Business Segments

9 Months Ended

Sep. 30, 2012

Business Segments

9. Business Segments

The Company’s reportable segments are primarily based on its individual operating subsidiaries. Each of the principal operating subsidiaries are headed by a chief executive officer who is responsible for the operation of its business and has the duties and authority commensurate with that position. Investment gains (losses) and the related income taxes, excluding those of CNA, are included in the Corporate and other segment.

CNA’s results are reported in four business segments: CNA Specialty, CNA Commercial, Life & Group Non-Core and Other. CNA Specialty provides a broad array of professional, financial and specialty property and casualty products and services, primarily through insurance brokers and managing general underwriters. CNA Commercial includes property and casualty coverages sold to small businesses and middle market entities and organizations primarily through an independent agency distribution system. CNA Commercial also includes commercial insurance and risk management products sold to large corporations primarily through insurance brokers. Life & Group Non-Core primarily includes the results of the life and group lines of business that are in run-off. Other includes the operations of Hardy since its acquisition date of July 2, 2012, corporate expenses, including interest on corporate debt, and the results of certain property and casualty business primarily in run-off, including CNA Re and asbestos and environmental pollution. Hardy is a specialized Lloyd’s underwriter primarily of short-tail exposures.

Diamond Offshore’s business primarily consists of operating offshore drilling rigs that are chartered on a contract basis for fixed terms by companies engaged in exploration and production of hydrocarbons. Offshore rigs are mobile units that can be relocated based on market demand. Diamond Offshore’s fleet consists of 44 drilling rigs, including four new-build rigs which are under construction and two rigs being constructed utilizing the hulls of two of Diamond Offshore’s existing mid-water floaters. On September 30, 2012, Diamond Offshore’s drilling rigs were located offshore 14 countries in addition to the United States.

Boardwalk Pipeline is engaged in the interstate transportation and storage of natural gas. This segment consists of three interstate natural gas pipeline systems originating in the Gulf Coast region, Oklahoma and Arkansas, and extending north and east through the midwestern states of Tennessee, Kentucky, Illinois, Indiana and Ohio, with approximately 14,540 miles of pipeline.

HighMount is engaged in the exploration, production and marketing of natural gas and oil (including condensate and natural gas liquids), primarily located in the Permian Basin in West Texas. HighMount holds mineral rights on over 700,000 net acres with over 6,000 producing wells.

Loews Hotels owns and/or operates 18 hotels, 16 of which are in the United States and two are in Canada.

The Corporate and other segment consists primarily of corporate investment income, including investment gains (losses) from non-insurance subsidiaries, corporate interest expense and other unallocated expenses.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, other than the accounting for deferred acquisition costs, as further discussed in Note 1 herein. In addition, CNA does not maintain a distinct investment portfolio for each of its insurance segments, and accordingly, allocation of assets to each segment is not performed. Therefore, net investment income and investment gains (losses) are allocated based on each segment’s carried insurance reserves, as adjusted.

The following tables set forth the Company’s consolidated revenues and income (loss) attributable to Loews Corporation by business segment:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
(In millions)
Revenues (a):
CNA Financial:
CNA Specialty	$	957		$	874		$	2,798		$	2,640
CNA Commercial		1,091			962			3,163			3,040
Life & Group Non-Core		340			334			1,050			993
Other		77			6			101			29
Total CNA Financial		2,465			2,176			7,112			6,702
Diamond Offshore		730			881			2,319			2,582
Boardwalk Pipeline		271			269			862			843
HighMount		74			95			219			297
Loews Hotels		98			82			272			251
Corporate and other		77			(65	)		63			(27	)
Total	$	3,715		$	3,438		$	10,847		$	10,648
Income (loss) before income tax and noncontrolling interests (a):
CNA Financial:
CNA Specialty	$	214		$	123		$	589		$	527
CNA Commercial		193			81			519			357
Life & Group Non-Core		(60	)		(43	)		(111	)		(136	)
Other		(33	)		(34	)		(84	)		(110	)
Total CNA Financial		314			127			913			638
Diamond Offshore		234			335			732			974
Boardwalk Pipeline		58			46			216			141
HighMount		(248	)		25			(499	)		78
Loews Hotels		(1	)		(1	)		17			13
Corporate and other		52			(93	)		(15	)		(100	)
Total	$	409		$	439		$	1,364		$	1,744
Net income (loss) – Loews (a):
CNA Financial:
CNA Specialty	$	122		$	69		$	347		$	297
CNA Commercial		119			34			309			199
Life & Group Non-Core		(21	)		(15	)		(26	)		(50	)
Other		(20	)		(19	)		(53	)		(65	)
Total CNA Financial		200			69			577			381
Diamond Offshore		83			121			264			363
Boardwalk Pipeline		20			18			80			56
HighMount		(158	)		16			(319	)		50
Loews Hotels		(1	)					9			8
Corporate and other		33			(62	)		(11	)		(67	)
Total	$	177		$	162		$	600		$	791

(a) Investment gains (losses) included in Revenues, Income (loss) before income tax and noncontrolling interests and Net income (loss) – Loews are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Revenues and Income (loss) before income tax and noncontrolling interests:
CNA Financial:
CNA Specialty	$	2		$	(8	)	$	18		$	7
CNA Commercial		10			(15	)		34			13
Life & Group Non-Core		(3	)		(4	)		14			(7	)
Other		(1	)					(4	)		1
Total CNA Financial		8			(27	)		62			14
Corporate and other		(1	)					(3	)		1
Total	$	7		$	(27	)	$	59		$	15
Net income (loss) – Loews:
CNA Financial:
CNA Specialty	$	1		$	(5	)	$	11		$	4
CNA Commercial		6			(8	)		20			8
Life & Group Non-Core		(2	)		(2	)		8			(4	)
Other								(2	)		1
Total CNA Financial		5			(15	)		37			9
Corporate and other		(1	)					(2	)
Total	$	4		$	(15	)	$	35		$	9