Loews Corporation (L) today reported income from operations before
investment losses for 2009 of $1,069 million compared to $572 million in
2008. Income from continuing operations for 2009 was $566 million, or
$1.31 per share, compared to a loss of $182 million, or $0.38 per share,
in 2008. The Company reported income from continuing operations for the
2009 fourth quarter of $403 million, or $0.94 per share compared to a
loss of $958 million, or $2.20 per share in the 2008 fourth quarter.
Book value per common share increased to $39.76 at December 31, 2009 as
compared to $30.18 at December 31, 2008. The increase during the year
was primarily driven by a $3.3 billion (after tax and noncontrolling
interests) improvement in the fair value of our insurance subsidiary’s
fixed maturities investment portfolio reflecting a further narrowing of
credit spreads that began in the second quarter of 2009.
Net income (loss) and earnings (loss) per share information attributable
to Loews common stock and the former Carolina Group stock is summarized
in the table below:
December 31,
Three Months Years Ended
(In millions, except per share data) 2009 2008 2009 2008
Net income (loss) attributable to Loews common stock:
Income before net investment gains (losses) $ 357 $ (676 ) $ 1,069 $ 572
Net investment gains (losses) 46 (282 ) (503 ) (754 )
Income (loss) from continuing operations 403 (958 ) 566 (182 )
Discontinued operations, net (a) (2 ) 4,501
Net income (loss) attributable to Loews common stock 403 (958 ) 564 4,319
Net income attributable to former Carolina Group stock -
Discontinued operations, net (b) 211
Net income (loss) attributable to Loews Corporation $ 403 $ (958 ) $ 564 $ 4,530
Net income (loss) per share:
Loews common stock:
Income (loss) from continuing operations $ 0.94 $ (2.20 ) $ 1.31 $ (0.38 )
Discontinued operations, net (a) (.01 ) 9.43
Net income (loss) attributable to Loews common stock $ 0.94 $ (2.20 ) $ 1.30 $ 9.05
Former Carolina Group stock - Discontinued
operations, net (b) $ 1.95
Book value per share of Loews common stock at:
December 31, 2009 $ 39.76
December 31, 2008 $ 30.18
(a) Includes a tax-free non-cash gain of $4,287 million
related to the separation of Lorillard, Inc. and an after tax gain of
$75 million from the sale of Bulova Corporation for the year ended
December 31, 2008.
(b) The Carolina Group and Carolina Group stock were
eliminated effective June 10, 2008 as part of the separation of
Lorillard, Inc.
Income from Continuing Operations
Three Months Ended December 31, 2009 Compared with 2008
Income from continuing operations primarily reflects improved net
investment income and net investment gains at CNA Financial Corporation,
compared to a loss from continuing operations in the prior year. Net
investment income benefited from higher limited partnership results,
partially offset by the impact of lower short-term interest rates. In
addition, higher investment income from the holding company trading
portfolio contributed to the improved results.
The prior year loss from continuing operations reflects a $440 million
(after tax) non-cash impairment charge related to the carrying value of
HighMount Exploration & Production LLC’s natural gas and oil properties,
reflecting negative revisions in proved reserve quantities as a result
of declines in commodity prices; a $314 million (after tax) non-cash
goodwill impairment charge related to HighMount; and
other-than-temporary impairment (OTTI) losses related to CNA’s
investment portfolio.
Income from continuing operations included net investment gains of $46
million (after tax and noncontrolling interests) in the fourth quarter
of 2009 compared to net investment losses of $282 million in the
comparable prior year period. Net investment gains in the fourth quarter
of 2009 were driven by a $217 million realized investment gain from the
sale of CNA’s common stock holdings in Verisk Analytics, Inc. and
decreased OTTI losses recognized in CNA’s available-for-sale portfolio.
The OTTI losses were primarily driven by the impact of difficult
economic conditions on residential and commercial mortgage-backed
securities and by credit issues in the financial sector. Net investment
losses in the fourth quarter of 2008 were primarily driven by OTTI
losses due to credit related issues.
Year Ended December 31, 2009 Compared with 2008
The increase in income from continuing operations in 2009 is primarily
due to the reasons discussed in the three months comparison, partially
offset by a non-cash impairment charge of $660 million (after tax) in
2009 related to the carrying value of HighMount’s natural gas and oil
properties, reflecting declines in commodity prices. Excluding
impairment charges, HighMount’s results declined over the prior year due
to decreased production volumes and lower natural gas prices. Results at
Boardwalk Pipeline Partners, LP were lower primarily due to loss of
revenues while remediating pipeline anomalies, and favorable one time
transactions in 2008.
Net investment losses were $503 million (after tax and noncontrolling
interests) in 2009, compared to losses of $754 million in the prior
year. The improvement was driven by the gain from the sale of Verisk
common stock holdings as discussed above and decreased OTTI losses
recorded in 2009.
Discontinued Operations
In June of 2008, the Company disposed of its entire ownership interest
in Lorillard, Inc. through the redemption of Carolina Group stock in
exchange for Lorillard common stock and an exchange of our remaining
Lorillard common stock for Loews common stock. The Carolina Group and
Carolina Group stock have been eliminated. The Company also sold Bulova
Corporation in January 2008. Lorillard’s results of operations and the
gain on disposal of Lorillard and Bulova have been classified as
discontinued operations.
SHARE REPURCHASES
At December 31, 2009, there were 425,070,322 shares of Loews common
stock outstanding. During the fourth quarter, the Company acquired
5,811,700 shares of its common stock for approximately $205 million; and
for the full year, the Company acquired 10,523,800 shares of its common
stock for approximately $348 million. From January 1, 2010 through
February 5, 2010, the Company acquired an additional 1,552,100 shares of
its common stock for approximately $57 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 year end results of Loews Corporation
has been scheduled for 11:00 a.m. EST, Monday, February 8, 2010. 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 international callers, (973) 582-2757. The
conference ID number is 50743490.
A conference call to discuss the year end results of CNA has been
scheduled for 10:00 a.m. EST, Monday, February 8, 2010. A live webcast
of the call will be available online at http://investor.cna.com.
Please go to the website at least ten minutes before the event begins to
register and to download and install any necessary audio software. Those
interested in participating in the question and answer session should
dial (888) 293-6979, or for international callers, (719) 457-2707.
A conference call to discuss the year end results of Boardwalk Pipeline
has been scheduled for 9:00 a.m. EST, Monday, February 8, 2010. A live
webcast of the call will be available online at the Boardwalk Pipeline
website (www.bwpmlp.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 (866) 356-4281, or for international callers, (617) 597-5395. The
conference ID number is 72814737.
A conference call to discuss the year end results of Diamond Offshore
was held on Thursday, February 4, 2010. 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 (CNA), a 90% owned subsidiary; Diamond
Offshore Drilling, Inc. (DO), a 50.4% owned subsidiary; HighMount
Exploration & Production LLC, a wholly owned subsidiary; Boardwalk
Pipeline Partners, LP (BWP), a 72% owned subsidiary; and Loews
Hotels, a wholly owned subsidiary.
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.
Loews Corporation and Subsidiaries
Financial Review
December 31,
Three Months Years Ended
2009 2008 2009 2008
(Amounts in millions, except per share data)
Revenues:
Insurance premiums $ 1,686 $ 1,765 $ 6,721 $ 7,150
Net investment income 591 50 2,499 1,581
Investment gains (losses) 75 (484 ) (853 ) (1,294 )
Contract drilling revenues 873 887 3,537 3,476
Other 597 525 2,213 2,334
Total 3,822 2,743 14,117 13,247
Expenses:
Insurance claims & policyholders’ benefits (a) 1,371 1,343 5,290 5,723
Contract drilling expenses 317 313 1,224 1,185
Impairment of natural gas and oil properties (b) 691 1,036 691
Impairment of Goodwill (c) 482 482
Other 1,251 1,255 4,837 4,579
Total 2,939 4,084 12,387 12,660
Income (loss) before income tax 883 (1,341 ) 1,730 587
Income tax (expense) benefit (277 ) 530 (345 ) (7 )
Income (loss) from continuing operations 606 (811 ) 1,385 580
Discontinued operations:
Results of operations 1 (2 ) 351
Gain on disposal (d) 4,362
Net income (loss) 606 (810 ) 1,383 5,293
Amounts attributable to noncontrolling interests (203 ) (148 ) (819 ) (763 )
Net income (loss) attributable to Loews Corporation $ 403 $ (958 ) $ 564 $ 4,530
Net income (loss) attributable to:
Loews common stock:
Income (loss) from continuing operations $ 403 $ (958 ) $ 566 $ (182 )
Discontinued operations, net (2 ) 4,501
Net income (loss) attributable to Loews common stock 403 (958 ) 564 4,319
Former Carolina Group stock - Discontinued Operations, net 211
Net income (loss) attributable to Loews Corporation $ 403 $ (958 ) $ 564 $ 4,530
Income (loss) per share attributable to Loews common stock:
Income (loss) from continuing operations $ 0.94 $ (2.20 ) $ 1.31 $ (0.38 )
Discontinued operations, net (0.01 ) 9.43
Diluted net income (loss) attributable to Loews common stock $ 0.94 $ (2.20 ) $ 1.30 $ 9.05
Diluted net income per share of former Carolina Group stock
- Discontinued operations, net $ 1.95
Weighted diluted number of shares:
Loews common stock 429.25 435.65 433.45 477.23
Former Carolina Group stock 108.60
(a) Includes a gain of $94 million ($55 million after tax and
noncontrolling interest), net of reinsurance for the year ended
December 31, 2009, related to a legal settlement pertaining to the
placement of personal accident reinsurance.
(b) Reflects a non-cash impairment charge of $1,036 million ($660
million after tax) for the year ended December 31, 2009, compared to
$691 million ($440 million after tax) for the three months and year
ended December 31, 2008 related to the carrying value of HighMount’s
natural gas and oil properties.
(c) The non-cash impairment charge of $482 million ($314 million after
tax) relates to goodwill at HighMount for the three months and year
ended December 31, 2008.
(d) Includes a tax-free non-cash gain of $4,287 million related to the
separation of Lorillard, Inc. and an after tax gain of $75 million
from the sale of Bulova Corporation for the year ended December 31,
2008.
Loews Corporation and Subsidiaries
Additional Financial Information
December 31,
Three Months Years Ended
2009 2008 2009 2008
(In millions)
Revenues:
CNA Financial $ 2,326 $ 2,021 $ 9,329 $ 9,096
Diamond Offshore 891 856 3,653 3,486
HighMount 154 180 620 770
Boardwalk Pipeline 279 207 910 848
Loews Hotels 71 88 284 380
Investment income and other 26 (125 ) 174 (39 )
3,747 3,227 14,970 14,541
Investment gains (losses):
CNA Financial 72 (484 ) (857 ) (1,297 )
Corporate and other 3 4 3
75 (484 ) (853 ) (1,294 )
Total $ 3,822 $ 2,743 $ 14,117 $ 13,247
Income (Loss) Before Income Tax:
CNA Financial (a) $ 287 $ (50 ) $ 1,408 $ 747
Diamond Offshore 419 402 1,864 1,843
HighMount (b) 55 (1,115 ) (839 ) (890 )
Boardwalk Pipeline 72 66 157 292
Loews Hotels (c) (3 ) 5 (52 ) 62
Investment income, net 26 (123 ) 175 (54 )
Other (d) (48 ) (42 ) (130 ) (119 )
808 (857 ) 2,583 1,881
Investment gains (losses):
CNA Financial 72 (484 ) (857 ) (1,297 )
Corporate and other 3 4 3
75 (484 ) (853 ) (1,294 )
Total $ 883 $ (1,341 ) $ 1,730 $ 587
Net Income (Loss) Attributable to Loews Corporation:
CNA Financial (a) $ 182 $ (15 ) $ 904 $ 488
Diamond Offshore 128 137 642 612
HighMount (b) 35 (717 ) (537 ) (575 )
Boardwalk Pipeline (e) 28 27 67 125
Loews Hotels (c) (4 ) 4 (34 ) 40
Investment income, net 16 (78 ) 113 (33 )
Other (d) (28 ) (34 ) (86 ) (85 )
357 (676 ) 1,069 572
Investment gains (losses):
CNA Financial 44 (283 ) (505 ) (756 )
Corporate and other 2 1 2 2
46 (282 ) (503 ) (754 )
Income (loss) from continuing operations 403 (958 ) 566 (182 )
Discontinued operations, net (f) (2 ) 4,501
Net income (loss) attributable to Loews common stock 403 (958 ) 564 4,319
Former Carolina Group stock - Discontinued operations, net 211
Net income (loss) attributable to Loews Corporation $ 403 $ (958 ) $ 564 $ 4,530
(a) Includes a gain of $94 million ($55 million after tax and
noncontrolling interest), net of reinsurance for the year ended
December 31, 2009, related to a legal settlement pertaining to the
placement of personal accident reinsurance.
(b) Reflects a non-cash impairment charge of $1,036 million ($660
million after tax) for the year ended December 31, 2009, compared to
$691 million ($440 million after tax) for the three months and year
ended December 31, 2008 related to the carrying value of HighMount’s
natural gas and oil properties, and a $482 million ($314 million
after tax) non-cash impairment charge related to goodwill at
HighMount for the three months and year ended December 31, 2008.
(c) Includes an impairment charge of $27 million ($16 million after tax)
for the year ended December 31, 2009 related to the writedown of
Loews Hotels’ entire investment in a hotel property. Also reflects a
$20 million ($12 million after tax) charge related to two hotel
properties for the year ended December 31, 2009.
(d) Consists primarily of corporate interest expense and other
unallocated expenses.
(e) Represents a 71.8%, 72.9%, 73.1% and 71.1% ownership interest in
Boardwalk Pipeline for the respective periods.
(f) Includes a tax-free non-cash gain of $4,287 million related to the
separation of Lorillard, Inc. and an after tax gain of $75 million
from the sale of Bulova Corporation for the year ended December 31,
2008.
SOURCE: Loews Corporation
Loews Corporation
Peter W. Keegan, 212-521-2950
Chief Financial Officer
or
Darren Daugherty, 212-521-2788
Investor Relations
or
Candace Leeds, 212-521-2416
Public Affairs
