Good morning. My name is [JulieAnn] and I will be your conference operator today. At this time I would like to welcome everyone to the Loews second quarter 2009 earnings conference call. (Operator Instructions) I would now like to turn the conference over to Mr. Darren Daugherty, Director of Investor Relations. Please go ahead sir.

Thank you JulieAnn. Good morning everyone. Welcome to Loews Corporation’s second quarter 2009 earnings conference call. A copy of the earnings release may be found on our website, loews.com. On 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 10-K and 10-Q 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 will now turn the call over to Loews Chief Executive Officer, Jim Tisch.

Thank you very much Darren and good morning everyone, and thank you for joining us on our call today. In the second quarter of ’09 Loews’ income before net investment losses was $519 million versus $575 million in the same period of ’08. We had a solid quarter although our results reflect a mix of factors. CNA achieved must improved results, reporting a 22% increase in operating income over the prior year. In its core property and casualty operations, CNA had another quarter of steady performance, reporting a 98.1% combined ratio. It also had favorable rate trends and renewal retention, as well as strength in writing new business. Further reinforcing CNA’s underwriting discipline and conservatism, the company reported favorable reserve development for the 10th consecutive quarter. We have seen continuing improvement in the financial markets and as of June 30, CNA’s book value per share had included by more than 31% since the beginning of the year, even after taking into account the quarter’s realized losses. The recovery in the market value of CNA’s portfolio was primarily led by corporate and municipal bonds. Peter Keegan will provide some additional commentary on the CNA investment portfolio when I’m finished. Diamond Offshore had an excellent quarter, reporting its second highest earnings on record. For the quarter, average day rates and utilization for Diamond’s fleet were strong. Its revenue backlog currently stands at approximately $8.7 billion. Diamond recently completed the acquisition of its newest rig, the Ocean Courage. This new build, sixth generation rig was purchased through a foreclosure auction for $460 million. Last year, prices for similar new build rigs peaked at approximately $750 million. We feel comfortable that this acquisition represents an excellent opportunity that is consistent with Diamond’s proven strategy of acquiring and upgrading rigs at times when the market…

Thanks Jim and good morning everyone. For the second quarter Loews reported income from continuing operations of $0.78 a share as compared to $1.00 a share in the prior year second quarter. CNA’s contribution to Loews net income before investment losses increased to $278 million from $227 million in the prior year’s second quarter. In addition to solid underwriting performance, this increase reflects a strong rebound in investment income, primarily from improved limited partnership results. As Jim mentioned, the market value of CNA’s portfolio has recovered significantly, increasing both its GAAP equity and regulatory capital. CNA’s realized net investment losses in the second quarter totaled $178 million after tax and non-controlling interests versus losses of $65 million in the prior year quarter. These losses primarily consist of other than temporary impairments that were largely driven by the deterioration of underlying collateral and asset backed holdings, primarily residential and commercial mortgage backed securities. Diamond Offshore’s contribution to net income decreased to $181 million versus its highest ever quarter of $194 million in 2008. HighMount reported net income of $29 million versus $48 million in the second quarter of 2008. The decline reflects lower realized prices on slightly increased production volume. HighMount reported natural gas production of 20.3 billion cubic feet at an average realized price of $6.40 per 1,000 cubic feet, natural gas liquids production of 891.6 thousand barrels at an average realized price of $24.31 per barrel and oil production of 107.1 thousand barrels at an average realized price of $54.04 per barrel. As of June 30, HighMount had hedges in place for 56% of its estimated total production for the remainder of 2009 and 31% of estimated total production for 2010. Boardwalk’s contribution to net income was $8 million versus $28 million in the second quarter of 2008. Its…

Thank you Pete. Operator at this time we’ll open it up for questions.

Thank you. (Operator Instructions) Your first question comes from Robert Glasspiegel - Langen McAlenney.

On the share repurchase, can we read any sense that maybe you have a greater confidence that you don’t need to keep the money available for Boardwalk and CNA to the same extent you thought a quarter ago?

Bob, I read your report earlier today, and I don’t want to disappoint you. I have no comment.

Let me compliment you, by the way, with how patient you were with Becky this morning as she tried to quiz you on the earnings mess. I don’t think she quite figured out how realized gains and losses flow through the income statement. I guess the Dow Jones had the same general problem. Hotels. How do you manage through the current situation? Are you looking around for opportunities to buy things in the current depressed state? Or just sort of run with what you’ve got?

No, you’re exactly right. Number one in terms of the operations of the hotels, they have been focused on cutting costs dramatically, so in an attempt to improve the operating margin. And in fact, occupancy is doing very well, or reasonably well. The real problem is average room rate, which is down, depending on the property, anywhere between 20 and 35%. And so that’s causing the decline in RevPAR. The good news is that it’s not just happening to us, that this is an industry wide phenomenon. And I’m sure you’ve read in the newspapers of certain hotels being taken back by the mortgage holders. So it’s my guess that at some point in time, we are going to see a significant number of hotels hit the market for sale and we will view that as an opportunity to acquire some property at attractive prices. For the past 10 or 15 years at least, hotels have traded at real premium prices. And I’ve said that they are the equivalent of the poor man’s football team. If you can’t own the football team in town, you might as well own the best hotel. And as a result, as I said they’ve traded at very steep prices. It’s my expectation that in the coming quarters, we will see hotels that can be acquired at more attractive prices.

My last question, Jimmy, if I put a gun to your head and said Loews Corporate portfolio, are you de-risking, re-risking or running with what you’ve got? Which option would you take?

You don’t have to put the gun to my head. We’re de-risking.

You’re de-risking?

Yes.

I saw your comments with Becky. Is that sort of drives your thought process that the debt’s got to get de-leveraged?

Yes. In terms of the portfolio, we’re reducing our exposure to municipals, we’re increasing our exposure to corporate. This is all in primarily in CNA. We’re also reducing our asset backs, and at Loews we really haven’t taken substantial credit risk in our portfolio in a long time. Rather from time to time we’ll foray into the government bond market, but otherwise we keep our cash relatively short.

Your next question comes from David Adelman - Morgan Stanley.

Jim, could you sort of outline the likely pathway you see to having CNA ultimately repay the preferred investment you made last year?

That was a $1.25 billion preferred stock with a 10% coupon. We would like CNA to be able to pay that back as soon as possible. But before CNA can pay that back, they have to get their ratings into better shape. First of all, statistically CNA we believe CNA should be one or two notches rated higher by one or two notches. And we believe that the combination of the good reserving at CNA as shown by the 10th consecutive quarter of releasing reserves, as well as the strong management team should begin to get the rating agencies to move. Combined with that is that accumulated earnings over the coming quarters should also substantially boost property and casualty company statutory surplus. So at some point in time, and I don’t know exactly when it is and I won’t put a date on it, at some point in time CNA should be able to begin paying down that deferred and ultimately it should all be repaid.

Second question, Diamond’s purchase of this rig during the quarter, is there a broader statement one can read from that, vis a vie, Loews general view towards sort of the economic and financial state of the world?

This was a terrific rate. Is a terrific rate. It is, as I said in my remarks, if you had ordered it last year, chances are you’d pay $750 million for the rig. We were able to buy it for $460 million and we’re not going to have to wait a long time to put it to work. If you ordered it last year at $750 million you have to wait three years to actually get it on the payroll with the customer, because it takes so long to build. So we just view this as a very attractive purchase for Diamond. In terms of what conclusions can you draw about the shape of what’s going on in the offshore drilling business and in the world, it shows what happens, number one, when people are over levered. This was an auction of the rig by the yard because they were not paid by the owner of the rig. And in terms of the world, I think it reflects the fact that people are somewhat concerned that oil prices are down. Now it all matters on your perspective. Oil prices are down from $140, down by 50%, but they’re up by 100% from $35 a barrel I guess in the first quarter of this year. I don’t have a forecast on where oil prices are going, but at today’s prices of $70 a barrel, my guess is that drilling is still very economic for the major oil companies. So we’re looking forward to operating the rig at attractive day rates.

And then lastly on HighMount, do you have available to share with us the average price at which you’ve hedged the natural gas production that you reference for ’09 and 2010? And also do you see any realistic scenarios where Loews would have to put additional capital into HighMount excluding sort of an affirmative decision to either significantly ramp up the drilling activity and/or an acquisition?

Okay. So the weighted average price of our hedge for the third and fourth quarter of ’09 is $7.79 and for 2010 it’s $6.99. In terms of Loews putting in more cash into HighMount, we have no expectation of having to do that at all. That’s not in our game plan.

Your next question comes from Andy Baker - Jefferies & Company. Andy Baker - Jefferies & Company: A couple of questions. First I guess is it’s next quarter so time for me to ask, $2.4 billion in holding company cash, we have to look at, you know, your desire to sleep at night. We have to look at your requirements of your current portfolio. We have to look at where your stock price is. We look at where assets are. I mean stock prices are back up, maybe asset prices are still coming down. How should we think about over the next, you know, how you might look to deploy this, if at all, over the next, you know, 12 to 18 months?

You know, Andy, not only have you dialed into the calls, you’ve also been listening carefully and I think I can’t add anything to it. We are looking for opportunities. We constantly kick tires. But the one thing is that you didn’t quote me on and I’ll quote myself now is, “If there’s nothing to do, do nothing.” So we’re constantly looking. We constantly see that cash there. We’re constantly thinking about what to do with it. And as soon as we figure it out, we’ll issue a press release. Andy Baker - Jefferies & Company: As sort of a take off on that, you know, the market has, you know, for a while seemed to give you credit. Following the spinoff of Lorillard, it seemed to give you credit, you know, for your assets, both public and private. You know you were trading at a nice premium to the value of your public holdings. I mean the market was giving some real value to your private. And it seems like you have sort of whittled away over the course of the past year. And any thoughts on, you know, how important is it to you to reduce the discounts NAV or is the real goal just to increase NAV and let the market ultimately give you credit for that?

You know from my perspective it’s really frustrating. The stock, as you said the stock trades recently as much as $1 below the value of the public pieces. That doesn’t take into account the nonpublic pieces. And the nonpublic pieces include our cash net of debt. So $2.4 billion less the $867 million of long term debt. It includes our GP interest in Boardwalk Pipeline. It includes Loews Hotels. It includes our investment in HighMount Exploration. It includes $200 million that we have in debt of Boardwalk Pipeline. And it includes $1.25 billion of CNA preferred stock. So sometimes I feel, when I think about Loews, like the guy who’s hawking something on TV saying, “But there’s more. And there’s more. And there’s more.” And listen, the market is well aware of that but it selects not to pay attention to it. The market is also well aware, I’m sure, of although I’ll reiterate it now just to make sure, the market is well aware of number one, our quest to build long term value, our track record in doing that. The last number I saw was a 16% compound annual rate of return over the past 49 or 50 years. And if you go back more recently, I saw a figure from 1981 of a 19% compound annual rate of return. So I’m not complaining, because rather than complain what we have done from time to time when the market doesn’t recognize the value is repurchase shares. And just to repeat one more time, we have a history of repurchasing shares going back to the seventies and every decade, we have purchased at least 25% of our outstanding shares in that decade. So that in 1970 we started off with the equivalent today of 1.300 billion shares and at last count that’s down to about 433 million. So thank you for that question allowing me to stand up on my soapbox and give a little rant. Andy Baker - Jefferies & Company: Thank you. I’m right there with you on that soapbox.

Your next question comes from Michael Millman - Millman Research Associates.

Actually following up on that last is that I guess on a previous call you had said that you were super cautious on use of cash because of subsidiary or potential subsidiary needs. And so wanted to get an idea of what you thought subsidiary needs might be at this point.

I am hopeful that subsidiary needs from Loews are zero. That’s my hope and expectation.

Would you run your cash portfolio on that basis?

Yes. But even if there are needs from the subsidiaries, I mean, we’re talking a small percent of the $2.4 billion that Loews has.

I guess you didn’t repeat that you have asbestos pockets. Should we assume that?

Yes, my pockets are still asbestos lined and money doesn’t burn a hole in them.

Okay. Great. We wanted to make sure nothing has changed.

Nothing has changed.

There are no further questions at this time. I’ll now turn the call back over to Mr. Daugherty for any closing remarks.

Thank you for joining us on the call today. A replay and a downloadable mp3 file will be available on our website, loews.com, in approximately two hours. That concludes today’s call.

Thank you all for participating in today’s Loews second quarter 2009 earnings conference call. You may now disconnect.