NEW YORK, July 30, 2018 /PRNewswire/ -- Loews Corporation
(NYSE: L) today reported net income for the three months ended
June 30, 2018 of $230 million, or $0.72 per share, compared to $231 million, or $0.69 per share, in the prior year period. Net
income for the six months ended June 30,
2018 was $523 million, or
$1.61 per share, compared to
$526 million, or $1.56 per share, in the prior year period. The
increased earnings per share for the quarter and year to date
periods reflect share repurchase activity in 2017 and 2018.
Net income for the three months ended June 30, 2018 was essentially unchanged from the
prior year period, as lower earnings at Diamond Offshore Drilling,
Inc. and CNA Financial Corporation were offset by improved results
from the parent company investment portfolio and higher earnings at
Boardwalk Pipeline Partners, LP and Loews Hotels & Co. Net
income for the six months ended June 30,
2018 decreased slightly as compared to the prior year period
due primarily to lower earnings at Diamond Offshore.
Book value per share increased to $59.72 at June 30,
2018 from $57.83 at
December 31, 2017. Book value per
share excluding accumulated other comprehensive income (AOCI)
increased to $61.69 at June 30, 2018 from $57.91 at December 31,
2017. The increase in book value per share is primarily
attributable to the commitment to purchase Boardwalk Pipeline
common units not already owned by the Company.
CONSOLIDATED HIGHLIGHTS
(In millions, except
per share data)
|
June 30,
|
Three
Months
|
Six Months
|
2018
|
2017
|
2018
|
2017
|
Income before net
investment gains (losses)
|
$
231
|
$
205
|
$ 517
|
$ 480
|
Net investment gains
(losses)
|
(1)
|
26
|
6
|
46
|
Net income attributable
to Loews Corporation
|
$
230
|
$
231
|
$ 523
|
$ 526
|
Net income per
share
|
$ 0.72
|
$ 0.69
|
$ 1.61
|
$ 1.56
|
|
June 30,
2018
|
December 31,
2017
|
Book value per
share
|
$
59.72
|
$
57.83
|
Book value per
share excluding AOCI
|
61.69
|
57.91
|
Three Months Ended June 30,
2018 Compared to 2017
CNA's earnings decreased slightly mainly due to lower realized
investment results and increased costs associated with the
transition to a new IT infrastructure service provider. This was
offset by an improvement in underwriting income generated by the
core property & casualty business over the prior year due to
the lower corporate tax rate from the Tax Cuts and Jobs Act of 2017
(the "Tax Act"). An increase in earned premium also
contributed to the bottom line. Net investment income also
benefited from the lower tax rate as well as improved performance
of limited partnership investments.
Diamond Offshore's results declined due to lower revenue given
the continuing depressed market conditions, which impacted both rig
utilization and average daily revenue. Asset impairment charges of
$12 million and $23 million (after tax and noncontrolling
interests) were recognized in the three months ended June 30, 2018 and 2017.
Boardwalk Pipeline's earnings increased over the second quarter
of 2017, which included a $15 million
loss (after tax and noncontrolling interest) on the sale of a
processing facility. Additionally, results in the second quarter of
2018 benefited from a lower corporate tax rate booked at the Loews
level due to the Tax Act. Partially offsetting these positives were
reduced transportation revenues resulting primarily from contract
restructuring and lower transportation rates due to contract
expirations.
Loews Hotels & Co's earnings increased due to improved
results at several owned hotels, primarily the Loews Miami Beach
Hotel, slightly higher earnings at joint venture properties and the
lower corporate tax rate.
Income generated by the parent company investment portfolio
increased primarily due to improved returns on limited
partnerships, equity securities and cash, together with the lower
corporate tax rate.
Corporate and other results improved in 2018 on a pretax basis
due to the absence of transaction expenses incurred in 2017 related
to the acquisition of Consolidated Container Company LLC and lower
corporate expenses. Net income for Corporate and other in 2018 was
negatively impacted by the lower corporate tax rate, which resulted
in a reduced tax benefit as compared to the prior year period.
Six Months Ended June 30, 2018
Compared to 2017
CNA's earnings increased primarily due to improved underwriting
results and increased net investment income driven by premium
growth and the lower corporate tax rate, partially offset by lower
realized investment gains and costs associated with the transition
to a new IT infrastructure service provider.
Diamond Offshore's earnings decreased primarily due to the
reasons discussed above, partially offset by a favorable adjustment
in 2018 to an uncertain tax position recorded at year-end 2017
related to the Tax Act.
Boardwalk Pipeline's earnings increased primarily due to the
reasons discussed above.
Loews Hotels & Co's earnings increased primarily due to
improved operating performance of joint venture properties and
improved results at several owned hotels, primarily the Loews Miami
Beach Hotel. The lower corporate tax rate also contributed to the
year-over-year improvement. Results in 2017 included a $10 million net pretax gain on the sale of a
joint venture property and the impairment of an investment in
another joint venture.
Income generated by the parent company investment portfolio
increased due to improved returns on limited partnership and
short-term investments, together with the lower corporate tax rate.
These increases were partially offset by lower performance of
equity securities.
Corporate and other results improved before income tax due to
the reasons discussed above. The lowering of the corporate tax rate
resulted in a slight deterioration in Corporate and other after-tax
results in 2018.
SHARE REPURCHASES
At June 30, 2018, there were 316.7
million shares of Loews common stock outstanding. For the three and
six months ended June 30, 2018, the
Company repurchased 5.8 million and 15.6 million shares of its
common stock at an aggregate cost of $290
million and $788 million. From
July 1, 2018 to July 27, 2018, the Company repurchased an
additional 1.0 million shares of its common stock at an aggregate
cost of $49 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.
On July 18, 2018, the Company
completed the purchase of all of the outstanding common units of
Boardwalk Pipeline not already owned by the Company for
$1.5 billion.
CONFERENCE CALLS
A conference call to discuss the second 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 3197427. An
online replay will also be available on the Loews Corporation's
website following the call.
A conference call to discuss the second quarter results of CNA
has been scheduled for today at 10:00 a.m.
ET. A live webcast will be available at
http://investor.cna.com. Those interested in participating in the
question and answer session should dial (888) 572-7025, or for
international callers, (719) 325-2420.
A conference call to discuss the second quarter results of
Diamond Offshore has been scheduled for today at 8:30 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
4479039.
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. 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.
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Loews Corporation
and Subsidiaries
|
|
|
|
|
Selected Financial
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
Three
Months
|
Six Months
|
(In
millions)
|
2018
|
2017
|
2018
|
2017
|
Revenues:
|
|
|
|
|
CNA
Financial (a) (b)
|
$
2,574
|
$
2,366
|
$
5,109
|
$
4,695
|
Diamond
Offshore
|
271
|
399
|
570
|
776
|
Boardwalk Pipeline
|
285
|
318
|
622
|
686
|
Loews
Hotels & Co
|
201
|
181
|
384
|
348
|
Investment income and other (c)
|
259
|
95
|
486
|
154
|
Total
|
$
3,590
|
$
3,359
|
$
7,171
|
$
6,659
|
Income (Loss) Before
Income Tax:
|
|
|
|
|
CNA
Financial (a) (d)
|
$
329
|
$
370
|
$
676
|
$
715
|
Diamond
Offshore (e)
|
(79)
|
(9)
|
(104)
|
16
|
Boardwalk Pipeline (f)
|
39
|
23
|
134
|
141
|
Loews
Hotels & Co
|
24
|
20
|
44
|
39
|
Investment income, net
|
42
|
2
|
56
|
61
|
Corporate and other (c)
|
(48)
|
(59)
|
(94)
|
(115)
|
Total
|
$
307
|
$
347
|
$
712
|
$
857
|
Net Income (Loss)
Attributable to Loews Corporation:
|
|
|
|
|
CNA
Financial (a) (d)
|
$
240
|
$
244
|
$
501
|
$
478
|
Diamond
Offshore (e) (g)
|
(37)
|
7
|
(27)
|
19
|
Boardwalk Pipeline (f)
|
16
|
6
|
52
|
43
|
Loews
Hotels & Co
|
17
|
10
|
30
|
20
|
Investment income, net
|
34
|
2
|
45
|
40
|
Corporate and other (c)
|
(40)
|
(38)
|
(78)
|
(74)
|
Net
income attributable to Loews Corporation
|
$
230
|
$
231
|
$
523
|
$
526
|
|
|
|
|
|
|
(a)
|
Includes realized
investment losses of $3 million ($1 million after tax and
noncontrolling interests) and realized investment gains of $43
million ($26 million after tax and noncontrolling interests) for
the three months ended June 30, 2018 and 2017. Realized investment
gains were $6 million ($6 million after tax and noncontrolling
interests) and $77 million ($46 million after tax and
noncontrolling interests) for the six months ended June 30, 2018
and 2017.
|
(b)
|
Includes an increase
of $143 million and $280 million for the three and six months ended
June 30, 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 the
financial results of Consolidated Container Company which was
acquired on May 22, 2017, corporate interest expense and other
unallocated corporate expenses.
|
(d)
|
Includes charges of
$40 million ($28 million after tax and noncontrolling interests)
and $20 million ($12 million after tax and noncontrolling
interests) for the six months ended June 30, 2018 and 2017 related
to the 2010 retroactive reinsurance agreement to cede CNAʼs legacy
asbestos and environmental pollution liabilities.
|
|
(e)
|
Includes asset
impairment charges of $27 million ($12 million after tax and
noncontrolling interests) for the three and six months ended June
30, 2018 and $72 million ($23 million after tax and noncontrolling
interests) for the three and six months ended June 30, 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 three and six months ended June 30, 2017.
|
(g)
|
Includes a tax
benefit of $43 million ($23 million after noncontrolling interests)
for the six months ended June 30, 2018 related to a favorable
adjustment to an uncertain tax position recorded by Diamond
Offshore at year-end 2017 related to the Tax Act.
|
Loews Corporation
and Subsidiaries
|
Consolidated
Financial Review
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
Three
Months
|
Six Months
|
(In millions, except
per share data)
|
2018
|
2017
|
2018
|
2017
|
Revenues:
|
|
|
|
|
Insurance premiums
|
$
1,815
|
$
1,734
|
$
3,600
|
$
3,379
|
Net
investment income
|
551
|
478
|
1,057
|
1,082
|
Investment gains (losses)
|
(3)
|
43
|
6
|
77
|
Operating revenues and other (a) (b)
|
1,227
|
1,104
|
2,508
|
2,121
|
Total
|
3,590
|
3,359
|
7,171
|
6,659
|
Expenses:
|
|
|
|
|
Insurance claims and policyholders' benefits (c)
|
1,327
|
1,280
|
2,666
|
2,573
|
Operating expenses and other (a) (b) (d) (e)
|
1,956
|
1,732
|
3,793
|
3,229
|
Total
|
3,283
|
3,012
|
6,459
|
5,802
|
Income before income
tax
|
307
|
347
|
712
|
857
|
Income tax expense
(f)
|
(59)
|
(69)
|
(84)
|
(188)
|
Net income
|
248
|
278
|
628
|
669
|
Amounts attributable
to noncontrolling interests
|
(18)
|
(47)
|
(105)
|
(143)
|
Net income
attributable to Loews Corporation
|
$
230
|
$
231
|
$
523
|
$
526
|
Net income per share
attributable to Loews Corporation
|
$
0.72
|
$
0.69
|
$
1.61
|
$
1.56
|
Weighted average
number of shares
|
319.78
|
337.72
|
324.23
|
337.70
|
|
|
|
|
|
(a)
|
Includes the
financial results of Consolidated Container Company, which was
acquired on May 22, 2017.
|
(b)
|
Includes an increase
of $143 million and $280 million for the three and six months ended
June 30, 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 charges of
$40 million ($28 million after tax and noncontrolling interests)
and $20 million ($12 million after tax and noncontrolling
interests) for the six months ended June 30, 2018 and 2017 related
to the 2010 retroactive reinsurance agreement to cede CNAʼs legacy
asbestos and environmental pollution liabilities.
|
(d)
|
Includes asset
impairment charges of $27 million ($12 million after tax and
noncontrolling interests) for the three and six months ended June
30, 2018 and $72 million ($23 million after tax and noncontrolling
interests) for the three and six months ended June 30, 2017 related
to the carrying value of Diamond Offshoreʼs drilling
rigs.
|
(e)
|
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 three and six months ended June 30, 2017.
|
(f)
|
Includes a benefit of
$43 million ($23 million after noncontrolling interests) for the
six months ended June 30, 2018 related to a favorable adjustment to
an uncertain tax position recorded by Diamond Offshore at year-end
2017 related to the Tax Act.
|
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SOURCE Loews Corporation