Skip to content
AnalystLens

Loews Annual Report (Amendment), Year Ended Dec 31, 2003

Filing Date
Filed March 4, 2004
Period End
December 31, 2003
Security
L
In the record · 2016–202610-K1110-Q338-K83

L filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 83 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Deal closed8-K · Apr ’20Apr ’20
  3. Leadership change8-K · Feb ’22Feb ’22
  4. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K/A filed March 4, 2004. Cited figures are marked; the original filing is the authoritative source.

Loews Corporation (NYSE: L) reported a 2003 net loss of $610.7 milliona, compared with net income of $912.0 million in 2002, driven mainly by $1,667.4 million (after tax and minority interest) of net unfavorable prior year development at its 90% owned subsidiary CNA Financial Corporation.

Consolidated revenues were $16,461.0 millionb versus $17,456.5 million in 2002. Loss from continuing operations was $666.1 million, or $(4.21) per Loews common share, and Lorillard's net income fell $178.2 million. Book value per Loews common share was $60.92 at year-end 2003, versus $61.68 a year earlier.

This is an amended filing (Form 10-K/A, Amendment No. 1) that corrects several typographical and numerical errors. CNA took significant 2003 actions to replenish statutory capital. Loews bought $750.0 millionc of CNA convertible preferred stock in November 2003 and purchased $345.6 million of CCC surplus notes in February 2004, with further commitments.

CNA sold most of its Group Benefits business to Hartford on December 31, 2003, and agreed in February 2004 to sell its individual life insurance business to Swiss Re for approximately $690.0 milliond, with completion expected by March 31, 2004. Loews also acquired Texas Gas Transmission for approximately $1.05 billion in May 2003.

Lorillard's net income declined to $587.6 million, and the company disclosed continuing tobacco litigation, including the Engle judgment that was vacated on appeal. For investors, the key issues are the size of CNA's reserve charges, the capital support Loews has committed to CNA, the ongoing cost of tobacco settlement payments, and the pending RJR and B&W combination, which the filing says could further concentrate the U.S. tobacco market.

02—Key points

Key Highlights

  1. Net loss of $610.7 million in 2003, versus net income of $912.0 million in 2002; loss per Loews common share was $(3.91) on a net basis.
  2. CNA recorded net prior year development of $1,667.4 million after tax and minority interest, including $465.4 million for asbestos, environmental pollution and mass tort reserves, and a $356.9 million after-tax increase in reinsurance and insurance receivable bad debt reserves.
  3. Loews purchased $750.0 million of CNA convertible preferred stock in November 2003 and committed up to $500.0 million in surplus notes and an additional $150.0 million of capital support to CNA's property and casualty subsidiary.
  4. CNA agreed in February 2004 to sell its individual life insurance business to Swiss Re for approximately $690.0 million, expected to close by March 31, 2004.
  5. Lorillard's revenues fell to $3,295.4 million from $3,843.7 million, and its net income fell to $587.6 million from $765.8 million; Newport accounted for approximately 90.2% of Lorillard's 2003 unit sales.
  6. Loews acquired Texas Gas Transmission in May 2003 for approximately $1.05 billion including $250.0 million of assumed debt.
  7. Book value per Loews common share was $60.92 at December 31, 2003, compared with $61.68 at December 31, 2002.

03—Questions

Frequently Asked Questions

  1. Why did Loews swing from a profit in 2002 to a loss in 2003?

    The loss was driven primarily by CNA's 2003 reserve strengthening. CNA recorded $1,667.4 million of after-tax net prior year development, including $1,202.0 million for core reserves and $465.4 million for asbestos, environmental pollution and mass tort reserves. CNA also increased its bad debt reserves for reinsurance and insurance receivables by $356.9 million after tax. The filing also notes lower Lorillard results and a $116.4 million after-tax loss on the sale of the Group Benefits business.

  2. How much capital has Loews committed to CNA?

    Loews bought $750.0 million of a new series of CNA convertible preferred stock in November 2003. It committed up to $500.0 million in surplus notes by February 27, 2004, and an additional $150.0 million by March 31, 2004, to support the statutory capital of Continental Casualty Company. In February 2004 Loews purchased $345.6 million of surplus notes from CCC, with $300.0 million bought because CNA had not yet completed the individual life sale.

  3. What is the outlook for Lorillard and tobacco litigation?

    The filing says Lorillard faces substantial litigation, including the Engle case, in which a $16.3 billion punitive award against Lorillard was vacated on appeal; plaintiffs have sought review by the Florida Supreme Court. The U.S. Department of Justice seeks $280.0 billion in disgorgement, with trial scheduled for September 2004. Lorillard's 2003 cash payment under the State Settlement Agreements was approximately $800.0 million, and the company says these payments will materially adversely affect future cash flows and operating income.

  4. Is the company's common stock dividend changing?

    The filing reports that Loews paid regular dividends of $0.15 per share of Loews common stock in each quarter of 2003 and 2002, for a total of $0.60 per year. Carolina Group stock dividends increased to $0.455 per share quarterly beginning in the second quarter of 2003.

04—Continue

← View all 10-K filings