Loews Corporation Reports Net Income for 2006

Business Wire, Feb 12, 2007

NEW YORK -- Loews Corporation (NYSE:LTR;CG) today reported consolidated net income (including both the Loews Group and Carolina Group) for the 2006 fourth quarter of $746.5 million, compared to $127.6 million in the 2005 fourth quarter. Consolidated net income for the year ended December 31, 2006 was $2,491.3 million, compared to $1,211.6 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:

[TABLE OMITTED]

(a) Reflects Loews Corporation's sales of 15 million shares of Carolina Group stock in each of August and 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.

Three Months Ended December 31, 2006 Compared With 2005

Net income attributable to Loews common stock for the fourth quarter of 2006 amounted to $609.4 million, or $1.11 per share, compared to $46.0 million, or $0.08 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 89% owned subsidiary, CNA Financial Corporation and the Company's 54% owned subsidiary, Diamond Offshore Drilling, Inc., partially offset by a decrease in the share of Carolina Group earnings attributable to Loews common stock, due to the sale of additional Carolina Group stock in August and May 2006.

Net income attributable to Loews common stock includes net investment gains of $96.5 million (after tax and minority interest) compared to net investment losses of $49.0 million (after tax and minority interest) in the comparable period of the prior year.

Net income attributable to Carolina Group stock for the fourth quarter of 2006 was $137.1 million, or $1.26 per Carolina Group share, compared to $81.6 million, or $1.11 per Carolina Group share in the comparable period of the prior year. The increase in net income attributable to Carolina Group stock was due to an increase in Lorillard Inc. net income primarily driven by higher unit sales, and reflects an increase in the number of Carolina Group shares outstanding. The Company is issuing a separate press release reporting the results of the Carolina Group for the fourth quarter of 2006.

Consolidated revenues in the fourth quarter of 2006 amounted to $4.9 billion, compared to $4.1 billion in the comparable period of the prior year.

Year Ended December 31, 2006 Compared With 2005

Net income attributable to Loews common stock for the year ended 2006 amounted to $2,074.9 million, or $3.75 per share, compared to $960.3 million, or $1.72 per share, in the prior year. The results for the year ended December 31, 2005 included catastrophe losses at CNA of $304.8 million (after tax and minority interest) including the impact from Hurricanes Wilma, Katrina, Rita, Dennis and Ophelia and a benefit of $136.5 million related to a federal income tax settlement due primarily to net refund interest and the release of federal income tax reserves at CNA. The increase in net income was primarily due to improved results at CNA and Diamond Offshore, partially offset by a decrease in the share of Carolina Group earnings attributable to Loews common stock, as discussed above.

Net income attributable to Loews common stock includes net investment gains of $68.6 million (after tax and minority interest) compared to net investment losses of $10.3 million (after tax and minority interest) in the prior year.

Net income attributable to Carolina Group stock for the year ended 2006 was $416.4 million, or $4.46 per Carolina Group share, compared to $251.3 million, or $3.62 per Carolina Group share in the prior year. The increase in net income attributable to Carolina Group stock was due to an increase in Lorillard Inc. net income driven by higher effective unit prices reflecting lower sales promotion expenses (accounted for as a reduction to net sales), increased unit sales, and reflects an increase in the number of Carolina Group shares outstanding.

Consolidated revenues for the year ended 2006 amounted to $17.9 billion, compared to $16.0 billion in the prior year.

At December 31, 2006, there were 544,203,457 shares of Loews common stock outstanding and 108,325,806 shares of Carolina Group stock outstanding. During the three months and year ended December 31, 2006, the Company purchased 6,432,010 and 13,934,510 shares of Loews common stock at an aggregate cost of $255.0 and $509.8 million, respectively. 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: (i) 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 (ii) 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 December 31, 2006, the outstanding Carolina Group stock represents a 62.3% economic interest in the economic performance of the Carolina Group.