UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported)
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February 11, 2013
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LOEWS CORPORATION
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(Exact name of registrant as specified in its charter)
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Delaware
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1-6541
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13-2646102
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(State or other jurisdiction
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(Commission
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(I.R.S. Employer
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of incorporation)
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File Number)
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Identification No.)
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667 Madison Avenue, New York, N.Y.
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10065-8087
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
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(212) 521-2000
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NOT APPLICABLE
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(Former name or former address, if changed since last report.)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c))
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1
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Item 2.02
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Results of Operations and Financial Condition.
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On February 11, 2013, Registrant issued a press release for Loews Corporation providing information on its results of operations for the fourth quarter of 2012. The press release is furnished as Exhibit 99.1 to this Form 8-K.
The information under Item 2.02 and in Exhibit 99.1 in this Current Report is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information under Item 2.02 and in Exhibit 99.1 in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
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Item 9.01
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Financial Statements and Exhibits.
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(a)
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Not applicable.
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(b)
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Not applicable.
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(c)
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Exhibit:
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Exhibit Reference
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Number
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Exhibit Description
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99.1
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Loews Corporation press release, issued February 11, 2013, providing information on its results of operations for the fourth quarter and year ended 2012.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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LOEWS CORPORATION
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(Registrant)
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Dated: February 11, 2013
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By:
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/s/ Gary W. Garson
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Gary W. Garson
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Senior Vice President
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General Counsel
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and Secretary
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Exhibit 99.1
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Contact:
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Peter W. Keegan
Chief Financial Officer
(212) 521-2950
Mary Skafidas
Investor and Public Relations
(212) 521-2788
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LOEWS CORPORATION REPORTS NET INCOME FOR 2012
NEW YORK, February 11, 2013—Loews Corporation (NYSE:L) today reported net income for 2012 of $568 million or $1.43 per share as compared to $1.1 billion or $2.62 per share in 2011. Net income in 2012 includes catastrophe losses of $243 million (after tax and noncontrolling interests) at CNA Financial Corporation primarily related to Storm Sandy and after tax ceiling test impairment charges of $433 million at HighMount Exploration & Production LLC related to the carrying value of its natural gas and oil properties reflecting declines in natural gas and NGL prices. Excluding these charges, net income (non-GAAP), as adjusted, in 2012 was $1.2 billion.
For the three months ended December 31, 2012, Loews reported a net loss of $32 million or $0.08 per share as compared to net income of $271 million, or $0.68 per share, in the 2011 fourth quarter. Excluding catastrophe losses of $171 million (after tax and noncontrolling interests) at CNA and the after tax ceiling test impairment charge of $97 million at HighMount, net income (non-GAAP), as adjusted, in the 2012 fourth quarter was $236 million.
Book value per share increased to $49.67 at December 31, 2012 from $47.33 at December 31, 2011.
CONSOLIDATED HIGHLIGHTS
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December 31,
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Three Months
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Years Ended
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(In millions, except per share data)
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2012
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2011
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2012
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2011
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Income before net investment gains (losses) and ceiling test
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impairment charges
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$ | 67 | $ | 311 | $ | 968 | $ | 1,093 | ||||||||
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Non-cash ceiling test impairment charges
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(97 | ) | (433 | ) | ||||||||||||
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Net investment gains (losses)
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(2 | ) | (40 | ) | 33 | (31 | ) | |||||||||
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Net income (loss) attributable to Loews Corporation
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$ | (32 | ) | $ | 271 | $ | 568 | $ | 1,062 | |||||||
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Net income (loss) per share
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$ | (0.08 | ) | $ | 0.68 | $ | 1.43 | $ | 2.62 | |||||||
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Book value per share at:
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December 31, 2012
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$ | 49.67 | ||||||||||||||
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December 31, 2011
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47.33 | |||||||||||||||
Page 1 of 5
Three Months Ended December 31, 2012 Compared to 2011
Income before net investment losses and ceiling test impairment charges in 2012 was $67 million, as compared to $311 million in the 2011 fourth quarter. The decrease is due primarily to lower results at CNA and Diamond Offshore Drilling, Inc. as well as decreased parent company investment income as a result of lower performance of equity investments. These decreases were partially offset by higher earnings at Boardwalk Pipeline Partners, L.P.
CNA’s earnings declined due to higher catastrophe losses of $171 million (after tax and noncontrolling interests) primarily related to Storm Sandy and a lower level of favorable net prior year development in 2012 than in 2011, partially offset by increased investment income. Increased investment income reflects improved performance of limited partnership investments.
Diamond Offshore’s earnings decreased primarily due to an impairment charge related to the carrying value of three semisubmersible rigs and lower average daily revenue partially offset by an overall increase in utilization and lower contract drilling expense.
Boardwalk Pipeline’s earnings increased primarily due to the contributions from recent acquisitions and lower general and administrative expenses.
Year Ended December 31, 2012 Compared to 2011
Income before net investment gains and ceiling test impairment charges in 2012 was $968 million, as compared to $1.1 billion in 2011. The decrease is due primarily to lower results at CNA and Diamond Offshore partially offset by higher earnings at Boardwalk Pipeline and higher parent company investment income as a result of improved performance of equity investments.
CNA’s earnings decreased primarily due to the reasons discussed in the three month comparison above.
Diamond Offshore earnings decreased as a result of lower rig utilization and a decrease in average dayrate partially offset by lower interest expense.
Boardwalk Pipeline’s earnings increased primarily due to the reasons discussed in the three month comparison above as well as lower impairment charges in 2012.
SHARE REPURCHASES
At December 31, 2012, there were 391.8 million shares of Loews common stock outstanding. During the three months and year ended December 31, 2012, the Company purchased 2.1 million and 5.6 million shares of its common stock at an aggregate cost of $83 million and $222 million. Depending on market conditions, the Company may from time to time purchase shares of its and its subsidiaries’ outstanding common stock in the open market or otherwise.
CONFERENCE CALLS
A conference call to discuss the fourth quarter results of Loews Corporation has been scheduled for 11:00 a.m. EST, today. A live webcast of the call will be available online at the Loews Corporation website (www.loews.com). Please go to the website at least ten minutes before the event begins to register and to download and install any necessary audio software. Those interested in participating in the question and answer session should dial (877) 692-2592, or for
Page 2 of 5
international callers, (973) 582-2757. The conference ID number is 88744024. An online replay will also be available on the Loews Corporation’s website following the call.
A conference call to discuss the fourth quarter results of CNA has been scheduled for 10:00 a.m. EST, today. A live webcast will be available at http://investor.cna.com. Those interested in participating in the question and answer session should dial (888) 556-4997, or for international callers, (719) 325-2429. Please go to the website at least ten minutes before the event begins to register and to download and install any necessary audio software.
A conference call to discuss the fourth quarter results of Boardwalk Pipeline has been scheduled for 9:00 a.m. EST, today. A live webcast will be available at www.bwpmlp.com. Those interested in participating in the question and answer session should dial (866) 272-9941 or for international callers, (617) 213-8895. The conference ID number is 56922529. Please go to the website at least ten minutes before the event begins to register and to download and install any necessary audio software.
A conference call to discuss the fourth quarter results of Diamond Offshore was held on Tuesday, February 5, 2013. An online replay is available on Diamond Offshore’s website (www.diamondoffshore.com).
# # #
ABOUT LOEWS CORPORATION
Loews Corporation, a holding company, is one of the largest diversified corporations in the United States. Its principal subsidiaries are CNA Financial Corporation (NYSE: CNA), a 90% owned subsidiary; Diamond Offshore Drilling, Inc. (NYSE: DO), a 50.4% owned subsidiary; Boardwalk Pipeline Partners, LP (NYSE: BWP), a 55% owned subsidiary; HighMount Exploration & Production LLC, a wholly owned subsidiary; and Loews Hotels, a wholly owned subsidiary.
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FORWARD-LOOKING STATEMENTS
Statements contained in this press release which are not historical facts are “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are inherently uncertain and subject to a variety of risks that could cause actual results to differ materially from those expected by management of the Company. A discussion of the important risk factors and other considerations that could materially impact these matters as well as the Company’s overall business and financial performance can be found in the Company’s reports filed with the Securities and Exchange Commission and readers of this release are urged to review those reports carefully when considering these forward-looking statements. Copies of these reports are available through the Company’s website (www.loews.com). Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Any such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.
Page 3 of 5
Loews Corporation and Subsidiaries
Selected Financial Information
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December 31,
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(In millions)
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Three Months
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Years Ended
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2012
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2011
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2012
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2011
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Revenues:
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CNA Financial
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$ | 2,437 | $ | 2,294 | $ | 9,487 | $ | 8,982 | ||||||||
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Diamond Offshore (a)
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753 | 752 | 3,072 | 3,334 | ||||||||||||
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Boardwalk Pipeline
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325 | 301 | 1,187 | 1,144 | ||||||||||||
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HighMount
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78 | 93 | 297 | 390 | ||||||||||||
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Loews Hotels
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125 | 86 | 397 | 337 | ||||||||||||
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Investment income (loss) and other
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(11 | ) | 22 | 55 | (6 | ) | ||||||||||
| 3,707 | 3,548 | 14,495 | 14,181 | |||||||||||||
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Investment gains (losses):
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CNA Financial
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(2 | ) | (33 | ) | 60 | (19 | ) | |||||||||
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Corporate and other
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(34 | ) | (3 | ) | (33 | ) | ||||||||||
| (2 | ) | (67 | ) | 57 | (52 | ) | ||||||||||
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Total
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$ | 3,705 | $ | 3,481 | $ | 14,552 | $ | 14,129 | ||||||||
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Income (Loss) Before Income Tax:
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CNA Financial (b)
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$ | (31 | ) | $ | 274 | $ | 820 | $ | 898 | |||||||
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Diamond Offshore (a) (c)
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185 | 203 | 917 | 1,177 | ||||||||||||
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Boardwalk Pipeline (d)
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88 | 70 | 304 | 211 | ||||||||||||
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HighMount
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Operations
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16 | 21 | 44 | 99 | ||||||||||||
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Ceiling test impairment charge
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(153 | ) | (680 | ) | ||||||||||||
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Loews Hotels
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(3 | ) | 4 | 14 | 17 | |||||||||||
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Investment income (loss), net
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(9 | ) | 24 | 61 | 1 | |||||||||||
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Other (e)
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(56 | ) | (47 | ) | (138 | ) | (125 | ) | ||||||||
| 37 | 549 | 1,342 | 2,278 | |||||||||||||
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Investment gains (losses):
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CNA Financial
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(2 | ) | (33 | ) | 60 | (19 | ) | |||||||||
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Corporate and other
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(34 | ) | (3 | ) | (33 | ) | ||||||||||
| (2 | ) | (67 | ) | 57 | (52 | ) | ||||||||||
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Total
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$ | 35 | $ | 482 | $ | 1,399 | $ | 2,226 | ||||||||
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Net Income (Loss) Attributable to Loews Corporation:
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CNA Financial (b)
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$ | (5 | ) | $ | 195 | $ | 535 | $ | 567 | |||||||
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Diamond Offshore (a) (c)
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73 | 88 | 337 | 451 | ||||||||||||
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Boardwalk Pipeline (d) (f)
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31 | 21 | 111 | 77 | ||||||||||||
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HighMount
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Operations
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9 | 12 | 26 | 62 | ||||||||||||
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Ceiling test impairment charge
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(97 | ) | (433 | ) | ||||||||||||
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Loews Hotels
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(2 | ) | 5 | 7 | 13 | |||||||||||
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Investment income (loss), net
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(6 | ) | 16 | 41 | 3 | |||||||||||
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Other (e)
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(33 | ) | (26 | ) | (89 | ) | (80 | ) | ||||||||
| (30 | ) | 311 | 535 | 1,093 | ||||||||||||
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Investment gains (losses):
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CNA Financial
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(2 | ) | (19 | ) | 35 | (10 | ) | |||||||||
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Corporate and other
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(21 | ) | (2 | ) | (21 | ) | ||||||||||
| (2 | ) | (40 | ) | 33 | (31 | ) | ||||||||||
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Net income (loss) attributable to Loews Corporation
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$ | (32 | ) | $ | 271 | $ | 568 | $ | 1,062 | |||||||
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(a)
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Includes a $76 million gain ($32 million after tax and noncontrolling interests) for the year ended December 31, 2012 related to the sale of jack-up rigs.
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(b)
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Include catastrophe losses of $268 million and $391 million ($171 million and $243 million after tax and noncontrolling interests) for the three months and year ended December 31, 2012 primarily related to Storm Sandy.
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(c)
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Includes an impairment charge of $62 million ($19 million after tax and noncontrolling interests) for the three months and year ended December 31, 2012 related to the carrying value of three semisubmersible rigs.
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(d)
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Includes an impairment charge of $29 million ($11 million after tax and noncontrolling interests) for the year ended December 31, 2011 related to the carrying value of steel pipe materials.
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(e)
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Consists primarily of corporate interest expense and other unallocated expenses.
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(f)
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Represents a 55.5%, 64.0%, 59.3% and 64.7% ownership interest in Boardwalk Pipeline for the respective periods.
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Page 4 of 5
Loews Corporation and Subsidiaries
Consolidated Financial Review
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December 31,
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(In millions, except per share data)
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Three Months
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Years Ended
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2012
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2011
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2012
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2011
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Revenues:
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Insurance premiums
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$ | 1,784 | $ | 1,661 | $ | 6,882 | $ | 6,603 | ||||||||
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Net investment income
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555 | 550 | 2,349 | 2,063 | ||||||||||||
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Investment gains (losses)
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(2 | ) | (67 | ) | 57 | (52 | ) | |||||||||
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Contract drilling revenues
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741 | 734 | 2,936 | 3,254 | ||||||||||||
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Other
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627 | 603 | 2,328 | 2,261 | ||||||||||||
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Total
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3,705 | 3,481 | 14,552 | 14,129 | ||||||||||||
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Expenses:
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Insurance claims & policyholders’ benefits
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1,732 | 1,358 | 5,896 | 5,489 | ||||||||||||
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Contract drilling expenses
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377 | 407 | 1,537 | 1,549 | ||||||||||||
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Other (a)
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1,561 | 1,234 | 5,720 | 4,865 | ||||||||||||
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Total
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3,670 | 2,999 | 13,153 | 11,903 | ||||||||||||
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Income before income tax
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35 | 482 | 1,399 | 2,226 | ||||||||||||
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Income tax (expense) benefit
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48 | (70 | ) | (289 | ) | (532 | ) | |||||||||
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Net income
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83 | 412 | 1,110 | 1,694 | ||||||||||||
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Amounts attributable to noncontrolling interests
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(115 | ) | (141 | ) | (542 | ) | (632 | ) | ||||||||
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Net income (loss) attributable to Loews Corporation
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$ | (32 | ) | $ | 271 | $ | 568 | $ | 1,062 | |||||||
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Diluted income (loss) per share attributable to
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Loews Corporation
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$ | (0.08 | ) | $ | 0.68 | $ | 1.43 | $ | 2.62 | |||||||
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Weighted diluted number of shares
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392.85 | 397.31 | 395.87 | 405.32 | ||||||||||||
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(a)
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Includes non-cash impairment charges of $153 million ($97 million after tax) and $680 million ($433 million after tax) for the three months and year ended December 31, 2012 related to the carrying value of HighMount's natural gas and oil properties.
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Page 5 of 5