During the call today, we might 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. James S. Tisch Thank you, Mary. Good morning, and thank you for joining us today to discuss Loews' second quarter results. As you know by now, we reported earnings of $56 million for the quarter, as compared to $250 million of Loews earned in the second quarter of 2011. Net income for the quarter includes after-tax, noncash fueling test impairment charges of $142 million at HighMount, related to the carrying value of its natural gas properties. These charges were the results of declines in natural gas and natural gas liquids pricing. Loews ended the second quarter with $3.7 billion in cash and investments at the holding company level. This quarter, we spent approximately $51 million buying back about 1.3 million shares of Loews' stock. During the second quarter, Moody's Investors Service upgraded by 1 notch the senior unsecured ratings of Loews, CNA Financial and Diamond Offshore. According to Moody's, Loews' upgrade to A2 reflects the strengthening credit profile of our primary operating subsidiaries and our standalone financial strength and conservative financial policies. Moody's also affirmed the CNA insurance company's financial strength ratings and revised the outlook on these ratings to positive from stable. So now, both Moody's and S&P have CNA's financial strength on positive outlook, which is a real credit to the progress that's being made by the management team at CNA. In addition to the good news from the rating agencies, CNA had a solid quarter, which was favorably impacted by lower catastrophe losses and improved non-catastrophe current accident year underwriting results. Lower net investment income from CNA's limited partnership investments created a drag on an otherwise strong improvement in net operating income. ELP investment produced a second quarter pretax loss of $35 million in 2012 as compared to pretax income of $11 million in 2011.
The combined ratio for the P&C operations, excluding catastrophe losses in prior year development, improved by nearly 3 points versus last year's second quarter. Also, the reported combined ratio improved by 4.3 points to 101.7 during the second quarter.CNA continues to close the underwriting performance gap with its best-in-class competitors. There's more work to be done, and we look forward to CNA continuing its steady progress towards becoming a top-tier industry performer. In July, CNA closed its acquisition of Hardy Underwriting, a specialized Lloyd's underwriter with a solid market reputation and a long history of disciplined underwriting. This acquisition will provide CNA with a key platform for international growth. Hardy's results would be included in CNA's and Loews' third quarter results. Turning to Diamond Offshore and the offshore drilling market. Diamond had a solid quarter despite its net income being down by about $60 million versus last year's second quarter. The biggest driver of the decline was that Diamond had 5 rigs in the shipyard this quarter for the 5-year special surveys compared to none during the same period last year. It's worth mentioning that despite the drop in oil prices, the offshore drilling market continues to show real strength. We believe that Diamond is well positioned to take advantage of these market conditions, given its rig availability over the coming 2 to 3 years. Recent contracts signed by Diamond and other drillers for mid-water, deepwater and ultra-deepwater rigs indicate that demand is strong. Diamond continues to focus on modernizing its fleet. As a reminder, Diamond has 4 ultra-deepwater drillships under construction in Korea. Earlier in '09, Diamond purchased 2 ultra-deep waters semisubmersibles in bankruptcy options. And most recently, Diamond is reconstructing an older semisubmersible into a high spec drilling unit to be named the Ocean Onyx. The rig was recently awarded a 1-year contract at a rate of $490,000 per day to work in the U.S. Gulf of Mexico upon delivery from the shipyard in the third quarter of 2013. Read the rest of this transcript for free on seekingalpha.com