Exhibit 99.2
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
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CAROLINA GROUP REPORTS NET INCOME
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FOR THE FIRST QUARTER OF 2004
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NEW YORK, April 29, 2004-Loews Corporation (NYSE:LTR) today reported
Carolina Group net income for the 2004 first quarter of $103.0 million,
compared to $124.4 million in the 2003 first quarter. Net income for the first
quarter of 2003 included a $28.0 million charge ($17.1 million after taxes) to
resolve indemnification claims and trademark matters in connection with the
1977 sale by Lorillard of its international business. Net income attributable
to Carolina Group stock (NYSE:CG) for the first quarter of 2004 was $34.4
million, or $0.59 per share of Carolina Group stock, compared to $28.6
million, or $0.72 per share in the prior year.
The increase in net income attributable to Carolina Group stock for the
first quarter of 2004, as compared to the corresponding period of the prior
year, reflects the sale by Loews Corporation of 18,055,000 shares of Carolina
Group stock in November of 2003, partially offset by the lower overall results
of the Carolina Group. Net income per share of Carolina Group stock was not
impacted by the sale of Carolina Group stock in November of 2003. Carolina
Group stock represents a 33.43% and 23.01% economic interest in the Carolina
Group for the three months ended March 31, 2004 and 2003, respectively.
Net sales for the Carolina Group were $767.9 million in the first quarter of
2004, compared to $844.2 million in the 2003 first quarter. The decline in net
sales reflects increased sales promotion expenses and a decrease in unit sales
volume of 1.4%.
Net income attributable to the Loews Group intergroup interest for the first
quarter of 2004 amounted to $68.6 million, compared to $95.8 million in the
comparable period of the prior year. The decline reflects the November of 2003
sale of Carolina Group stock discussed above and the lower overall results of
the Carolina Group.
Results of operations of the Carolina Group include interest expense of
$24.6 and $29.5 million, net of taxes, for the three months ended March 31,
2004 and 2003, respectively, on
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notional intergroup debt. At March 31, 2004, $1.998 billion principal amount
of notional intergroup debt was outstanding.
The Carolina Group stock, commonly called a tracking stock, is intended to
reflect the economic performance of a defined group of the Company's assets
and liabilities, referred to as the Carolina Group, principally consisting of
the Company's subsidiary Lorillard, Inc. The Carolina Group, a notional group,
is not a separate legal entity. The purpose of this financial information is
to provide investors with additional information to use in analyzing the
results of operations and financial condition of the Carolina Group, and this
financial information should be read in conjunction with the consolidated
financial information of Loews Corporation.
As of March 31, 2004, there were 57,966,750 shares of Carolina Group stock
outstanding representing a 33.43% economic interest. Depending on market
conditions, the Company, for the account of the Carolina Group, from time to
time may purchase shares of Carolina Group stock in the open market or
otherwise.
# # #
Loews Corporation has issued a separate press release reporting its
consolidated results for the first quarter of 2004, which accompanies this
press release.
A conference call to discuss the first quarter results of Loews Corporation
has been scheduled for 11:00 a.m. EDT, Thursday, April 29, 2004. 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.
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Carolina Group
Financial Review
Three Months Ended
March 31,
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2004 2003
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(Amounts in millions,
except per share data)
Net sales(a) $ 767.9 $ 844.2
Cost of sales (a)(b) 467.3 466.5
Selling, advertising and administrative(c) 100.0 134.7
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Total operating costs and expenses 567.3 601.2
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Operating income 200.6 243.0
Investment income 8.5 8.8
Interest expense (40.3) (48.2)
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Income before income taxes 168.8 203.6
Income taxes 65.8 79.2
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Net income 103.0 124.4
Earnings attributable to the Loews Group intergroup
interest(d) 68.6 95.8
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Income attributable to Carolina Group shareholders(e) $ 34.4 $ 28.6
==================
Per share of Carolina Group stock(f) $ 0.59 $ 0.72
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Weighted number of shares outstanding 57.97 39.91
==================
(a) Includes excise taxes of $156.1 and $156.9 for the three months ended
March 31, 2004 and 2003.
(b) Includes charges of $201.1 and $197.5 ($122.7 and $120.7 after taxes) to
accrue obligations under the State Settlement Agreements for the
respective periods.
(c) Includes a $28.0 charge in 2003 ($17.1 after taxes) to resolve
indemnification claims and trademark matters in connection with the 1977
sale by Lorillard of its international business.
(d) The Loews Group's intergroup interest in the earnings of the Carolina
Group reflected share equivalents amounting to 115,445,000 shares of
173,411,750 share and share equivalents outstanding in 2004 and share
equivalents amounting to 133,500,000 shares of 173,750,000 share and
share equivalents outstanding in 2003. As of March 31, 2004, there were
57,966,750 shares of Carolina Group stock outstanding.
(e) Represents 33.43% and 23.01% of the economic interest in the Carolina
Group for the three months ended March 31, 2004 and 2003.
(f) Earnings per common share-assuming dilution is not presented because
securities that could potentially dilute basic earnings per share in the
future would have been insignificant or antidilutive for the periods
presented.
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Carolina Group
Supplemental Information
The following information regarding unit volume shipped by Lorillard Tobacco
Company to its direct buying customers by brand follows (all units in
thousands):
Three Months Ended
March 31,
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2004 2003
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Full Price Brands
Total Newport 7,379,958 7,471,365
Total Kent Family 210,449 268,989
Total True 160,764 192,744
Total Max 11,307 13,608
Total Satin 2,094 2,826
Total Triumph 528 1,017
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Total Full Price Brands 7,765,100 7,950,549
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Price/Value Brands
Total Old Gold 218,814 246,345
Total Maverick 155,562 82,674
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Total Price/Value Brands 374,376 329,019
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Total Domestic Cigarettes 8,139,476 8,279,568
Total Puerto Rico and U.S. Possessions 211,864 192,018
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Grand Total 8,351,340 8,471,586
=======================
Notes:
1. This information is unaudited and is not adjusted for returns.
2. Domestic unit volume includes units sold as well as promotional units, and
excludes volumes for Puerto Rico and U.S. Possessions.
3. Unit volume for a quarter is not necessarily indicative of unit volume for
any subsequent period.
4. Unit volume is not necessarily indicative of the level of revenues for any
period.
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