NEW
YORK, Oct. 30, 2023 /PRNewswire/ -- Loews
Corporation (NYSE: L) today released its third quarter 2023
financial results.
Third Quarter highlights:
Loews Corporation reported net income of $253 million, or $1.12 per share, in the third quarter of 2023
compared to a net loss of $22
million, or $0.09 per share,
in the third quarter of 2022. This year's third quarter results
included a $37 million after-tax
charge for the termination of a defined benefit pension plan.
Results for the prior year have been adjusted to reflect the
application of the accounting standard for long-duration contracts
(LDTI). The following highlight key drivers of our third quarter
results:
- CNA Financial Corporation's (NYSE: CNA) net income improved
year-over-year due to higher net investment income, higher
underwriting income, and a significantly lower unfavorable impact
from the long-term care annual reserve reviews performed in the
third quarter of each year.
- The parent company posted higher investment returns on equity
securities and short-term investments.
- Loews Corporation repurchased 1.9 million shares of its common
stock for a total cost of $118
million through the end of the quarter and repurchased an
additional 1.0 million shares for $64
million since September 30,
2023.
- Book value per share, excluding AOCI, increased to $79.92 as of September 30,
2023, from $74.88 as of
December 31, 2022 due to repurchases
of common shares and strong operating results during the year.
- Loews Corporation purchased 4.5 million shares of CNA common
stock for a total cost of $175
million.
- As of September 30, 2023, the
parent company had $2.3 billion of
cash and investments and $1.8 billion
of debt.
CEO commentary:
"Loews had another good quarter with strong
performance across each of our consolidated subsidiaries. CNA
reported strong underwriting results and net income despite high
industry catastrophe losses."
– James S. Tisch, President and CEO, Loews
Corporation
Consolidated highlights:
|
September
30,
|
|
Three
Months
|
Nine
Months
|
(In millions, except
per share data)
|
2023
|
2022
(a)
|
2023
|
2022
(a)
|
Net income attributable
to Loews Corporation before
net
investment gains (losses)
|
$
280
|
$
54
|
$
1,027
|
$
582
|
Net investment gains
(losses):
|
|
|
|
|
CNA
|
(27)
|
(76)
|
(75)
|
(115)
|
Loews Hotels &
Co
|
|
|
36
|
|
Total net investment
gains (losses):
|
(27)
|
(76)
|
(39)
|
(115)
|
Net income (loss)
attributable to Loews Corporation
|
$
253
|
$
(22)
|
$
988
|
$
467
|
Net income (loss) per
share
|
$
1.12
|
$
(0.09)
|
$
4.31
|
$
1.90
|
|
|
September 30,
2023
|
|
December 31, 2022
(a)
|
|
|
|
|
Book value per
share
|
$
64.43
|
|
$
60.81
|
Book value per share
excluding AOCI
|
79.92
|
|
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 September 30,
2023 compared to 2022
CNA:
- Net income attributable to Loews Corporation improved to
$235 million from a loss of
$37 million.
- Core income increased to $289
million from $43 million.
- The annual Life and Group reserve reviews for long-term care
resulted in a $6 million unfavorable
impact compared to an unfavorable impact of $131 million driven by the increase in cost of
care inflation assumptions.
- Results include higher net investment income from limited
partnerships, common stock investments and fixed income
securities.
- Property and Casualty underwriting results were higher due to
improved underlying underwriting income and lower net catastrophe
losses, partially offset by lower favorable net prior year loss
reserve development.
- Net written premium growth of 6%.
- Property and Casualty combined ratio was 94.3% compared to
95.8%. Property and Casualty underlying combined ratio was 90.4%
compared to 91.1%.
- Net income was positively impacted by lower investment losses
on fixed maturity securities.
Boardwalk:
- Net income increased $15 million
to $49 million compared to
$34 million.
- EBITDA increased $10 million to
$202 million compared to $192 million.
- Net income and EBITDA increased due to higher revenues from
re-contracting at higher rates, higher natural gas liquids and
other hydrocarbons transportation revenues, recently completed
growth projects and improved storage and parking and lending
revenues due to favorable market conditions. These increases were
partially offset by increased repairs and maintenance costs
associated with pipeline safety regulatory requirements, as well as
higher employee related expenses.
Loews Hotels:
- Net income decreased $8 million
to $17 million compared to
$25 million.
- Adjusted EBITDA decreased $16
million to $60 million
compared to $76 million.
- Net income decreased due to lower equity income from joint
ventures driven by decreased overall occupancy rates and higher
operating costs.
Corporate & Other:
- Net loss increased $4 million to
$48 million from $44 million.
- The company recorded a charge of $37
million after tax in the third quarter of 2023 related to
the termination of a defined benefit plan.
- Excluding this charge, results improved $33 million mostly due to higher investment
income for the parent company from equity securities and short-term
investments.
Nine months ended September 30, 2023 compared to
2022
Loews Corporation reported net income of $988 million, or $4.31 per share, compared to $467 million, or $1.90 per share. The following are key
highlights:
- CNA's Property and Casualty underwriting results were lower due
to higher net catastrophe losses and unfavorable net prior year
loss reserve development in 2023 compared to favorable net prior
year loss reserve development in 202, partially offset by improved
underlying underwriting income.
- Property and Casualty combined ratio was 94.0% compared to
93.0%. Property and Casualty underlying combined ratio was 90.8%
compared to 91.1%.
- CNA's net written premiums increased 9%.
- Loews Hotels & Co's net income included an after-tax gain
of $36 million related to the
acquisition of an additional equity interest in, and the
consolidation of, a previously unconsolidated joint venture
property in the second quarter of 2023.
- All other segment drivers of results for the nine months ended
September 30, 2023 as compared to the
comparable prior year period are consistent with the three-month
period discussed above.
Share Purchases:
- On September 30, 2023, there were
224.3 million shares of Loews common stock outstanding.
- For the three months ended September 30,
2023, Loews repurchased 1.9 million shares of its common
stock at an aggregate cost of $118
million.
- Loews has repurchased an additional 1.0 million shares for
$64 million since September 30, 2023.
- For the three months ended September 30,
2023, Loews purchased 4.5 million shares of CNA common stock
at an aggregate cost of $175
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, October 30, 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, October 30, 2023, CNA will
host an earnings call at 9:00 a.m.
ET.
- A live webcast will be available via the Investor Relations
section of CNA's website at www.cna.com.
- To participate by phone, 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
|
|
|
September
30,
|
|
Three
Months
|
Nine
Months
|
(In
millions)
|
2023
|
2022
|
2023
|
2022
|
Revenues:
|
|
|
|
|
CNA Financial
(a)
|
$ 3,336
|
$ 2,957
|
$ 9,792
|
$ 8,768
|
Boardwalk
Pipelines
|
363
|
339
|
1,125
|
1,045
|
Loews Hotels & Co
(b)
|
196
|
180
|
642
|
532
|
Corporate investment
income (loss) and other
|
31
|
(15)
|
84
|
(94)
|
Total
|
$ 3,926
|
$ 3,461
|
$
11,643
|
$
10,251
|
Income (Loss) Before
Income Tax:
|
|
|
|
|
CNA Financial (a)
(c)
|
$
326
|
$
(51)
|
$ 1,058
|
$
531
|
Boardwalk
Pipelines
|
66
|
47
|
257
|
221
|
Loews Hotels & Co
(b)
|
24
|
34
|
159
|
120
|
Corporate:
|
|
|
|
|
Investment income
(loss), net
|
31
|
(19)
|
84
|
(100)
|
Other (d)
|
(91)
|
(36)
|
(175)
|
(123)
|
Total (c)
|
$
356
|
$
(25)
|
$ 1,383
|
$
649
|
Net Income (Loss)
Attributable to Loews Corporation:
|
|
|
|
|
CNA Financial (a)
(c)
|
$
235
|
$
(37)
|
$
758
|
$
398
|
Boardwalk
Pipelines
|
49
|
34
|
191
|
164
|
Loews Hotels & Co
(b)
|
17
|
25
|
115
|
84
|
Corporate:
|
|
|
|
|
Investment income
(loss), net
|
24
|
(15)
|
66
|
(79)
|
Other (d)
|
(72)
|
(29)
|
(142)
|
(100)
|
Net income (loss)
attributable to Loews Corporation (c)
|
$
253
|
$
(22)
|
$
988
|
$
467
|
|
|
(a)
|
The three months ended
September 30, 2023 and 2022 include net investment losses of $38
million and $96 million ($27 million and $76 million after tax and
noncontrolling interests). The nine months ended September 30, 2023
and 2022 include net investment losses of $105 million and $166
million ($75 million and $115 million after tax and noncontrolling
interests).
|
(b)
|
Includes a gain of $46
million ($36 million after tax) for the nine months ended September
30, 2023 related to Loews Hotels & Co's acquisition of an
additional equity interest in, and the consolidation of, a
previously unconsolidated joint venture property.
|
(c)
|
The effects of adopting
ASU 2018-12 on the Selected Financial Information were as
follows:
|
|
|
Three Months Ended
September 30, 2022
|
As
Reported
|
|
Effect of
Adoption
|
|
As
Adjusted
|
(In
millions)
|
|
|
|
|
|
Income (Loss) Before
Income Tax:
|
|
|
|
|
|
CNA
Financial
|
$
164
|
|
$
(215)
|
|
$
(51)
|
Total
|
190
|
|
(215)
|
|
(25)
|
Net Income (Loss)
Attributable to Loews Corporation:
|
|
|
|
|
|
CNA
Financial
|
$
115
|
|
$
(152)
|
|
$
(37)
|
Total
|
130
|
|
(152)
|
|
(22)
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2022
|
As
Reported
|
|
Effect of
Adoption
|
|
As
Adjusted
|
(In
millions)
|
|
|
|
|
|
Income (Loss) Before
Income Tax:
|
|
|
|
|
|
CNA
Financial
|
$
787
|
|
$
(256)
|
|
$
531
|
Total
|
905
|
|
(256)
|
|
649
|
Net Income (Loss)
Attributable to Loews Corporation:
|
|
|
|
|
|
CNA
Financial
|
$
579
|
|
$
(181)
|
|
$
398
|
Total
|
648
|
|
(181)
|
|
467
|
|
|
(d)
|
Consists of parent
company interest expense, corporate expenses and the equity income
(loss) of Altium Packaging. The three and nine months ended
September 30, 2023 include a charge of $47 million ($37
million after tax) related to the termination of a defined benefit
plan.
|
Loews Corporation
and Subsidiaries
Consolidated
Financial Review
|
|
|
September
30,
|
|
Three
Months
|
Nine
Months
|
(In millions, except
per share data)
|
2023
|
2022
|
2023
|
2022
|
Revenues:
|
|
|
|
|
Insurance
premiums
|
$
2,406
|
$
2,221
|
$
7,001
|
$
6,435
|
Net investment
income
|
592
|
404
|
1,752
|
1,202
|
Investment losses
(a)
|
(38)
|
(96)
|
(59)
|
(166)
|
Operating revenues and
other
|
966
|
932
|
2,949
|
2,780
|
Total
|
3,926
|
3,461
|
11,643
|
10,251
|
|
|
|
|
|
Expenses:
|
|
|
|
|
Insurance claims and
policyholders' benefits (b)
|
1,826
|
1,880
|
5,258
|
4,959
|
Operating expenses and
other
|
1,744
|
1,606
|
5,002
|
4,643
|
Total
|
3,570
|
3,486
|
10,260
|
9,602
|
|
|
|
|
|
Income (loss) before
income tax (b)
|
356
|
(25)
|
1,383
|
649
|
Income tax expense
(b)
|
(80)
|
(2)
|
(315)
|
(137)
|
Net income (loss)
(b)
|
276
|
(27)
|
1,068
|
512
|
Amounts attributable to
noncontrolling interests (b)
|
(23)
|
5
|
(80)
|
(45)
|
Net income (loss)
attributable to Loews Corporation (b)
|
$
253
|
$
(22)
|
$
988
|
$
467
|
|
|
|
|
|
Net income (loss) per
share attributable to Loews
Corporation (b)
|
$
1.12
|
$
(0.09)
|
$
4.31
|
$
1.90
|
|
|
|
|
|
Weighted average number
of shares
|
225.99
|
240.76
|
229.16
|
245.03
|
|
|
(a)
|
Includes a gain of $46
million ($36 million after tax) for the nine months ended
September 30, 2023 related to Loews Hotels & Co's
acquisition of an additional equity interest in, and the
consolidation of, a previously unconsolidated joint venture
property.
|
(b)
|
The effects of adopting
ASU 2018-12 on the Consolidated Financial Review were as
follows:
|
|
|
Three Months Ended
September 30, 2022
|
As
Reported
|
|
Effect of
Adoption
|
|
As
Adjusted
|
(In
millions)
|
|
|
|
|
|
Insurance claims and
policyholders' benefits
|
$
1,665
|
|
$
215
|
|
$
1,880
|
Income (Loss) before
income tax
|
190
|
|
(215)
|
|
(25)
|
Income tax
expense
|
(47)
|
|
45
|
|
(2)
|
Net income
(loss)
|
143
|
|
(170)
|
|
(27)
|
Amounts attributable to
noncontrolling interests
|
(13)
|
|
18
|
|
5
|
Net income (loss)
attributable to Loews Corporation
|
130
|
|
(152)
|
|
(22)
|
Net income (loss) per
share attributable to Loews Corporation
|
0.54
|
|
(0.63)
|
|
(0.09)
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2022
|
As
Reported
|
|
Effect of
Adoption
|
|
As
Adjusted
|
(In
millions)
|
|
|
|
|
|
Insurance claims and
policyholders' benefits
|
$
4,703
|
|
$
256
|
|
$
4,959
|
Income (loss) before
income tax
|
905
|
|
(256)
|
|
649
|
Income tax
expense
|
(190)
|
|
53
|
|
(137)
|
Net income
(loss)
|
715
|
|
(203)
|
|
512
|
Amounts attributable to
noncontrolling interests
|
(67)
|
|
22
|
|
(45)
|
Net income (loss)
attributable to Loews Corporation
|
648
|
|
(181)
|
|
467
|
Net income (loss) per
share attributable to Loews Corporation
|
2.64
|
|
(0.74)
|
|
1.90
|
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:
|
September
30,
|
|
Three
Months
|
Nine
Months
|
(In
millions)
|
2023
|
2022
|
2023
|
2022
|
CNA net income (loss)
attributable to Loews Corporation
|
$
235
|
$
(37)
|
$
758
|
$
398
|
Investment
losses
|
31
|
84
|
84
|
127
|
Consolidation
adjustments including noncontrolling interests
|
23
|
(4)
|
80
|
46
|
Core income
|
$
289
|
$
43
|
$
922
|
$
571
|
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:
|
September
30,
|
|
Three
Months
|
Nine
Months
|
(In
millions)
|
2023
|
2022
|
2023
|
2022
|
Boardwalk net income
attributable to Loews Corporation
|
$
49
|
$
34
|
$
191
|
$
164
|
Interest,
net
|
33
|
42
|
106
|
126
|
Income tax
expense
|
17
|
13
|
66
|
57
|
Depreciation and
amortization
|
103
|
103
|
306
|
297
|
EBITDA
|
$
202
|
$
192
|
$
669
|
$
644
|
Loews Hotels & Co
Adjusted EBITDA is calculated by excluding from Loews Hotels
& Co's EBITDA, noncontrolling interest share of EBITDA
adjustments, state and local government development grants, gains
or losses on asset acquisitions and 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:
|
September
30,
|
|
Three
Months
|
Nine
Months
|
(In
millions)
|
2023
|
2022
|
2023
|
2022
|
Loews Hotels & Co
net income attributable to Loews Corporation
|
$
17
|
$
25
|
$
115
|
$
84
|
Interest,
net
|
1
|
(1)
|
5
|
6
|
Income tax
expense
|
7
|
9
|
44
|
36
|
Depreciation and
amortization
|
18
|
16
|
51
|
47
|
EBITDA
|
43
|
49
|
215
|
173
|
Noncontrolling interest
share of EBITDA adjustments
|
(2)
|
(1)
|
(3)
|
(1)
|
Gain on asset
acquisition
|
|
|
(46)
|
|
Asset
impairments
|
|
8
|
9
|
22
|
Equity investment
adjustments:
|
|
|
|
|
Loews Hotels & Co's
equity method income
|
(26)
|
(36)
|
(98)
|
(115)
|
Pro rata Adjusted
EBITDA of equity method investments
|
45
|
56
|
168
|
180
|
Consolidation
adjustments
|
|
|
|
(1)
|
Adjusted
EBITDA
|
$
60
|
$
76
|
$
245
|
$
258
|
The following table presents a reconciliation of Loews
Hotels & Co's equity method income to Pro rata Adjusted EBITDA
of equity method investments:
|
September
30,
|
|
Three
Months
|
Nine
Months
|
(In
millions)
|
2023
|
2022
|
2023
|
2022
|
Loews Hotels & Co's
equity method income
|
$
26
|
$
36
|
$
98
|
$
115
|
Pro rata share of
equity method investments:
|
|
|
|
|
Interest,
net
|
10
|
10
|
33
|
28
|
Income tax
expense
|
|
|
|
|
Depreciation and
amortization
|
12
|
12
|
37
|
37
|
Distributions in excess
of basis
|
(3)
|
(3)
|
|
|
Consolidation
adjustments
|
|
1
|
|
|
Pro rata Adjusted
EBITDA of equity method investments
|
$
45
|
$
56
|
$
168
|
$
180
|
View original
content:https://www.prnewswire.com/news-releases/loews-corporation-reports-net-income-of-253-million-for-the-third-quarter-of-2023-301970712.html
SOURCE Loews Corporation