LOEWS CORPORATION REPORTS NET INCOME OF $446 MILLION FOR THE FOURTH QUARTER OF 2023 AND $1.4 BILLION FOR THE FULL YEAR
- Net income of $446 million, or $1.99 per share, in the fourth quarter of 2023, representing a 26% increase over the same period in 2022
- Repurchased 14.0 million common shares for $852 million in 2023
- Book value per share, excluding AOCI, increased 9% to $81.92 as of December 31, 2023, from $74.88 as of December 31, 2022
- CEO commented on strong results, with each subsidiary producing robust performance
- Net loss of $14 million in Corporate & Other segment
- Charge of $37 million related to the termination of a defined benefit plan
Insights
The reported repurchase of 14.0 million common shares for $852 million by Loews Corporation signifies a robust approach to capital allocation and shareholder value enhancement. Such a large-scale buyback can be indicative of the management's confidence in the company's intrinsic value, often leading to earnings per share (EPS) accretion. It is crucial to analyze the impact of this buyback on the company's leverage and liquidity, as an extensive repurchase program can sometimes strain financial resources or limit future investment capabilities.
Furthermore, the improved net income and year-over-year growth are promising signs for investors, reflecting operational efficiency and potentially leading to a positive market revaluation. However, it is important to consider the sustainability of these income sources and whether they are attributable to core operations or one-time events. The increase in book value per share, excluding Accumulated Other Comprehensive Income (AOCI), suggests a solid growth in equity, which is a positive indicator of the company's financial health.
Loews Corporation's earnings report showcases a diversified business model, with subsidiaries in different sectors contributing to the overall financial success. The 26% increase in net income in Q4 2023 compared to the same period in 2022 is particularly noteworthy, especially in the context of the broader economic environment. Investors should pay attention to the performance of CNA Financial Corporation and Boardwalk Pipelines, as these subsidiaries appear to be significant contributors to the parent company's earnings.
Moreover, the Property and Casualty combined ratio, which is a key performance metric in the insurance industry, shows a favorable outcome for CNA. A combined ratio below 100% indicates profitability in underwriting, which is a strong sign for CNA's core insurance operations. The growth in net written premiums by 10% is also indicative of competitive strength and market penetration.
The details provided on CNA's performance, particularly the improvement in Property and Casualty underwriting results and the lower net catastrophe losses, are of significant interest. The Property and Casualty underlying combined ratio slightly improved, which points towards efficient claims management and pricing discipline. Investors should consider how these metrics compare to industry averages and what they suggest about CNA's competitive positioning within the insurance sector.
Additionally, the adoption of ASU 2018-12 and its retrospective application could have implications for the comparability of financial results. This accounting standard update affects the accounting for long-duration contracts, which is particularly relevant for insurance companies. The impact of this change on reported figures should be carefully assessed to ensure a clear understanding of the underlying business performance.
14.0 MILLION COMMON SHARES REPURCHASED IN 2023 FOR
Fourth Quarter highlights:
Loews Corporation reported net income of
- CNA Financial Corporation's (NYSE: CNA) net income improved year-over-year due to higher net investment income and higher underwriting income.
- Boardwalk Pipelines' results improved due to higher revenues from re-contracting, partially offset by higher expenses.
- These increases were partially offset by lower investment returns on equity securities at the parent company compared to the 2022 period.
- Loews Corporation repurchased 2.1 million shares of its common stock for a total cost of
$141 million - Book value per share, excluding AOCI, increased
9% to$81.92 $74.88 - As of December 31, 2023, the parent company had
$2.6 billion $1.8 billion
CEO commentary:
"Loews had a spectacular quarter, with each of our subsidiaries producing strong results."
– James S. Tisch, President and CEO, Loews Corporation
Consolidated highlights:
December 31, | |||||
Three Months | Years Ended | ||||
(In millions, except per share data) | 2023 | 2022 (a) | 2023 | 2022 (a) | |
Net income attributable to Loews Corporation before | |||||
net investment gains (losses) | $ 442 | $ 378 | $ 1,469 | $ 960 | |
Net investment gains (losses): | |||||
CNA | 4 | (23) | (71) | (138) | |
Loews Hotels & Co | 36 | ||||
Total net investment gains (losses) | 4 | (23) | (35) | (138) | |
Net income attributable to Loews Corporation | $ 446 | $ 355 | $ 1,434 | $ 822 | |
Net income per share | $ 1.99 | $ 1.49 | $ 6.29 | $ 3.38 | |
December 31, 2023 | December 31, 2022 (a) | |||
Book value per share | $ 70.69 | $ 60.81 | ||
Book value per share excluding AOCI | 81.92 | 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 December 31, 2023 compared to 2022
CNA:
- Net income attributable to Loews Corporation improved
57% to$336 million $214 million - Core income increased
37% to$362 million $265 million - Results include higher net investment income from limited partnerships 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 premiums grew by
10% driven by strong retention and new business. - Property and Casualty combined ratio was
92.1% compared to93.7% . Property and Casualty underlying combined ratio was91.4% compared to91.2% . - Net income was positively impacted by investment gains in 2023 compared to investment losses in 2022 mostly due to the favorable change in fair value of non-redeemable preferred stock.
Boardwalk:
- Net income increased
11% to$92 million $83 million - EBITDA increased
5% to$260 million $248 million - Net income and EBITDA increased due to higher transportation revenues from re-contracting and recently completed growth projects, increased storage and parking and lending revenues, and the Bayou Ethane acquisition. These increases were partially offset by higher depreciation expenses due to an increased asset base from recently completed growth projects and higher employee-related expenses.
Loews Hotels:
- Net income of
$32 million $33 million - Adjusted EBITDA of
$83 million $85 million - Net income slightly decreased due to lower equity income from joint ventures driven by decreased overall occupancy rates and higher operating costs offset by consolidating the results of a property previously accounted for under the equity method.
Corporate & Other:
- Results decreased to a net loss of
$14 million $25 million - The decrease in results is primarily due to lower investment income from parent company equity securities.
Year ended December 31, 2023 compared to 2022
Loews Corporation reported net income of
- CNA's results improved due to higher net investment income, higher Property and Casualty underwriting income, lower investment losses, and a significantly lower unfavorable impact from the long-term care annual reserve review performed in the third quarter of each year.
- Investment income at the parent company improved due to higher returns on short-term investments and equity securities.
- Boardwalk Pipelines' results increased due to higher revenues from re-contracting and recently completed growth projects.
- Loews Hotels & Co's net income increased due to an after-tax gain of
$36 million - These increases were partially offset by an after-tax charge of
$37 million
Share Purchases:
- On December 31, 2023, there were 222.2 million shares of Loews common stock outstanding.
- For the three months and year ended December 31, 2023, Loews repurchased 2.1 million and 14.0 million shares of its common stock at an aggregate cost of
$141 million $852 million - For the year ended December 31, 2023, Loews purchased 4.5 million shares of CNA common stock at an aggregate cost of
$178 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
Earnings Remarks and Conference Calls
For Loews Corporation
- Today, February 5, 2024, 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, February 5, 2024, 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 | |||||
December 31, | |||||
Three Months | Years Ended | ||||
(In millions) | 2023 | 2022 | 2023 | 2022 | |
Revenues: | |||||
CNA Financial (a) | $ 3,507 | $ 3,111 | $ 13,299 | $ 11,879 | |
Boardwalk Pipelines | 511 | 401 | 1,636 | 1,446 | |
Loews Hotels & Co (b) | 210 | 189 | 852 | 721 | |
Corporate investment income (loss) and other | 30 | 92 | 114 | (2) | |
Total | $ 4,258 | $ 3,793 | $ 15,901 | $ 14,044 | |
Income (Loss) Before Income Tax: | |||||
CNA Financial (a) (c) | $ 460 | $ 283 | $ 1,518 | $ 814 | |
Boardwalk Pipelines | 116 | 109 | 373 | 330 | |
Loews Hotels & Co (b) | 41 | 41 | 200 | 161 | |
Corporate: | |||||
Investment income (loss), net | 30 | 92 | 114 | (8) | |
Other (d) | (34) | (60) | (209) | (183) | |
Total (c) | $ 613 | $ 465 | $ 1,996 | $ 1,114 | |
Net Income (Loss) Attributable to Loews Corporation: | |||||
CNA Financial (a) (c) | $ 336 | $ 214 | $ 1,094 | $ 612 | |
Boardwalk Pipelines | 92 | 83 | 283 | 247 | |
Loews Hotels & Co (b) | 32 | 33 | 147 | 117 | |
Corporate: | |||||
Investment income (loss), net | 24 | 72 | 90 | (6) | |
Other (d) | (38) | (47) | (180) | (148) | |
Net income attributable to Loews Corporation (c) | $ 446 | $ 355 | $ 1,434 | $ 822 | |
(a) | The three months ended December 31, 2023 includes net investment gains of |
(b) | Includes a gain of |
(c) | The effects of adopting ASU 2018-12 on the Selected Financial Information were as follows: |
Three Months Ended December 31, 2022 | As | Effect of | As | |||
Income (Loss) Before Income Tax: | ||||||
CNA Financial | $ 294 | $ (11) | $ 283 | |||
Total | 476 | (11) | 465 | |||
Net Income (Loss) Attributable to Loews Corporation: | ||||||
CNA Financial | $ 223 | $ (9) | $ 214 | |||
Total | 364 | (9) | 355 | |||
Year Ended December 31, 2022 | As | Effect of | As | |||
Income (Loss) Before Income Tax: | ||||||
CNA Financial | $ 1,081 | $ (267) | $ 814 | |||
Total | 1,381 | (267) | 1,114 | |||
Net Income (Loss) Attributable to Loews Corporation: | ||||||
CNA Financial | $ 802 | $ (190) | $ 612 | |||
Total | 1,012 | (190) | 822 | |||
(d) | Consists of parent company interest expense, corporate expenses and the equity income (loss) of Altium Packaging. The year ended December 31, 2023 includes a charge of |
Loews Corporation and Subsidiaries | |||||
Consolidated Financial Review | |||||
December 31, | |||||
Three Months | Years Ended | ||||
(In millions, except per share data) | 2023 | 2022 | 2023 | 2022 | |
Revenues: | |||||
Insurance premiums | $ 2,479 | $ 2,232 | $ 9,480 | $ 8,667 | |
Net investment income | 643 | 600 | 2,395 | 1,802 | |
Investment gains (losses) (a) | 6 | (33) | (53) | (199) | |
Operating revenues and other | 1,130 | 994 | 4,079 | 3,774 | |
Total | 4,258 | 3,793 | 15,901 | 14,044 | |
Expenses: | |||||
Insurance claims and policyholders' benefits (b) | 1,810 | 1,694 | 7,068 | 6,653 | |
Operating expenses and other | 1,835 | 1,634 | 6,837 | 6,277 | |
Total | 3,645 | 3,328 | 13,905 | 12,930 | |
Income before income tax (b) | 613 | 465 | 1,996 | 1,114 | |
Income tax expense (b) | (136) | (87) | (451) | (223) | |
Net income (b) | 477 | 378 | 1,545 | 891 | |
Amounts attributable to noncontrolling interests (b) | (31) | (23) | (111) | (69) | |
Net income attributable to Loews Corporation (b) | $ 446 | $ 355 | $ 1,434 | $ 822 | |
Net income per share attributable to Loews Corporation (b) | $ 1.99 | $ 1.49 | $ 6.29 | $ 3.38 | |
Weighted average number of shares | 223.80 | 238.08 | 227.81 | 243.28 | |
(a) | Includes a gain of |
(b) | The effects of adopting ASU 2018-12 on the Consolidated Financial Review were as follows: |
Three Months Ended December 31, 2022 | As | Effect of | As | |||
Insurance claims and policyholders' benefits | $ 1,683 | $ 11 | $ 1,694 | |||
Income before income tax | 476 | (11) | 465 | |||
Income tax expense | (88) | 1 | (87) | |||
Net income | 388 | (10) | 378 | |||
Amounts attributable to noncontrolling interests | (24) | 1 | (23) | |||
Net income attributable to Loews Corporation | 364 | (9) | 355 | |||
Net income per share attributable to Loews Corporation | 1.53 | (0.04) | 1.49 | |||
Year Ended December 31, 2022 | As | Effect of | As | |||
Insurance claims and policyholders' benefits | $ 6,386 | $ 267 | $ 6,653 | |||
Income before income tax | 1,381 | (267) | 1,114 | |||
Income tax expense | (278) | 55 | (223) | |||
Net income | 1,103 | (212) | 891 | |||
Amounts attributable to noncontrolling interests | (91) | 22 | (69) | |||
Net income attributable to Loews Corporation | 1,012 | (190) | 822 | |||
Net income per share attributable to Loews Corporation | 4.16 | (0.78) | 3.38 |
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:
December 31, | |||||
Three Months | Years Ended | ||||
(In millions) | 2023 | 2022 | 2023 | 2022 | |
CNA net income attributable to Loews Corporation | $ 336 | $ 214 | $ 1,094 | $ 612 | |
Investment (gains) losses | (5) | 26 | 79 | 154 | |
Consolidation adjustments including noncontrolling | 31 | 25 | 111 | 70 | |
Core income | $ 362 | $ 265 | $ 1,284 | $ 836 | |
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:
December 31, | |||||
Three Months | Years Ended | ||||
(In millions) | 2023 | 2022 | 2023 | 2022 | |
Boardwalk net income attributable to Loews | $ 92 | $ 83 | $ 283 | $ 247 | |
Interest, net | 38 | 40 | 144 | 166 | |
Income tax expense | 24 | 26 | 90 | 83 | |
Depreciation and amortization | 106 | 99 | 412 | 396 | |
EBITDA | $ 260 | $ 248 | $ 929 | $ 892 | |
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:
December 31, | |||||
Three Months | Years Ended | ||||
(In millions) | 2023 | 2022 | 2023 | 2022 | |
Loews Hotels & Co net income attributable to Loews | $ 32 | $ 33 | $ 147 | $ 117 | |
Interest, net | 4 | 4 | 9 | 11 | |
Income tax expense | 9 | 8 | 53 | 44 | |
Depreciation and amortization | 18 | 17 | 69 | 64 | |
EBITDA | 63 | 62 | 278 | 236 | |
Noncontrolling interest share of EBITDA adjustments | (2) | (5) | |||
Gain on asset acquisition | (46) | ||||
Asset impairments | 3 | 3 | 12 | 25 | |
Equity investment adjustments: | |||||
Loews Hotels & Co's equity method income | (31) | (33) | (129) | (148) | |
Pro rata Adjusted EBITDA of equity method | 50 | 54 | 218 | 234 | |
Consolidation adjustments | (1) | (2) | |||
Adjusted EBITDA | $ 83 | $ 85 | $ 328 | $ 345 | |
The following table presents a reconciliation of Loews Hotels & Co's equity method income to Pro rata Adjusted EBITDA of equity method investments:
December 31, | |||||
Three Months | Years Ended | ||||
(In millions) | 2023 | 2022 | 2023 | 2022 | |
Loews Hotels & Co's equity method income | $ 31 | $ 33 | $ 129 | $ 148 | |
Pro rata share of equity method investments: | |||||
Interest, net | 10 | 11 | 43 | 40 | |
Income tax expense | |||||
Depreciation and amortization | 12 | 12 | 49 | 50 | |
Distributions in excess of basis | (3) | (3) | (3) | (4) | |
Consolidation adjustments | 1 | ||||
Pro rata Adjusted EBITDA of equity method | $ 50 | $ 54 | $ 218 | $ 234 | |
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SOURCE Loews Corporation
FAQ
How many common shares did Loews Corporation repurchase in 2023?
What was the increase in net income in the fourth quarter of 2023 compared to the same period in 2022?
What was the book value per share, excluding AOCI, as of December 31, 2023?
What was the reason for the net loss of $14 million in the Corporate & Other segment?
What was the charge related to in the PR?
