NEW YORK, Nov. 5, 2018 /PRNewswire/ -- Loews
Corporation (NYSE: L) today reported net income for the three
months ended September 30, 2018 of
$278 million, or $0.88 per share, compared to $157 million, or $0.46 per share, in the prior year period. Net
income for the nine months ended September
30, 2018 was $801 million, or
$2.49 per share, compared to
$683 million, or $2.02 per share, in the prior year period.
Net income for the three and nine months ended September 30, 2018 increased as compared to the
prior year period, due to higher earnings at CNA Financial
Corporation, Boardwalk Pipeline Partners, LP and Loews Hotels &
Co. Lower results at Diamond Offshore Drilling, Inc. and the parent
company investment portfolio partially offset the year-over-year
improvement.
Book value per share increased to $60.18 at September 30,
2018 from $57.83 at
December 31, 2017. Book value per
share excluding accumulated other comprehensive income (AOCI)
increased to $62.58 at September 30, 2018 from $57.91 at December 31,
2017.
CONSOLIDATED HIGHLIGHTS
(In millions, except
per share data)
|
September
30,
|
Three
Months
|
Nine
Months
|
2018
|
2017
|
2018
|
2017
|
Income before net
investment gains
|
$
267
|
$
147
|
$ 784
|
$ 627
|
Net investment
gains
|
11
|
10
|
17
|
56
|
Net income attributable
to Loews Corporation
|
$
278
|
$
157
|
$ 801
|
$ 683
|
Net income per
share
|
$ 0.88
|
$ 0.46
|
$ 2.49
|
$ 2.02
|
|
|
|
|
September 30,
2018
|
December 31,
2017
|
Book value per
share
|
$
|
60.18
|
$
|
57.83
|
Book value per
share excluding AOCI
|
|
62.58
|
|
57.91
|
Three Months Ended September 30,
2018 Compared to 2017
CNA's earnings increased due to improved underwriting income
driven by lower net catastrophe losses for the core property &
casualty business as compared to the prior year and a lower
corporate tax rate from the Tax Cuts and Jobs Act of 2017 (the "Tax
Act"). These increases were partially offset by lower favorable net
prior year reserve development and lower net investment income
driven by decreased limited partnership returns. Earnings in 2017
were impacted by a loss of $42
million ($24 million after tax
and noncontrolling interests) on the early redemption of debt.
Diamond Offshore's results declined due to lower revenue
reflecting the ongoing depressed market conditions, which impacted
both rig utilization and average daily revenue. Results were also
negatively impacted by a legal settlement. Earnings in 2017 were
reduced by a loss of $35 million
($11 million after tax and
noncontrolling interests) on the early redemption of debt.
Boardwalk Pipeline's earnings increased as a result of the
Company now owning 100% of the business as compared to 51% in the
prior year period. Net income in 2018 benefited from a lower
corporate tax rate booked at the Loews level due to the Tax Act.
However, on a pretax basis, earnings declined because of lower net
transportation revenues, resulting primarily from a contract
restructuring and reduced rates on renewing contracts and higher
operating expenses primarily due to an increased asset base.
Loews Hotels & Co's earnings increased because of improved
results at several owned hotels including the Loews Miami Beach
Hotel, greater contributions from its joint venture properties in
the Universal Orlando Resort and the lower corporate tax
rate.
Income generated by the parent company investment portfolio
decreased primarily due to weaker returns on equity securities and
alternatives and a lower overall investment balance caused
primarily by the purchase of the Boardwalk units in July 2018, partially offset by a lower corporate
tax rate.
Corporate and other results were consistent with the prior year
period on a pretax basis. 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.
Nine Months Ended September 30,
2018 Compared to 2017
CNA's earnings increased primarily due to the reasons discussed
above partially offset by lower realized investment gains in 2018
as compared with the 2017 period.
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 and lower drilling rig impairment charges in
2018. Earnings in 2017 were impacted by a loss of $35 million ($11
million after tax and noncontrolling interests) on the early
redemption of debt.
Boardwalk Pipeline's earnings increased primarily due to the
reasons discussed above. Earnings in 2017 were impacted by a loss
of $47 million ($15 million after tax and noncontrolling
interests) related to the sale of a processing facility.
Loews Hotels & Co's earnings increased primarily due to
improved operating performance of Orlando 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.
Income generated by the parent company investment portfolio
decreased due to lower performance of equity securities partially
offset by improved returns on short-term investments and a lower
corporate tax rate.
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 deterioration in Corporate and other after-tax
results in 2018.
SHARE REPURCHASES
At September 30, 2018, there were
314.9 million shares of Loews common stock outstanding. For the
three and nine months ended September 30,
2018, the Company repurchased 1.8 million and 17.4 million
shares of its common stock at an aggregate cost of $88 million and $876
million. From October 1, 2018
to November 2, 2018, the Company
repurchased an additional 1.0 million shares of its common stock at
an aggregate cost of $47 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 third 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 5089717. An
online replay will also be available at www.loews.com following the
call.
A conference call to discuss the third 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 (888) 572-7025, or
for international callers, (719) 325-2420.
A conference call to discuss the third 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
6584488.
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
|
Three
Months
|
Nine
Months
|
|
(In
millions)
|
2018
|
2017
|
2018
|
2017
|
|
Revenues:
|
|
|
|
|
|
CNA Financial (a)
(b)
|
$
2,622
|
$
2,441
|
$
7,731
|
$
7,136
|
|
Diamond
Offshore
|
289
|
368
|
859
|
1,144
|
|
Boardwalk
Pipeline
|
279
|
301
|
901
|
987
|
|
Loews Hotels &
Co
|
190
|
162
|
574
|
510
|
|
Investment income and
other (c)
|
228
|
249
|
714
|
403
|
|
Total
|
$
3,608
|
$
3,521
|
$
10,779
|
$
10,180
|
|
|
|
|
|
|
|
|
Income (Loss) Before
Income Tax:
|
|
|
|
|
|
CNA Financial (a)
(d)
|
$
401
|
$
190
|
$
1,077
|
$
905
|
|
Diamond Offshore (d)
(e) (f)
|
(56)
|
(3)
|
(160)
|
13
|
|
Boardwalk Pipeline
(g)
|
38
|
69
|
172
|
210
|
|
Loews Hotels &
Co
|
14
|
8
|
58
|
47
|
|
Investment income,
net
|
5
|
48
|
61
|
109
|
|
Corporate and other
(c)
|
(48)
|
(48)
|
(142)
|
(163)
|
|
Total
|
$
354
|
$
264
|
$
1,066
|
$
1,121
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Loews Corporation:
|
|
|
|
|
|
CNA Financial (a)
(d)
|
$
300
|
$
130
|
$
801
|
$
608
|
|
Diamond Offshore (d)
(e) (f)
|
(27)
|
6
|
(54)
|
25
|
|
Boardwalk Pipeline
(g)
|
28
|
17
|
80
|
60
|
|
Loews Hotels &
Co
|
11
|
4
|
41
|
24
|
|
Investment income,
net
|
4
|
32
|
49
|
72
|
|
Corporate and other
(c)
|
(38)
|
(32)
|
(116)
|
(106)
|
|
Net income
attributable to Loews Corporation
|
$
278
|
$
157
|
$
801
|
$
683
|
|
|
(a)
|
Includes realized
investment gains of $15 million and $16 million ($11 million and
$10 million after tax and noncontrolling interests) for the three
months ended September 30, 2018 and 2017. Realized investment gains
were $21 million and $93 million ($17 million and $56 million after
tax and noncontrolling interests) for the nine months ended
September 30, 2018 and 2017.
|
|
(b)
|
Includes an increase
of $145 million and $419 million for the three and nine months
ended September 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 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
three and nine months ended September 30, 2017.
|
|
(e)
|
Includes asset
impairment charges of $27 million and $72 million ($12 million and
$23 million after tax and noncontrolling interests) for the nine
months ended September 30, 2018 and 2017 related to the carrying
value of Diamond Offshoreʼs drilling rigs.
|
|
(f)
|
Includes a tax
benefit of $43 million ($23 million after noncontrolling interests)
for the nine months ended September 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.
|
|
(g)
|
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 nine months ended September 30,
2017.
|
|
Loews Corporation
and Subsidiaries
|
|
Consolidated
Financial Review
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
|
Three
Months
|
Nine
Months
|
|
(In millions, except
per share data)
|
2018
|
2017
|
2018
|
2017
|
|
Revenues:
|
|
|
|
|
|
Insurance
premiums
|
$
1,853
|
$
1,806
|
$
5,453
|
$
5,185
|
|
Net investment
income
|
494
|
557
|
1,551
|
1,639
|
|
Investment
gains
|
15
|
16
|
21
|
93
|
|
Operating revenues
and other (a) (b)
|
1,246
|
1,142
|
3,754
|
3,263
|
|
Total
|
3,608
|
3,521
|
10,779
|
10,180
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Insurance claims and
policyholders' benefits
|
1,312
|
1,480
|
3,978
|
4,053
|
|
Operating expenses
and other (a) (b) (c) (d)
|
1,942
|
1,777
|
5,735
|
5,006
|
|
Total
|
3,254
|
3,257
|
9,713
|
9,059
|
|
|
|
|
|
|
|
|
Income before income
tax
|
354
|
264
|
1,066
|
1,121
|
|
Income tax expense
(e)
|
(65)
|
(52)
|
(149)
|
(240)
|
|
Net income
|
289
|
212
|
917
|
881
|
|
Amounts attributable
to noncontrolling interests
|
(11)
|
(55)
|
(116)
|
(198)
|
|
Net income
attributable to Loews Corporation
|
$
278
|
$
157
|
$
801
|
$
683
|
|
|
|
|
|
|
|
|
Net income per share
attributable to Loews Corporation
|
$
0.88
|
$
0.46
|
$
2.49
|
$
2.02
|
|
|
|
|
|
|
|
|
Weighted average
number of shares
|
316.81
|
337.79
|
321.73
|
337.73
|
|
|
(a)
|
Includes the
financial results of Consolidated Container Company, which was
acquired on May 22, 2017.
|
|
(b)
|
Includes an increase
of $145 million and $419 million for the three and nine months
ended September 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 asset
impairment charges of $27 million and $72 million ($12 million and
$23 million after tax and noncontrolling interests) for the nine
months ended September 30, 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 nine months ended September 30, 2017.
|
|
(e)
|
Includes a benefit of
$43 million ($23 million after noncontrolling interests) for the
nine months ended September 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