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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) April 21, 2003
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CNA FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-5823 36-6169860
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
CNA PLAZA, CHICAGO, ILLINOIS 60685
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (312) 822-5000
(Former Name or Former Address, if Changed Since Last Report)
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Item 9. Regulation FD Disclosure
On December 19, 2002, Registrant sold $750 million of a new issue of preferred
stock, designated Series H Cumulative Preferred Issue (Preferred Stock), to
Loews Corporation (Loews), which owns approximately 90% of the Registrant's
common stock. As previously reported, the Preferred Stock accrues cumulative
dividends at an initial rate of 8% per year, compounded annually. The dividend
rate will be adjusted quarterly to a rate equal to 400 basis points above the
ten-year U.S. Treasury rate beginning with the quarterly dividend after the
first triggering event (a Triggering Event) to occur of either (i) an increase
by two intermediate ratings levels of the financial strength rating of
Continental Casualty Company (CCC), the Registrant's wholly-owned subsidiary,
from its current rating by any of A.M. Best Company, Standard & Poor's or
Moody's Investors Service or (ii) one year following an increase by one
intermediate ratings level of the financial strength rating of CCC by any one of
those rating agencies. Unpaid cumulative dividends cannot be paid on the
Preferred Stock unless and until one of the Triggering Events has occurred.
Beginning with the quarter following an increase of one intermediate rating
level in CCC's financial strength rating, however, current (but not unpaid
cumulative) quarterly dividends can be paid.
Although the cumulative dividends on the Preferred Stock will not be accrued in
the Registrant's financial statements until a Triggering Event occurs, reported
earnings per share available to Registrant's common stockholders (EPS) will be
reduced by the Preferred Stock cumulative dividend for all periods in which the
Preferred Stock is outstanding. The following table describes the 2003 EPS
impact of the Preferred Stock assuming no Triggering Event occurs in 2003.
Quarterly Accrual of
Preferred Stock
Dividends (in $ EPS Impact of
millions) Preferred Stock(1)
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First quarter 2003 $15 $(0.066)
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Second quarter 2003 15 (0.067)
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Third quarter 2003 15 (0.068)
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Fourth quarter 2003 15 (0.068)
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(1) Based upon 223.6 million outstanding shares of common stock of Registrant as
of March 31, 2003.
In addition to the Preferred Stock, Loews owns approximately 90% of Registrant's
outstanding common stock and, accordingly, Loews's financial statements include
Registrant as a consolidated subsidiary. Registrant understands, therefore, that
the impact of the foregoing would not result in a significant impact on Loews's
financial statements.
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FORWARD-LOOKING STATEMENTS
This report includes a number of statements which relate to anticipated future
events (forward-looking statements) rather than actual present conditions or
historical events. You can identify forward-looking statements because generally
they include words such as "believes", "expects", "intends", "anticipates",
"estimates", and similar expressions. Forward-looking statements, by their
nature, are subject to a variety of inherent risks and uncertainties that could
cause actual results to differ materially from the results projected. Many of
these risks and uncertainties cannot be controlled by the Registrant.
Any forward-looking statements made in this report are made by the Registrant as
of the date of this report. The Registrant does not have any obligation to
update or revise any forward-looking statement contained in this report, even if
the Registrant's expectations or any related events, conditions or circumstances
change.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CNA FINANCIAL CORPORATION
Dated: April 21, 2003 /s/ Robert V. Deutsch
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By: Robert V. Deutsch
Its: Executive Vice President and
Chief Financial Officer