Loews Corporation Reports Net Income for the Third Quarter of 2007

Business Wire, Oct 29, 2007

NEW YORK -- Loews Corporation (NYSE:LTR;CG) today reported consolidated net income (including both the Loews Group and Carolina Group) for the 2007 third quarter of $555.7 million, compared to $635.1 million in the 2006 third quarter. Consolidated net income for the nine months ended September 30, 2007 was $1,977.4 million, compared to $1,744.8 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]

Three Months Ended September 30, 2007 Compared with 2006

Net income attributable to Loews common stock for the third quarter of 2007 amounted to $410.0 million, or $0.77 per share, compared to $517.2 million, or $0.94 per share, in the comparable period of the prior year. The decrease in net income reflects a decline in results at the Company's 89% owned subsidiary, CNA Financial Corporation, and investment losses, partially offset by improved results at the Company's 51% owned subsidiary, Diamond Offshore Drilling, Inc., and higher results from Lorillard, Inc. The decrease in CNA's net income was driven by a charge of $96.4 million (after tax and minority interest) resulting from the settlement of an arbitration proceeding related to a run-off book of business. Net income in 2007 also reflects the July 31, 2007 acquisition, by the Company's newly formed subsidiary HighMount Exploration & Production LLC, of certain natural gas exploration and production assets from Dominion Resources, Inc.

Net income attributable to Loews common stock includes net investment losses of $31.1 million (after tax and minority interest) in the third quarter of 2007 compared to net investment gains of $30.7 million (after tax and minority interest) in the comparable period of the prior year. The net investment losses in the third quarter of 2007 were primarily driven by an increase in other-than-temporary impairment losses, which was partially offset by an increase in net realized results.

Net income per share of Carolina Group stock for the third quarter of 2007 was $1.34 per share, compared to $1.17 per share in the comparable period of the prior year. The increase in net income per share of Carolina Group stock was due to an increase in Lorillard net income primarily from higher effective unit prices resulting from a December 2006 price increase and lower promotion expenses, partially offset by an increase in expenses for the State Settlement Agreements. The Company is issuing a separate press release reporting the results of the Carolina Group for the third quarter of 2007.

Consolidated revenues in the third quarter of 2007 amounted to $4.7 billion, compared to $4.5 billion in the comparable period of the prior year.

Nine Months Ended September 30, 2007 Compared with 2006

Net income attributable to Loews common stock for the first nine months of 2007 amounted to $1,572.4 million, or $2.92 per share, compared to $1,465.5 million, or $2.64 per share, in the comparable period of the prior year. The increase in net income reflects improved results at Diamond Offshore, increased investment income and higher results from Lorillard, partially offset by a decrease in the share of Carolina Group earnings attributable to Loews common stock, due to the sale of Carolina Group stock in August and May of 2006.

Net income attributable to Loews common stock includes net investment losses of $14.3 million (after tax and minority interest) in the first nine months of 2007 compared to net investment losses of $27.9 million (after tax and minority interest) in the comparable period of the prior year. The net investment losses in the first nine months of 2007 were primarily driven by an increase in other-than-temporary impairment losses, which was partially offset by an increase in net realized results on derivative securities and a gain of $91.6 million (after tax) related to a reduction in the Company's ownership interest in Diamond Offshore from the conversion of Diamond Offshore's 1.5% convertible debt into Diamond Offshore common stock.

Net income per share of Carolina Group stock for the first nine months of 2007 was $3.73 per share, compared to $3.16 per share in the comparable period of the prior year. The increase in net income per share of Carolina Group stock was due to an increase in Lorillard net income primarily from higher effective unit prices resulting from a December 2006 price increase and lower promotion expenses, partially offset by an increase in expenses for the State Settlement Agreements.

Consolidated revenues in the first nine months of 2007 amounted to $14.0 billion, compared to $13.0 billion in the comparable period of the prior year.

At September 30, 2007, there were 529,594,291 shares of Loews common stock outstanding and 108,445,516 shares of Carolina Group stock outstanding. During the three and nine months ended September 30, 2007, the Company purchased 6,091,400 and 14,789,949 shares of Loews common stock at an aggregate cost of $287.6 million and $671.8 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.