case Reserves
|
$
|
4,761.0
|
$
|
5,165.0
|
|||
Net
IBNR Reserves
|
6,364.0
|
6,081.0
|
|||||
Total
Net Carried Claim and Claim Adjustment Expense Reserves
|
$
|
11,125.0
|
$
|
11,246.0
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions, except %)
|
|||||||||||||
Net
written premiums
|
$
|
625.0
|
$
|
595.0
|
$
|
1,273.0
|
$
|
1,189.0
|
|||||
Net
earned premiums
|
633.0
|
630.0
|
1,261.0
|
1,203.0
|
|||||||||
Net
investment income
|
99.4
|
67.1
|
186.4
|
122.9
|
|||||||||
Net
operating income before net realized
|
|||||||||||||
investment
gains (losses)
|
100.3
|
73.8
|
204.0
|
145.7
|
|||||||||
Net
realized investment gains (losses)
|
(7.8
|
)
|
4.9
|
(6.0
|
)
|
7.9
|
|||||||
Net
income
|
92.5
|
78.7
|
198.0
|
153.6
|
|||||||||
Ratios:
|
|||||||||||||
Loss
and loss adjustment expense
|
61.2
|
%
|
69.0
|
%
|
60.2
|
%
|
65.8
|
%
|
|||||
Expense
|
27.2
|
24.8
|
26.8
|
25.8
|
|||||||||
Dividend
|
0.1
|
0.2
|
0.1
|
0.2
|
|||||||||
Combined
|
88.5
|
%
|
94.0
|
%
|
87.1
|
%
|
91.8
|
%
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(In
millions)
|
|||||||
Gross
Case Reserves
|
$
|
1,801.0
|
$
|
1,907.0
|
|||
Gross
IBNR Reserves
|
3,594.0
|
3,298.0
|
|||||
Total
Gross Carried Claim and Claim Adjustment Expense Reserves
|
$
|
5,395.0
|
$
|
5,205.0
|
|||
Net
Case Reserves
|
$
|
1,335.0
|
$
|
1,442.0
|
|||
Net
IBNR Reserves
|
2,649.0
|
2,352.0
|
|||||
Total
Net Carried Claim and Claim Adjustment Expense Reserves
|
$
|
3,984.0
|
$
|
3,794.0
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Net
earned premiums
|
$
|
159.0
|
$
|
204.0
|
$
|
322.0
|
$
|
370.0
|
|||||
Net
investment income
|
137.5
|
145.7
|
324.6
|
251.8
|
|||||||||
Net
operating income before net realized
|
|||||||||||||
investment
losses
|
4.1
|
3.9
|
1.5
|
5.2
|
|||||||||
Net
realized investment losses
|
(20.2
|
)
|
(0.6
|
)
|
(27.1
|
)
|
(3.4
|
)
|
|||||
Net
income (loss)
|
(16.1
|
)
|
3.3
|
(25.6
|
)
|
1.8
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Net
investment income
|
$
|
77.0
|
$
|
55.0
|
$
|
145.0
|
$
|
116.0
|
|||||
Revenues
|
57.2
|
154.7
|
108.8
|
192.0
|
|||||||||
Net
operating income before net realized
|
|||||||||||||
investment
gains (losses)
|
24.9
|
82.7
|
19.2
|
96.9
|
|||||||||
Net
realized investment gains (losses)
|
(8.2
|
)
|
(4.5
|
)
|
(10.7
|
)
|
(8.8
|
)
|
|||||
Net
income (loss)
|
16.7
|
78.2
|
8.5
|
88.1
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(In
millions)
|
|||||||
Gross
Case Reserves
|
$
|
2,867.0
|
$
|
3,297.0
|
|||
Gross
IBNR Reserves
|
3,907.0
|
4,075.0
|
|||||
Total
Gross Carried Claim and Claim Adjustment Expense Reserves
|
$
|
6,774.0
|
$
|
7,372.0
|
|||
Net
Case Reserves
|
$
|
1,312.0
|
$
|
1,554.0
|
|||
Net
IBNR Reserves
|
1,908.0
|
1,902.0
|
|||||
Total
Net Carried Claim and Claim Adjustment Expense Reserves
|
$
|
3,220.0
|
$
|
3,456.0
|
June
30, 2006
|
December
31, 2005
|
||||||||||||
Environmental
|
|
Environmental
|
|||||||||||
Pollution
and
|
Pollution
and
|
||||||||||||
Asbestos
|
Mass
Tort
|
Asbestos
|
Mass
Tort
|
||||||||||
(In
millions)
|
|||||||||||||
Gross
reserves
|
$
|
2,799.0
|
$
|
603.0
|
$
|
2,992.0
|
$
|
680.0
|
|||||
Ceded
reserves
|
(1,294.0
|
)
|
(229.0
|
)
|
(1,438.0
|
)
|
(257.0
|
)
|
|||||
Net
reserves
|
$
|
1,505.0
|
$
|
374.0
|
$
|
1,554.0
|
$
|
423.0
|
Percent
of
|
|||||||||||||
Number
of
|
Net
Paid
|
Net
Asbestos
|
Asbestos
Net
|
||||||||||
June
30, 2006
|
Policyholders
|
Losses
|
Reserves
|
Reserves
|
|||||||||
(In
millions of dollars)
|
|||||||||||||
Policyholders
with settlement agreements
|
|||||||||||||
Structured
settlements
|
15
|
$
|
18.0
|
$
|
165.0
|
11.0
|
%
|
||||||
Wellington
|
3
|
1.0
|
14.0
|
0.9
|
|||||||||
Coverage
in place
|
39
|
(18.0
|
)
|
93.0
|
6.2
|
||||||||
Fibreboard
|
1
|
54.0
|
3.6
|
||||||||||
Total
with settlement agreements
|
58
|
1.0
|
326.0
|
21.7
|
|||||||||
Other
policyholders with active accounts
|
|||||||||||||
Large
asbestos accounts
|
205
|
37.0
|
262.0
|
17.4
|
|||||||||
Small
asbestos accounts
|
1,076
|
9.0
|
96.0
|
6.4
|
|||||||||
Total
other policyholders
|
1,281
|
46.0
|
358.0
|
23.8
|
|||||||||
Assumed
reinsurance and pools
|
3.0
|
144.0
|
9.6
|
||||||||||
Unassigned
IBNR
|
677.0
|
44.9
|
|||||||||||
Total
|
1,339
|
$
|
50.0
|
$
|
1,505.0
|
100.0
|
%
|
||||||
December
31, 2005
|
|||||||||||||
Policyholders
with settlement agreements
|
|||||||||||||
Structured
settlements
|
13
|
$
|
30.0
|
$
|
167.0
|
10.7
|
%
|
||||||
Wellington
|
4
|
2.0
|
15.0
|
1.0
|
|||||||||
Coverage
in place
|
34
|
13.0
|
58.0
|
3.7
|
|||||||||
Fibreboard
|
1
|
54.0
|
3.5
|
||||||||||
Total
with settlement agreements
|
52
|
45.0
|
294.0
|
18.9
|
|||||||||
Other
policyholders with active accounts
|
|||||||||||||
Large
asbestos accounts
|
199
|
68.0
|
273.0
|
17.6
|
|||||||||
Small
asbestos accounts
|
1,073
|
23.0
|
135.0
|
8.7
|
|||||||||
Total
other policyholders
|
1,272
|
91.0
|
408.0
|
26.3
|
|||||||||
Assumed
reinsurance and pools
|
6.0
|
143.0
|
9.2
|
||||||||||
Unassigned
IBNR
|
709.0
|
45.6
|
|||||||||||
Total
|
1,324
|
$
|
142.0
|
$
|
1,554.0
|
100.0
|
%
|
Net
|
Percent
of
|
||||||||||||
Environmental
|
Environmental
|
||||||||||||
Number
of
|
Net
|
Pollution
|
Pollution
Net
|
||||||||||
June
30, 2006
|
Policyholders
|
Paid
Losses
|
Reserves
|
Reserve
|
|||||||||
(In
millions of dollars)
|
|||||||||||||
Policyholders
with Settlement Agreements
|
|||||||||||||
Structured
settlements
|
10
|
$
|
10.0
|
$
|
11.0
|
|
3.7
|
%
|
|||||
Coverage
in place
|
18
|
3.0
|
22.0
|
7.3
|
|||||||||
Total
with Settlement Agreements
|
28
|
13.0
|
33.0
|
11.0
|
|||||||||
Other
Policyholders with Active Accounts
|
|||||||||||||
Large
pollution accounts
|
113
|
12.0
|
55.0
|
18.4
|
|||||||||
Small
pollution accounts
|
366
|
11.0
|
44.0
|
14.8
|
|||||||||
Total
Other Policyholders
|
479
|
23.0
|
99.0
|
33.2
|
|||||||||
Assumed
Reinsurance & Pools
|
1.0
|
33.0
|
11.0
|
||||||||||
Unassigned
IBNR
|
134.0
|
44.8
|
|||||||||||
Total
|
507
|
$
|
37.0
|
$
|
299.0
|
100.0
|
%
|
Net
|
Percent
of
|
||||||||||||
Environmental
|
Environmental
|
||||||||||||
Number
of
|
Net
|
Pollution
|
Pollution
Net
|
||||||||||
December
31, 2005
|
Policyholders
|
Paid
Losses
|
Reserves
|
Reserve
|
|||||||||
(In
millions of dollars)
|
|||||||||||||
Policyholders
with Settlement Agreements
|
|||||||||||||
Structured
settlements
|
6
|
$
|
10.0
|
$
|
17.0
|
5.1
|
%
|
||||||
Coverage
in place
|
16
|
10.0
|
23.0
|
6.8
|
|||||||||
Total
with Settlement Agreements
|
22
|
20.0
|
40.0
|
11.9
|
|||||||||
Other
Policyholders with Active Accounts
|
|||||||||||||
Large
pollution accounts
|
120
|
18.0
|
63.0
|
18.8
|
|||||||||
Small
pollution accounts
|
362
|
15.0
|
50.0
|
14.9
|
|||||||||
Total
Other Policyholders
|
482
|
33.0
|
113.0
|
33.7
|
|||||||||
Assumed
Reinsurance & Pools
|
3.0
|
33.0
|
9.8
|
||||||||||
Unassigned
IBNR
|
150.0
|
44.6
|
|||||||||||
Total
|
504
|
$
|
56.0
|
$
|
336.0
|
100.0
|
%
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Revenues:
|
|||||||||||||
Manufactured
products
|
$
|
977.3
|
$
|
928.3
|
$
|
1,832.1
|
$
|
1,723.4
|
|||||
Net
investment income
|
19.4
|
11.3
|
44.2
|
24.5
|
|||||||||
Investment
(losses) gains
|
|
(0.1
|
)
|
(0.6
|
)
|
(2.0
|
)
|
||||||
Other
|
0.1
|
6.1
|
0.1
|
6.1
|
|||||||||
Total
|
996.8
|
945.6
|
1,875.8
|
1,752.0
|
|||||||||
Expenses:
|
|||||||||||||
Cost
of sales
|
552.6
|
574.4
|
1,064.3
|
1,061.1
|
|||||||||
Other
operating
|
108.9
|
97.1
|
201.7
|
187.0
|
|||||||||
Total
|
661.5
|
671.5
|
1,266.0
|
1,248.1
|
|||||||||
335.3
|
274.1
|
609.8
|
503.9
|
||||||||||
Income
tax expense
|
131.1
|
111.5
|
237.2
|
200.9
|
|||||||||
Net
income
|
$
|
204.2
|
$
|
162.6
|
$
|
372.6
|
$
|
303.0
|
·
|
the
number and types of cases filed and
appealed;
|
·
|
the
number of cases tried and appealed;
|
·
|
the
development of the law;
|
·
|
the
application of new or different theories of liability by plaintiffs
and
their counsel; and
|
·
|
litigation
strategy and tactics.
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(Units
in billions)
|
|||||||||||||
Total
domestic Lorillard unit volume (1)
|
9.142
|
9.395
|
17.610
|
17.609
|
|||||||||
Total
domestic industry unit volume (1)
|
96.727
|
99.976
|
184.716
|
187.918
|
|||||||||
Lorillard’s
share of the domestic market (1)
|
9.5
|
%
|
9.4
|
%
|
9.5
|
%
|
9.4
|
%
|
|||||
Lorillard’s
premium segment as a percentage of its
|
|||||||||||||
total
domestic volume (1)
|
94.8
|
%
|
95.3
|
%
|
94.9
|
%
|
95.4
|
%
|
|||||
Lorillard’s
share of the premium segment (1)
|
12.4
|
%
|
12.5
|
%
|
12.5
|
%
|
12.5
|
%
|
|||||
Newport
share of the domestic market (1)
|
8.6
|
%
|
8.6
|
%
|
8.7
|
%
|
8.6
|
%
|
|||||
Newport
share of the premium segment (1)
|
11.9
|
%
|
12.0
|
%
|
12.1
|
%
|
12.0
|
%
|
|||||
Total
menthol segment market share for the industry (2)
|
27.4
|
%
|
27.1
|
%
|
27.7
|
%
|
27.1
|
%
|
|||||
Total
discount segment market share for the industry (1)
|
27.7
|
%
|
28.5
|
%
|
27.7
|
%
|
28.6
|
%
|
|||||
Newport’s
share of the menthol segment (2)
|
32.7
|
%
|
33.1
|
%
|
32.8
|
%
|
32.9
|
%
|
|||||
Newport
as a percentage of Lorillard’s (3):
|
|||||||||||||
Total
volume
|
91.6
|
%
|
91.8
|
%
|
91.8
|
%
|
91.7
|
%
|
|||||
Net
sales
|
93.0
|
%
|
93.0
|
%
|
93.2
|
%
|
92.9
|
%
|
(1)
|
Management
Science Associates, Inc.
|
(2)
|
Lorillard
proprietary data
|
(3)
|
Lorillard
shipment reports
|
·
|
A
substantial volume
of
litigation seeking compensatory and punitive damages ranging
into the billions
of dollars,
as well as equitable and
injunctive relief, arising out of allegations
of
cancer and other health
effects resulting
from the use
of
cigarettes,
addiction
to smoking
or
exposure to environmental
tobacco smoke,
including
claims for reimbursement of health care costs allegedly incurred
as a
result of smoking, as well as other alleged damages. Please read
Item 3 -
Legal Proceedings of our 2005 Annual Report on Form 10-K and Note
13 of
the Notes to Consolidated Condensed Financial Statements included
in Item
1 of this Report for information with respect to litigation and the
State
Settlement Agreements.
|
·
|
Substantial
annual payments by Lorillard, continuing in perpetuity, and significant
restrictions on marketing and advertising agreed to under the terms
of the
State Settlement Agreements. The State Settlement Agreements impose
a
stream of future payment obligations on Lorillard and the other major
U.S.
cigarette manufacturers and place significant restrictions on their
ability to market and sell
cigarettes.
|
·
|
The
cigarette market is highly concentrated with Lorillard’s two major
competitors, Philip Morris USA and Reynolds American Inc. having
a
combined market share of approximately 77.5% in the first six months
of
2006. In addition, Reynolds American Inc. owns the third and fourth
leading menthol brands, Kool and Salem, which have a combined share
of the
menthol segment of approximately 18.7%. The concentration of U.S.
market
share could make it more difficult for Lorillard to compete for shelf
space in retail outlets, which is already exacerbated by restrictive
marketing programs of Lorillard’s larger competitors, and could impact
price competition among menthol
brands.
|
·
|
The
continuing contraction of the U.S. cigarette market, in which Lorillard
currently conducts its only significant business. As a result of
price
increases, restrictions on advertising and promotions, increases
in
regulation and excise taxes, health concerns, a decline in the social
acceptability of smoking, increased pressure from anti-tobacco groups
and
other factors, U.S. industry cigarette shipments have decreased at
a
compound annual rate of approximately 2.38% over the period 1996
through
2005, according to volume information provided by
MSAI.
|
·
|
Competition
from deep discounters who enjoy competitive cost and pricing advantages
because they are not subject to the same payment obligations under
the
State Settlement Agreements as Lorillard. Market share for the deep
discount brands decreased 0.7% to 12.2% in the first six months of
2006
versus the first six months of 2005, as estimated by MSAI. Lorillard’s
focus on the premium market and its obligations under the State Settlement
Agreements make it very difficult to compete successfully in the
deep
discount market.
|
·
|
Continuing
sizable industry-wide promotional expenses and sales incentives are
being
implemented in response to declining unit volume, state excise tax
increases and continuing competition among the three largest cigarette
manufacturers, including Lorillard, and smaller participants who
have
established a competitive level of market share in recent years,
principally in the deep discount cigarette segment. As a result of
on-going high levels of competition based on the retail price of
brands
and the competitive price advantages of deep discounters, the ability
of
Lorillard and the other major manufacturers to raise prices has been
adversely affected. While the environment remains highly price
competitive, during 2005 and continuing in the first six months of
2006,
Lorillard reduced promotional and sales incentives which had the
effect of
increasing unit prices.
|
·
|
Substantial
federal, state and local excise taxes which are reflected in the
retail
price of cigarettes. In the first six months of 2006, the federal
excise
tax was $0.39 per pack and combined state and local excise taxes
ranged
from $0.07 to $3.00 per pack. In the first six months of 2006, excise
tax
increases ranging from $0.20 to $1.00 per pack were implemented in
two
municipalities. Proposals continue to be made to increase federal,
state
and local excise taxes. Lorillard believes that increases in excise
and
similar taxes have had an adverse impact on sales of cigarettes and
that
future increases, the extent of which cannot be predicted, could
result in
further volume declines for the cigarette industry, including Lorillard,
and an increased sales shift toward lower priced discount cigarettes
rather than premium brands. In addition, Lorillard and other cigarette
manufacturers are required to pay an assessment under a federal law
designed to fund payments to tobacco quota holders and
growers.
|
·
|
Substantial
and increasing regulation of the tobacco industry and governmental
restrictions on smoking. Bills have been introduced in the U.S. Congress
to grant the Food and Drug Administration (“FDA”) authority to regulate
tobacco products. Lorillard believes that FDA regulations, if enacted,
could among other things result in new restrictions on the manner
in which
cigarettes can be advertised and marketed, and may alter the way
cigarette
products are developed and manufactured. Lorillard also believes
that any
such proposals, if enacted, would provide Philip Morris, as the largest
tobacco company in the country, with a competitive
advantage.
|
·
|
Sales
of counterfeit cigarettes in the United States continue to adversely
impact sales by the manufacturer of the counterfeited brands, including
Lorillard, and potentially damage the value and reputation of those
brands.
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Revenues:
|
|||||||||||||
Operating
|
$
|
131.8
|
$
|
118.5
|
$
|
306.3
|
$
|
269.3
|
|||||
Net
investment income
|
0.7
|
0.9
|
1.2
|
1.4
|
|||||||||
Total
|
132.5
|
119.4
|
307.5
|
270.7
|
|||||||||
Expenses:
|
|||||||||||||
Operating
|
85.3
|
81.5
|
175.3
|
155.4
|
|||||||||
Interest
|
15.2
|
15.1
|
30.8
|
29.7
|
|||||||||
Total
|
100.5
|
96.6
|
206.1
|
185.1
|
|||||||||
32.0
|
22.8
|
101.4
|
85.6
|
||||||||||
Income
tax expense
|
10.9
|
9.1
|
34.5
|
34.0
|
|||||||||
Minority
interest
|
4.6
|
14.7
|
|||||||||||
Net
income
|
$
|
16.5
|
$
|
13.7
|
$
|
52.2
|
$
|
51.6
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Revenues:
|
|||||||||||||
Operating
|
$
|
510.9
|
$
|
292.1
|
$
|
961.2
|
$
|
551.0
|
|||||
Net
investment income
|
8.4
|
6.1
|
16.8
|
11.9
|
|||||||||
Investment
gains (losses)
|
(0.2
|
)
|
(1.3
|
)
|
|||||||||
Total
|
519.3
|
298.2
|
977.8
|
561.6
|
|||||||||
Expenses:
|
|||||||||||||
Operating
|
273.0
|
228.3
|
519.6
|
440.4
|
|||||||||
Interest
|
5.7
|
15.7
|
12.5
|
25.3
|
|||||||||
Total
|
278.7
|
244.0
|
532.1
|
465.7
|
|||||||||
240.6
|
54.2
|
445.7
|
95.9
|
||||||||||
Income
tax expense
|
72.7
|
15.6
|
139.2
|
29.8
|
|||||||||
Minority
interest
|
80.4
|
18.8
|
146.7
|
32.5
|
|||||||||
Net
income
|
$
|
87.5
|
$
|
19.8
|
$
|
159.8
|
$
|
33.6
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Revenues:
|
|||||||||||||
Operating
|
$
|
101.7
|
$
|
93.3
|
$
|
194.9
|
$
|
180.5
|
|||||
Net
investment income
|
0.2
|
0.5
|
0.4
|
5.4
|
|||||||||
Total
|
101.9
|
93.8
|
195.3
|
185.9
|
|||||||||
Expenses:
|
|||||||||||||
Operating
|
79.4
|
72.6
|
156.0
|
141.5
|
|||||||||
Interest
|
2.9
|
2.9
|
5.8
|
4.8
|
|||||||||
Total
|
82.3
|
75.5
|
161.8
|
146.3
|
|||||||||
19.6
|
18.3
|
33.5
|
39.6
|
||||||||||
Income
tax expense
|
7.6
|
2.5
|
13.0
|
10.6
|
|||||||||
Net
income
|
$
|
12.0
|
$
|
15.8
|
$
|
20.5
|
$
|
29.0
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Revenues:
|
|||||||||||||
Manufactured
products
|
$
|
43.4
|
$
|
40.4
|
$
|
87.0
|
$
|
79.5
|
|||||
Net
investment income
|
60.4
|
(51.8
|
)
|
160.2
|
(28.0
|
)
|
|||||||
Investment
gains (losses)
|
4.4
|
6.7
|
(1.6
|
)
|
3.8
|
||||||||
Other
|
5.7
|
9.0
|
6.4
|
9.9
|
|||||||||
Total
|
113.9
|
4.3
|
252.0
|
65.2
|
|||||||||
Expenses:
|
|||||||||||||
Cost
of sales
|
22.1
|
19.7
|
43.7
|
38.7
|
|||||||||
Operating
|
31.0
|
30.5
|
61.8
|
56.7
|
|||||||||
Interest
|
19.1
|
21.5
|
38.2
|
88.6
|
|||||||||
Total
|
72.2
|
71.7
|
143.7
|
184.0
|
|||||||||
41.7
|
(67.4
|
)
|
108.3
|
(118.8
|
)
|
||||||||
Income
tax expense (benefit)
|
14.3
|
(22.8
|
)
|
37.4
|
(40.3
|
)
|
|||||||
Net
income (loss)
|
$
|
27.4
|
$
|
(44.6
|
)
|
$
|
70.9
|
$
|
(78.5
|
)
|
Insurance
Financial Strength Ratings
|
Debt
Ratings
|
|||
Property
& Casualty (a)
|
Life
(b)
|
CNA
|
Continental
|
|
CCC
|
Senior
|
Senior
|
||
Group
|
CAC
|
Debt
|
Debt
|
|
A.M.
Best
|
A
|
A-
|
bbb
|
Not
rated
|
Fitch
|
A-
|
A-
|
BBB-
|
BBB-
|
Moody’s
|
A3
|
Baa1
|
Baa3
|
Baa3
|
S&P
|
A-
|
BBB+
|
BBB-
|
BBB-
|
(a)
|
A.M.
Best, Fitch and Moody’s outlooks for the Property & Casualty
companies’ financial strength and holding company debt ratings are stable.
S&P’s outlook is negative.
|
(b)
|
A.M.
Best, Fitch and Moody’s have a stable outlook while S&P has a negative
outlook on the CAC rating.
|
·
|
inflation;
|
·
|
aggregate
volume of domestic cigarette
shipments;
|
·
|
market
share; and
|
·
|
industry
operating income.
|
Payments
Due by Period
|
||||||||||||||||
Less
than
|
More
than
|
|||||||||||||||
June
30, 2006
|
Total
|
1
year
|
1-3
years
|
4-5
years
|
5
years
|
|||||||||||
(In
millions)
|
||||||||||||||||
Debt
(a)
|
$
|
8,087.5
|
$
|
749.3
|
$ |
1,404.5
|
$
|
460.9
|
$
|
5,472.8
|
||||||
Operating
leases
|
386.0
|
41.1
|
121.6
|
87.7
|
135.6
|
|||||||||||
Claim
and claim expense reserves (b)
|
32,044.0
|
3,996.0
|
10,931.0
|
5,642.0
|
11,475.0
|
|||||||||||
Future
policy benefits reserves (c)
|
10,092.0
|
109.0
|
354.0
|
343.0
|
9,286.0
|
|||||||||||
Policyholder
funds reserves (c)
|
1,108.0
|
329.0
|
455.0
|
176.0
|
148.0
|
|||||||||||
Guaranteed
payment contracts (d)
|
24.0
|
11.0
|
13.0
|
|||||||||||||
Purchase
obligations (e)
|
1,032.8
|
568.8
|
463.9
|
0.1
|
||||||||||||
Total
|
$
|
52,774.3
|
$
|
5,804.2
|
$ |
13,743.0
|
$
|
6,709.7
|
$
|
26,517.4
|
(a)
|
Includes
estimated future interest payments, but does not include original
issue
discount.
|
(b)
|
Claim
and claim adjustment expense reserves are not discounted and represent
CNA’s estimate of the amount and timing of the ultimate settlement and
administration of claims based on CNA’s assessment of facts and
circumstances known as of June 30, 2006. See the Results of Operations
section of this MD&A for further information. Claim and claim
adjustment expense reserves of $18.0 million related to business
which has
been 100% ceded to unaffiliated parties in connection with the individual
life sale are not included.
|
(c)
|
Future
policy benefits and policyholder funds reserves are not discounted
and
represent CNA’s estimate of the ultimate amount and timing of the
settlement of benefits based on its assessment of facts and circumstances
known as of June 30, 2006. Future policy benefit reserves of $933.0
million and policyholder fund reserves of $49.0 million related to
business which has been 100% ceded to unaffiliated parties in connection
with the individual life sale are not included.
|
(d)
|
Primarily
relating to telecommunication and software services.
|
(e)
|
Consists
primarily of obligations aggregating approximately $580.0 million
relating
to Diamond Offshores’ major upgrade of its Ocean
Endeavor
and Ocean
Monarch
rigs and construction of two new jack-up rigs, the Ocean
Septer
and Ocean
Shield.
Also included in this amount is approximately $309.1 million primarily
relating to Boardwalk Pipeline’s East Texas/Mississippi expansion
project.
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Fixed
maturity securities
|
$
|
479.8
|
$
|
410.0
|
$
|
895.0
|
$
|
773.8
|
|||||
Short-term
investments
|
57.9
|
28.5
|
123.0
|
60.7
|
|||||||||
Limited
partnerships
|
53.3
|
37.6
|
126.8
|
116.9
|
|||||||||
Equity
securities
|
8.2
|
7.5
|
14.3
|
12.0
|
|||||||||
Income
(loss) from trading portfolio (a)
|
(9.8
|
)
|
14.1
|
32.5
|
(16.2
|
)
|
|||||||
Interest
on funds withheld and other deposits
|
(29.8
|
)
|
(50.5
|
)
|
(54.6
|
)
|
(89.4
|
)
|
|||||
Other
|
5.0
|
6.4
|
8.1
|
12.8
|
|||||||||
Total
investment income
|
564.6
|
453.6
|
1,145.1
|
870.6
|
|||||||||
Investment
expenses
|
(12.9
|
)
|
(14.3
|
)
|
(22.9
|
)
|
(25.3
|
)
|
|||||
Net
investment income
|
$
|
551.7
|
$
|
439.3
|
$
|
1,122.2
|
$
|
845.3
|
(a)
|
The
change in net unrealized gains (losses) on trading securities, included
in
net investment income, was $(6.0) million, $1.0 million, $(4.0) million
and $(7.0) million for the three and six months ended June 30, 2006
and
2005.
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Realized
investment gains (losses) :
|
|||||||||||||
Fixed
maturity securities:
|
|||||||||||||
U.S.
Government bonds
|
$
|
(0.4
|
)
|
$
|
13.6
|
$
|
3.4
|
$
|
(12.4
|
)
|
|||
Corporate
and other taxable bonds
|
(76.6
|
)
|
(24.3
|
)
|
(96.3
|
)
|
(45.7
|
)
|
|||||
Tax-exempt
bonds
|
(14.1
|
)
|
27.5
|
11.3
|
34.4
|
||||||||
Asset-backed
bonds
|
(4.3
|
)
|
4.6
|
(13.7
|
)
|
11.4
|
|||||||
Redeemable
preferred stock
|
(0.7
|
)
|
(0.2
|
)
|
(0.9
|
)
|
10.2
|
||||||
Total
fixed maturity securities
|
(96.1
|
)
|
21.2
|
(96.2
|
)
|
(2.1
|
)
|
||||||
Equity
securities
|
2.9
|
24.5
|
5.9
|
38.8
|
|||||||||
Derivative
securities
|
(1.4
|
)
|
(23.0
|
)
|
5.5
|
(18.7
|
)
|
||||||
Short-term
investments
|
(2.3
|
)
|
0.4
|
(4.0
|
)
|
0.2
|
|||||||
Other
invested assets, including dispositions
|
(1.8
|
)
|
3.4
|
(1.8
|
)
|
(11.0
|
)
|
||||||
Allocated
to participating policyholders’ and
|
|||||||||||||
minority
interests
|
1.0
|
(0.6
|
)
|
1.7
|
2.0
|
||||||||
Total
realized investment gains (losses)
|
(97.7
|
)
|
25.9
|
(88.9
|
)
|
9.2
|
|||||||
Income
tax (expense) benefit
|
34.4
|
(9.2
|
)
|
26.1
|
(5.5
|
)
|
|||||||
Minority
interest
|
5.4
|
(1.5
|
)
|
5.4
|
(0.2
|
)
|
|||||||
Net
realized investment gains (losses)
|
$
|
(57.9
|
)
|
$
|
15.2
|
$
|
(57.4
|
)
|
$
|
3.5
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Net
realized gains (losses) on fixed maturity
|
|||||||||||||
and
equity securities:
|
|||||||||||||
Fixed
maturity securities:
|
|||||||||||||
Gross
realized gains
|
$
|
25.0
|
$
|
89.0
|
$
|
102.0
|
$
|
265.0
|
|||||
Gross
realized losses
|
(121.0
|
)
|
(68.0
|
)
|
(198.0
|
)
|
(267.0
|
)
|
|||||
Net
realized gains (losses) on fixed maturity securities
|
(96.0
|
)
|
21.0
|
(96.0
|
)
|
(2.0
|
)
|
||||||
Equity
securities:
|
|||||||||||||
Gross
realized gains
|
4.0
|
34.0
|
8.0
|
54.0
|
|||||||||
Gross
realized losses
|
(1.0
|
)
|
(9.0
|
)
|
(2.0
|
)
|
(15.0
|
)
|
|||||
Net
realized gains on equity securities
|
3.0
|
25.0
|
6.0
|
39.0
|
|||||||||
Net
realized gains (losses) on fixed maturity
|
|||||||||||||
and
equity securities
|
$
|
(93.0
|
)
|
$
|
46.0
|
$
|
(90.0
|
)
|
$
|
37.0
|
Months
in
|
||||||||||
Fair
Value
|
Unrealized
|
|||||||||
Date
of
|
Loss
|
Loss
Prior
|
||||||||
Issuer
Description and Discussion
|
Sale
|
On
Sale
|
To
Sale (a)
|
|||||||
(In
millions)
|
||||||||||
Various
notes and bonds issued by the United States Treasury.
|
||||||||||
Securities
sold due to inflationary outlook and asset class
|
$
|
2,289.0
|
$
|
8.0
|
0-6
|
|||||
reallocation.
|
||||||||||
State
of New York revenue bonds. Position was sold to reduce
|
||||||||||
municipal
holdings.
|
289.0
|
6.0
|
0-12
|
|||||||
Company
provides property and casualty, managed care, life and
|
||||||||||
various
other insurance products in the United States. Position
was
|
||||||||||
sold
to reduce exposure in the insurance sector.
|
56.0
|
5.0
|
0-6
|
|||||||
Total
|
$
|
2,634.0
|
$
|
19.0
|
(a)
|
Represents
the range of consecutive months the various positions were in an
unrealized loss prior to sale. 0-12+
|
means
certain positions were less than 12 months, while others were greater
than
12 months.
|
June
30, 2006
|
December
31, 2005
|
||||||||||||
(In
millions of dollars)
|
|||||||||||||
General
account investments:
|
|||||||||||||
Fixed
maturity securities available-for-sale:
|
|||||||||||||
U.S.
Treasury securities and obligations of
|
|||||||||||||
government
agencies
|
$
|
1,708.0
|
4.2
|
%
|
$
|
1,469.0
|
3.7
|
%
|
|||||
Asset-backed
securities
|
14,778.0
|
36.6
|
12,859.0
|
32.4
|
|||||||||
States,
municipalities and political subdivisions-
|
|||||||||||||
tax-exempt
|
5,291.0
|
13.1
|
9,209.0
|
23.2
|
|||||||||
Corporate
securities
|
6,533.0
|
16.2
|
6,165.0
|
15.5
|
|||||||||
Other
debt securities
|
3,276.0
|
8.1
|
3,044.0
|
7.7
|
|||||||||
Redeemable
preferred stock
|
306.0
|
0.8
|
216.0
|
0.5
|
|||||||||
Options
embedded in convertible debt securities
|
1.0
|
1.0
|
|||||||||||
Total
fixed maturity securities available-for-sale
|
31,893.0
|
79.0
|
32,963.0
|
83.0
|
|||||||||
Fixed
maturity securities trading:
|
|||||||||||||
U.S.
Treasury securities and obligations of
|
|||||||||||||
government
agencies
|
3.0
|
4.0
|
|||||||||||
Asset-backed
securities
|
51.0
|
0.1
|
87.0
|
0.2
|
|||||||||
Corporate
securities
|
126.0
|
0.3
|
154.0
|
0.4
|
|||||||||
Other
debt securities
|
16.0
|
26.0
|
0.1
|
||||||||||
Redeemable
preferred stock
|
|||||||||||||
Total
fixed maturity securities trading
|
196.0
|
0.4
|
271.0
|
0.7
|
|||||||||
Equity
securities available-for-sale:
|
|||||||||||||
Common
stock
|
358.0
|
0.9
|
289.0
|
0.7
|
|||||||||
Preferred
stock
|
505.0
|
1.3
|
343.0
|
0.9
|
|||||||||
Total
equity securities available-for-sale
|
863.0
|
2.2
|
632.0
|
1.6
|
|||||||||
Equity
securities trading
|
61.0
|
0.2
|
49.0
|
0.1
|
|||||||||
Short-term
investments available-for-sale
|
5,429.0
|
13.5
|
3,870.0
|
9.8
|
|||||||||
Short-term
investments trading
|
192.0
|
0.5
|
368.0
|
0.9
|
|||||||||
Limited
partnerships
|
1,671.0
|
4.1
|
1,509.0
|
3.8
|
|||||||||
Other
investments
|
27.0
|
0.1
|
33.0
|
0.1
|
|||||||||
Total
general account investments
|
$
|
40,332.0
|
100.0
|
%
|
$
|
39,695.0
|
100.0
|
%
|
Percent
of
|
Percent
of
|
||||||
Market
|
Unrealized
|
||||||
Value
|
Loss
|
||||||
Due
in one year or less
|
2.0
|
%
|
1.0
|
%
|
|||
Due
after one year through five years
|
8.0
|
5.0
|
|||||
Due
after five years through ten years
|
9.0
|
9.0
|
|||||
Due
after ten years
|
23.0
|
25.0
|
|||||
Asset-backed
securities
|
58.0
|
60.0
|
|||||
Total
|
100.0
|
%
|
100.0
|
%
|
Estimated
|
Fair
Value as a Percentage of Book Value
|
Unrealized
|
|||||||||||||||||
June
30, 2006
|
Fair
Value
|
90-99%
|
80-89%
|
70-79%
|
<70%
|
Loss
|
|||||||||||||
(In
millions)
|
|||||||||||||||||||
Fixed
maturity securities:
|
|||||||||||||||||||
Non-investment
grade:
|
|||||||||||||||||||
0-6
months
|
$
|
1,023.0
|
$
|
24.0
|
$
|
24.0
|
|||||||||||||
7-12
months
|
217.0
|
12.0
|
$
|
2.0
|
14.0
|
||||||||||||||
13-24
months
|
54.0
|
4.0
|
1.0
|
5.0
|
|||||||||||||||
Greater
than 24 months
|
11.0
|
1.0
|
1.0
|
||||||||||||||||
Total
non-investment grade
|
$
|
1,305.0
|
$
|
40.0
|
$
|
4.0
|
$
|
-
|
$
|
-
|
$
|
44.0
|
|||||||
December
31, 2005
|
|||||||||||||||||||
Fixed
maturity securities:
|
|||||||||||||||||||
Non-
investment grade:
|
|||||||||||||||||||
0-6
months
|
$
|
632.0
|
$
|
20.0
|
$
|
8.0
|
$
|
1.0
|
$
|
29.0
|
|||||||||
7-12
months
|
118.0
|
4.0
|
6.0
|
10.0
|
|||||||||||||||
13-24
months
|
122.0
|
3.0
|
3.0
|
||||||||||||||||
Greater
than 24 months
|
2.0
|
||||||||||||||||||
Total
non-investment grade
|
$
|
874.0
|
$
|
27.0
|
$
|
14.0
|
$
|
1.0
|
$
|
-
|
$
|
42.0
|
June
30, 2006
|
December
31, 2005
|
||||||||||||
(In
millions of dollars)
|
|
||||||||||||
U.S.
Government and affiliated agency securities
|
$
|
1,870.0
|
5.8
|
%
|
$
|
1,628.0
|
4.9
|
%
|
|||||
Other
AAA rated
|
17,340.0
|
54.6
|
18,233.0
|
55.2
|
|||||||||
AA
and A rated
|
5,166.0
|
16.3
|
6,046.0
|
18.3
|
|||||||||
BBB
rated
|
4,544.0
|
14.3
|
4,499.0
|
13.7
|
|||||||||
Non
investment-grade
|
2,863.0
|
9.0
|
2,612.0
|
7.9
|
|||||||||
Total
|
$
|
31,783.0
|
100.0
|
%
|
$
|
33,018.0
|
100.0
|
%
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(In
millions)
|
|||||||
Short-term
investments available-for-sale:
|
|||||||
Commercial
paper
|
$
|
1,295.0
|
$
|
1,906.0
|
|||
U.S.
Treasury securities
|
1,740.0
|
251.0
|
|||||
Money
market funds
|
439.0
|
294.0
|
|||||
Other,
including collateral held related to securities lending
|
1,955.0
|
1,419.0
|
|||||
Total
short-term investments available-for-sale
|
5,429.0
|
3,870.0
|
|||||
Short-term
investments trading:
|
|||||||
Commercial
paper
|
63.0
|
94.0
|
|||||
U.S.
Treasury securities
|
2.0
|
64.0
|
|||||
Money
market funds
|
127.0
|
200.0
|
|||||
Other
|
10.0
|
||||||
Total
short-term investments trading
|
192.0
|
368.0
|
|||||
Total
short-term investments
|
$
|
5,621.0
|
$
|
4,238.0
|
·
|
the
impact of competitive products, policies and pricing and the competitive
environment in which CNA operates, including changes in CNA’s book of
business;
|
·
|
product
and policy availability and demand and market responses, including
the
level of CNA’s ability to obtain rate increases and decline or non-renew
under priced accounts, to achieve premium targets and profitability
and to
realize growth and retention
estimates;
|
·
|
development
of claims and the impact on loss reserves, including changes in claim
settlement policies;
|
·
|
the
performance of reinsurance companies under reinsurance contracts
with
CNA;
|
·
|
the
effects upon insurance markets and upon industry business practices
and
relationships of current litigation, investigations and regulatory
activity by the New York State Attorney General’s office and other
authorities concerning contingent commission arrangements with brokers
and
bid solicitation activities;
|
·
|
legal
and regulatory activities with respect to certain non-traditional
and
finite-risk insurance products, and possible resulting changes in
accounting and financial reporting in relation to such products,
including
our restatement of financial results in May of 2005 and CNA’s relationship
with an affiliate, Accord Re Ltd., as disclosed in connection with
that
restatement;
|
·
|
regulatory
limitations, impositions and restrictions upon CNA, including the
effects
of assessments and other surcharges for guaranty funds and second-injury
funds and other mandatory pooling
arrangements;
|
·
|
weather
and other natural physical events, including the severity and frequency
of
storms, hail, snowfall and other winter conditions, as well as of
natural
disasters such as hurricanes and
earthquakes;
|
·
|
man-made
disasters, including the possible occurrence of terrorist attacks
and the
effect of the absence or insufficiency of applicable terrorism legislation
on coverages;
|
·
|
the
unpredictability of the nature, targets, severity or frequency of
potential terrorist events, as well as the uncertainty as to CNA’s ability
to contain its terrorism exposure effectively, notwithstanding the
extension until 2007 of the Terrorism Risk Insurance Act of
2002;
|
·
|
the
occurrence of epidemics;
|
·
|
exposure
to liabilities due to claims made by insureds and others relating
to
asbestos remediation and health-based asbestos impairments, as well
as
exposure to liabilities for environmental pollution, mass tort,
construction defect claims and exposure to liabilities due to claims
made
by insureds relating to lead-based
paint;
|
·
|
whether
a national privately financed trust to replace litigation of asbestos
claims with payments to claimants from the trust will be established
or
approved through federal legislation, or, if established and approved,
whether it will contain funding requirements in excess of CNA’s
established loss reserves or carried loss
reserves;
|
·
|
the
sufficiency of CNA’s loss reserves and the possibility of future increases
in reserves;
|
·
|
regulatory
limitations and restrictions, including limitations upon CNA’s ability to
receive dividends from its insurance subsidiaries and to pay dividends
to
us, imposed by state regulatory agencies and minimum risk-based capital
standards established by the National Association of Insurance
Commissioners;
|
·
|
the
risks and uncertainties associated with CNA’s loss reserves as outlined in
the Critical Accounting Estimates section of this
MD&A;
|
·
|
the
level of success in integrating acquired businesses and operations,
and in
consolidating, or selling existing
ones;
|
·
|
the
possibility of further changes in CNA’s ratings by ratings agencies,
including the inability to access certain markets or distribution
channels, and the required collateralization of future payment obligations
as a result of such changes, and changes in rating agency policies
and
practices;
|
·
|
the
effects of corporate bankruptcies, such as Enron and WorldCom, on
capital
markets and on the markets for directors and officers and errors
and
omissions coverages;
|
·
|
general
economic and business conditions, including inflationary pressures
on
medical care costs, construction costs and other economic sectors
that
increase the severity of claims;
|
·
|
the
effectiveness of current initiatives by claims management to reduce
loss
and expense ratios through more efficacious claims handling techniques;
and
|
·
|
changes
in the composition of CNA’s operating
segments.
|
·
|
health
concerns, claims and regulations relating to the use of tobacco products
and exposure to environmental tobacco
smoke;
|
·
|
legislation,
including actual and potential excise tax increases, and the effects
of
tobacco litigation settlements on pricing and consumption
rates;
|
·
|
continued
intense competition from other cigarette manufacturers, including
significant levels of promotional activities and the presence of
a sizable
deep-discount category;
|
·
|
the
continuing decline in volume in the domestic cigarette
industry;
|
·
|
increasing
marketing and regulatory restrictions, governmental regulation and
privately imposed smoking
restrictions;
|
·
|
litigation,
including risks associated with adverse jury and judicial determinations,
courts reaching conclusions at variance with the general understandings
of
applicable law, bonding requirements and the absence of adequate
appellate
remedies to get timely relief from any of the foregoing;
and
|
·
|
the
impact of each of the factors described under “Results of
Operations—Lorillard” in the MD&A portion of this
report.
|
·
|
the
impact of changes in demand for oil and natural gas and oil and gas
price
fluctuations on exploration and production
activity;
|
·
|
costs
and timing of rig upgrades;
|
·
|
utilization
levels and dayrates for offshore oil and gas drilling
rigs;
|
·
|
the
availability and cost of insurance, and the risks associated with
self-insurance, covering drilling
rigs;
|
·
|
regulatory
issues affecting natural gas transmission, including ratemaking and
other
proceedings particularly affecting our gas transmission
subsidiaries;
|
·
|
the
ability of Texas Gas and Gulf South to renegotiate, extend or replace
existing customer contracts on favorable
terms;
|
·
|
the
successful development and projected cost of planned expansion projects
and investments; and
|
·
|
the
development of additional natural gas reserves and the completion
of
projected new liquefied natural gas facilities and expansion of existing
facilities.
|
·
|
general
economic and business conditions;
|
·
|
changes
in financial markets (such as interest rate, credit, currency, commodities
and equities markets) or in the value of specific
investments;
|
·
|
changes
in domestic and foreign political, social and economic conditions,
including the impact of the global war on terrorism, the war in Iraq,
the
future outbreak of hostilities and future acts of
terrorism;
|
·
|
the
economic effects of the September 11, 2001 terrorist attacks, other
terrorist attacks and the war in
Iraq;
|
·
|
potential
changes in accounting policies by the Financial Accounting Standards
Board
(the “FASB”), the SEC or regulatory agencies for any of our subsidiaries’
industries which may cause us or our subsidiaries to revise their
financial accounting and/or disclosures in the future, and which
may
change the way analysts measure our and our subsidiaries business
or
financial performance;
|
·
|
the
impact of regulatory initiatives and compliance with governmental
regulations, judicial rulings and jury
verdicts;
|
·
|
the
results of financing efforts;
|
·
|
the
closing of any contemplated transactions and agreements;
and
|
·
|
the
outcome of pending litigation.
|
Category
of risk exposure:
|
Fair
Value Asset (Liability)
|
Market
Risk
|
|||||||||||
June
30,
|
December
31,
|
June
30,
|
December
31,
|
||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Equity
markets (1):
|
|||||||||||||
Equity
securities (a)
|
$
|
521.0
|
$
|
441.8
|
$
|
(130.0
|
)
|
$
|
(110.0
|
)
|
|||
Options - purchased
|
31.2
|
33.5
|
8.0
|
(1.0
|
)
|
||||||||
- written
|
(5.0
|
)
|
(9.1
|
)
|
(1.0
|
)
|
2.0
|
||||||
Warrants
|
0.2
|
0.1
|
|||||||||||
Short
sales
|
(66.5
|
)
|
(67.3
|
)
|
17.0
|
17.0
|
|||||||
Limited
partnership investments
|
346.4
|
371.7
|
(25.0
|
)
|
(25.0
|
)
|
|||||||
Interest
rate (2):
|
|||||||||||||
Treasury
- short
|
(78.6
|
)
|
(7.0
|
)
|
|||||||||
Futures
- short
|
(86.0
|
)
|
(10.0
|
)
|
|||||||||
Futures
- long
|
44.0
|
||||||||||||
Interest
rate swaps - short
|
(0.1
|
)
|
(2.0
|
)
|
|||||||||
Short
sales - foreign
|
(19.9
|
)
|
(2.0
|
)
|
|||||||||
Fixed
maturities - long
|
323.8
|
415.7
|
2.0
|
3.0
|
|||||||||
Short-term
investments
|
191.8
|
367.7
|
|||||||||||
Other
derivatives
|
0.1
|
(2.0
|
)
|
(3.0
|
)
|
||||||||
Gold
(3):
|
|||||||||||||
Options - purchased
|
0.5
|
(4.0
|
)
|
10.0
|
|||||||||
- written
|
(0.7
|
)
|
(14.0
|
)
|
Note:
|
The
calculation of estimated market risk exposure is based on assumed
adverse
changes in the underlying reference price or index of (1) a decrease
in
equity prices of 25%, (2) a decrease in interest rates of 100 basis
points
and (3) a decrease in gold prices of 20%. Adverse changes on options
which
differ from those presented above would not necessarily result in
a
proportionate change to the estimated market risk
exposure.
|
(a)
|
A
decrease in equity prices of 25% would result in market risk amounting
to
$(167.0) and $(255.0) at June 30, 2006 and December 31, 2005,
respectively. This market risk would be offset by decreases in liabilities
to customers under variable insurance
contracts.
|
Category
of risk exposure:
|
Fair
Value Asset (Liability)
|
Market
Risk
|
|||||||||||
June
30,
|
December
31,
|
June
30,
|
December
31,
|
||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
millions)
|
|||||||||||||
Equity
markets (1):
|
|||||||||||||
Equity
securities:
|
|||||||||||||
General
accounts (a)
|
$
|
863.2
|
$
|
631.8
|
$
|
(216.0
|
)
|
$
|
(158.0
|
)
|
|||
Separate
accounts
|
38.3
|
43.5
|
(10.0
|
)
|
(11.0
|
)
|
|||||||
Limited
partnership investments
|
1,598.6
|
1,397.3
|
(125.0
|
)
|
(112.0
|
)
|
|||||||
Interest
rate (2):
|
|||||||||||||
Fixed
maturities (a)(b)
|
31,895.3
|
32,965.5
|
(1,853.0
|
)
|
(1,897.0
|
)
|
|||||||
Short-term
investments (a)
|
10,808.2
|
8,738.9
|
(12.0
|
)
|
(4.0
|
)
|
|||||||
Other
invested assets
|
23.2
|
27.8
|
|||||||||||
Other
derivative securities
|
4.3
|
3.6
|
66.0
|
||||||||||
Separate
accounts (a):
|
|||||||||||||
Fixed
maturities
|
444.6
|
466.1
|
(21.0
|
)
|
(23.0
|
)
|
|||||||
Short-term
investments
|
16.2
|
36.2
|
|||||||||||
Debt
|
(5,311.0
|
)
|
(5,530.0
|
)
|
Note:
|
The
calculation of estimated market risk exposure is based on assumed
adverse
changes in the underlying reference price or index of (1) a decrease
in
equity prices of 25% and (2) an increase in interest rates of 100
basis
points.
|
(a)
|
Certain
securities are denominated in foreign currencies. An assumed 20%
decline
in the underlying exchange rates would result in an aggregate foreign
currency exchange rate risk of $(308.0) and $(245.0) at June 30,
2006 and
December 31, 2005, respectively.
|
|
(b)
|
Certain
fixed maturities positions include options embedded in convertible
debt
securities. A decrease in underlying equity prices of 25% would result
in
market risk amounting to $(76.0) and $(54.0) at June 30, 2006 and
December
31, 2005, respectively.
|
·
|
Second
hand smoke causes premature death and disease in children and in
adults
who do not smoke.
|
·
|
Children
exposed to secondhand smoke are at an increased risk for sudden infant
death syndrome (SIDS), acute respiratory infections and ear
problems.
|
·
|
Exposure
of adults to secondhand smoke has immediate adverse effects on the
cardiovascular system and causes heart disease and lung
cancer.
|
·
|
The
scientific evidence indicates that there is no risk-free level of
exposure
to secondhand smoke.
|
·
|
Many
millions of Americans, both children and adults, are exposed to secondhand
smoke in their homes and
workplaces.
|
·
|
Eliminating
smoking in indoor spaces fully protects non-smokers from exposure
to
secondhand smoke. Separating smokers from non-smokers, cleaning the
air,
and ventilating buildings cannot eliminate exposures of non-smokers
to
secondhand smoke.
|
Period
|
(a)
Total number
of
shares
purchased
|
(b)
Average
price
paid per
share
|
(c)
Total number of
shares
purchased as
part
of publicly
announced
plans or
programs
|
(d)
Maximum number of shares
(or
approximate dollar value)
of
shares that may yet be
purchased
under the plans or
programs
(in millions)
|
June
1, 2006 -
|
||||
June
30, 2006
|
5,548,800
|
$34.02
|
N/A
|
N/A
|
Votes
For
|
Votes
Withheld
|
||
Ann
E. Berman
|
178,485,382
|
2,447,088
|
|
Joseph
L. Bower
|
177,346,950
|
3,585,520
|
|
Charles
M. Diker
|
175,925,289
|
5,007,181
|
|
Paul
J. Fribourg
|
174,812,816
|
6,119,654
|
|
Walter
L. Harris
|
174,933,801
|
5,998,669
|
|
Philip
A. Laskawy
|
175,913,301
|
5,019,169
|
|
Gloria
R. Scott
|
173,624,626
|
7,307,844
|
|
Andrew
H. Tisch
|
176,132,333
|
4,800,137
|
|
James
S. Tisch
|
175,853,030
|
5,079,440
|
|
Jonathan
M. Tisch
|
176,132,376
|
4,800,094
|
Description
of Exhibit
|
Number
|
Certification
by the Chief Executive Officer of the Company pursuant to Rule 13a-14(a)
and Rule 15d-14(a)
|
31.1*
|
Certification
by the Chief Financial Officer of the Company pursuant to Rule 13a-14(a)
and Rule 15d-14(a)
|
31.2*
|
Certification
by the Chief Executive Officer of the Company pursuant to 18 U.S.C.
Section 1350 (as adopted by Section 906 of the Sarbanes-Oxley Act
of
2002)
|
32.1*
|
Certification
by the Chief Financial Officer of the Company pursuant to 18 U.S.C.
Section 1350 (as adopted by Section 906 of the Sarbanes-Oxley Act
of
2002)
|
32.2*
|
Pending
Tobacco Litigation, incorporated by reference to Exhibit 99.01 to
Registrant’s Report on Form 10-K for the year ended December 31,
2005
|
99.1
|
|
LOEWS
CORPORATION
|
|
|
(Registrant)
|
|
|
||
|
||
|
||
Dated: August
1, 2006
|
By:
|
/s/
Peter W. Keegan
|
|
PETER
W. KEEGAN
|
|
|
Senior
Vice President and
|
|
Chief
Financial Officer
|
||
(Duly
authorized officer
|
||
and
principal financial
|
||
officer)
|
Exhibit
31.1
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
(b)
|
Designed
such internal controls over financial reporting, or caused such internal
controls over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Dated: August
1, 2006
|
By:
|
/s/
James S. Tisch
|
JAMES
S. TISCH
|
||
Chief
Executive Officer
|
Exhibit
31.2
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision,
to ensure
that material information relating to the registrant, including
its
consolidated subsidiaries, is made known to us by others within
those
entities, particularly during the period in which this report
is being
prepared;
|
(b)
|
Designed
such internal controls over financial reporting, or caused such
internal
controls over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the
period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably
likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
(a)
|
All
significant deficiencies and material weaknesses in the design
or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Dated: August
1, 2006
|
By:
|
/s/Peter
W. Keegan
|
PETER
W. KEEGAN
|
||
Chief
Financial Officer
|
Exhibit
32.1
|
Dated: August
1, 2006
|
By:
|
/s/
James S. Tisch
|
JAMES
S. TISCH
|
||
Chief
Executive Officer
|
Exhibit
32.2
|
Dated: August
1, 2006
|
By:
|
/s/
Peter W. Keegan
|
PETER
W. KEEGAN
|
||
Chief
Financial Officer
|