Loews Corporation is a holding company. Its subsidiaries are engaged in the following
lines of business: property and casualty insurance (CNA Financial Corporation,
a 90% owned subsidiary); the production and sale of cigarettes (Lorillard, Inc.,
a wholly owned subsidiary); the operation of hotels (Loews Hotels Holding Corporation,
a wholly owned subsidiary); the operation of offshore oil and gas drilling rigs
(Diamond Offshore Drilling, Inc., a 54% owned subsidiary); the operation of an
interstate natural gas transmission pipeline system (Texas Gas Transmission, LLC,
a wholly owned subsidiary), and the distribution and sale of watches and clocks
(Bulova Corporation, a 97% owned subsidiary).
CNA FINANCIAL CORPORATION
CNA Financial Corporation (together with its subsidiaries, "CNA")
was incorporated in 1967 and is an insurance holding company whose primary subsidiaries
consist of property and casualty insurance companies. CNAs property and casualty
insurance operations are conducted by Continental Casualty Company ("CCC"),
incorporated in 1897, and its affiliates, and The Continental Insurance Company
("CIC"), organized in 1853, and its affiliates. CNAs principal market
is the United States with a continued focus on expanding globally to serve those
with growing worldwide interests.
LORILLARD, INC.
The Companys wholly owned subsidiary, Lorillard, Inc. ("Lorillard"),
is engaged, through its subsidiaries, in the production and sale of cigarettes.
The principal cigarette brand names of Lorillard are Newport, Kent, True, Maverick
and Old Gold. Lorillards largest selling brand is Newport, the second largest
selling cigarette brand in the United States and the largest selling brand in
the menthol segment of the U.S. cigarette market
LOEWS HOTELS HOLDING CORPORATION
The subsidiaries of Loews Hotels Holding Corporation ("Loews Hotels"),
a wholly owned subsidiary of the Company, presently operate the following 20
hotels.
DIAMOND OFFSHORE DRILLING, INC.
Diamond Offshore Drilling Inc. ("Diamond Offshore"), is engaged,
through its subsidiaries, in the business of owning and operating drilling rigs
that are used primarily in the drilling of offshore oil and gas wells on a contract
basis for companies engaged in exploration and production of hydrocarbons. Diamond
Offshore operates 45 offshore rigs.
TEXAS GAS TRANSMISSION, LLC
Texas Gas owns and operates a natural gas pipeline system originating in the
Louisiana Gulf Coast area and in East Texas and running north and east through
Louisiana, Arkansas, Mississippi, Tennessee, Kentucky, Indiana and into Ohio,
with smaller diameter lines extending into Illinois. Texas Gass direct market
area encompasses eight states in the South and Midwest, and includes the Memphis,
Tennessee; Louisville, Kentucky; Cincinnati, Ohio; and the Evansville and Indianapolis,
Indiana metropolitan areas. Texas Gas also has indirect market access to the
Northeast through interconnections with unaffiliated pipelines.
Competition: The property and casualty and life and health insurance industries
are highly competitive both as to rate and service. CNAs consolidated property
and casualty subsidiaries compete not only with other stock insurance companies,
but also with mutual insurance companies, reinsurance companies and other entities
for both producers and customers. CNA must continuously allocate resources to
refine and improve its insurance and reinsurance products and services.
Lorillard believes its ability to compete even more effectively has been restrained
by the Philip Morris Retail Leaders program and could further be restrained
by the proposed combination of RJR and B&W.
Competition from other hotels, motor hotels and inns, including facilities
owned by local interests and by national and international chains, is vigorous
in all areas in which Loews Hotels operates. The demand for hotel rooms in many
areas is seasonal and dependent on general and local economic conditions. Loews
Hotels properties also compete with facilities offering similar services in
locations other than those in which its hotels are located. Competition among
luxury hotels is based primarily on location and service. Competition among
resort and commercial hotels is based on price as well as location and service.
Because of the competitive nature of the industry, hotels must continually make
expenditures for updating, refurnishing and repairs and maintenance, in order
to prevent competitive obsolescence.
Competition: The contract drilling industry is highly competitive and is influenced
by a number of factors, including the current and anticipated prices of oil
and natural gas, the expenditures by oil and gas companies for exploration and
development of oil and natural gas and the availability of drilling rigs. In
addition, demand for drilling services remains dependent on a variety of political
and economic factors beyond Diamond Offshores control, including worldwide
demand for oil and natural gas, the ability of the Organization of Petroleum
Exporting Countries ("OPEC") to set and maintain production levels
and pricing, the level of production of non-OPEC countries and the policies
of the various governments regarding exploration and development of their oil
and natural gas reserves.
Competition: Texas Gas competes primarily with other interstate pipelines in
the transportation of natural gas, and natural gas competes with other forms
of energy available to Texas Gass customers, including electricity, coal, and
fuel oils. The principal elements of competition among pipelines are rates,
terms of service, access to supply basins, and flexibility and reliability of
service. In addition, the FERCs continuing efforts to increase competition
in the natural gas industry are having the effect of increasing the natural
gas transportation options of Texas Gass traditional customer base. As a result,
segmentation and capacity release have created an active secondary market, which
is increasingly competitive with Texas Gas.