NEW YORK, Nov. 2, 2020 /PRNewswire/ -- Loews Corporation
(NYSE: L) today reported net income of $139
million, or $0.50 per share,
for the three months ended September 30,
2020, compared to net income of $72
million, or $0.24 per share,
in the third quarter of 2019. Net loss for the nine months ended
September 30, 2020 was $1.33 billion, or $4.70 per share, compared to net income of
$715 million, or $2.34 per share, for the nine months ended
September 30, 2019.
CNA Financial Corporation drove the quarterly increase in net
income. Property & casualty underwriting income before
catastrophe losses and prior year development rose, as CNA posted
an underlying combined ratio of 92.6%, down from 94.6% in the prior
year quarter. CNA also benefited from higher net investment income,
more net investment gains, and reduced net reserve charges in its
Life & Group business. Offsetting these improvements were
increased net catastrophe losses primarily from severe
weather-related events.
Loews Hotels & Co posted a quarterly net loss due to the
revenue impact of the COVID-19 pandemic, and Boardwalk Pipelines'
net income also declined from last year. Additionally, last year's
third quarter included a net loss from Diamond Offshore Drilling,
Inc.
"CNA's underlying Property & Casualty business is performing
extremely well," said James Tisch,
CEO of Loews. "Rates increased 12% in the quarter and new business
flow was robust, resulting in strong premium growth. The underlying
combined ratios of 92.6% for the third quarter and 93.3%
year-to-date are excellent. While weather-related catastrophe
losses were high for CNA and the industry this quarter, CNA's
underlying property & casualty franchise is stronger than it
has ever been." Turning to Loews's other subsidiaries, Mr. Tisch
added, "Operationally, both Boardwalk and Altium continued to
perform steadily and Loews Hotels, although negatively impacted by
the pandemic, is slowly coming back from its lows in May."
Book value per share decreased to $63.16 at September 30,
2020 from $65.71 at
December 31, 2019, driven by the net
losses reported for the first nine months of 2020. Book value per
share excluding accumulated other comprehensive income (AOCI)
decreased to $62.29 at September 30, 2020 from $65.94 at December 31,
2019.
CONSOLIDATED HIGHLIGHTS
(In millions, except
per share data)
|
September
30,
|
Three
Months
|
Nine
Months
|
2020
|
2019
|
2020
|
2019
|
Income (loss) before
net investment gains (losses)
|
$
106
|
$
67
|
$
(299)
|
$
688
|
Net investment gains
(losses):
|
|
|
|
|
CNA
|
33
|
5
|
(72)
|
27
|
Corporate
|
|
|
(957)
|
|
Total net investment
gains (losses)
|
33
|
5
|
(1,029)
|
27
|
Net income (loss)
attributable to Loews Corporation
|
$
139
|
$
72
|
$
(1,328)
|
$
715
|
Net income (loss) per
share
|
$
0.50
|
$
0.24
|
$
(4.70)
|
$
2.34
|
|
September 30,
2020
|
December 31,
2019
|
Book value per
share
|
$
63.16
|
$
65.71
|
Book value per
share excluding AOCI
|
62.29
|
65.94
|
The economic disruption caused by the COVID-19 pandemic and
measures to mitigate the spread of the virus have significantly
affected Loews's results. The full impact of COVID-19 on Loews will
depend on the duration of mandated and voluntary containment
efforts, related economic policies, and other societal responses to
the pandemic.
Three Months Ended September 30,
2020 Compared to Three Months Ended September 30, 2019
CNA's property & casualty underwriting income before
catastrophe losses and prior year development improved, as premiums
increased and the underlying combined ratio improved by two points.
However, higher net catastrophe losses, primarily from severe
weather-related events, more than offset this improvement. CNA's
earnings benefited from higher net investment income and net
investment gains, with limited partnership returns driving the
increase in net investment income. Net reserve charges in CNA's
Life & Group business declined to $58
million (after tax and noncontrolling interests) from
$112 million (after tax and
noncontrolling interests), primarily from CNA recognizing a lower
active life reserve premium deficiency during its annual long term
care reserve review.
Boardwalk Pipelines' earnings decreased as net operating
revenues declined and expenses increased. Revenue from growth
projects recently placed in service and higher storage and parking
and lending revenues did not fully offset revenue declines from
expiring contracts replaced by contracts at lower overall average
rates. Depreciation and property taxes rose primarily due to an
increased asset base from growth projects, as well as the
expiration of property tax abatements.
Loews Hotels' results reflect the continuing negative impact of
the COVID-19 pandemic. As of September 30,
2020, 21 of 27 properties were operational, with six
properties resuming operations during the quarter. All hotels
currently operating are experiencing low occupancy, consistent with
market conditions, but revenues across the system rose
significantly from the second quarter to the third quarter. Loews
Hotels has enacted significant measures to adjust the operating
cost structure of each hotel and of the management company. For the
three months ended September 30,
2020, Loews Hotels recorded a $24
million ($17 million after
tax) gain on an asset sale, partially offset by impairment charges
of $10 million ($7 million after tax).
Nine Months Ended September 30,
2020 Compared to Nine Months Ended September 30, 2019
The net loss for the nine months ended September 30, 2020 was driven by six main
factors: (i) an investment loss caused by the write down of the
carrying value of our interest in Diamond Offshore as a result of
its bankruptcy filing on April 26,
2020; (ii) drilling rig impairment charges at Diamond
Offshore; (iii) operating losses at Loews Hotels; (iv) a reduction
in CNA's and the parent company's net investment income; (v) net
investment losses at CNA as compared to net investment gains in
2019; and (vi) lower property and casualty underwriting income at
CNA caused mainly by higher catastrophe losses.
CNA's earnings decreased primarily due to higher net catastrophe
losses, lower net investment income, and net investment losses as
compared to investment gains in the prior year period. Partially
offsetting these declines were lower net reserve charges in CNA's
Life & Group business, primarily from the recognition of a
lower active life reserve premium deficiency in the current year
period. In 2020, pretax net catastrophe losses of $536 million included $273
million from weather-related events, $195 million related to the COVID-19 pandemic,
and $68 million related to civil
unrest, as compared to total pretax net catastrophe losses of
$128 million in 2019 due primarily to
weather-related events. The decline in net investment income was
driven by lower returns on limited partnership and common stock
investments. The net investment losses were driven by higher
impairment losses on fixed maturity securities and the unfavorable
change in the fair value of non-redeemable preferred stock.
Boardwalk Pipelines' earnings decreased primarily due to the
reasons set forth above in the three-month discussion. Prior
year net income benefited from proceeds of $19 million (after tax) received in conjunction
with a contract cancellation due to a customer bankruptcy.
Loews Hotels' earnings decreased primarily due to the reasons
set forth in the three-month discussion above and benefited from
$37 million ($24 million after tax) in gains on the sale of
assets mostly offset by impairment charges of $30 million ($22
million after tax).
The parent company investment portfolio posted lower income
primarily because limited partnership and equity investments
generated losses versus gains in the prior year.
Diamond Offshore's results for the nine months ended
September 30, 2020, as compared with
the 2019 period, only reflect operations through the bankruptcy
filing of Diamond Offshore on April 26,
2020 and include drilling rig impairment charges of
$408 million (after tax and
noncontrolling interests) recorded in the first quarter of
2020.
Corporate segment results include the investment loss realized
upon the bankruptcy filing by Diamond Offshore.
SHARE REPURCHASES
At September 30, 2020, there were
275.0 million shares of Loews common stock outstanding. For the
three and nine months ended September 30,
2020, the Company repurchased 5.4 million and 16.1 million
shares of its common stock for an aggregate cost of $195 million and $673
million. From October 1, 2020
to October 30, 2020, the Company
repurchased an additional 0.7 million shares of its common stock at
an aggregate cost of $23 million.
Depending on market conditions, the Company may from time to time
purchase its shares and shares of 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 10:00 a.m. ET. A live webcast will be available
via the Investors/Media section of 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 2178207. 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 9:00 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. An online replay will be
available on CNA's website following the call.
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
Three
Months
|
Nine
Months
|
(In
millions)
|
2020
|
2019
|
2020
|
2019
|
Revenues:
|
|
|
|
|
CNA Financial
(a)
|
$
2,840
|
$
2,686
|
$
7,897
|
$
8,011
|
Boardwalk Pipelines
(b)
|
289
|
296
|
926
|
969
|
Loews Hotels & Co
(c)
|
60
|
156
|
236
|
522
|
Investment income
(loss) and other (d) (e)
|
276
|
286
|
(490)
|
842
|
Diamond Offshore
(f)
|
|
251
|
305
|
711
|
Total
|
$
3,465
|
$
3,675
|
$
8,874
|
$
11,055
|
|
|
|
|
|
|
Income (Loss) Before
Income Tax:
|
|
|
|
|
CNA Financial (a) (g)
(h)
|
$
251
|
$
127
|
$
344
|
$
888
|
Boardwalk Pipelines
(b)
|
26
|
39
|
166
|
217
|
Loews Hotels & Co
(c)
|
(62)
|
5
|
(192)
|
42
|
Corporate:
(i)
|
|
|
|
|
Investment income
(loss), net
|
23
|
36
|
(33)
|
153
|
Other (e)
|
(55)
|
(45)
|
(1,363)
|
(136)
|
Diamond Offshore (f)
(j)
|
|
(102)
|
(934)
|
(321)
|
Total
|
$
183
|
$
60
|
$
(2,012)
|
$
843
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Loews Corporation:
|
|
|
|
|
CNA Financial (a) (g)
(h)
|
$
192
|
$
96
|
$
272
|
$
650
|
Boardwalk Pipelines
(b)
|
20
|
29
|
123
|
161
|
Loews Hotels & Co
(c)
|
(47)
|
3
|
(144)
|
28
|
Corporate:
(i)
|
|
|
|
|
Investment income
(loss), net
|
18
|
28
|
(26)
|
121
|
Other (e)
|
(44)
|
(36)
|
(1,077)
|
(108)
|
Diamond Offshore (f)
(j)
|
|
(48)
|
(476)
|
(137)
|
Net income (loss)
attributable to Loews Corporation
|
$
139
|
$
72
|
$
(1,328)
|
$
715
|
|
|
|
|
|
|
(a)
|
Includes net
investment gains of $46 million ($33 million after tax and
noncontrolling interests) and $8 million ($5 million after tax and
noncontrolling interests) for the three months ended September 30,
2020 and 2019. Includes net investment losses of $101 million ($72
million after tax and noncontrolling interests) and net investment
gains of $41 million ($27 million after tax and noncontrolling
interests) for the nine months ended September 30, 2020 and
2019.
|
(b)
|
Includes settlement
proceeds of $26 million ($19 million after tax) related to a
customer bankruptcy for the nine months ended September 30,
2019.
|
(c)
|
Includes gains on the
sale of assets of $24 million ($17 million after tax) and $37
million ($24 million after tax) for the three and nine months ended
September 30, 2020 and impairment charges of $10 million ($7
million after tax ) and $30 million ($22 million after tax ) for
the three and nine months ended September 30, 2020. The nine months
ended September 30, 2019 includes impairment charges of $11 million
($6 million after tax).
|
(d)
|
Includes parent
company investment income (loss) and the financial results of
Altium Packaging.
|
(e)
|
Includes a loss of
$1.2 billion ($957 million after tax) for the nine months ended
September 30, 2020 as a result of Diamond Offshore's Chapter 11
bankruptcy filing on April 26, 2020.
|
(f)
|
Includes financial
results through April 26, 2020.
|
(g)
|
Includes a charge of
$74 million ($52 million after tax and noncontrolling interests)
and $216 million ($151 million after tax and noncontrolling
interests) for the three and nine months ended September 30, 2020
and 2019 related to the recognition of an active life reserve
premium deficiency in long term care that was primarily driven by
changes in interest rate assumptions.
|
(h)
|
Includes net
catastrophe losses of $160 million ($112 million after tax and
noncontrolling interests) and $32 million ($22 million after tax
and noncontrolling interests) for the three months ended September
30, 2020 and 2019, and $536 million ($377 million after tax and
noncontrolling interests) and $128 million ($90 million after tax
and noncontrolling interests) for the nine months ended September
30, 2020 and 2019.
|
(i)
|
The Corporate segment
consists of investment income (loss) from the parent company's cash
and investments, interest expense, other unallocated corporate
expenses and the financial results of Altium Packaging as well as
the loss resulting from Diamond Offshore's Chapter 11 bankruptcy
filing on April 26, 2020.
|
(j)
|
Includes impairment
charges of $774 million ($408 million after tax and noncontrolling
interests) at Diamond Offshore related to the carrying value of
four drilling rigs for the nine months ended September 30,
2020.
|
|
|
|
|
|
|
|
Loews Corporation
and Subsidiaries
|
Consolidated
Financial Review
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
Three
Months
|
Nine
Months
|
(In millions, except
per share data)
|
2020
|
2019
|
2020
|
2019
|
Revenues:
|
|
|
|
|
Insurance
premiums
|
$
1,953
|
$
1,890
|
$
5,672
|
$
5,517
|
Net investment
income
|
540
|
525
|
1,347
|
1,733
|
Investment gains
(losses) (a)
|
46
|
8
|
(1,312)
|
41
|
Operating revenues
and other (b)
|
926
|
1,252
|
3,167
|
3,764
|
Total
|
3,465
|
3,675
|
8,874
|
11,055
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
Insurance claims and
policyholders' benefits (c) (d)
|
1,616
|
1,614
|
4,683
|
4,323
|
Operating expenses
and other (b) (e)
|
1,666
|
2,001
|
6,203
|
5,889
|
Total
|
3,282
|
3,615
|
10,886
|
10,212
|
|
|
|
|
|
|
Income (loss) before
income tax
|
183
|
60
|
(2,012)
|
843
|
Income tax (expense)
benefit
|
(21)
|
(21)
|
284
|
(183)
|
Net income
(loss)
|
162
|
39
|
(1,728)
|
660
|
Amounts attributable
to noncontrolling interests
|
(23)
|
33
|
400
|
55
|
Net income (loss)
attributable to Loews Corporation
|
$
139
|
$
72
|
$
(1,328)
|
$
715
|
|
|
|
|
|
|
Net income (loss) per
share attributable to Loews Corporation
|
$
0.50
|
$
0.24
|
$
(4.70)
|
$
2.34
|
|
|
|
|
|
|
Weighted average
number of shares
|
279.49
|
302.35
|
282.63
|
305.73
|
|
|
|
|
|
|
(a)
|
Includes a loss of
$1.2 billion ($957 million after tax) for the nine months ended
September 30, 2020 as a result of Diamond Offshore's Chapter 11
bankruptcy filing on April 26, 2020.
|
(b)
|
Includes financial
results of Diamond Offshore through April 26, 2020.
|
(c)
|
Includes a charge of
$74 million ($52 million after tax and noncontrolling interests)
and $216 million ($151 million after tax and noncontrolling
interests) for the three and nine months ended September 30, 2020
and 2019 related to the recognition of an active life reserve
premium deficiency in long term care that was primarily driven by
changes in interest rate assumptions.
|
(d)
|
Includes net
catastrophe losses of $160 million ($112 million after tax and
noncontrolling interests) and $32 million ($22 million after tax
and noncontrolling interests) for the three months ended September
30, 2020 and 2019, and $536 million ($377 million after tax and
noncontrolling interests) and $128 million ($90 million after tax
and noncontrolling interests) for the nine months ended September
30, 2020 and 2019.
|
|
(e)
|
Includes impairment
charges of $774 million ($408 million after tax and noncontrolling
interests) at Diamond Offshore related to the carrying value of
four drilling rigs for the nine months ended September 30,
2020.
|
|
|
|
|
|
|
|
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SOURCE Loews Corporation