NEW
YORK, July 31, 2023 /PRNewswire/ -- Loews
Corporation (NYSE: L) today released its second quarter 2023
financial results.
Second Quarter highlights:
Loews Corporation reported net income of $360 million, or $1.58 per share, in the second quarter of 2023
compared to $167 million, or
$0.68 per share, in the second
quarter of 2022. The year-over-year increase in net income was
driven by higher net income from its consolidated subsidiaries and
higher net investment income at the parent company. The following
bullets highlight key drivers of these results:
- CNA Financial Corporation (NYSE: CNA) posted higher net
investment income, lower investment losses, and improved underlying
underwriting income, partially offset by higher catastrophe losses
and lower favorable Property and Casualty prior year loss reserve
development.
- The parent company posted higher investment returns on
short-term investments and equity securities.
- Loews Corporation repurchased 1.8 million shares of its common
stock for a total cost of $107
million, and bought an additional 0.6 million shares for
$37 million so far in the third
quarter.
- Book value per share, excluding AOCI, increased to $78.56 as of June 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 retired, at maturity, $500 million of outstanding senior notes with
available cash.
- As of June 30, 2023, the parent
company had $2.5 billion of cash and
investments and $1.8 billion of
debt.
CEO commentary:
"Loews had another solid quarter with each of
our consolidated subsidiaries performing well. CNA reported stellar
results, despite high industry catastrophe losses. The company also
recorded its highest ever quarterly underlying underwriting
income."
– James S. Tisch, President and CEO, Loews
Corporation
Consolidated
highlights:
|
|
|
June
30,
|
|
Three
Months
|
Six
Months
|
(In millions, except
per share data)
|
2023
|
2022
(a)
|
2023
|
2022
(a)
|
Net income attributable
to Loews Corporation before
net
investment gains (losses)
|
$
347
|
$
203
|
$
747
|
$
528
|
Net investment gains
(losses):
|
|
|
|
|
CNA
|
(23)
|
(36)
|
(48)
|
(39)
|
Loews Hotels &
Co
|
36
|
|
36
|
|
Total net investment
gains (losses):
|
13
|
(36)
|
(12)
|
(39)
|
Net income attributable
to Loews Corporation
|
$
360
|
$
167
|
$
735
|
$
489
|
Net income per
share
|
$
1.58
|
$
0.68
|
$
3.19
|
$
1.98
|
|
June 30,
2023
|
|
December 31, 2022
(a)
|
|
|
|
|
Book value per
share
|
$
64.59
|
|
$
60.81
|
Book value per share
excluding AOCI
|
78.56
|
|
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 June 30,
2023 compared to 2022
CNA:
- Net income attributable to Loews Corporation improved to
$255 million from $170 million.
- Core income increased to $308
million from $230
million.
- Net written premiums increased 10%, excluding currency
fluctuations, over the prior year's second quarter.
- Results include higher net investment income from limited
partnerships, common stock investments and fixed income
securities.
- Underwriting results were lower due to higher net catastrophe
losses and lower favorable Property and Casualty net prior year
loss reserve development, partially offset by improved underlying
underwriting income.
- Property and Casualty combined ratio was 93.8% compared to
91.0%. The underlying combined ratio was 91.1% compared to
90.8%.
- Net income was positively impacted by lower investment losses
driven by the favorable relative change in fair value of
non-redeemable preferred stock.
Boardwalk:
- Net income increased $18 million
to $57 million compared to
$39 million.
- EBITDA increased $20 million to
$213 million compared to $193 million.
- Net income and EBITDA increased due to higher revenues from
recently completed growth projects, re-contracting at higher rates,
higher utilization-based revenues, as well as improved storage and
parking and lending revenues due to favorable market conditions.
This increase was 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 increased $30 million
to $74 million compared to
$44 million.
- Adjusted EBITDA decreased $15
million to $100 million
compared to $115 million.
- The company recorded a gain of $46
million ($36 million after
tax) related to the acquisition of an additional equity interest in
the Live! By Loews in Arlington,
Texas, which was an unconsolidated joint venture prior to
this transaction.
- Excluding this gain, net income decreased due to higher
operating expenses and lower equity income from joint ventures,
partially offset by improved operating revenues.
- Lower income from joint ventures was driven by slightly
decreased occupancy rates and higher staffing costs.
Corporate & Other:
- Net loss improved $60 million to
$26 million from $86 million due to higher net investment income
from short-term investments and equity securities.
Six months ended June 30, 2023 compared to
2022
Loews Corporation reported net income of $735 million, or $3.19 per share, compared to $489 million, or $1.98 per share, in 2022. The following are key
highlights:
- Loews Hotels & Co's net income, excluding the gain noted in
the three-month period discussion above, increased as occupancy and
average daily room rates at many hotels were higher in 2023 than
2022. This increase was partially offset by higher operating
expenses largely due to increased staffing costs.
- CNA's net investment income improved $165 million from limited partnership and common
stock investments and fixed income securities. Property and
Casualty combined ratio was 93.9% compared to 91.4% in the prior
year period. The underlying combined ratio was 91.0% for both
periods.
- CNA's net written premiums increased 10%, excluding currency
fluctuations, in the first half of 2023 compared to the first half
of last year.
- All other segment drivers of results for the six months ended
June 30, 2023 as compared to the
comparable prior year period are consistent with the three-month
period discussed above.
Share Repurchases:
- On June 30, 2023, there were
226.1 million shares of Loews common stock outstanding.
- For the three months ended June 30,
2023, Loews repurchased 1.8 million shares of its common
stock at an aggregate cost of $107
million.
- Loews has repurchased an additional 0.6 million shares for
$37 million so far in the third
quarter.
- For the three months ended June 30,
2023, Loews purchased 0.1 million shares of CNA common stock
at an aggregate cost of $3
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, July 31, 2023, earnings
remarks will be available on our website.
- Remarks will include commentary from Loews's president and
chief executive officer and from its chief financial officer.
For CNA
- Today, July 31, 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 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
|
|
|
June
30,
|
|
Three
Months
|
Six
Months
|
(In
millions)
|
2023
|
2022
|
2023
|
2022
|
Revenues:
|
|
|
|
|
CNA Financial
(a)
|
$
3,304
|
$
2,926
|
$
6,456
|
$
5,811
|
Boardwalk
Pipelines
|
365
|
325
|
762
|
706
|
Loews Hotels & Co
(b)
|
254
|
200
|
446
|
352
|
Investment income
(loss) and other (c)
|
11
|
(63)
|
53
|
(79)
|
Total
|
$
3,934
|
$
3,388
|
$
7,717
|
$
6,790
|
Income (Loss) Before
Income Tax:
|
|
|
|
|
CNA Financial (a)
(d)
|
$
361
|
$
227
|
$
732
|
$
582
|
Boardwalk
Pipelines
|
76
|
52
|
192
|
174
|
Loews Hotels & Co
(b)
|
101
|
64
|
135
|
86
|
Corporate:
|
|
|
|
|
Investment income
(loss), net
|
11
|
(65)
|
53
|
(81)
|
Other (e)
|
(41)
|
(43)
|
(85)
|
(87)
|
Total (d)
|
$
508
|
$
235
|
$
1,027
|
$
674
|
Net Income (Loss)
Attributable to Loews Corporation:
|
|
|
|
|
CNA Financial (a)
(d)
|
$
255
|
$
170
|
$
523
|
$
435
|
Boardwalk
Pipelines
|
57
|
39
|
143
|
130
|
Loews Hotels & Co
(b)
|
74
|
44
|
98
|
59
|
Corporate:
|
|
|
|
|
Investment income
(loss), net
|
9
|
(51)
|
42
|
(64)
|
Other (e)
|
(35)
|
(35)
|
(71)
|
(71)
|
Net income
attributable to Loews Corporation (d)
|
$
360
|
$
167
|
$
735
|
$
489
|
|
|
(a)
|
The three months ended
June 30, 2023 and 2022 include net investment losses of $32 million
and $59 million ($23 million and $36 million after tax and
noncontrolling interests). The six months ended June 30, 2023 and
2022 include net investment losses of $67 million and $70 million
($48 million and $39 million after tax and noncontrolling
interests).
|
(b)
|
Includes a gain of $46
million ($36 million after tax) for the three and six months ended
June 30, 2023 related to Loews Hotels & Co's acquisition of an
additional equity interest and consolidation of a previously
unconsolidated joint venture property.
|
(c)
|
Includes investment
income (loss) from the parent company's cash and
investments.
|
(d)
|
The effects of adopting
ASU 2018-12 on the Selected Financial Information were as
follows:
|
Three Months Ended June
30, 2022
|
As Reported
|
|
Effect of
Adoption
|
|
As Adjusted
|
(In
millions)
|
|
|
|
|
|
Income (Loss) Before
Income Tax:
|
|
|
|
|
|
CNA
Financial
|
$
245
|
|
$
(18)
|
|
$
227
|
Total
|
253
|
|
(18)
|
|
235
|
Net Income (Loss)
Attributable to Loews Corporation:
|
|
|
|
|
|
CNA
Financial
|
$
183
|
|
$
(13)
|
|
$
170
|
Total
|
180
|
|
(13)
|
|
167
|
Six Months Ended June
30, 2022
|
As Reported
|
|
Effect of
Adoption
|
|
As Adjusted
|
(In
millions)
|
|
|
|
|
|
Income (Loss) Before
Income Tax:
|
|
|
|
|
|
CNA
Financial
|
$
623
|
|
$
(41)
|
|
$
582
|
Total
|
715
|
|
(41)
|
|
674
|
Net Income (Loss)
Attributable to Loews Corporation:
|
|
|
|
|
|
CNA
Financial
|
$
464
|
|
$
(29)
|
|
$
435
|
Total
|
518
|
|
(29)
|
|
489
|
|
|
(e)
|
Consists of parent
company interest expense, corporate expenses, and the equity income
(loss) of Altium Packaging.
|
Loews Corporation
and Subsidiaries
Consolidated
Financial Review
|
|
|
June
30,
|
|
Three
Months
|
Six
Months
|
(In millions, except
per share data)
|
2023
|
2022
|
2023
|
2022
|
Revenues:
|
|
|
|
|
Insurance
premiums
|
$
2,347
|
$
2,155
|
$
4,595
|
$
4,214
|
Net investment
income
|
592
|
366
|
1,161
|
798
|
Investment gains
(losses) (a)
|
14
|
(59)
|
(21)
|
(70)
|
Operating revenues and
other
|
981
|
926
|
1,982
|
1,848
|
Total
|
3,934
|
3,388
|
7,717
|
6,790
|
|
|
|
|
|
Expenses:
|
|
|
|
|
Insurance claims and
policyholders' benefits (b)
|
1,779
|
1,601
|
3,432
|
3,079
|
Operating expenses and
other
|
1,647
|
1,552
|
3,258
|
3,037
|
Total
|
3,426
|
3,153
|
6,690
|
6,116
|
|
|
|
|
|
Income before income
tax (b)
|
508
|
235
|
1,027
|
674
|
Income tax expense
(b)
|
(120)
|
(48)
|
(235)
|
(135)
|
Net income
(b)
|
388
|
187
|
792
|
539
|
Amounts attributable to
noncontrolling interests (b)
|
(28)
|
(20)
|
(57)
|
(50)
|
Net income attributable
to Loews Corporation (b)
|
$
360
|
$
167
|
$
735
|
$
489
|
|
|
|
|
|
Net income per share
attributable to Loews Corporation (b)
|
$
1.58
|
$
0.68
|
$
3.19
|
$
1.98
|
|
|
|
|
|
Weighted average number
of shares
|
227.97
|
245.94
|
230.78
|
247.20
|
(a)
|
Includes a gain of $46
million ($36 million after tax) for the three and six months ended
June 30, 2023 related to Loews Hotels & Co's acquisition of an
additional equity interest and 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 June
30, 2022
|
As Reported
|
|
Effect of
Adoption
|
|
As Adjusted
|
(In
millions)
|
|
|
|
|
|
Insurance claims and
policyholders' benefits
|
$
1,583
|
|
$
18
|
|
$
1,601
|
Income before income
tax
|
253
|
|
(18)
|
|
235
|
Income tax
expense
|
(51)
|
|
3
|
|
(48)
|
Net income
|
202
|
|
(15)
|
|
187
|
Amounts attributable to
noncontrolling interests
|
(22)
|
|
2
|
|
(20)
|
Net income attributable
to Loews Corporation
|
180
|
|
(13)
|
|
167
|
Net income per share
attributable to Loews Corporation
|
0.73
|
|
(0.05)
|
|
0.68
|
Six Months Ended June
30, 2022
|
As Reported
|
|
Effect of
Adoption
|
|
As Adjusted
|
(In
millions)
|
|
|
|
|
|
Insurance claims and
policyholders' benefits
|
$
3,038
|
|
$
41
|
|
$
3,079
|
Income before income
tax
|
715
|
|
(41)
|
|
674
|
Income tax
expense
|
(143)
|
|
8
|
|
(135)
|
Net income
|
572
|
|
(33)
|
|
539
|
Amounts attributable to
noncontrolling interests
|
(54)
|
|
4
|
|
(50)
|
Net income attributable
to Loews Corporation
|
518
|
|
(29)
|
|
489
|
Net income per share
attributable to Loews Corporation
|
2.09
|
|
(0.11)
|
|
1.98
|
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:
|
June
30,
|
|
Three
Months
|
Six
Months
|
(In
millions)
|
2023
|
2022
|
2023
|
2022
|
CNA net income
attributable to Loews Corporation
|
$
255
|
$
170
|
$
523
|
$
435
|
Investment
losses
|
25
|
40
|
53
|
43
|
Consolidating
adjustments including noncontrolling interests
|
28
|
20
|
57
|
50
|
Core income
|
$
308
|
$
230
|
$
633
|
$
528
|
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:
|
June
30,
|
|
Three
Months
|
Six
Months
|
(In
millions)
|
2023
|
2022
|
2023
|
2022
|
Boardwalk net income
attributable to Loews Corporation
|
$
57
|
$
39
|
$
143
|
$
130
|
Interest
|
35
|
42
|
72
|
84
|
Income tax
expense
|
19
|
13
|
49
|
44
|
Depreciation and
amortization
|
102
|
99
|
203
|
194
|
EBITDA
|
$
213
|
$
193
|
$
467
|
$
452
|
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 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:
|
June
30,
|
|
Three
Months
|
Six
Months
|
(In
millions)
|
2023
|
2022
|
2023
|
2022
|
Loews Hotels & Co
net income attributable to Loews Corporation
|
$
74
|
$
44
|
$
98
|
$
59
|
Interest
|
(1)
|
4
|
4
|
8
|
Income tax
expense
|
27
|
20
|
37
|
27
|
Depreciation and
amortization
|
17
|
16
|
33
|
31
|
EBITDA
|
117
|
84
|
172
|
125
|
Gain on asset
acquisition
|
(46)
|
|
(46)
|
|
Asset
impairments
|
9
|
14
|
9
|
14
|
Equity investment
adjustments:
|
|
|
|
|
Loews Hotels & Co's
equity method income
|
(41)
|
(53)
|
(72)
|
(79)
|
Pro rata Adjusted
EBITDA of equity method investments
|
62
|
71
|
124
|
124
|
Consolidating
adjustments
|
(1)
|
(1)
|
(2)
|
(2)
|
Adjusted
EBITDA
|
$
100
|
$
115
|
$
185
|
$
182
|
The following table presents a reconciliation of Loews Hotels
& Co's equity method income to Pro rata Adjusted EBITDA of
equity method investments:
|
June
30,
|
|
Three
Months
|
Six
Months
|
(In
millions)
|
2023
|
2022
|
2023
|
2022
|
Loews Hotels & Co's
equity method income
|
$
41
|
$
53
|
$
72
|
$
79
|
Pro rata share of
equity method investments:
|
|
|
|
|
Interest
|
12
|
9
|
23
|
18
|
Income tax
expense
|
|
|
|
|
Depreciation and
amortization
|
12
|
12
|
25
|
25
|
Distributions in excess
of basis
|
(3)
|
(3)
|
3
|
2
|
Consolidation
adjustments
|
|
|
1
|
|
Pro rata Adjusted
EBITDA of equity method investments
|
$
62
|
$
71
|
$
124
|
$
124
|
View original
content:https://www.prnewswire.com/news-releases/loews-corporation-reports-net-income-of-360-million-for-the-second-quarter-of-2023-301888856.html
SOURCE Loews Corporation