Good morning. My name is Jackie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Loews Third Quarter 2013 Earnings Conference Call. [Operator Instructions] Thank you. I would now like to turn the call over to Mary Skafidas, Vice President of Investor and Public Relations. Please go ahead.

Thank you, Jackie, and good morning, everyone. Welcome to the Loews Third Quarter 2013 Earnings Conference Call. A copy of our earnings release and earnings snapshot may be found on our website, loews.com. On this call this morning, we have our Chief Executive Officer, Jim Tisch; and our Chief Financial Officer, Peter Keegan. Following our prepared remarks this morning, we will have a question-and-answer session. Before we begin, however, I will remind you that this conference call might include 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, which is included in the company's filings with the SEC. During the call today, we may also discuss non-GAAP financial measures. Please refer to our security filings for reconciliation to the most comparable GAAP measures. I will now turn the call over to Loews' Chief Executive Officer, Jim Tisch.

Thank you, Mary. Good morning, and thank you for joining us on our call today. Loews had net income of $282 million or $0.73 per share for the third quarter of 2013 as compared to $177 million or $0.45 per share for the same quarter last year. Net income for this year's quarter includes an after-tax noncash ceiling test impairment charge of $42 million at HighMount as compared to charges in the third quarter of last year of $166 million. Pete will go into more details on these charges later in the call. Now let's take a closer look at each of our subsidiaries, starting with CNA. CNA had another strong quarter and continued to improve its underwriting results. Excluding catastrophes and prior year development, CNA posted a loss ratio of 62.8% and a combined ratio of 95.9% in its core P&C operations. This represents almost a 5-point improvement in the combined ratio versus the third quarter of 2012. CNA has been able to accomplish this in 2 ways: First, by taking advantage of favorable rate trends and pushing rate over retention; and second, by actively managing its P&C portfolio, focusing on key segments and exiting segments that don't hold potential for long-term profitability. Premium rates continue to rise, increasing approximately 7% during the quarter, across P&C operations. Rising interest rates should have a favorable impact on CNA as the company will be able to invest its cash flow at higher yields. CNA continues to take advantage of attractive yield opportunities in the tax exempt and municipal bond markets. And from the exciting world of accounting, as some of you may have heard on the CNA call, the FASB has proposed a new set of accounting standards for the insurance industry. These proposed rules will make it difficult to compare…

Well, thanks, Jim, and good morning, everyone. Loews Corporation today reported net income for the 2013 third quarter of $282 million compared to $177 million in the 2012 third quarter. Net income for the third quarter of 2013 and 2012 includes after-tax noncash impairment charges of $42 million and $166 million at HighMount related to the carrying value of its natural gas and oil properties. Excluding these impairment charges, net income for the third quarter of 2013 and 2012 was $324 million and $343 million. Net income for the 9 months ended September 30, 2013 was $793 million or $2.03 per share as compared to $600 million or $1.51 per share in the prior year period. Net income for the 9 months ended September 30, 2013, and 2012 includes after-tax noncash ceiling test impairment charges of $134 million and $336 million at HighMount. Excluding these noncash impairment charges, net income for the 9 months ended September 30, 2013, and 2012 was $927 million and $936 million. CNA's contribution to Loews' net income for the third quarter was $247 million as compared to $200 million last year. CNA's earnings increased primarily from improved non-catastrophe current accident year underwriting results and higher favorable net prior year development. These increases were partially offset by higher catastrophe losses and reduced results from the Life & Group segment as a result of unfavorable morbidity in the long-term care business. Diamond Offshore's contribution to net income for the third quarter of 2013 was $44 million compared to $83 million in the prior year quarter. Results for the third quarter decreased primarily due to lost revenue and bad debt write-offs totaling $35 million after-tax and noncontrolling interests related to the termination of rig contracts due to payment defaults by 2 of Diamond's customers and lower utilization. These…

Thank you, Pete. Jackie, at this time, we would like to open up the call for questions.

[Operator Instructions] Our first question comes from the line of Josh Shanker with Deutsche Bank.

First of all, I wonder if you could go onto a little bit of detail on investments,I realize it's not a significant thing, but the volatility, and what we can expect in the future quarters, given the numbers we saw in 3Q relative to prior quarters?

I assume you're talking about investments for Loews Corp.

For Loews Corp. That's right, the coupons.

So we have about $4.8 billion of cash and investments. We have about $700 million or so of limited partnership investments that have very good liquidity terms to it, and then we have another $500 million or so of equities. And then beyond that, most of the rest of the other $3.7 billion is invested in money market instruments that do not earn a lot of income.

And the -- and the spike, the $50 million from this quarter in terms of which bucket?

Say again?

The $50 million this quarter goes in which bucket of earnings?

All equities in LPs.

Yes, all equities in LPs.

All LPs. Okay. And also, on the hotels, you got limited partnerships or joint partnerships. Is that the same investor in both hotels, or are those 2 different investors?

It's joint venture -- 2 separate joint ventures, but the same investor.

Your next question comes from the line of David Adelman with Morgan Stanley.

Pete, maybe a question for you. If spot natural gas prices seasonally adjusted in the forward curve, say, ceiling adjusted, or remain more or less where they are today going forward, will there continue to be ceiling test impairment charges over time?

If prices stayed flat, the answer is probably yes because what happens is in the type of accounting we use is you capitalize all of your drilling costs, and so not everything is successful. So by definition, over time, you'd have to take some of them off. I mean, I'm giving you a very simplistic view of this, but in an unchanged pricing environment, that is probably what would happen.

Okay. And then, Jim, just a question on share repurchases. In a broad sense, leaving out some large-scale acquisition, what drives the outcome from here over the next 12 or 18 months in which 12 or 18 months from now, share repurchases have been very substantial relative to the current run rate versus share repurchases being modest relative to the recent run rate?

So there are a few things. Number one, we like to buy the stock at prices that appear low to us on an absolute and relative basis. Number two, we have other calls on our cash beyond simply an acquisition or share repurchases or dividends. So for example, if the Bluegrass project moves forward, chances are that will require significant financing coming from Loews. So that's something that we always keep our eyes attuned to. And finally, if the company is in possession of material nonpublic information, then our legal beagles here do not allow us to repurchase shares. So all those factors going to the mix and make it therefore difficult for investors to discern from our share repurchase in a particular quarter or share repurchases or lack of share repurchases, whether we're bullish or bearish on the stock.

[Operator Instructions] Your next question comes from the line of Michael Millman with Millman Research.

Could you talk about what's the cause of the unfavorable contract renewal conditions at Boardwalk? And I have another question.

Sure. Marcellus Shale has turned the pipeline industry on its head. About 3 years ago, there was virtually no gas production in the Marcellus Shale. And today, there's about 11 billion cubic feet of production. That's in the context of the U.S. total production of about -- using the prior numbers, about 66.5 billion cubic feet per day. The Northeast consumes about, on average, 12 billion cubic feet a day. So the system that had been put in place to transport natural gas from Texas, Louisiana and the Gulf of Mexico, up to Ohio, Pennsylvania and the Northeast, because of Marcellus' increased production has really -- demand for the transportation to the Northeast has changed dramatically, and that's a major part of what's going on right now.

So there's pipelines then for Marcellus that are in place but not Boardwalk's.

That's right. Plus, if you think of it in terms of the mileage that the average Mcf of natural gas travels, it's dramatically lower because the natural gas is not coming from Texas up to the Northeast, it's coming from Pennsylvania up through the Northeast. And in fact, the reason that Boardwalk is moving forward with the Bluegrass Pipeline project is because it has excess capacity going up to the Northeast. In the Texas gas system, we call it a pipeline, but it really has 3 separate pipes that go from Louisiana up to Ohio. And in the Bluegrass project, we are planning to take one of those pipes that formerly carried natural gas, and instead, we are going to convert it to a pipeline that is capable of carrying natural gas liquids. Those natural gas liquids are currently being produced in the Marcellus Shale and there is very limited capacity to take away those natural gas liquids. So what we're trying to do is get commitments from natural gas and NGL producers to hold their natural gas liquids from the Marcellus Shale down through a combination of new pipelines and our existing pipeline to new processing facilities, fractionation facilities in Louisiana. That's a major effort for Boardwalk. And as I've said in my remarks, we will have a pretty good sense, I believe, in the first quarter of this year -- of 2014, whether or not this project will move forward.

I see. That was very helpful. Another question. Your -- I guess it's your feelings on investment opportunities given the government shutdown and debt limit crisis that we just experienced.

What's my feeling?

What's your feeling about wanting to make investments, U.S., international, given those?

What's my view? My view on the debt crisis and the government shutdown was that: Number one, I assumed that, eventually, the government would reopen; and number two, I assumed that all interest and principal on the debt would be paid on a timely basis. And that in fact, that whole crisis that we experienced from mid-September to mid-October, while it took up the front pages of the newspaper and took a lot of ink in the investment world, it really wasn't that important in terms of thinking about long-term investing. And the issues that were around before the crisis and after the crisis are really the ones that are the focus -- our focus on deciding when, where and how to invest. Thank you. Let me just say -- one other thing I want to say, I want to add something to my remarks even though there's no question. And that is the issue relating to the FASB and these new accounting rules for insurance companies. They will make it very difficult for investors to be able to understand what's going on within an insurance company and also what's going on within the insurance industry. If these rules get put in place, as proposed by the FASB, it will make it very difficult to compare the numbers from 1 quarter to another quarter within a company, and that's because the reserves are going to be discounted and discount rate is going to change every quarter and can change from one line of business to another line of business. So the measures that we use today to look at our insurance profitability will not be used when as and if these rules are implemented. And likewise, the problem for comparing from one company to another company is that different companies will use different discount rates to compute the present value of their reserves. From my perspective and the perspective of Loews and CNA, the current system that we have in place is tried and true and tested. It is conservative because reserves are not discounted, but the system gives us a very good sense of the profitability of the company, as well as the financial standing of the company. So it's really unclear to us why the FASB wants to tinker with these rules in the first place, but that's what they're doing. Let me turn the call back to Jackie.

There appear to be no further questions at this time. I'd now like to turn the call back over to Mary Skafidas for any additional or closing remarks.

Thank you, Jackie. Thank you, all, for your continued interest. A replay of this call will be available on our website at loews.com in approximately 2 hours. That concludes today's call.

Thank you. This concludes today's conference call. You may now disconnect.