NEW
YORK, Aug. 1, 2022 /PRNewswire/ -- Loews
Corporation (NYSE:L) today reported net income of $180 million, or $0.73 per share, for the second quarter of 2022
compared to net income of $754
million, or $2.86 per share,
in the second quarter of 2021. Net income for the six months ended
June 30, 2022 was $518 million,
or $2.09 per share, compared to net
income of $1.0 billion, or
$3.82 per share, for the six months
ended June 30, 2021.
Net income for the three months ended June 30, 2021
included a gain of $438 million
(after tax) related to the sale of 47% of Altium Packaging and its
deconsolidation on April 1, 2021.
Excluding this significant transaction, net income for the second
quarter of 2021 would have been $316
million. The decrease in net income quarter-over-quarter was
primarily driven by lower net investment income from limited
partnership and common stock investments and net investment losses
recognized in the second quarter of 2022 compared to net investment
gains in the comparable prior year period. This decline was
partially offset by higher property & casualty underwriting
income and higher net investment income from fixed income
securities at CNA Financial Corporation and
significantly improved results at Loews Hotels & Co.
The drivers of the decrease in net income for the six months
ended June 30, 2022 are consistent
with the three month discussion above.
"Operationally our subsidiaries performed very well this
quarter. Loews Hotels & Co achieved its highest net income
quarter in over a decade and equity market volatility masked CNA's
best ever underlying combined ratio of 90.8%," said James S. Tisch, President and CEO of Loews
Corporation.
Book value per share as of June 30, 2022 was $62.90 compared to $71.84 as of December 31, 2021, reflecting
the impact that increased risk-free interest rates and widening
credit spreads have on CNA's fixed income portfolio. Book value per
share excluding accumulated other comprehensive income (AOCI)
increased to $73.26 as of
June 30, 2022 from $71.09 as of
December 31, 2021.
CONSOLIDATED
HIGHLIGHTS
|
|
June
30,
|
|
Three
Months
|
Six
Months
|
(In millions, except
per share data)
|
2022
|
2021
|
2022
|
2021
|
Income before net
investment gains (losses)
|
$
216
|
$
304
|
$
557
|
$
521
|
Net investment gains
(losses):
|
|
|
|
|
CNA
|
(36)
|
24
|
(39)
|
68
|
Corporate
|
|
426
|
|
426
|
Net income attributable
to Loews Corporation
|
$
180
|
$
754
|
$
518
|
$
1,015
|
|
|
|
|
|
Net income per
share
|
$
0.73
|
$
2.86
|
$
2.09
|
$
3.82
|
|
June 30,
2022
|
|
December 31,
2021
|
|
|
|
|
Book value per
share
|
$
62.90
|
|
$
71.84
|
Book value per share
excluding AOCI
|
73.26
|
|
71.09
|
This press release contains financial measures that are not in
accordance with accounting principles generally accepted in
the United States of America
("GAAP"). Management believes some investors may find these
measures useful to evaluate our and our subsidiaries' financial
performance. CNA utilizes core income and Boardwalk Pipelines
utilizes earnings before interest, income tax expense, depreciation
and amortization ("EBITDA"). These measures are defined and
reconciled to the most comparable GAAP measures on page 6 of this
release.
Three Months Ended June 30, 2022 Compared to Three
Months Ended June 30, 2021
CNA's net income attributable to Loews Corporation for the three
months ended June 30, 2022 decreased
$147 million to $183 million compared to $330 million in the comparable prior year period
and core income for the three months ended June 30, 2022 decreased $96 million to $245
million compared to $341
million in the comparable prior year period due to lower net
investment income from limited partnership and common stock
investments, partially offset by improved property & casualty
underwriting income and higher net investment income from
fixed income securities. Net income was also negatively
impacted by the swing from net investment gains in last year's
second quarter to net investment losses in the second quarter of
2022.
Boardwalk Pipelines' net income for the three months ended
June 30, 2022 decreased $8
million to $39 million
compared to $47 million in the
comparable prior year period and EBITDA for the three months ended
June 30, 2022 decreased $3
million to $193 million
compared to $196 million in the
comparable prior year period due primarily to increased costs from
maintenance projects driven by increased regulatory requirements,
partially offset by higher revenues from growth projects recently
placed into service and an increase in storage and parking and
lending revenues. Net income was also negatively impacted by higher
expenses due to an increased asset base from recently completed
growth projects.
Loews Hotels & Co's results for the three months ended
June 30, 2022 improved $65
million to income of $44
million from a loss of $21
million in the comparable prior year period. This
significant improvement was driven by increased occupancy rates due
to the rebound in travel, especially at resort destinations, and
higher average daily room rates. The hotel properties at the
Universal Orlando Resort contributed meaningfully to the
period-over-period improvement, as all 9,000 rooms were open for
the entire quarter. Net income was negatively impacted by an
impairment charge of $14 million
($11 million after tax) recorded in
the second quarter of 2022 to reduce the carrying value of an asset
to its estimated fair value.
The Corporate & other segment results for the three months
ended June 30, 2022 decreased $484
million to a loss of $86
million from income of $398
million in the comparable prior year period as the second
quarter of 2021 included a $555
million ($438 million after
tax) gain related to the sale of 47% of Altium Packaging and its
deconsolidation on April 1, 2021.
Excluding this significant transaction, results declined due to the
broad market decline of equity securities, partially offset by
reduced overhead costs at the parent company in the second quarter
of 2022 as compared to the comparable prior year period.
Six Months Ended June 30, 2022 Compared to Six Months
Ended June 30, 2021
The drivers of each segment's results for the six months ended
June 30, 2022 as compared to the comparable prior year period
are consistent with the three month discussion above.
SHARE REPURCHASES
At June 30, 2022, there were 242.2 million shares of Loews
common stock outstanding. For the three and six months ended
June 30, 2022, the Company repurchased 4.2 million and 6.3
million shares of its common stock at an aggregate cost of
$254 million and $384 million, respectively. From July 1, 2022 to July 29,
2022, the Company repurchased an additional 1.3 million
shares of its common stock at an aggregate cost of $75 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, in
privately negotiated transactions or otherwise.
CONFERENCE CALLS
A conference call to discuss the second quarter results of Loews
Corporation has been scheduled for today at 10:00 a.m. ET. A live webcast will be available
via the Investors/Media section of www.loews.com. Those interested
in attending can also dial (866) 342-8591, or for international
callers, (203) 518-9797. The conference ID number is L2Q22. An
online replay will also be available at www.loews.com following the
call.
A conference call to discuss the second quarter results of CNA
has been scheduled for today at 9:00 a.m.
ET. A live webcast will be available via the Investor
Relations section of www.cna.com. Those interested in participating
should dial (800) 289-0571, or for international callers, (720)
543-0206.
ABOUT LOEWS CORPORATION
Loews Corporation is a diversified company with businesses in
the insurance, energy, hospitality, and packaging industries. 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
|
|
June
30,
|
|
Three
Months
|
Six
Months
|
(In
millions)
|
2022
|
2021
|
2022
|
2021
|
Revenues:
|
|
|
|
|
CNA Financial
(a)
|
$
2,926
|
$
3,029
|
$
5,811
|
$
5,895
|
Boardwalk
Pipelines
|
325
|
312
|
706
|
684
|
Loews Hotels &
Co
|
200
|
98
|
352
|
155
|
Investment income
(loss) and other (b) (c)
|
(63)
|
564
|
(79)
|
891
|
Total
|
$
3,388
|
$
4,003
|
$
6,790
|
$
7,625
|
Income (Loss) Before
Income Tax:
|
|
|
|
|
CNA Financial
(a)
|
$
245
|
$
463
|
$
623
|
$
840
|
Boardwalk
Pipelines
|
52
|
63
|
174
|
177
|
Loews Hotels & Co
(d)
|
64
|
(26)
|
86
|
(81)
|
Corporate:
(e)
|
|
|
|
|
Investment income
(loss), net
|
(65)
|
24
|
(81)
|
70
|
Other (c)
|
(43)
|
488
|
(87)
|
413
|
Total
|
$
253
|
$
1,012
|
$
715
|
$
1,419
|
Net Income (Loss)
Attributable to Loews Corporation:
|
|
|
|
|
CNA Financial
(a)
|
$
183
|
$
330
|
$
464
|
$
609
|
Boardwalk
Pipelines
|
39
|
47
|
130
|
132
|
Loews Hotels & Co
(d)
|
44
|
(21)
|
59
|
(64)
|
Corporate:
(e)
|
|
|
|
|
Investment income
(loss), net
|
(51)
|
19
|
(64)
|
55
|
Other (c)
|
(35)
|
379
|
(71)
|
283
|
Net income
attributable to Loews Corporation
|
$
180
|
$
754
|
$
518
|
$
1,015
|
|
(a)
|
Includes net investment
losses of $59 million and net investment gains of $38 million ($36
million of losses and $24 million of gains after tax and
noncontrolling interests) for the three months ended June 30, 2022
and 2021. Includes net investment losses of $70 million and net
investment gains of $95 million ($39 million of losses and $68
million of gains after tax and noncontrolling interests) for the
six months ended June 30, 2022 and 2021.
|
(b)
|
Includes parent company
investment income (loss) and the financial results of Altium
Packaging. On April 1, 2021, Loews sold 47% of Altium Packaging,
which was then deconsolidated and subsequently recorded as an
equity method investment.
|
(c)
|
Includes an investment
gain of $555 million ($438 million after tax) for the three and six
months ended June 30, 2021 related to the sale of 47% of Altium
Packaging and its deconsolidation on April 1, 2021.
|
(d)
|
Includes an impairment
charge of $14 million ($11 million after tax) for the three and six
months ended June 30, 2022 to reduce the carrying value of an asset
to its estimated fair value.
|
(e)
|
The Corporate segment
consists of investment income (loss) from the parent company's cash
and investments, interest expense, other unallocated corporate
expenses, the consolidated results of Altium Packaging through
March 31, 2021 and the equity method of accounting for Altium
Packaging subsequent to its deconsolidation on April 1, 2021, as
well as the gain related to the deconsolidation of Altium
Packaging.
|
Loews Corporation
and Subsidiaries
Consolidated Financial Review
|
|
June
30,
|
|
Three
Months
|
Six
Months
|
(In millions, except
per share data)
|
2022
|
2021
|
2022
|
2021
|
Revenues:
|
|
|
|
|
Insurance
premiums
|
$
2,155
|
$
2,035
|
$
4,214
|
$
3,997
|
Net investment
income
|
366
|
616
|
798
|
1,166
|
Investment gains
(losses) (a)
|
(59)
|
578
|
(70)
|
635
|
Operating revenues and
other (b)
|
926
|
774
|
1,848
|
1,827
|
Total
|
3,388
|
4,003
|
6,790
|
7,625
|
|
|
|
|
|
Expenses:
|
|
|
|
|
Insurance claims and
policyholders' benefits
|
1,583
|
1,546
|
3,038
|
3,052
|
Operating expenses and
other (b)
|
1,552
|
1,445
|
3,037
|
3,154
|
Total
|
3,135
|
2,991
|
6,075
|
6,206
|
|
|
|
|
|
Income before income
tax
|
253
|
1,012
|
715
|
1,419
|
Income tax
expense
|
(51)
|
(219)
|
(143)
|
(333)
|
Net income
|
202
|
793
|
572
|
1,086
|
Amounts attributable to
noncontrolling interests
|
(22)
|
(39)
|
(54)
|
(71)
|
Net income attributable
to Loews Corporation
|
$
180
|
$
754
|
$
518
|
$
1,015
|
|
|
|
|
|
Net income per share
attributable to Loews Corporation
|
$
0.73
|
$
2.86
|
$
2.09
|
$
3.82
|
|
|
|
|
|
Weighted average number
of shares
|
245.94
|
263.34
|
247.20
|
265.55
|
|
(a)
|
Includes an investment
gain of $555 million ($438 million after tax) for the three and six
months ended June 30, 2021 related to the sale of 47% of Altium
Packaging and its deconsolidation on April 1, 2021.
|
(b)
|
On April 1, 2021, Loews
sold 47% of Altium Packaging, which was then deconsolidated and
subsequently recorded as an equity method investment.
|
DEFINITIONS OF NON-GAAP MEASURES AND RECONCILIATION OF GAAP
MEASURES TO NON-GAAP MEASURES
CNA Financial Corporation
Core income is calculated by excluding from net income
attributable to Loews Corporation the after-tax effects of
investment gains (losses) and any cumulative effects of changes in
accounting guidance. In addition, core income excludes the effects
of noncontrolling interests. The calculation of core income
excludes investment gains (losses) because these are generally
driven by economic factors that are not necessarily reflective of
CNA's primary operations.
|
June
30,
|
|
Three
Months
|
Six
Months
|
(In
millions)
|
2022
|
2021
|
2022
|
2021
|
CNA net income
attributable toLoews Corporation
|
$
183
|
$
330
|
$
464
|
$
609
|
Investment (gains)
losses
|
40
|
(27)
|
43
|
(76)
|
Consolidating
adjustments including noncontrolling interests
|
22
|
38
|
54
|
71
|
Core income
|
$
245
|
$
341
|
$
561
|
$
604
|
Boardwalk Pipelines
EBITDA is defined as earnings before interest, income tax
expense, depreciation and amortization.
|
June
30,
|
|
Three
Months
|
Six
Months
|
(In
millions)
|
2022
|
2021
|
2022
|
2021
|
Boardwalk Pipelines net
income attributable to Loews Corporation
|
$
39
|
$
47
|
$
130
|
$
132
|
Interest
|
42
|
40
|
84
|
81
|
Income tax
expense
|
13
|
16
|
44
|
45
|
Depreciation and
amortization
|
99
|
93
|
194
|
185
|
EBITDA
|
$
193
|
$
196
|
$
452
|
$
443
|
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SOURCE Loews Corporation