NEW YORK, Feb. 11, 2019 /PRNewswire/ -- Loews Corporation
(NYSE: L) today reported net income for the year ended December 31, 2018 of $636
million, or $1.99 per share,
compared to $1.16 billion, or
$3.45 per share, in the prior year.
For the three months ended December 31,
2018, Loews reported a loss of $165
million, or $0.53 per share,
compared to net income of $481
million, or $1.43 per share,
in the prior year period.
The loss during the three months ended December 31, 2018 was driven by catastrophe
losses at CNA Financial Corporation, investment results at both CNA
and the parent company, and operating results at Diamond Offshore
Drilling Inc. The $200 million net
benefit from the Tax Cuts and Jobs Act of 2017 (the "Tax Act"),
included in the results for the three months ended December 31, 2017, contributed to the quarterly
and annual year-over-year declines.
Book value per share increased to $59.34 at December 31,
2018 from $57.83 at
December 31, 2017. Book value per
share excluding accumulated other comprehensive income (AOCI)
increased to $62.16 at December 31, 2018 from $57.91 at December 31,
2017.
CONSOLIDATED HIGHLIGHTS
(In millions, except
per share data)
|
December
31,
|
Three
Months
|
Years
Ended
|
2018
|
2017
|
2018
|
2017
|
Net income (loss)
attributable to Loews Corporation
|
$(165)
|
$ 481
|
$ 636
|
$ 1,164
|
Net income (loss) per
share
|
$(0.53)
|
$ 1.43
|
$ 1.99
|
$ 3.45
|
|
December 31,
2018
|
December 31,
2017
|
Book value per
share
|
$
|
59.34
|
$
|
57.83
|
Book value per
share excluding AOCI
|
|
62.16
|
|
57.91
|
Three Months Ended December 31,
2018 Compared to 2017
The lower corporate tax rate in 2018 contributed to improved net
income for all segments with pretax income. For those segments with
pretax losses, the net loss increased on a comparative basis due to
the reduced tax benefit in 2018.
CNA's net income in 2017 was affected by a $78 million net charge related to the Tax Act.
Absent this charge, CNA's results in 2018 decreased due to lower
net investment income reflecting declines in CNA's limited
partnership and common equity investments and realized investment
losses as compared to realized gains in the prior year period. In
2018, CNA generated underwriting losses in its core property &
casualty business, as compared to underwriting gains in 2017,
resulting from higher net catastrophe losses, lower favorable prior
year development and a higher underlying loss ratio. CNA's non-core
operations also contributed to the unfavorable quarterly impact as
compared to the prior year due mainly to the timing of reserve
reviews.
Diamond Offshore's net loss increased by $6 million in 2018 as compared to 2017. Excluding
the impact of the adjustment to deferred taxes required by the Tax
Act, net loss would have increased by $8
million due to lower revenue reflecting current challenging
market fundamentals, which negatively affected both rig utilization
and dayrates. Results in 2017 were also impacted by an impairment
charge related to the carrying value of three drilling rigs and by
restructuring costs.
Boardwalk Pipeline's net income in 2017 was affected by a
$294 million net benefit related to
the Tax Act. Absent this net tax benefit, net income in 2018
increased as a result of Loews now owning 100% of the company as
compared to 51% in the prior year period. This increase was
partially offset by lower net transportation revenues, resulting
primarily from a contract restructuring and reduced rates on
renewing contracts, offset in part by revenues from growth
projects.
Loews Hotels & Co's net income in 2017 were affected by a
$27 million net benefit related to
the Tax Act. Absent this net tax benefit, net income decreased
primarily due to a state tax adjustment.
Investment results generated by the parent company investment
portfolio decreased primarily due to losses in the current period
on common equity and limited partnership investments as compared to
gains in the prior year, as well as a lower level of invested
assets than during 2017.
Year Ended December 31, 2018
Compared to 2017
The following discussion excludes the 2017 impact on each
segment of the Tax Act, which is included in the quarterly
discussion described above. However, the discussion below includes
the impact of the lower corporate tax rate in 2018 resulting from
the Tax Act.
CNA's net income decreased primarily due to lower net
investment income driven by limited partnership returns, as well as
realized investment losses as compared to gains in 2017. Lower
favorable net prior year loss reserve development was offset by
lower net catastrophe losses. CNA also recognized increased losses
from its loss portfolio transfer due to the timing of reserve
reviews and non-recurring costs associated with the transition to a
new IT infrastructure service provider. The lower corporate tax
rate partially offset the year-over-year decline in earnings.
Diamond Offshore's results decreased primarily due to lower rig
utilization, lower dayrates and a one-time charge related to a
legal settlement, partially offset by lower drilling rig impairment
charges in 2018, and a charge in 2017 related to the early
redemption of debt. The lower corporate tax rate reduced the tax
benefit recognized in 2018 as compared to 2017.
Boardwalk Pipeline's net income increased primarily due to the
reasons discussed above. Earnings in 2017 were impacted by a loss
related to the sale of a processing facility. The lower corporate
tax rate contributed to the year-over-year improvement.
Loews Hotels & Co's net income increased due to improved
results at several owned hotels and the improved operating
performance of the Orlando joint
venture properties. The lower corporate tax rate contributed to the
year-over-year improvement.
Investment results generated by the parent company investment
portfolio decreased due to the reasons discussed above.
Corporate and other results improved before income tax due to
the absence of costs related to the acquisition of Consolidated
Container Company LLC in 2017. The lowering of the corporate tax
rate resulted in a reduced tax benefit in Corporate and other's
after-tax 2018 results.
SHARE REPURCHASES
At December 31, 2018, there were
312.1 million shares of Loews common stock outstanding. For the
three months and year ended December 31,
2018, the Company repurchased 2.9 million and 20.3 million
shares of its common stock at an aggregate cost of $135 million and $1.0
billion. From January 1, 2019
to February 8, 2019, the Company
repurchased an additional 0.9 million shares of its common stock at
an aggregate cost of $44 million.
Depending on market conditions, the Company may from time to time
purchase shares of its and its subsidiaries' outstanding common
stock in the open market or otherwise.
CONFERENCE CALLS
A conference call to discuss the fourth quarter results of Loews
Corporation has been scheduled for today at 11:00 a.m. ET. A live webcast will be available
at www.loews.com. Those interested in participating in the question
and answer session should dial (877) 692-2592, or for international
callers, (973) 582-2757. The conference ID number is 2653937. An
online replay will also be available at www.loews.com following the
call.
A conference call to discuss the fourth quarter results of CNA
has been scheduled for today at 10:00 a.m.
ET. A live webcast will be available via the Investor
Relations section of www.cna.com. Those interested in participating
in the question and answer session should dial (800) 289-0571, or
for international callers, (720) 543-0206.
A conference call to discuss the fourth quarter results of
Diamond Offshore has been scheduled for today at 9:00 a.m. ET. A live webcast will be available at
www.diamondoffshore.com. Those interested in participating in the
question and answer session should dial (844) 492-6043, or for
international callers, (478) 219-0839. The conference ID number is
7757436.
ABOUT LOEWS CORPORATION
Loews Corporation is a diversified company with businesses in
the insurance, energy, hospitality and packaging industries. Our
subsidiaries are: CNA Financial Corporation (NYSE: CNA), Diamond
Offshore Drilling, Inc. (NYSE: DO), Boardwalk Pipeline Partners LP,
Loews Hotels & Co and Consolidated Container Company LLC.
Investors are encouraged to view the subsidiary virtual investor
presentations found in the 'Events & Presentations' section of
ir.loews.com for an in-depth strategic review of each company. For
more information please visit www.loews.com.
FORWARD-LOOKING STATEMENTS
Statements contained in this press release which are not
historical facts are "forward-looking statements" within the
meaning of the federal securities laws. Forward-looking statements
are inherently uncertain and subject to a variety of risks that
could cause actual results to differ materially from those expected
by management of the Company. A discussion of the important risk
factors and other considerations that could materially impact these
matters as well as the Company's overall business and financial
performance can be found in the Company's reports filed with the
Securities and Exchange Commission and readers of this release are
urged to review those reports carefully when considering these
forward-looking statements. Copies of these reports are available
through the Company's website (www.loews.com). Given these risk
factors, investors and analysts should not place undue reliance on
forward-looking statements. Any such forward-looking statements
speak only as of the date of this press release. The Company
expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statement
to reflect any change in the Company's expectations with regard
thereto or any change in events, conditions or circumstances on
which any forward-looking statement is based.
|
Loews Corporation
and Subsidiaries
|
|
|
|
|
|
|
Selected Financial
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
Three
Months
|
Years
Ended
|
|
|
(In
millions)
|
2018
|
2017
|
2018
|
2017
|
|
|
Revenues:
|
|
|
|
|
|
|
CNA Financial (a)
(b)
|
$
2,403
|
$
2,447
|
$
10,134
|
$
9,583
|
|
|
Diamond
Offshore
|
234
|
356
|
1,093
|
1,500
|
|
|
Boardwalk
Pipeline
|
326
|
338
|
1,227
|
1,325
|
|
|
Loews Hotels &
Co
|
181
|
172
|
755
|
682
|
|
|
Investment income and
other (c)
|
143
|
242
|
857
|
645
|
|
|
Total
|
$
3,287
|
$
3,555
|
$
14,066
|
$
13,735
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before
Income Tax:
|
|
|
|
|
|
|
CNA Financial (a)
(d)
|
$
(114)
|
$
409
|
$
963
|
$
1,314
|
|
|
Diamond Offshore (d)
(e)
|
(66)
|
(35)
|
(226)
|
(22)
|
|
|
Boardwalk Pipeline
(f)
|
59
|
83
|
231
|
293
|
|
|
Loews Hotels &
Co
|
15
|
18
|
73
|
65
|
|
|
Corporate:
(g)
|
|
|
|
|
|
|
Investment income
(loss), net
|
(71)
|
37
|
(10)
|
146
|
|
|
Other
|
(55)
|
(51)
|
(197)
|
(214)
|
|
|
Total
|
$
(232)
|
$
461
|
$
834
|
$
1,582
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Loews Corporation (h):
|
|
|
|
|
|
|
CNA Financial (a)
(d)
|
$
(75)
|
$
193
|
$
726
|
$
801
|
|
|
Diamond Offshore (d)
(e)
|
(58)
|
(52)
|
(112)
|
(27)
|
|
|
Boardwalk Pipeline
(f)
|
55
|
320
|
135
|
380
|
|
|
Loews Hotels &
Co
|
7
|
40
|
48
|
64
|
|
|
Corporate:
(g)
|
|
|
|
|
|
|
Investment income
(loss), net
|
(57)
|
25
|
(8)
|
97
|
|
|
Other
|
(37)
|
(45)
|
(153)
|
(151)
|
|
|
Net income (loss)
attributable to Loews Corporation
|
$
(165)
|
$
481
|
$
636
|
$
1,164
|
|
|
(a)
|
Includes realized
investment losses of $78 million and gains of $29 million ($55
million and $18 million after
tax and noncontrolling interests) for the three months ended
December 31, 2018 and 2017. Realized investment
losses were $57 million and gains of $122 million ($38 million and
$74 million after tax and noncontrolling
interests) for the year ended December 31, 2018 and
2017.
|
|
|
(b)
|
Includes an increase
in revenues of $158 million and $587 million for the three months
and year ended
December 31, 2018 due to the implementation of a new accounting
standard for revenue recognition
(Accounting Standard Update 2014-09) on January 1, 2018.
|
|
|
(c)
|
Includes parent
company investment income and the financial results of Consolidated
Container Company,
which was acquired on May 22, 2017.
|
|
|
(d)
|
Includes a loss on
the early redemption of debt of $42 million ($24 million after tax
and noncontrolling
interests) at CNA and $35 million ($11 million after tax and
noncontrolling interests) at Diamond Offshore for
the year ended December 31, 2017.
|
|
|
(e)
|
Includes asset
impairment charges of $28 million ($9 million after tax and
noncontrolling interests) for the three
months ended December 31, 2017 and $27 million and $100 million
($12 million and $32 million after tax and
noncontrolling interests) for the year ended December 31, 2018 and
2017 related to the carrying value of
Diamond Offshoreʼs drilling rigs.
|
|
|
(f)
|
Includes a loss of
$47 million ($15 million after tax and noncontrolling interests) at
Boardwalk Pipeline related
to the sale of a processing facility for the year ended December
31, 2017.
|
|
|
(g)
|
The Corporate segment
consists of investment income from the parent company's cash and
investments, interest
expense, other unallocated expenses and the results of Consolidated
Container since its acquisition date.
|
|
|
(h)
|
Net income for the
three months and year ended December 31, 2017 includes a net
benefit of $200 million,
resulting from the Tax Act. This is comprised of a net benefit of
$294 million and $27 million at Boardwalk
Pipeline and Loews Hotels partially offset by charges of $78
million, $36 million and $7 million at CNA,
Diamond Offshore and Corporate and other.
|
|
|
Loews Corporation
and Subsidiaries
|
|
Consolidated
Financial Review
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
Three
Months
|
Years
Ended
|
|
(In millions, except
per share data)
|
2018
|
2017
|
2018
|
2017
|
|
Revenues:
|
|
|
|
|
|
Insurance
premiums
|
$
1,859
|
$
1,803
|
$
7,312
|
$
6,988
|
|
Net investment
income
|
266
|
543
|
1,817
|
2,182
|
|
Investment gains
(losses)
|
(78)
|
29
|
(57)
|
122
|
|
Operating revenues
and other (a) (b)
|
1,240
|
1,180
|
4,994
|
4,443
|
|
Total
|
3,287
|
3,555
|
14,066
|
13,735
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Insurance claims and
policyholders' benefits
|
1,594
|
1,257
|
5,572
|
5,310
|
|
Operating expenses
and other (a) (b) (c) (d) (e)
|
1,925
|
1,837
|
7,660
|
6,843
|
|
Total
|
3,519
|
3,094
|
13,232
|
12,153
|
|
|
|
|
|
|
|
|
Income (loss) before
income tax
|
(232)
|
461
|
834
|
1,582
|
|
Income tax (expense)
benefit (f)
|
21
|
70
|
(128)
|
(170)
|
|
Net income
(loss)
|
(211)
|
531
|
706
|
1,412
|
|
Amounts attributable
to noncontrolling interests
|
46
|
(50)
|
(70)
|
(248)
|
|
Net income (loss)
attributable to Loews Corporation
|
$
(165)
|
$
481
|
$
636
|
$
1,164
|
|
|
|
|
|
|
|
|
Net income (loss) per
share attributable to Loews Corporation
|
$
(0.53)
|
$
1.43
|
$
1.99
|
$
3.45
|
|
|
|
|
|
|
|
|
Weighted average
number of shares
|
313.88
|
336.80
|
319.93
|
337.50
|
|
(a)
|
Includes the
financial results of Consolidated Container Company, which was
acquired on May 22, 2017.
|
|
(b)
|
Includes an increase
in revenues of $158 million and $587 million and expenses of $159
million and $595 million for
the three months and year ended December 31, 2018 due to the
implementation of a new accounting standard for
revenue recognition (Accounting Standard Update 2014-09) on January
1, 2018. The new standard increases
revenues and expenses to reflect the gross amounts paid by
consumers for CNA's non-insurance warranty products.
|
|
(c)
|
Includes asset
impairment charges of $28 million ($9 million after tax and
noncontrolling interests) for the three
months ended December 31, 2017 and $27 million and $100 million
($12 million and $32 million after tax and
noncontrolling interests) for the year ended December 31, 2018 and
2017 related to the carrying value of Diamond
Offshoreʼs drilling rigs.
|
|
(d)
|
Includes a loss of
$47 million ($15 million after tax and noncontrolling interests) at
Boardwalk Pipeline related to the
sale of a processing facility for the year ended December 31,
2017.
|
|
(e)
|
Includes an aggregate
loss on the early redemption of debt of $77 million ($35 million
after tax and noncontrolling
interests) at CNA and Diamond Offshore for the year ended December
31, 2017.
|
|
(f)
|
Net income for the
three months and year ended December 31, 2017 includes a net
benefit of $200 million, resulting
from the Tax Act.
|
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SOURCE Loews Corporation