EX-99.1 2 lc_exbcomplete.htm EXHIBIT Unassociated Document
Exhibit 99.1

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Contact:
Peter W. Keegan
Chief Financial Officer
(212) 521-2950
 
Darren Daugherty
Investor Relations
(212) 521-2788
 
Candace Leeds
Public Affairs
(212) 521-2416
 

LOEWS CORPORATION REPORTS
NET INCOME FOR 2009
 
NEW YORK, February 8, 2010—Loews Corporation (NYSE: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                          
 
 
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(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.
 

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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).

 
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# # #
 
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; HighMount Exploration & Production LLC, a wholly owned subsidiary; Boardwalk Pipeline Partners, LP (NYSE: 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.
 

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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.


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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.

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