NEW
YORK, May 1, 2023 /PRNewswire/ -- Loews
Corporation (NYSE: L) today released its first quarter 2023
financial results.
First Quarter highlights:
Loews Corporation reported net income of $375 million, or $1.61 per share, in the first quarter of 2023
compared to $322 million, or
$1.29 per share, in the first quarter
of 2022. The following are the key highlights:
- The increase in net income was driven by higher investment
returns at the Parent Company and improved results at Loews Hotels
& Co.
- CNA posted higher net investment income and a record high
quarter of underlying underwriting income, partially offset by
higher catastrophe losses, unfavorable prior year loss reserve
development, and higher investment losses.
- Net income at Boardwalk Pipelines was relatively unchanged, as
higher revenues were offset by an increase in maintenance
costs.
- Loews repurchased 8.2 million shares for a total cost of
$486 million, which represents nearly
3.5% of its shares outstanding at the beginning of the
quarter.
- Book value per share increased to $63.41 at March 31,
2023, from $60.81 at
December 31, 2022 due to repurchases
of common shares and operating results during the quarter.
- Book value per share, excluding accumulated other comprehensive
income (AOCI), increased to $76.84 at
March 31, 2023, from $74.88 at December 31,
2022.
- Loews cash and investments balance was $3.1 billion as of March
31, 2023.
CEO commentary:
"Our subsidiaries performed well this quarter.
Loews Hotels produced stellar results and CNA recorded its highest
ever quarterly underlying underwriting income."
–
James S. Tisch, President and
CEO, Loews Corporation
Consolidated
highlights:
|
|
Three Months
Ended
March
31,
|
(In millions, except
per share data)
|
2023
|
2022
(a)
|
Income before net
investment losses
|
$
400
|
$
325
|
Net investment
losses:
|
|
|
CNA
|
(25)
|
(3)
|
Net income attributable
to Loews Corporation
|
$
375
|
$
322
|
|
|
|
Net income per
share
|
$
1.61
|
$
1.29
|
|
March 31,
2023
|
|
December 31, 2022
(a)
|
|
|
|
|
Book value per
share
|
$
63.41
|
|
$
60.81
|
Book value per share
excluding AOCI
|
76.84
|
|
74.88
|
(a)
|
As of January 1, 2023,
Loews Corporation adopted Accounting Standards Update 2018-12,
"Financial Services – Insurance (Topic 944): Targeted Improvements
to the Accounting for Long-Duration Contracts ("ASU 2018-12"),
which was applied retrospectively effective January 1, 2021.
Previously reported amounts have been adjusted to reflect
application of the new guidance. See pages 4 and 5 of this release
for more information.
|
Three months ended March 31, 2023 compared to
2022
CNA:
- Net income attributable to Loews Corporation improved to
$268 million from $265 million.
- Core income increased to $325
million from $298
million.
- Results include higher net investment income from fixed income
securities and limited partnership and common stock
investments.
- Underwriting results were lower due to higher net catastrophe
losses and unfavorable net prior year loss reserve development
partially offset by improved underlying underwriting income.
- Net income was negatively impacted by higher investment losses
driven by sales of fixed income securities.
- Property and Casualty combined ratio was 93.9% compared to
91.9% in the prior year period. The underlying combined ratio was
90.8% compared to 91.4% in the prior year period.
Boardwalk:
- Net income decreased $5 million
to $86 million compared to
$91 million.
- EBITDA decreased $2 million to
$256 million compared to $258 million.
- Net income and EBITDA decreased due to increased repairs and
maintenance costs associated with pipeline safety regulatory
requirements partially offset by higher revenues from recently
completed growth projects, re-contracting at higher rates, and
higher utilization-based revenues. Storage and parking and lending
revenues also increased.
Loews Hotels:
- Net income increased $9 million
to $24 million compared to
$15 million.
- Adjusted EBITDA increased $19
million to $86 million
compared to $67 million.
- Revenues increased due to improved occupancy and higher average
daily room rates at many hotels.
- Higher revenues were partially offset by an increase in
operating expenses due to higher demand levels.
Corporate & Other:
- Net loss improved $46 million to
$3 million from $49 million due to higher net investment
income.
Share Repurchases:
- On March 31, 2023, there were 228
million shares of Loews common stock outstanding.
- For the three months ended March 31,
2023, Loews repurchased 8.2 million shares of its common
stock at an aggregate cost of $486
million.
- Depending on market conditions, Loews 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.
Reconciliation of GAAP Measures to Non-GAAP Measures
This news 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, Boardwalk utilizes earnings
before interest, income tax expense, depreciation and amortization
("EBITDA"), and Loews Hotels utilizes Adjusted EBITDA. These
measures are defined and reconciled to the most comparable GAAP
measures on pages 6 and 7 of this release.
Earnings Remarks and Conference Calls
For Loews Corporation
– Today, May 1, 2023, earnings remarks will be
available on our website.
– Remarks will include commentary from Loews's president and
chief executive officer and chief financial officer.
For CNA
– Today, May 1, 2023, at 9:00
a.m. ET.
– A live webcast will be available via the Investor Relations
section of www.cna.com.
– To participate, dial 1-844-481-2830 (USA Toll Free) or +1-412-317-1850
(International).
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 news 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 news 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
|
|
Three Months Ended
March 31,
|
(In
millions)
|
2023
|
2022
|
Revenues:
|
|
|
CNA Financial
(a)
|
$
3,152
|
$
2,885
|
Boardwalk
Pipelines
|
397
|
381
|
Loews Hotels &
Co
|
192
|
152
|
Investment income
(loss) (b)
|
42
|
(16)
|
Total
|
$
3,783
|
$
3,402
|
Income (Loss) Before
Income Tax:
|
|
|
CNA Financial (a)
(c)
|
$
371
|
$
355
|
Boardwalk
Pipelines
|
116
|
122
|
Loews Hotels &
Co
|
34
|
22
|
Corporate:
(d)
|
|
|
Investment income
(loss), net
|
42
|
(16)
|
Other
|
(44)
|
(44)
|
Total (c)
|
$
519
|
$
439
|
Net Income (Loss)
Attributable to Loews Corporation:
|
|
|
CNA Financial (a)
(c)
|
$
268
|
$
265
|
Boardwalk
Pipelines
|
86
|
91
|
Loews Hotels &
Co
|
24
|
15
|
Corporate:
(d)
|
|
|
Investment income
(loss), net
|
33
|
(13)
|
Other
|
(36)
|
(36)
|
Net income
attributable to Loews Corporation (c)
|
$
375
|
$
322
|
|
|
(a)
|
The three months ended
March 31, 2023 and 2022 include net investment losses of $35
million and $11 million ($25 million and $3 million after tax and
noncontrolling interests).
|
(b)
|
Includes investment
income (loss) from the parent company's cash and
investments.
|
(c)
|
The effects of adopting
ASU 2018-12 on the Selected Financial Information were as
follows:
|
Three Months Ended
March 31, 2022
|
As Reported
|
|
Effect of
Adoption
|
|
As Adjusted
|
(In
millions)
|
|
|
|
|
|
Income (Loss) Before
Income Tax:
|
|
|
|
|
|
CNA
Financial
|
$
378
|
|
$
(23)
|
|
$
355
|
Total
|
462
|
|
(23)
|
|
439
|
Net Income (Loss)
Attributable to Loews Corporation:
|
|
|
|
|
|
CNA
Financial
|
$
281
|
|
$
(16)
|
|
$
265
|
Total
|
338
|
|
(16)
|
|
322
|
|
|
(d)
|
The Corporate segment
consists of investment income (loss) from the parent company's cash
and investments, interest expense, corporate expenses, and the
equity income (loss) of Altium Packaging.
|
Loews Corporation
and Subsidiaries Consolidated Financial
Review
|
|
Three Months Ended
March 31,
|
(In millions, except
per share data)
|
2023
|
2022
|
Revenues:
|
|
|
Insurance
premiums
|
$
2,248
|
$
2,059
|
Net investment
income
|
569
|
432
|
Investment
losses
|
(35)
|
(11)
|
Operating revenues and
other
|
1,001
|
922
|
Total
|
3,783
|
3,402
|
|
|
|
Expenses:
|
|
|
Insurance claims and
policyholders' benefits (a)
|
1,653
|
1,478
|
Operating expenses and
other
|
1,611
|
1,485
|
Total
|
3,264
|
2,963
|
|
|
|
Income before income
tax (a)
|
519
|
439
|
Income tax expense
(a)
|
(115)
|
(87)
|
Net income
(a)
|
404
|
352
|
Amounts attributable to
noncontrolling interests (a)
|
(29)
|
(30)
|
Net income attributable
to Loews Corporation (a)
|
$
375
|
$
322
|
|
|
|
Net income per share
attributable to Loews Corporation (a)
|
$
1.61
|
$
1.29
|
|
|
|
Weighted average number
of shares
|
233.62
|
248.48
|
(a)
|
The effects of adopting
ASU 2018-12 on the Consolidated Financial Review were as
follows:
|
Three Months Ended
March 31, 2022
|
As Reported
|
|
Effect of
Adoption
|
|
As Adjusted
|
(In
millions)
|
|
|
|
|
|
Insurance claims and
policyholders' benefits
|
$
1,455
|
|
$
23
|
|
$
1,478
|
Income before income
tax
|
462
|
|
(23)
|
|
439
|
Income tax
expense
|
(92)
|
|
5
|
|
(87)
|
Net income
|
370
|
|
(18)
|
|
352
|
Amounts attributable to
noncontrolling interests
|
(32)
|
|
2
|
|
(30)
|
Net income attributable
to Loews Corporation
|
338
|
|
(16)
|
|
322
|
Net income per share
attributable to Loews Corporation
|
1.36
|
|
(0.07)
|
|
1.29
|
Definitions of Non-GAAP Measures and Reconciliation of GAAP
Measures to Non-GAAP Measures:
CNA Financial Corporation
Core income is calculated by excluding from CNA's net income
attributable to Loews Corporation the after-tax effects of
investment gains (losses). 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. The following table presents a
reconciliation of CNA net income attributable to Loews Corporation
to core income:
|
Three Months Ended
March 31,
|
(In
millions)
|
2023
|
2022
|
CNA net income
attributable to Loews Corporation
|
$
268
|
$
265
|
Investment
losses
|
28
|
3
|
Consolidating
adjustments including noncontrolling interests
|
29
|
30
|
Core income
|
$
325
|
$
298
|
Boardwalk Pipelines
EBITDA is defined as earnings before interest, income tax
expense, depreciation and amortization. The following table
presents a reconciliation of Boardwalk net income attributable to
Loews Corporation to EBITDA:
|
Three Months Ended
March 31,
|
(In
millions)
|
2023
|
2022
|
Boardwalk net income
attributable to Loews Corporation
|
$
86
|
$
91
|
Interest
|
39
|
42
|
Income tax
expense
|
30
|
31
|
Depreciation and
amortization
|
101
|
94
|
EBITDA
|
$
256
|
$
258
|
Loews Hotels & Co
Adjusted EBITDA is calculated by excluding from Loews Hotels
& Co's EBITDA, state and local government development grants,
gains or losses on dispositions, asset impairments, and equity
method income and including Loews Hotels & Co's pro rata
Adjusted EBITDA of equity method investments. Pro rata Adjusted
EBITDA of equity method investments is calculated by applying Loews
Hotels & Co's ownership percentage to the underlying equity
method investment's components of EBITDA and excluding
distributions in excess of basis.
The following table presents a reconciliation of Loews Hotels
& Co net income attributable to Loews Corporation to Adjusted
EBITDA:
|
Three Months Ended
March 31,
|
(In
millions)
|
2023
|
2022
|
Loews Hotels & Co
net income attributable to Loews Corporation
|
$
24
|
$
15
|
Interest
|
6
|
4
|
Income tax
expense
|
10
|
7
|
Depreciation and
amortization
|
16
|
15
|
EBITDA
|
56
|
41
|
Equity investment
adjustments:
|
|
|
Loews Hotels & Co's
equity method income
|
(31)
|
(26)
|
Pro rata Adjusted
EBITDA of equity method investments
|
62
|
53
|
Consolidating
adjustments
|
(1)
|
(1)
|
Adjusted
EBITDA
|
$
86
|
$
67
|
The following table presents a reconciliation of Loews Hotels
& Co's equity method income to Pro rata Adjusted EBITDA of
equity method investments:
|
Three Months Ended
March 31,
|
(In
millions)
|
2023
|
2022
|
Loews Hotels & Co's
equity method income
|
$
31
|
$
26
|
Pro rata share of
equity method investments:
|
|
|
Interest
|
12
|
9
|
Income tax
expense
|
|
|
Depreciation and
amortization
|
13
|
12
|
Distributions in excess
of basis
|
6
|
5
|
Consolidation
adjustments
|
|
1
|
Pro rata Adjusted
EBITDA of equity method investments
|
$
62
|
$
53
|
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SOURCE Loews Corporation