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Loews Annual Report (Amendment), Year Ended Dec 31, 2004

Filing Date
Filed May 10, 2005
Period End
December 31, 2004
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 May 10, 2005. Cited figures are marked; the original filing is the authoritative source.

Loews Corporation's Form 10-K/A (Amendment No. 1) for fiscal year 2004 restates the company's consolidated financial statements as of December 31, 2004 and 2003 and for the years 2004, 2002 and 2003.

The restatement corrects the accounting for several reinsurance contracts entered into by CNA Financial Corporation, a 91%-owned subsidiary, primarily with a former affiliate, and CNA's equity accounting for that affiliate. Per the filing, the restatement affects only Items 1, 6, 7, 8 and 15. As restated, consolidated net income for 2004 is $1,235.3 milliona (previously reported $1,231.3 million), and the net loss for 2003 is $598.6 million (previously reported $610.7 million).

Shareholders' equity at December 31, 2004 is $12,156.0 millionb, compared with $12,183.3 million previously reported. Total assets at December 31, 2004 are $73,634.9 million, compared with $73,749.5 million previously reported. Loews is a holding company whose subsidiaries operate commercial property and casualty insurance (CNA, 91% owned), cigarettes (Lorillard, wholly owned), hotels, offshore drilling (Diamond Offshore, 55% owned), interstate natural gas pipelines (Boardwalk Pipelines, wholly owned, which acquired Gulf South for approximately $1.14 billion in December 2004), and watches and clocks (Bulova).

Loews's Carolina Group tracking stock, outstanding at 68,019,435 shares as of February 18, 2005, represents a 39.21% economic interest in the Carolina Group. Net income attributable to Loews common stock was $1,050.8 millionc, or $5.66 per share, in 2004.

The filing states that CNA's further finite reinsurance reviews could lead to additional restatements that could have a material adverse impact on the company's financial condition. Deloitte & Touche LLP's report on the restated statements is dated May 5, 2005.

02—Key points

Key Highlights

  1. Restatement: The 10-K/A restates 2004, 2003 and 2002 results to correct CNA's accounting for reinsurance contracts with a former affiliate and CNA's equity accounting for that affiliate. Restated 2004 net income is $1,235.3 million, versus $1,231.3 million previously reported.
  2. Balance sheet effect: Restated shareholders' equity at December 31, 2004 is $12,156.0 million, versus $12,183.3 million previously reported. Restated total assets are $73,634.9 million, versus $73,749.5 million previously reported.
  3. Net loss in 2003: Restated consolidated net loss for 2003 is $598.6 million, compared with $610.7 million previously reported, reflecting the restatement's effect on CNA's results.
  4. Lorillard: Cigarette subsidiary Lorillard reported 2004 net income of $642.3 million, with Newport accounting for approximately 91.0% of its sales. The company recorded pretax charges of $845.9 million for State Settlement Agreement obligations in 2004.
  5. Acquisitions: Boardwalk Pipelines acquired Gulf South Pipeline in December 2004 for approximately $1.14 billion, funded with $575.0 million of interim loan proceeds and about $561.0 million of available cash.
  6. Ongoing risks: The filing states that further restatements of Loews's financial results are possible as a consequence of CNA's ongoing finite reinsurance reviews, which could have a material adverse impact on the company's financial condition.
  7. Litigation: Approximately 4,075 product liability cases were pending against U.S. cigarette manufacturers, with Lorillard a defendant in about 3,750 of them, including a $591.0 million Louisiana verdict (Scott) under appeal.

03—Questions

Frequently Asked Questions

  1. What was changed in this amended 10-K/A compared with the original filing?

    According to the explanatory note, the amendment reflects solely the restatement of Loews's consolidated financial statements as of December 31, 2004 and 2003 and for 2004, 2003 and 2002. The restatement corrects the accounting for several reinsurance contracts of CNA, primarily with a former affiliate, and CNA's equity accounting for that affiliate. It affects only Items 1 (supplementary insurance data and loss reserve development schedule), 6, 7, 8 and 15.

  2. How did the restatement change reported net income and equity?

    Restated 2004 net income is $1,235.3 million, up from $1,231.3 million previously reported. Restated 2003 net loss is $598.6 million, compared with $610.7 million previously reported. Shareholders' equity at December 31, 2004 is $12,156.0 million, down from $12,183.3 million. Restated 2004 net income per Loews common share is $5.66, versus $5.64 previously reported.

  3. Does the filing warn of further restatements?

    Yes. The filing states that CNA's analyses of other finite reinsurance contracts could be questioned in the context of a state regulatory examination, and that further restatements of Loews's financial results are possible, which could have a material adverse impact on the company's financial condition.

  4. What is the Carolina Group tracking stock?

    Carolina Group stock is a tracking stock intended to reflect the economic performance of a defined group of assets and liabilities, principally Loews's 100% ownership of Lorillard and an intergroup note of $1.9 billion at December 31, 2004. As of December 31, 2004, it represented a 39.19% economic interest in the Carolina Group. Its holders are shareholders of Loews Corporation and bear its equity risks.

04—Continue

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