DEFA14A 1 bodyamend_completehtml.htm LOEWS CORP. DEFA14A Complete Proxy Stmt./Amend 2005 Licensed to: Loews Corp Document Created using EDGARIZER HTML 3.0.0.24264 Copyright 2005 EDGARfilings, Ltd., an IEC company. All rights reserved EDGARfilings.com

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

Filed by the Registrant x

Filed by a Party other than the Registrant o

Check the appropriate box:

| o | Preliminary
Proxy Statement |
| --- | --- |
| o | Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)) |
| o | Definitive
Proxy Statement |
| x | Definitive
Additional Materials |
| o | Soliciting
Material Pursuant to § 240.14a-12 |

| Loews
Corporation |
| --- |
| (Name
of Registrant as Specified In Its Charter) |

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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| --- | --- |
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667 Madison Avenue

New York, New York 10021-8087

To the Shareholders:

This year’s Annual Meeting of Shareholders of Loews Corporation (the “Company”) is only one week away. The meeting will be held on Tuesday, May 10, 2005, at 11:00 A.M., New York City time, at The Regency Hotel, 540 Park Avenue, New York, New York, for the purposes set forth in the notice of meeting accompanying the proxy statement we previously sent to you on March 25, 2005. Since your vote is important, a duplicate proxy is enclosed for your convenience.

In addition, the Company issued a press release today announcing its earnings for the first quarter of 2005 and that it will restate its previously issued financial statements for the years ended December 31, 2002, 2003 and 2004. A copy of the press release is included with this letter.

If you have already submitted a proxy and do not wish to change your vote, you need not take any further action at this time. If you wish to change a vote previously cast or vote now for the first time, please see the instructions set forth on the enclosed proxy which will permit you to vote by mail, over the telephone or through the internet. Your submission of a later dated proxy will revoke any prior proxy you may have previously submitted.


LOEWS
CORPORATION
Dated: May
3, 2005

Contact: Peter W. Keegan Senior Vice President (212) 521-2950 Candace Leeds V.P. of Public Affairs (212) 521-2416 Joshua E. Kahn Investor Relations (212) 521-2788

FOR IMMEDIATE RELEASE

LOEWS CORPORATION REPORTS

NET INCOME FOR THE FIRST QUARTER OF 2005

NEW YORK, May 3, 2005—Loews Corporation (NYSE:LTR;CG) today reported consolidated net income (including both the Loews Group and Carolina Group) for the 2005 first quarter of $339.7 million, compared to $44.9 million in the 2004 first quarter. Income before net investment losses attributable to Loews common stock amounted to $308.0 million in the first quarter of 2005 compared to $310.8 million in the comparable 2004 quarter. Net income attributable to Loews common stock includes net investment losses of $14.8 million (after tax and minority interest), compared to losses of $300.3 million in the comparable 2004 quarter, which included an impairment loss of $368.3 million (after tax and minority interest) for CNA’s sale of its individual life insurance business.

The Company will restate its financial results for prior years to correct CNA’s accounting for several reinsurance contracts, primarily with a former affiliate, and CNA’s equity accounting for that affiliate. The Company will file a Form 10-K/A for 2004 reflecting the effects of the restatement, which will reduce shareholders’ equity as of December 31, 2004 by $27.3 million, or 0.2%.

Net income and earnings per share information attributable to Loews common stock and Carolina Group stock is summarized in the table below.

| (In
millions, except per share data) | Three
Months Ended March 31, — 2005 | 2004 | | |
| --- | --- | --- | --- | --- |
| | | (Restated) | | |
| Net
income attributable to Loews common stock: | | | | |
| Income
before net investment losses | $ 308.0 | $ | 310.8 | |
| Net
investment losses (a) | (14.8 | ) | (300.3 | ) |
| Net
income attributable to Loews common stock | 293.2 | | 10.5 | |
| Net
income attributable to Carolina Group stock | 46.5 | | 34.4 | |
| Consolidated
net income | $ 339.7 | $ | 44.9 | |
| Net
income per share: | | | | |
| Loews
common stock | $ 1.58 | $ | 0.06 | |
| Carolina
Group stock | $ 0.68 | $ | 0.59 | |
| Book
value per share of Loews common stock at: March
31, 2005 | $ 66.44 | | | |
| December 31, 2004 | $ 66.56 | | | |

(a) Includes an impairment loss of $368.3 (after tax and minority interest) in 2004 related to CNA's sale of its individual life insurance business.

Page 1 of 6

Net income attributable to Loews common stock for the first quarter of 2005 amounted to $293.2 million or $1.58 per share, compared to $10.5 million or $0.06 per share in the comparable period of the prior year.

Net income attributable to Carolina Group stock for the first quarter of 2005 was $46.5 million or $0.68 per Carolina Group share, compared to $34.4 million, or $0.59 per Carolina Group share in the first quarter of 2004. The Company is issuing a separate press release reporting the results of the Carolina Group for the quarter ended March 31, 2005.

Consolidated revenues in the first quarter of 2005 amounted to $3.7 billion, compared to $3.5 billion in the comparable 2004 quarter.

Financial Restatement

The Company will restate its financial results for prior years to correct CNA’s accounting for several reinsurance contracts, primarily with a former affiliate, and CNA’s equity accounting for that affiliate. The impact of this revised accounting results in a reduction to shareholders’ equity as of December 31, 2004 of $27.3 million, or 0.2%, and an increase in net income attributable to Loews common stock of $1.3 million, or $0.01 per Loews common share, for the three months ended March 31, 2004.

The Company will file a Form 10-K/A for 2004 reflecting the effects of the restatement as follows:

| Restated
Results as of and for the Year Ended December 31 | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | 2004 | | 2003 | | | | 2002 | |
| | Previously | | Previously | | | | Previously | |
| (In
millions, except per share data) | Reported | Restated | Reported | | Restated | | Reported | Restated |
| Shareholders’
equity | $ 12,183.3 | $ 12,156.0 | $ 11,054.3 | | $ 11,023.0 | | $ 11,235.2 | $ 11,191.8 |
| Net
income (loss) attributable to: | | | | | | | | |
| Loews
common stock | $ 1,046.8 | $ 1,050.8 | $ (725.9 | ) | $ (713.8 | ) | $ 771.3 | $ 786.2 |
| Carolina
Group stock | 184.5 | 184.5 | 115.2 | | 115.2 | | 140.7 | 140.7 |
| Total | $ 1,231.3 | $ 1,235.3 | $ (610.7 | ) | $ (598.6 | ) | $ 912.0 | $ 926.9 |
| Net
income (loss) per share attributable to: | | | | | | | | |
| Loews
common stock | $ 5.64 | $ 5.66 | $ (3.91 | ) | $ (3.85 | ) | $ 4.11 | $ 4.19 |
| Carolina
Group stock | $ 3.15 | $ 3.15 | $ 2.76 | | $ 2.76 | | $ 3.50 | $ 3.50 |

This restatement is based upon reconsideration of CNA’s accounting for its former equity interest in Accord Re Ltd. (“Accord”), and for several reinsurance contracts with Accord, but also includes two reinsurance agreements with unaffiliated parties that are immaterial in the aggregate. A subsidiary of The Continental Corporation (“TCC”) acquired a 49% ownership interest in Accord, a Bermuda company, in 1989 upon Accord’s formation. TCC also provided capital support to Accord through a guarantee from a TCC subsidiary. TCC was acquired by CNA in 1995.

Reinsurance relationships with Accord involved both property and casualty assumed reinsurance risks that were written by TCC subsidiaries and 100% ceded to Accord or reinsured from other cedents by Accord. Stop-loss protection in relation to those risks was obtained by Accord from a wholly owned TCC subsidiary.

Page 2 of 6

All of CNA’s reinsurance agreements with Accord relating to property risks were commuted as of year-end 2001, leaving six reinsurance agreements with Accord relating to casualty risks outstanding at that time. As of March 31, 2005 CNA provides no capital support to and has no ownership interest in Accord. During the period of CNA’s minority ownership, Accord also maintained reinsurance relationships with reinsurers unaffiliated with CNA.

As previously reported CNA continues to respond to various subpoenas, interrogatories and other requests for information received from state and federal regulatory authorities relating to on-going insurance industry investigations of non-traditional insurance products, including finite reinsurance. As also previously reported, CNA agreed to undergo a state regulatory financial examination of the Continental Casualty Company and its insurance subsidiaries as of December 31, 2003. Such review includes examination of certain of the finite reinsurance contracts entered into by CNA and whether such contracts possess sufficient risk transfer characteristics necessary to qualify for accounting treatment as reinsurance. In the course of complying with these requests CNA conducted a comprehensive review of its finite reinsurance relationships, including contracts with Accord. It is possible that CNA’s analyses of or accounting treatment for other finite reinsurance contracts could be questioned or disputed in the context of the referenced state regulatory examination, and further restatements of the Company’s financial results are possible as a consequence, which could have a material adverse impact on the Company’s financial condition.

#

At March 31, 2005, the book value per share of Loews common stock was $66.44, compared to $66.56 at December 31, 2004. The decline in book value per share reflects reduced unrealized gains in CNA’s fixed maturities portfolio and dividends paid to shareholders offsetting net income for the first quarter of 2005.

At March 31, 2005, there were 185,637,349 shares of Loews common stock outstanding and 68,027,309 shares of Carolina Group stock outstanding. Depending on market and other 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, 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 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 March 31, 2005, the outstanding Carolina Group stock represents a 39.22% economic interest in the economic performance of the Carolina Group.

A conference call to discuss the first quarter results of Loews Corporation has been scheduled for 11:00 a.m. EDT, Tuesday, May 3, 2005. A live broadcast of the call will be available online at the Loews Corporation website (www.loews.com). Please go to the website at least ten minutes before the event begins to register and to download and install any necessary audio software. Those interested in participating in the question and answer session of the conference call should dial (877) 692-2592. An online replay will be available at the Company’s website following the call.

A conference call to discuss the first quarter results of CNA has been scheduled for 10:00 a.m. EDT, Tuesday, May 3, 2005. A live broadcast of the call will be available online at the CNA website (http://investors.cna.com). Please go to the website at least ten minutes before the event begins to register and to download and install any necessary audio software. Those interested in participating in the question

Page 3 of 6

and answer session of the conference call should dial (800) 478-6251. An online replay will be available at CNA’s website following the call.

FORWARD-LOOKING STATEMENTS

Statements contained in this press release which are not historical facts are “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are inherently uncertain and subject to a variety of risks that could cause actual results to differ materially from those expected by management of the Company and CNA. A discussion of the important risk factors and other considerations that could materially impact these matters as well as the Company’s overall business and financial performance can be found in the Company’s reports filed with the Securities and Exchange Commission and readers of this release are urged to review those reports carefully when considering these forward-looking statements. Copies of these reports are available through the Company’s website (www.loews.com). Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Any such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

Page 4 of 6

Loews Corporation and Subsidiaries

Financial Review

| | Three
Months Ended March 31, — 2005 | 2004
(e) | |
| --- | --- | --- | --- |
| | | (Restated) | |
| | (Amounts
in millions, except | | |
| | per
share data) | | |
| Revenues: | | | |
| Insurance
premiums and net investment income (a) | $ 2,330.5 | $ 2,246.5 | |
| Manufactured
products (b) | 834.2 | 808.2 | |
| Other | 576.5 | 438.6 | |
| Total | 3,741.2 | 3,493.3 | |
| Expenses: | | | |
| Insurance
claims & policyholders’ benefits | 1,433.2 | 1,638.2 | |
| Cost
of manufactured products sold (b) | 505.7 | 487.5 | |
| Other | 1,250.4 | 1,287.2 | |
| Total | 3,189.3 | 3,412.9 | |
| | 551.9 | 80.4 | |
| Income
tax expense | 177.3 | 46.2 | |
| Minority
interest | 34.9 | (10.7 | ) |
| Total | 212.2 | 35.5 | |
| Net
Income | $ 339.7 | $ 44.9 | |
| Net
income attributable to: | | | |
| Loews
common stock | $ 293.2 | $ 10.5 | |
| Carolina
Group stock (c) | 46.5 | 34.4 | |
| | $ 339.7 | $ 44.9 | |
| Net
income per share of Loews common stock (d): | $ 1.58 | $ 0.06 | |
| Net
income per share of Carolina Group stock (d) | $ 0.68 | $ 0.59 | |
| Weighted
number of shares outstanding: | | | |
| Loews
common stock | 185.61 | 185.47 | |
| Carolina
Group stock | 68.00 | 57.97 | |

| (a) | Includes
investment losses of $22.8 and $452.0 (including an impairment loss of
$565.9 in 2004 related to CNA’s sale of its individual life insurance
business) for the respective periods. |
| --- | --- |
| (b) | Includes
excise taxes of $156.2 and $156.1 paid on sales of manufactured products
for the respective periods. |
| (c) | Represents
39.20% and 33.43% of the economic interest in the Carolina Group for the
respective periods. |
| (d) | Earnings
per common share-assuming dilution is not presented because securities
that could potentially dilute basic earnings per common share in the
future would have been insignificant or antidilutive for the periods
presented. |
| (e) | Restated
to correct CNA’s accounting for several reinsurance contracts, primarily
with a former affiliate, and CNA’s equity accounting for that
affiliate. |

Page 5 of 6

Loews Corporation and Subsidiaries

Additional Financial Information

| | Three
Months Ended March 31, — 2005 | 2004
(g) | | |
| --- | --- | --- | --- | --- |
| | | (Restated) | | |
| | (In
millions) | | | |
| Revenues: | | | | |
| CNA
Financial | $ 2,383.8 | $ | 2,724.7 | |
| Lorillard
(a) | 808.3 | | 775.7 | |
| Boardwalk
Pipelines | 151.3 | | 86.0 | |
| Diamond
Offshore | 264.7 | | 185.9 | |
| Loews
Hotels | 92.1 | | 80.7 | |
| Investment
income-net and other (b) | 63.8 | | 92.3 | |
| | 3,764.0 | | 3,945.3 | |
| Investment
(losses) gains: | | | | |
| CNA
Financial (c) | (16.7 | ) | (455.0 | ) |
| Corporate
and other | (6.1 | ) | 3.0 | |
| | (22.8 | ) | (452.0 | ) |
| Total | $ 3,741.2 | $ | 3,493.3 | |
| Income
Before taxes: | | | | |
| CNA
Financial | $ 264.4 | $ | 291.3 | |
| Lorillard
(e) | 154.9 | | 152.4 | |
| Boardwalk
Pipelines | 62.8 | | 43.1 | |
| Diamond
Offshore | 43.0 | | (16.1 | ) |
| Loews
Hotels | 21.3 | | 11.3 | |
| Investment
income-net and other (b) (d) | (48.5 | ) | (6.0 | ) |
| | 497.9 | | 476.0 | |
| Investment
(losses) gains: | | | | |
| CNA
Financial (c) | (16.7 | ) | (455.0 | ) |
| Corporate
and other | (5.4 | ) | 3.0 | |
| | (22.1 | ) | (452.0 | ) |
| Loews
common stock | 475.8 | | 24.0 | |
| Carolina
Group stock (f) | 76.1 | | 56.4 | |
| Total | $ 551.9 | $ | 80.4 | |
| Net
Income: | | | | |
| CNA
Financial | $ 180.0 | $ | 195.5 | |
| Lorillard
(e) | 94.7 | | 93.0 | |
| Boardwalk
Pipelines | 37.9 | | 26.0 | |
| Diamond
Offshore | 14.2 | | (6.9 | ) |
| Loews
Hotels | 13.2 | | 6.9 | |
| Investment
income-net and other (b) (d) | (32.0 | ) | (3.7 | ) |
| | 308.0 | | 310.8 | |
| Investment
(losses) gains : | | | | |
| CNA
Financial (c) | (11.7 | ) | (302.2 | ) |
| Corporate
and other | (3.1 | ) | 1.9 | |
| | (14.8 | ) | (300.3 | ) |
| Loews
common stock | 293.2 | | 10.5 | |
| Carolina
Group stock (f) | 46.5 | | 34.4 | |
| Total | $ 339.7 | $ | 44.9 | |

| (a) | Includes
excise taxes of $156.2 and $156.1 paid on sales of manufactured products
for the respective periods. |
| --- | --- |
| (b) | Consists
primarily of corporate investment income, interest expenses, the
operations of Bulova Corporation, equity earnings of Majestic Shipping
Corporation and other unallocated expenses. |
| (c) | Includes
an impairment loss of $565.9 ($368.3 after tax and minority interest)
related to CNA’s sale of its individual life insurance business for the
three months ended March 31, 2004. |
| (d) | Includes
additional interest expense of $35.5 and $17.0 ($23.1 and $11.1 after
taxes) related to charges from the early redemption of the Company’s
long-term debt for the three months ended March 31, 2005 and 2004,
respectively. |
| (e) | The
Loews Group’s intergroup interest in the earnings of the Carolina Group
declined from 66.57% in 2004 to 60.80% in 2005 due to the sale of Carolina
Group stock by Loews in December of 2004. |
| (f) | Represents
39.20% and 33.43% of the economic interest in the Carolina Group for the
respective periods. |
| (g) | Restated
to correct CNA’s accounting for several reinsurance contracts, primarily
with a former affiliate, and CNA’s equity accounting for that
affiliate. |

Page 6 of 6

| COMMON
STOCK | |
| --- | --- |
| LOEWS
CORPORATION | Proxy |
| This
Proxy is Solicited on Behalf of the Board of
Directors | |

Th e undersigned hereby constitutes and appoints Gary W. Garson, Peter W. Keegan and Kenneth J. Zinghini and each of them, each with full power of substitution, true and lawful attorneys, agents and proxies with all the powers the undersigned would possess if personally present, to vote all shares of Common Stock of the undersigned in Loews Corporation at the Annual Meeting of Shareholders to be held at The Regency Hotel, 540 Park Avenue, New York, New York, on May 10, 2005, at 11:00 A.M., New York City time, and at any adjournments thereof, upon the matters set forth in the Notice of Meeting and accompanying Proxy Statement and, in their judgment and discretion, upon such other business as may properly come before the meeting.

This Proxy when properly executed will be voted in the manner directed by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF DIRECTORS, “FOR” PROPOSALS 2, 3 and 4 AND “AGAINST” PROPOSALS 5, 6, 7 and 8.

THIS PROXY IS CONTINUED ON THE REVERSE SIDE

PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY

Address Change/Comments (Mark the corresponding box on the reverse side)


							for
Address		o
							Change
or
							Comments
							PLEASE
SEE REVERSE SIDE
The
Board of Directors recommends a vote FOR
Items 1, 2, 3 and 4						The
Board of Directors recommends a vote AGAINST Items 5, 6, 7, and 8
Item
1-ELECTION OF DIRECTORS					WITHHELD		FOR	AGAINST	ABSTAIN
Nominees:	03)
C.M. Diker	06)
P.A. Laskaway	09)
J.S. Tisch	FOR	FOR
ALL	Item
5-SHAREHOLDER PROPOSAL-	o	o	o
01)
J.L. Bower	04)
P.J. Fribourg	07)
G.R. Scott	10)
J.M. Tisch	o	o	CUMULATIVE
VOTING
02)
J. Brademas	05)
W.L. Harris	08)
A.H. Tisch	11)
P.R. Tisch
WITHHELD
FOR: (Write that Nominee’s name in the space
provided.)						Item
6-SHAREHOLDER PROPOSAL-POLITICAL	o	o	o
						CONTRIBUTIONS
			FOR	AGAINST	ABSTAIN	Item
7-SHAREHOLDER PROPOSAL-	o	o	o
Item
2-RATIFY DELOITTE & TOUCHE LLP AS INDEPENDENT			o	o	o	ENVIRONMENTAL TOBACCO
SMOKE
AUDITORS
						Item
8-SHAREHOLDER PROPOSAL-	o	o	o
Item
3-APPROVE AMENDED AND RESTATED STOCK OPTION			o	o	o	CIGARETTE
IGNITION PROPENSITY
PLAN
Item
4-APPROVE AMENDED AND RESTATED INCENTIVE			o	o	o
COMPENSATION
PLAN FOR
EXECUTIVE
OFFICERS
						_____
						\| \| \|	Please
sign EXACTLY as name appears on this Proxy. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
Corporate and partnership proxies should be signed by an authorized person
indicating the person’s title.
Signature(s)							Dated		,
2005
COMMON
STOCK

Vote by Internet or Telephone or Mail

24 Hours a Day, 7 Days a Week

Internet and telephone voting is available through 11:59 PM Eastern Time

on May 9, 2005.

Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner

as if you marked, signed and returned your proxy card.

\|	Internet	\|		\|	Telephone	\|	\|	Mail	\|
\|	http://www.proxyvoting.com/ltr	\|		\|	1-866-540-5760	\|	\|	Mark,
sign and date	\|
\|	Use
the Internet to vote your proxy.	\|	OR	\|	Use
any touch-tone telephone to	\|	OR	\|	your
proxy card and	\|
\|	Have
your proxy card in hand	\|		\|	vote
your proxy. Have your proxy	\|		\|	return
it in the	\|
\|	when
you access the web site.	\|		\|	card
in hand when you call.	\|		\|	enclosed
postage-paid	\|
\|		\|		\|		\|	\|	envelope.	\|

If you vote your proxy by Internet or by telephone,

you do NOT need to mail back your proxy card.

| CAROLINA
GROUP STOCK | |
| --- | --- |
| LOEWS
CORPORATION | Proxy |
| This
Proxy is Solicited on Behalf of the Board of
Directors | |

Th e undersigned hereby constitutes and appoints Gary W. Garson, Peter W. Keegan and Kenneth J. Zinghini and each of them, each with full power of substitution, true and lawful attorneys, agents and proxies with all the powers the undersigned would possess if personally present, to vote all shares of Carolina Group Stock of the undersigned in Loews Corporation at the Annual Meeting of Shareholders to be held at The Regency Hotel, 540 Park Avenue, New York, New York, on May 10, 2005, at 11:00 A.M., New York City time, and at any adjournments thereof, upon the matters set forth in the Notice of Meeting and accompanying Proxy Statement and, in their judgment and discretion, upon such other business as may properly come before the meeting.