Loews Corporation Reports Net Income for 2007

Business Wire, Feb 11, 2008

NEW YORK -- Loews Corporation (NYSE:LTR;CG) today reported consolidated net income (including both the Loews Group and Carolina Group) for the 2007 fourth quarter of $512 million, compared to $746 million in the 2006 fourth quarter. Consolidated net income for the year ended December 31, 2007 was $2,489 million, compared to $2,491 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 December 31, 2007 Compared with 2006

Net income attributable to Loews common stock for the fourth quarter of 2007 amounted to $384 million, or $0.72 per share, compared to $609 million, or $1.11 per share, in the comparable period of the prior year. The decrease in net income reflects reduced investment income and decreased results at the Company's 51% owned subsidiary, Diamond Offshore Drilling, Inc., primarily due to additional tax expense as a result of the repatriation of foreign earnings. Net income in 2007 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 $53 million (after tax and minority interest) in the fourth quarter of 2007 compared to net investment gains of $96 million (after tax and minority interest) in the prior year. The net investment losses in the fourth quarter of 2007 were primarily driven by $167 million (after tax and minority interest) of other-than-temporary impairment losses at the Company's 89% owned subsidiary, CNA Financial Corporation.

Net income per share of Carolina Group stock for the fourth quarter of 2007 was $1.18 per share, compared to $1.26 per share in the prior year. The decrease in net income is primarily due to a charge of $46 million, after taxes, related to litigation, partially offset by a lower effective tax rate as compared to 2006.

Consolidated revenues in the fourth quarter of 2007 amounted to $4.6 billion, compared to $4.8 billion in the comparable period of the prior year.

Year Ended December 31, 2007 Compared with 2006

Net income attributable to Loews common stock in 2007 amounted to $1,956 million, or $3.65 per share, compared to $2,075 million, or $3.75 per share, in the prior year. The decrease in net income reflects reduced investment income, reduced results at CNA and 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, partially offset by higher results from Lorillard, Inc.

Net income attributable to Loews common stock includes net investment losses of $67 million (after tax and minority interest) in 2007 compared to net investment gains of $69 million (after tax and minority interest) in the prior year. The net investment losses in 2007 were primarily driven by $428 million (after tax and minority interest) of other-than-temporary impairment losses at CNA which were partially offset by a gain of $93 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 2007 was $4.91 per share, compared to $4.46 per share in the prior year. The increase in net income is primarily due to higher effective unit prices resulting from price increases in December 2006 and September 2007, lower sales promotion expenses and a lower effective tax rate, partially offset by an increase in expenses for the State Settlement Agreements and a charge related to litigation.

Consolidated revenues in 2007 amounted to $18.4 billion, compared to $17.7 billion in the prior year.

At December 31, 2007, there were 529,683,628 shares of Loews common stock outstanding and 108,459,141 shares of Carolina Group stock outstanding. During the year ended December 31, 2007, the Company purchased 14,789,949 shares of Loews common stock at an aggregate cost of $672 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: (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; and (ii) Loews common stock, which represents 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, 2007, the outstanding Carolina Group stock represented a 62.4% interest in the economic performance of the Carolina Group.

On December 17, 2007, the Company announced that its Board of Directors has approved a plan to spin-off its entire ownership interest in Lorillard to holders of Carolina Group stock and Loews common stock in a tax-free transaction, as a result of which the Carolina Group, and all of the Carolina Group stock, would be eliminated and Lorillard would become a separate publicly traded company.