EX-99.1 2 lcpr_exbone.htm LOEWS CORPORATION PRESS RELEASE Loews Corporation Press Release
Exhibit 99.1
 
 
Contact:
Peter W. Keegan
Senior Vice President
(212) 521-2950
 
Candace Leeds
V.P. of Public Affairs
(212) 521-2416
 
Darren Daugherty
Investor Relations
(212) 521-2788

FOR IMMEDIATE RELEASE

LOEWS CORPORATION REPORTS
NET INCOME FOR THE SECOND QUARTER OF 2006

NEW YORK, August 1, 2006—Loews Corporation (NYSE:LTR;CG) today reported consolidated net income (including both the Loews Group and Carolina Group) for the 2006 second quarter of $568.7 million, compared to $435.6 million in the 2005 second quarter. Consolidated net income for the six months ended June 30, 2006 was $1,109.7 million, compared to $781.9 million in the prior year.

Net income and earnings per share information attributable to Loews common stock and Carolina Group stock is summarized in the table below:

   
June 30,
  
 
  
Three Months 
Six Months
(In millions, except per share data)
    
2006
    
2005
    
2006
    
2005
  
         
(Restated)
          
(Restated)
 
Net income attributable to Loews common stock:
                          
Income before net investment gains (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
  
Net income
  
$
0.85
  
$
0.68
  
$
1.70
  
$
1.22
  
Carolina Group stock
  
$
1.09
  
$
0.82
  
$
1.96
  
$
1.50
  
Book value per share of Loews common stock at:
                          
June 30, 2006
  
$
25.71
                    
December 31, 2005
  
$
23.64
                    

(a) Reflects Loews Corporation’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.
 
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Three Months Ended June 30, 2006 Compared With 2005

Net income attributable to Loews common stock for the second quarter of 2006 amounted to $474.9 million or $0.85 per share, compared to $379.9 million or $0.68 per share in the comparable period of the prior year. The increase in net income was primarily due to improved results at the Company’s 54% owned subsidiary, Diamond Offshore Drilling, Inc. and increased investment income. The results for the second quarter of 2005 included a benefit of $109.2 million related to a federal income tax settlement due primarily to net refund interest and the release of federal income tax reserves at the Company’s 91% owned subsidiary, CNA Financial Corporation.

Net income attributable to Loews common stock includes net investment losses of $55.0 million (after tax and minority interest) compared to net investment gains of $19.5 million (after tax and minority interest) in the comparable period of the prior year.

Net income attributable to Carolina Group stock for the second quarter of 2006 was $93.8 million or $1.09 per Carolina Group share, compared to $55.7 million, or $0.82 per Carolina Group share in the second quarter of 2005. The increase in net income attributable to Carolina Group stock for the second quarter of 2006 is primarily due to higher effective unit prices reflecting lower sales promotion expenses (accounted for as a reduction to net sales) and reflects an increase in the amount of Carolina Group shares outstanding. The Company is issuing a separate press release reporting the results of the Carolina Group for the second quarter of 2006.

Consolidated revenues in the second quarter of 2006 amounted to $4.3 billion, compared to $4.0 billion in the comparable 2005 quarter.

Six Months Ended June 30, 2006 Compared With 2005

Net income attributable to Loews common stock amounted to $948.3 million, or $1.70 per share, in the first half of 2006 compared to $679.7 million, or $1.22 per share, in the comparable period of the prior year. Net income attributable to Loews common stock includes net investment losses of $58.6 million (after tax and minority interest) compared to net investment gains of $4.7 million (after tax and minority interest) in the comparable period of the prior year. The results for the six months ended June 30, 2005 included a benefit of $109.2 million from a federal income tax settlement discussed above. The increase in net income was primarily due to improved results at the Company’s 54% owned subsidiary, Diamond Offshore Drilling, Inc. and increased investment income.

Net income attributable to Carolina Group stock for the first half of 2006 was $161.4 million or $1.96 per Carolina Group share, compared to $102.2 million, or $1.50 per Carolina Group share in the comparable period of the prior year. The increase in net income attributable to Carolina Group stock is primarily due to higher effective unit prices reflecting lower sales promotion expenses (accounted for as a reduction to net sales) and reflects an increase in the amount of Carolina Group shares outstanding.

Consolidated revenues in the first half of 2006 amounted to $8.5 billion, compared to $7.8 billion in the comparable period of the prior year.

# # #


 
 






 
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At June 30, 2006, there were 550,701,207 shares of Loews common stock outstanding and 93,291,246 shares of Carolina Group stock outstanding. During the three months ended June 30, 2006, the Company purchased 5,548,800 shares of Loews common stock at an aggregate cost of $188.8 million. Depending on market conditions, the Company from time to time purchases shares of its, and its subsidiaries’, outstanding common stock in the open market or otherwise.

The Company has two classes of common stock, Carolina Group stock, a tracking stock intended to reflect the economic performance of a group of the Company’s assets and liabilities, called the Carolina Group, principally consisting of the Company’s subsidiary Lorillard, Inc. and Loews common stock, representing the economic performance of the Company’s remaining assets, including the interest in the Carolina Group not represented by Carolina Group stock. At June 30, 2006, the outstanding Carolina Group stock represents a 53.7% economic interest in the economic performance of the Carolina Group.

A conference call to discuss the second quarter results of Loews Corporation has been scheduled for 11:00 a.m. EDT, Tuesday, August 1, 2006. A live broadcast of the call will be available online at the Loews Corporation website (www.loews.com). Please go to the website at least ten minutes before the event begins to register and to download and install any necessary audio software. Those interested in participating in the question and answer session of the conference call should dial (877) 692-2592. An online replay will be available at the Company’s website following the call.

A conference call to discuss the second quarter results of CNA has been scheduled for 10:00 a.m. EDT, Tuesday, August 1, 2006. A live broadcast of the call will be available online at the CNA website (http://investors.cna.com). Please go to the website at least ten minutes before the event begins to register and to download and install any necessary audio software. Those interested in participating in the question and answer session of the conference call should dial (800) 500-0177. An online replay will be available at CNA’s website following the call.

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 and CNA. 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
Financial Review

   
June 30,
  
   
Three Months
  
Nine Months
  
   
2006
  
2005 (e)
  
2006
  
2005 (e)
  
       
(Restated)
      
(Restated)
  
                   
   
(Amounts in millions, except per share data)
  
                   
Revenues:
                          
Insurance premiums and net investment income (a)
  
$
2,439.6
 
$
2,350.5
 
$
5,014.3
 
$
4,681.0
 
Manufactured products (b)
    
1,020.7
   
968.7
   
1,919.1
   
1,802.9
 
Other (c)
    
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 & policyholders’ benefits
    
1,432.2
   
1,581.8
   
2,924.2
   
3,015.0
 
Cost of manufactured products sold (b)
    
574.7
   
594.1
   
1,108.0
   
1,099.8
 
Other
    
1,247.6
   
1,216.1
   
2,482.2
   
2,466.5
 
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 (d)
    
93.8
    
55.7
    
161.4
   
102.2
  
   
$
568.7
  
$
435.6
  
$
1,109.7
  
$
781.9
  
                           
Income per share of Loews common stock:
                          
Income from continuing operations
  
$
0.85
  
$
0.68
  
$
1.71
  
$
1.20
  
Discontinued operations, net
              
(0.01
)
$
0.02
  
Diluted net income
  
$
0.85
  
$
0.68
 
$
1.70
  
$
1.22
  
                           
Diluted net income per share of Carolina Group stock
  
$
1.09
  
$
0.82
  
$
1.96
  
$
1.50
  
                           
Weighted diluted number of shares:
                          
Loews common stock
    
556.16
    
557.70
    
557.21
    
557.62
  
Carolina Group stock
    
86.11
    
68.10
    
82.24
    
68.08
  

(a)
Includes investment gains (losses) of $(93.3), $32.5, $(91.3) and $9.7 for the respective periods.
(b)
Includes excise taxes of $176.7, $179.0, $340.6 and $335.2 paid on sales of manufactured products for the respective periods.
(c)
Includes net refund interest of $129.7 from a federal income tax settlement in the second quarter of 2005.
(d)
Represents 50.09%, 39.22%, 47.85% and 39.21% of the economic interest in the Carolina Group for the respective periods.
(e)
Restated to correct the accounting for the periodic results of CNA's discontinued operations.

Page 4 of 5

 
            
Loews Corporation and Subsidiaries
Additional Financial Information

   
June 30,
  
   
Three Months
  
Nine Months
  
   
2006
  
2005 (g)
  
2006
  
2005 (g)
  
       
(Restated)
      
(Restated)
  
                   
 
  
(In millions) 
                           
Revenues:
                          
CNA Financial
  
$
2,510.6
 
$
2,543.5
 
$
5,002.3
  
$
4,927.3
 
Lorillard (a)
    
996.8
   
945.7
   
1,876.4
   
1,754.0
 
Boardwalk Pipelines
    
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
 
Investment income-net and other (b)
                          
Income (loss) from trading portfolio (c)
    
23.3
   
(61.0
)
  
93.9
   
(52.8
)
Other
    
86.2
   
58.6
   
159.7
   
114.2
 
     
4,370.6
   
3,998.2
   
8,613.1
   
7,762.2
 
                           
Investment (losses) gains:
                          
CNA Financial
    
(97.7
)
  
25.9
   
(88.9
)
  
9.2
 
Corporate and other
    
4.4
   
6.6
   
(2.4
)
  
0.5
 
     
(93.3
)
  
32.5
   
(91.3
)
  
9.7
 
Total
  
$
4,277.3
 
$
4,030.7
 
$
8,521.8
 
$
7,771.9
 
                           
Income Before Taxes:
                          
CNA Financial
  
$
451.3
 
$
310.8
 
$
797.6
 
$
575.2
 
Lorillard
    
181.2
   
180.3
   
345.8
   
335.2
 
Boardwalk Pipelines
    
32.0
   
22.8
   
101.4
   
85.6
 
Diamond Offshore
    
240.6
   
54.1
   
445.9
   
97.1
 
Loews Hotels
    
19.6
   
18.3
   
33.5
   
39.6
 
Investment income-net and other (b)
                          
Income (loss) from trading portfolio (c)
    
23.3
   
(61.0
)
  
93.9
   
(52.8
)
Other (d)
    
14.0
   
(13.0
)
  
16.0
   
(69.7
)
     
962.0
   
512.3
   
1,834.1
   
1,010.2
 
                           
Investment (losses) gains:
                          
CNA Financial
    
(97.7
)
  
25.9
   
(88.9
)
  
9.2
 
Corporate and other
    
4.4
   
6.6
   
(2.1
)
  
1.2
 
     
(93.3
)
  
32.5
   
(91.0
)
  
10.4
 
                           
Loews common stock
    
868.7
   
544.8
   
1,743.1
   
1,020.6
 
Carolina Group stock (e)
    
154.1
   
93.9
   
264.3
   
170.0
 
Total
  
$
1,022.8
 
$
638.7
 
$
2,007.4
 
$
1,190.6
 
                           
Net Income:
                          
CNA Financial (f)
  
$
281.4
 
$
251.3
 
$
498.5
 
$
431.3
 
Lorillard
    
110.5
   
6.9
   
211.5
   
201.6
 
Boardwalk Pipelines
    
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
 
Investment income-net and other (b)
                          
Income (loss) from trading portfolio (c)
    
15.1
   
(39.7
)
  
61.0
   
(34.3
)
Other (d)
    
9.2
   
(9.3
)
  
10.7
   
(46.7
)
     
532.3
    
358.6
    
1,014.3
    
666.6
  
                           
Investment (losses) gains:
                          
CNA Financial
    
(57.9
)
  
15.2
   
(57.4
)
  
3.5
 
Corporate and other
    
2.9
   
4.3
   
(1.2
)
  
1.2
 
     
(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
  
Loews common stock
    
474.9
    
379.9
    
948.3
    
679.7
  
Carolina Group stock (e)
    
93.8
    
55.7
    
161.4
    
102.2
  
Total
  
$
568.7
  
$
435.6
  
$
1,109.7
  
$
781.9
  

(a)
Includes excise taxes of $176.7, $179.0, $340.6 and $335.2 paid on sales of manufactured products for the respective periods.
(b)
Consists primarily of corporate investment income, interest expenses, the operations of Bulova Corporation, equity earnings of Majestic Shipping Corporation and other unallocated expenses.
(c)
Includes a loss on interest rate swaps of $52.6 ($34.2 after taxes) for the three and six months ended June 30, 2005.
(d)
Includes additional interest expense of $35.5 ($23.1 after taxes) related to charges from the early redemption of the Company's long-term debt for the six months ended June 30, 2005.
(e)
Represents 50.09%, 39.22%, 47.85% and 39.21% of the economic interest in the Carolina Group for the respective periods.
(f)
Includes a benefit of $104.4, in the second quarter of 2005, relating primarily to net refund interest and the release of federal income tax reserves.
(g)
Restated to correct the accounting for the periodic results of CNA's discontinued operations.
 
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