-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, McXUW2EbC5f12XlSJa5bqw+/vbhLGUPtqUKhNdlfr+LAesDt7Jfk8m9iYHGgo2pR yfOcrZe6t9plqBi+aOOUTw== 0000950137-03-006202.txt : 20031203 0000950137-03-006202.hdr.sgml : 20031203 20031202173758 ACCESSION NUMBER: 0000950137-03-006202 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031202 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20031203 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CNA FINANCIAL CORP CENTRAL INDEX KEY: 0000021175 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 366169860 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05823 FILM NUMBER: 031033472 BUSINESS ADDRESS: STREET 1: CNA PLZ STREET 2: 235 CITY: CHICAGO STATE: IL ZIP: 60685 BUSINESS PHONE: 3128225000 MAIL ADDRESS: STREET 1: CNA PLAZA STREET 2: 235 CITY: CHICAGO STATE: IL ZIP: 60685 8-K 1 c81394e8vk.txt CURRENT REPORT ============================================================================== 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 Date of report (Date of earliest event reported) December 2, 2003 ------------------------------------- CNA FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 1-5823 36-6169860 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) CNA PLAZA, CHICAGO, ILLINOIS 60685 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (312) 822-5000 Not Applicable (Former Name or Former Address, if Changed Since Last Report) ============================================================================== Item 7. Financial Statements and Exhibits (c) Exhibits: Exhibit No. Description - ----------- ----------- 99.1 CNA Financial Corporation press release, issued December 1, 2003. 99.2 CNA Financial Corporation Group Operations Segment -- Historical GAAP Results of Operations for the three and nine months ended September 30, 2003. Item 9. Regulation FD Disclosure The information 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 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. On December 1, 2003 Registrant issued a press release announcing that it has entered into a binding agreement to sell its Group Benefits business to Hartford Financial Services Group, Inc. for approximately $500 million. The press release is furnished as Exhibit 99.1 to this Form 8-K. In addition, Registrant is providing supplemental information on businesses related to the sale described above in a schedule furnished as Exhibit 99.2 to this Form 8-K. 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. CNA FINANCIAL CORPORATION Dated: December 2, 2003 /s/ Robert V. Deutsch -------------------------------- By: Robert V. Deutsch Its: Executive Vice President and Chief Financial Officer Page 2 of 2 EX-99.1 3 c81394exv99w1.txt CNA FINANCIAL CORPORATION PRESS RELEASE EXHIBIT 99.1 [CNA LOGO] FOR IMMEDIATE RELEASE CONTACT: MEDIA: ANALYSTS: Charles M. Boesel, 312/822-2592 Dawn M. Jaffray, 312/822-7757 Katrina W. Parker, 312/822-5167 CNA FINANCIAL ANNOUNCES AGREEMENT TO SELL GROUP BENEFITS BUSINESS CHICAGO, DECEMBER 1, 2003 --- CNA Financial Corporation (NYSE: CNA) today announced that it has entered into a binding agreement to sell its Group Benefits business to Hartford Financial Services Group, Inc. (NYSE: HIG) for approximately $500 million. The business sold includes group life and accident, short and long term disability and certain other products. CNA`s group long term care business is excluded from the sale. The transaction is expected to be completed on or before December 31, 2003, subject to certain customary closing conditions and regulatory approvals. Upon completion of the sale, it is anticipated that approximately 1,200 employees will transfer to The Hartford. "The sale of Group Benefits enables us to sharpen our operational focus and move forward on our recently announced capital plan," stated Stephen W. Lilienthal, Chairman and Chief Executive Officer of the CNA insurance companies. "We are pleased to have found a buyer with such a strong position in the employee benefits business." The purchase price is subject to certain adjustments including changes in the level of statutory surplus through the closing date. The sale is expected to provide additional capital to CNA's principal insurance subsidiary, Continental Casualty Company (CCC), as contemplated in CNA's recently announced capital plan. CNA expects to recognize an after-tax GAAP loss of approximately $200 million on the sale in the fourth quarter of 2003; however, this amount will fluctuate for changes in the market value of the investment assets supporting this business. CNA expects to recognize an after-tax statutory gain on the sale in excess of $100 million. ABOUT CNA CNA is the country's fourth largest commercial insurance writer and the 11th largest property and casualty company. CNA's insurance products include standard commercial lines, specialty lines, surety, marine and other property and casualty coverages; life and accident insurance; and pension products. CNA services include risk management, information services, underwriting, risk control and claims administration. For more information, please visit CNA at www.cna.com. CNA is a registered service mark, trade name and domain name of CNA Financial Corporation. Page 1 of 2 ABOUT THE HARTFORD The Hartford Financial Services Group, Inc. is one of the nation's largest investment and insurance companies, with 2002 revenues of $16.4 billion. The company is a leading provider of investment products, life insurance and group benefits; automobile and homeowners products; and business property and casualty insurance. FORWARD-LOOKING STATEMENT The statements contained in this press release, which are not historical facts, are forward-looking statements. When included in this press release, the words "believes," "expects," "intends," "anticipates," "estimates," and analogous expressions are intended to identify forward-looking statements. Forward-looking statements include expected developments in the insurance business of CNA (the "Company"), including losses for asbestos, environmental pollution and mass tort claims; the Company's expectations concerning its revenues, earnings, expenses and investment activities; expected cost savings and other results from the Company's expense reduction and restructuring activities; and the Company's proposed actions in response to trends in its business. Such statements, and the financial condition and results of operations of the Company and the price of the Company's common stock, are subject to a variety of inherent risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from those projected. Such risks and uncertainties include, among others: general economic and business conditions, including inflationary pressures on medical care costs, construction costs and other economic sectors that increase the severity of claims; changes in financial markets such as fluctuations in interest rates, long-term periods of low interest rates, credit conditions and currency, commodity and stock prices; the effects of corporate bankruptcies, such as Enron and WorldCom, on surety bond claims, as well as on capital markets and on the markets for directors & officers and errors & omissions coverages; changes in foreign or domestic political, social and economic conditions; regulatory initiatives and compliance with governmental regulations; judicial decisions and rulings, including interpretation of policy provisions, decisions regarding coverage and theories of liability, trends in litigation and the outcome of any litigation involving the Company; changes in tax laws and regulations; regulatory limitations and restrictions upon the Company and its insurance subsidiaries; the impact of competitive products, policies and pricing and the competitive environment in which the Company operates, including changes in the Company's books of business; product and policy availability and demand and market responses, including the level of ability to obtain rate increases and decline or non-renew underpriced 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 practices; the effectiveness of current initiatives by claims management to reduce loss and expense ratio through more efficacious claims handling techniques; the performance of reinsurance companies under reinsurance contracts with the Company; results of financing efforts, including the availability of bank credit facilities; changes in the Company's composition of operating segments; 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 of applicable terrorism legislation on coverages; the occurrence of epidemics; exposure to liabilities due to claims made by insureds and others relating to asbestos remediation and health-based asbestos impairments, and exposure to liabilities for environmental pollution and other mass tort claims; 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 the Company's established loss reserves or carried loss reserves; the sufficiency of the Company's loss reserves and the possibility of future increases in reserves; the level of success in integrating acquired businesses and operations, and in consolidating existing ones; the possibility of changes in the Company'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 actual closing of contemplated transactions and agreements; and various other matters and risks (many of which are beyond the Company's control) detailed in the Company's Securities and Exchange Commission filings. These forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statement contained in this press release to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based. # # # Page 2 of 2 EX-99.2 4 c81394exv99w2.txt HISTORICAL GAAP RESULTS OF OPERATIONS . . . EXHIBIT 99.2 CNA FINANCIAL CORPORATION GROUP OPERATIONS SEGMENT - HISTORICAL GAAP RESULTS OF OPERATIONS (1) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003
- ------------------------------------------------------------------------------------------------------------------------------------ THREE MONTHS ENDED SEPTEMBER 30, 2003 GROUP OPERATIONS GROUP OPERATIONS EXCLUDING BUSINESSES BUSINESSES INCLUDED TOTAL GROUP OPERATIONS (In millions) IN SALE (2) (3) IN SALE (2) AS REPORTED - ------------------------------------------------------------------------------------------------------------------------------------ Net earned premiums $ 32 $ 306 $ 338 Insurance claims & policyholders' benefits 40 222 262 Policyholders' dividends 1 - 1 Insurance related expenses 12 99 111 Net investment income 33 34 67 Other revenues 14 (1) 13 Other expenses 5 2 7 ------------------ ------------------ ------------------ Income before income tax and net realized investment gains 21 16 37 Income tax expense (7) (5) (12) ------------------ ------------------ ------------------ Income before net realized investment gains 14 11 25 Realized investment gains 17 8 25 Income tax expense on realized investment gains (6) (2) (8) ------------------ ------------------ ------------------ Net income $ 25 $ 17 $ 42 ================== ================== ==================
- ------------------------------------------------------------------------------------------------------------------------------------ NINE MONTHS ENDED SEPTEMBER 30, 2003 GROUP OPERATIONS GROUP OPERATIONS EXCLUDING BUSINESSES BUSINESSES INCLUDED TOTAL GROUP OPERATIONS (In millions) IN SALE (2) (3) IN SALE (2) AS REPORTED - ------------------------------------------------------------------------------------------------------------------------------------ Net earned premiums $ 94 $ 888 $ 982 Insurance claims & policyholders' benefits 121 639 760 Policyholders' dividends 1 - 1 Insurance related expenses 40 302 342 Net investment income 100 100 200 Other revenues 46 - 46 Other expenses 19 3 22 ------------------ ------------------ ------------------ Income before income tax and net realized investment (losses) gains 59 44 103 Income tax expense (20) (13) (33) ------------------ ------------------ ------------------ Income before net realized investment (losses) gains 39 31 70 Realized investment (losses) gains (16) 9 (7) Income tax benefit (expense) on realized investment (losses) gains 6 (3) 3 ------------------ ------------------ ------------------ Net income $ 29 $ 37 $ 66 ================== ================== ==================
(1) The historical results do not reflect any possible effects on Registrant's operating results of the proposed sale, including but not limited to the potential impact of unabsorbed overhead or other expenses. (2) Based on the December 1, 2003 announced sale of the Group Benefits businesses. Due to certain products that may be included or excluded with the close of the sale, which is expected to occur on or before December 31, 2003, the presentation of final results for the businesses sold may change. (3) Excluded businesses principally include Group Long Term Care and Institutional Markets. -----END PRIVACY-ENHANCED MESSAGE-----