Welcome to the Loews Third Quarter 2009 Earnings Conference Call. (Operator Instructions) I will now turn the call over to Darren Daugherty, Director of Investor Relations.

Welcome to Loews Corporations Third Quarter 2009 Earnings Conference Call. A copy of the earnings release may be found on our website Loews.com. One the call this morning are Jim Tisch the Chief Executive Officer of Loews, and Peter Keegan the Chief Financial Officer of Loews. Before we begin, I'd like to make a few brief disclosures concerning forward-looking statements. This conference call will include the use of statements that are forward-looking in nature. Actual results achieved by the company may differ materially from those projections made in any forward-looking statements. Forward-looking statements reflect circumstances at the time they are made and the company expressly disclaims any obligation to update or revise any forward-looking statements. This disclaimer is only a brief summary of the company's statutory forward-looking statements disclaimer. We urge you to read the full disclaimer which is included in the company's filings with the SEC. I'd also like to remind you that during this call today we may discuss certain non-GAAP financial measures. Please refer to our security filings for reconciliation to the most comparable GAAP measures. After Jim and Peter have discussed our results, we will have a question and answer session. If you would like to ask questions and are listening via the webcast, please use the dial in number to participate, 877-692-2592. I'll now turn the call over to Loews Chief Executive Officer, Jim Tisch.

Loews reported a solid quarter reflecting improved results in CNA, continued strong results in Diamond Offshore, and higher investment income in the holding company portfolio. During the third quarter Loews' book value per common share increased by over 14%, primarily as a result of the $1.7 billion increase in the mark-to-market value of CNA's investment portfolio. What a difference a quarter makes. CNA reported another quarter of solid operating income driven by improved investment income and low catastrophe losses. In its core property and casualty operations, CNA continues to focus on growing its specialty lines of business, as well as improving performance in its standard lines of business. CNA specialty lines continues to be the most profitable business in CNA's portfolio benefiting from diversification by product, geography, and industry class. With respect to its standard lines [Tom Multomad] has brought in new leadership to focus intently on improving profitability. A key part of that process is improving underwriting results and growing the top line in the small and middle market space while maintaining competitive expense levels. Perhaps most significantly CNA's investment portfolio continued the strong recovery that began earlier this year. At the end of the third quarter, CNA's book value per share stood at $35.38 compared to $20.92 at year end '08. This improvement was primarily the result of narrowing credit spreads in the fixed income market. While we are quite pleased to see the improvement in CNA's balance sheet, the volatility of fixed income security prices over the past year underscores how one could be potentially mislead by mark-to-market accounting, especially with the respect to unrealized losses at property and casualty insurance companies. Each quarter CNA goes through an extensive and rigorous process of recognizing losses on securities that it judges to be credit impaired or that it…

For the third quarter, Loews reported income from operations before investment losses of $530 million, as compared to $235 million in the prior year third quarter. Net investment losses for the quarter of $61 million after-tax and non-controlling interest are primarily from other than temporary impairments in CNA's available for sale investment portfolio. In the 2008 third quarter, net investment losses were $379 million. CNA's contribution to Loews net income before investment losses increased to $304 million from $76 million in the prior year third quarter. CNA's operating income increased in both its core property and casualty operations, as well as non-core operations. The improvement reflects lower catastrophe losses, increased investment income, and a $55 million after-tax gain from a settlement that resolved litigation related to the placement of personal acts of reinsurance. Investment income benefited from improved results from limited partnership investments, but was negatively impacted by lower short-term interest rates. Diamond Offshore's contribution to net income increased to $170 million versus $145 million in the third quarter of 2008. Diamond's revenue backlog currently stands at over $8.7 billion, including the contract for Diamond's deep water rig Ocean Courage, which is currently on route to the Gulf of Mexico where it will begin working early February of 2010 for Petrobras. In the third quarter, HighMount reported net income of $40 million versus $47 million in last year's third quarter. The decline reflects lower production volumes and realized prices. HighMount reported natural gas sales of 17.4 billion cubic feet at an average realized price of $6.72 per thousand cubic feet, natural gas liquids production of 762.3 thousand barrels at an average realized price of $27.32 per barrel, and oil production of 81.5 thousand barrels at an average price of $63.51 per barrel. As of September 30, HighMount hedges in place…

Operator, at this time we'll take questions.

(Operator Instructions) Your first question comes from Bob Glasspiegel – Langen McAlenney. Robert Glasspiegel – Langen McAlenney: It seems like the body language from Boardwalk is more positive and there's sort of light at the end of the pipeline as far as this not being a future need of cash from Loews. Is that a correct read?

Yes, but I would just say that's been our view for the past several quarters, so it's not new this quarter. Robert Glasspiegel – Langen McAlenney: In HighMount, I'm trying to learn the sort of seasonality of the business. What would have caused Q3 to be up from Q2 given the sort of pressures that I thought might have been in place with gas prices? Was this exacting the hedges or?

Tim Parker, who is the CEO of HighMount is on the line, let's let him answer that question.

Well, in terms of production volumes we were basically very close to in line. We did see a slight decrease in overall price. The big difference that we would have between the quarters would be the impairment that we had at the end of the first quarter. But other than that I don't quite see the variation that you're looking at. Robert Glasspiegel – Langen McAlenney: I was looking at Q3 versus Q2 sequentially, but maybe you could tell me what are your big seasonal quarters? What seasonality is there in the business as we think about modeling?

Robert Glasspiegel – Langen McAlenney: Jimmy, I was wondering if you could give us a little bit about your overall investment posture and how the parent portfolio has been positioned.

We are positioned very conservatively. We still have a lot of cash at the parent company level. The cash treasury builds, repos and fixed maturities make up about 2\3 of the entire investment portfolio, so we're not being heroes here. Robert Glasspiegel – Langen McAlenney: I assume there's no change in the parent debt which wasn't disclosed, Pete?

There's no change.

No change.

Your next question comes from David Adelman – Morgan Stanley.

Jim, could you talk about the feasibility and the timing of CNA repaying it's preferred investment to Loews, and is that contingent at all on an improvement in CNAs credit rating?

We would like CNA to pay off the preferred as rapidly as possible, and likewise CNA would like to do that as well. The issue relates to earnings that CNA has, relates to the credit rating that CNA has, and potentially improvements in that credit rating and the availability of the financial markets to CNA. So we have no specific timetable for that. Robert Glasspiegel – Langen McAlenney: You envision that ultimately being paid off out of cash generation of CNA or could they finance it through third parties are you in different between the two of those?

I'd say all of the above. The CNA board will do whatever is in the best interest of CNA. And I know that the board would like to pay that off as rapidly as possible because once that is paid off then that removes an impediment to paying common dividends to CNA shareholders. Robert Glasspiegel – Langen McAlenney: Then on a different topic, Jim, you mentioned the investment portfolio. Can you speak to how your assessment of the economy and of the capital markets overall impacts your relative appetite for making an acquisition?

Well, when you talk about the investment portfolio I wasn't sure if you were going to talk – I thought you were going to talk about the CNA investment portfolio, but you're instead talking about Loews? Robert Glasspiegel – Langen McAlenney: Yes, the holding company making sort of a new platform acquisition?

We are always looking. The issue right now though I believe is exactly what's going to happen in the economy. My guess is that the economy is going to be very sluggish for a long time, maybe on the order of, if we're lucky, 1% to 2% growth. And I don't see this as a typical recession and I don't see this as a period where we're going to have 4% to 6% growth for the next year or so. I think it'll be very sluggish and I think that additional taxes and mandates will just be additional headwinds for the economy. I say all that as preamble because if we were to buy anything, I would not want to pay up in price anticipating that the economy and, therefore, business in the business cycle will resume. So like it said on the front page of the Wall Street Journal, jittery companies stash cash. You can count Loews Corporation as one of those companies.

Your next question comes from Michael Millman – Millman Research Associates. Michael Millman – Millman Research Associates: Following up on some of these acquisitions and maybe you've talked about hotels in the past where we are we may see some improvement. Can you talk about if you're looking for assets in hotel purchases or are you looking for brands or either one?

We're not looking for brands. We believe we have a very, very good brand. What we would be looking for would be hotel assets to add to our brand. There was an enormous growth in what they call upper upscale hotel properties over the past decade. A number of those have gotten into financial distress of one sort or another, and we think that over the coming few years there will be opportunities to make acquisitions of those properties at attractive prices. But as I just said to David Adelman, our anticipation would be to buy those properties based on the current state of business not somebody's assumption that business going forward is going to improve substantially. Michael Millman – Millman Research Associates: The other side of that coin is selling properties and would you be a seller A, generally and B, would you be a seller if there wasn't a big capital gain tax involved in certain properties?

Well, there is a capital gains tax involved so it's difficult to say what we would do. In terms of whether we're a seller, no, we're very happy with our portfolio.

Your next question comes from Stephen Velgot – SIG Stephen Velgot – Susquehanna Financial Group: Jim, I had a question about the strategic rationale for CNA as part of the holding company. I imagine that Loews will continue to be a holding company for the foreseeable future, but can you just relate for us again why it's important to maintain ownership in CNA?

CNA is an intregal part of Loews. Loews has owned or controlled CNA for almost 35 years now, and we describe ourselves as unabashedly a conglomerate and we think that in that context CNA fits in very well with Loews. We like the outlook and prospects for CNA and so it's staying where it is. Stephen Velgot – Susquehanna Financial Group: If I could just elaborate then, I had from very investors who, as I'm sure you're aware, note that Loews stock trades below where even the public holdings trade. I don't expect that situation would remain indefinitely, but is there a point at which either the management or the board might look to do something strategic in order to change that situation in the market?

Well, there are two things you can do. You can complain about the prices of stock and the value of the stock, or you can do something about it. And there are multiple ways to do something about it. One is, I guess as you suggest, is to cast some holdings overboard. We're not looking to do that. The other way to deal with that is to buy in shares and in the past four months the company's brought in 4.5 million shares. As I like to say about our share repurchase history, we have a long and glorious history of share repurchases, buying in shares when the stock trades at a discount. Just to get on my soapbox again and provide an advertisement, Loews' stock has appreciated. Loews shareholders for the past 50 years have had a 16% rate of return on their shares compared to 9% for the S&P 500. So that if you have $1 50 years ago and you invested in the S&P 500, it would be worth about $75 now. On the other hand, that dollar if you would have invested in Loews at 16% would be worth $1,600 or $1,700. So the appreciation of Loews has been quite extraordinary. And one reason for that has been that we have aggressively bought in the shares. In 1970 we had the equivalent of 1.3 billion shares outstanding. Today it's below 430 million. For the life of me, I do not understand why the market values Loews so cheaply, but having said that I'm not complaining about it. Instead we're buying in the share and we're using that as an opportunity to create long-term value for all Loews shareholders. Beyond buying in the shares and doing what we're doing, I don't know what else we can do to close that valuation gap. It is a great frustration to me, but also I see it as a great opportunity. Stephen Velgot – Susquehanna Financial Group: Peter, could you provide us with the specific holding company position of cash equivalence and repos at the end of the quarter?

Just cash equivalence and repos? Stephen Velgot – Susquehanna Financial Group: Well what you typically – I think the non long-term investments that are at the holding company.

We have treasury bills and government repos and short-term investments of about $1 billion $800 million. And then we have another $750 million of fixed maturity treasuries and then the rest is other odds and ends.

Your next question comes from Adrian Day – Adrian Day Asset Management. Adrian Day – Adrian Day Asset Management: I had a question on hotels. I know you've had a couple of comments on that. You talked about the comparisons with last year, but I'm wondering if you're seeing any recent trends. Not so much at the beginning of this year, but say over the summer and into the fall. Are you noticing anything in particular?

No, we are not seeing a significant improvement in the business. It's still sluggish. The most sluggish part is the group business, especially at resort hotels. Because of what's happened in the past year with criticism coming from our elected officials, corporations now view it almost as taboo to have a meeting at a resort hotel. And there's not much that we can do about that, other than market it as aggressively as possible. City hotels are doing marginally better, but overall the business is still in no way robust nor is it seeming to be moving in that direction.

At this time, there are no further questions. I'll turn it back to management for closing remarks.

Thank you for joining us on the call today. A call replay will be available on our website loews.com in approximately two hours. That concludes today's call.

Thank you for participating in today's conference call. You may now disconnect.