EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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CONTACT:
MEDIA: ANALYSTS:
Charles M. Boesel, 312/822-2592 Dawn M. Jaffray, 312/822-7757
Katrina W. Parker, 312/822-5167
CNA FINANCIAL ANNOUNCES REVISION TO
4TH QUARTER AND YEAR-END 2002 RESULTS
CHICAGO, MARCH 19, 2003 --- CNA Financial Corporation (NYSE: CNA) today
announced a revision to its previously reported fourth quarter 2002 results to
reflect an additional $32 million of after-tax impairment losses on equity
securities. The revised fourth quarter 2002 net income is $50 million, or $0.21
per share, compared with the previously reported $82 million, or $0.36 per
share. The revised net income for the year ended December 31, 2002 is $155
million, or $0.68 per share, compared with the previously reported $187 million,
or $0.83 per share. The additional impairment losses had no impact on CNA's
previously reported net operating income, equity and book value per share.
CNA's decision to record additional impairment losses was made in relation to
discussions with the Staff of the Division of Corporation Finance of the
Securities and Exchange Commission in the course of a routine review of CNA's
periodic filings, including the timing and amount of other-than-temporary
impairment losses in CNA's available-for-sale fixed maturity and equity
securities investments.
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NET INCOME (LOSS)
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RESULTS FOR THREE MONTHS ENDED RESULTS FOR YEAR ENDED
DECEMBER 31 DECEMBER 31
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2002 AS 2002 AS
PREVIOUSLY PREVIOUSLY
(In millions) 2002 (a) REPORTED (b) 2002(a) REPORTED (b)
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NET OPERATING INCOME (C) $ 112 $ 112 $ 396 $ 396
NET REALIZED INVESTMENT LOSSES (62) (30) (149) (117)
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INCOME FROM CONTINUING OPERATIONS 50 82 247 279
LOSS FROM DISCONTINUED OPERATIONS (D) - - (35) (35)
ACCOUNTING CHANGE (E) - - (57) (57)
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NET INCOME $ 50 $ 82 $ 155 $ 187
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STOCKHOLDERS' EQUITY (AS OF DECEMBER 31) $ 9,401 $ 9,401
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(a) Revised to reflect additional impairment losses on equity securities.
(b) Results for the three months and year ended December 31, 2002 as previously
reported in CNA's February 13, 2003 press release.
(c) Net operating income (loss) excludes net realized investment gains and
losses, income or loss from discontinued operations and the cumulative
effect of a change in accounting principle.
(d) During the first quarter of 2002, CNA Vida, a Chilean-based life insurance
company, was sold and recorded as discontinued operations in accordance
with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived
Assets.
(e) Represents the effect of the adoption of SFAS 142, which was a change in
accounting for goodwill and indefinite-lived intangible assets.
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PER SHARE RESULTS AVAILABLE TO COMMON STOCKHOLDERS
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RESULTS FOR THREE MONTHS ENDED RESULTS FOR YEAR ENDED DECEMBER 31
DECEMBER 31
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2002 AS 2002 AS
PREVIOUSLY PREVIOUSLY
2002(a) REPORTED (b) 2002(a) REPORTED (b)
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INCOME FROM CONTINUING OPERATIONS (C) $ 0.21 $ 0.36 $ 1.10 $ 1.25
LOSS FROM DISCONTINUED OPERATIONS (D) - - (0.16) (0.16)
ACCOUNTING CHANGE (E) - - (0.26) (0.26)
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NET INCOME $ 0.21 $ 0.36 $ 0.68 $ 0.83
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BOOK VALUE PER COMMON SHARE $ 38.68 $ 38.68
(AS OF DECEMBER 31)
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(a) Revised to reflect additional impairment losses on equity securities.
(b) Results for the three months and year ended December 31, 2002 as previously
reported in CNA's February 13, 2003 press release.
(c) The three months and year ended December 31, 2002 per share results
available to common stockholders is reduced by $2 million, or $0.01 per
share, of accumulated but undeclared preferred stock dividends.
(d) During the first quarter of 2002, CNA Vida, a Chilean-based life insurance
company, was sold and recorded as discontinued operations in accordance
with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived
Assets.
(e) Represents the effect of the adoption of SFAS 142, which was a change in
accounting for goodwill and indefinite-lived intangible assets.
ABOUT THE COMPANY
CNA is the country's fourth largest commercial insurance writer, the ninth
largest property and casualty company and the 51st largest life insurance
company. CNA's insurance products include standard commercial lines, specialty
lines, surety, reinsurance, marine and other property and casualty coverages;
life and accident insurance; group long term care, disability and life
insurance; and pension products. CNA services include risk management,
information services, underwriting, risk control and claims administration. For
more information, please visit CNA at www.cna.com. CNA is a registered service
mark, trade name and domain name of CNA Financial Corporation.
SUPPLEMENTAL FINANCIAL INFORMATION
Supplemental financial information related to the revised fourth quarter and
year-end 2002 results is available on the investor relations pages of the CNA
Website or by contacting Dawn Jaffray at 312-822-7757.
FORWARD-LOOKING STATEMENT
The statements contained in this press release, which are not historical facts,
are forward-looking statements. When included in this press release, the words
"believes," "expects," "intends," "anticipates," "estimates," and analogous
expressions are intended to identify forward-looking statements. Forward looking
statements include expected developments in the insurance business of CNA (the
"Company"), including losses for asbestos, environmental pollution and mass tort
claims; the Company's expectations concerning its revenues, earnings, expenses
and investment activities; expected cost savings and other results from the
Company's restructuring activities; and the Company's proposed actions in
response to trends in its business.
Such statements, and the financial condition and results of operations of the
Company and the price of the Company's common stock, are subject to a variety of
inherent risks and uncertainties. These risks and uncertainties could cause
actual results to differ materially from those projected. Such risks and
uncertainties include, among others: general economic and business conditions,
including inflationary pressures on medical care costs, construction costs and
other economic sectors that increase the severity of claims; changes in
financial markets such as fluctuations in interest rates, long-term periods of
low interest rates, credit conditions and currency, commodity and stock prices;
the effects of corporate bankruptcies, such as Enron and WorldCom, on surety
bond claims, as well as on capital markets and on the markets for directors &
officers and errors & omissions coverages; changes in foreign or domestic
political, social and economic conditions; regulatory initiatives and compliance
with governmental regulations; judicial decisions and rulings, including
interpretation of policy provisions, decisions regarding coverage and theories
of liability, trends in litigation and the outcome of any litigation involving
the Company; changes in tax laws and regulations; regulatory limitations and
restrictions upon the Company and its insurance subsidiaries; the impact of
competitive products, policies and pricing and the competitive environment in
which the Company operates, including changes in the Company's books of
business; product and policy availability and demand and market responses,
including the level of ability to obtain rate increases and decline or non-renew
underpriced accounts, to achieve premium targets and profitability and to
realize growth and retention estimates; development of claims and the impact on
loss reserves, including changes in claim settlement practices; the
effectiveness of current initiatives by claims management to reduce loss and
expense ratio through more efficacious claims handling techniques; the
performance of reinsurance companies under reinsurance contracts with the
Company; results of financing efforts, including the availability of bank credit
facilities; changes in the Company's composition of operating segments; weather
and other natural physical events, including the severity and frequency of
storms, hail, snowfall and other winter conditions, as well as of natural
disasters such as hurricanes and earthquakes; man-made disasters, including the
possible occurrence of terrorist attacks and the effect of the absence of
applicable terrorism legislation on coverages; the occurrence of epidemics;
exposure to liabilities due to claims made by insureds and others relating to
asbestos remediation and health-based asbestos impairments, and exposure to
liabilities for environmental pollution and other mass tort claims; the
sufficiency of the Company's loss reserves and the possibility of future
increases in reserves; the level of success in integrating acquired businesses
and operations, and in consolidating existing ones; the possibility of changes
in the Company's ratings by ratings agencies and changes in rating agency
policies and practices; the actual closing of contemplated transactions and
agreements; and various other matters and risks (many of which are beyond the
Company's control) detailed in the Company's Securities and Exchange Commission
filings.
These forward-looking statements speak only as of the date of this press
release. The Company expressly disclaims any obligation or undertaking to
release any updates or revisions to any forward-looking statement contained in
this press release to reflect any change in the Company's expectations with
regard thereto or any change in events, conditions or circumstances on which any
statement is based.
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