EX-99.1 2 lc_complete.htm EXHIBIT 99.1 lc_complete.htm
Exhibit 99.1


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Contact:
Mary Skafidas
Investor and Public Relations
(212) 521-2788
 
 

NEWS RELEASE





LOEWS CORPORATION REPORTS NET INCOME OF
$327 MILLION FOR THE THIRD QUARTER OF 2016


NEW YORK, October 31, 2016—Loews Corporation (NYSE:L) today reported net income for the three months ended September 30, 2016 of $327 million, or $0.97 per share, compared to $182 million, or $0.50 per share, in the prior year period. Net income for the nine months ended September 30, 2016 was $364 million, or $1.08 per share, compared to $461 million, or $1.25 per share, in the prior year period.

Book value per share increased to $54.22 at September 30, 2016 from $51.67 at December 31, 2015. Book value per share excluding accumulated other comprehensive income (AOCI) increased to $53.79 at September 30, 2016 from $52.72 at December 31, 2015.

CONSOLIDATED HIGHLIGHTS

   
September 30,
  
   
Three Months
    
Nine Months
  
(In millions, except per share data)
  
2016
    
2015
    
2016
    
2015
  
                         
Income before net investment gains (losses)
   $ 300     $ 211     $ 352     $ 479  
Net investment gains (losses)
     27       (29 )     12       (18 )
Net income attributable to Loews Corporation
   $ 327     $ 182     $ 364     $ 461  
Net income per share
   $ 0.97     $ 0.50     $ 1.08     $ 1.25  

   
September 30, 2016
    
December 31, 2015
  
             
Book value per share
   $ 54.22     $ 51.67  
Book value per share excluding AOCI
     53.79       52.72  

 
 
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Three Months Ended September 30, 2016 Compared to 2015
 
Net income attributable to Loews Corporation for the three months ended September 30, 2016 increased $145 million as compared to the prior year period due to higher earnings at CNA Financial Corporation and improved results from the parent company investment portfolio. These increases were partially offset by lower earnings at Diamond Offshore and Boardwalk Pipeline.

CNA’s earnings increased due to higher net investment income driven by limited partnership investments as well as realized investment gains in the third quarter of 2016 compared to losses in the prior year period. These increases were partially offset by lower favorable net prior year reserve development and higher underwriting expenses, which included certain non-recurring costs related to information technology and employee termination costs.

Diamond Offshore’s earnings decreased due to a substantial reduction in the number of rigs operating as compared to the year ago period and significant unscheduled rig downtime, partially offset by lower depreciation expense resulting mainly from the asset impairment charges incurred in prior periods.

Boardwalk Pipeline’s earnings were lower due to a non-recurring franchise tax refund received in last year’s third quarter. Excluding the tax refund, Boardwalk Pipeline’s earnings were higher due to revenues from new growth projects recently placed in service and an increase in storage and parking and lending revenues, partially offset by an increase in interest expense.

Loews Hotels’ earnings increased primarily due to higher earnings from joint venture properties.

Income generated by the parent company investment portfolio improved due to higher income from limited partnership investments and equity securities.

Nine Months Ended September 30, 2016 Compared to 2015

Net income attributable to Loews Corporation for the nine months ended September 30, 2016 decreased primarily due to lower earnings at Diamond Offshore partially offset by improved results at CNA, Boardwalk Pipeline and from the parent company investment portfolio.

CNA’s earnings increased due to higher net investment income driven by limited partnership investments, realized investment gains in 2016 as compared to losses in 2015, and higher favorable net prior year reserve development, partially offset by higher underwriting expenses.

Diamond Offshore’s earnings decreased primarily due to increased asset impairment charges. Excluding these impairment charges, year-over-year earnings decreased as a result of a substantial reduction in the number of operating rigs, partially offset by revenue earned by newbuild drillships and lower depreciation expense as a result of the asset impairment charges.

Boardwalk Pipeline’s earnings increased due to new rates in effect following the Gulf South rate case, the return to service of the Evangeline pipeline, and growth projects recently placed in service.

Loews Hotels’ results decreased primarily due to an impairment charge related to a joint venture property.

Income generated by the parent company investment portfolio improved due to higher income from equity securities.


 
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SHARE REPURCHASES

At September 30, 2016, there were 337.0 million shares of Loews common stock outstanding. During the three and nine months ended September 30, 2016, the Company repurchased 0.4 million and 3.0 million shares of its common stock at an aggregate cost of $17 million and $115 million. Depending on market conditions, the Company may from time to time purchase shares of its and 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 11:00 a.m. ET. A live webcast will be available at 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 88205905. An online replay will also be available on the Loews Corporation’s website following the call.

A conference call to discuss the third quarter results of CNA has been scheduled for today at 10:00 a.m. ET. A live webcast will be available at www.cna.com. Those interested in participating in the question and answer session should dial (877) 675-4750, or for international callers, (719) 325-4785.

A conference call to discuss the third quarter results of Boardwalk Pipeline has been scheduled for today at 9:30 a.m. ET. A live webcast will be available at www.bwpmlp.com. Those interested in participating in the question and answer session should dial (855) 793-3255 or for international callers, (631) 485-4925. The conference ID number is 90369196.

A conference call to discuss the third quarter results of Diamond Offshore has been scheduled for today at 8:30 a.m. ET. A live webcast will be available at www.diamondoffshore.com. Those interested in participating in the question and answer session should dial (800) 247-9979, or for international callers, (973) 321-1100. The conference ID number is 89455433.

# # #

ABOUT LOEWS CORPORATION

Loews Corporation is a diversified company with three publicly-traded subsidiaries: CNA Financial Corporation (NYSE: CNA), Diamond Offshore Drilling, Inc. (NYSE: DO) and Boardwalk Pipeline Partners, LP (NYSE: BWP); and one wholly owned subsidiary, Loews Hotels & Resorts. 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
 
 
 
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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.


 
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Loews Corporation and Subsidiaries
Selected Financial Information


   
September 30,
  
(In millions)
  
Three Months
    
Nine Months
  
   
2016
    
2015
    
2016
    
2015
  
Revenues:
                        
CNA Financial
   $ 2,388     $ 2,203     $ 6,954     $ 6,874  
Diamond Offshore
     350       608       1,211       1,867  
Boardwalk Pipeline
     306       296       961       925  
Loews Hotels
     161       146       513       452  
Investment income (loss) and other
     37       (34 )     110       6  
      3,242       3,219       9,749       10,124  
Investment gains (losses):
                                
CNA Financial
     45       (50 )     30       (42 )
Corporate and other
                     (12 )        
      45       (50 )     18       (42 )
Total
   $ 3,287     $ 3,169     $ 9,767     $ 10,082  
Income (Loss) Before Income Tax:
                                
CNA Financial (a)
   $ 431     $ 284     $ 794     $ 755  
Diamond Offshore (b)
     36       139       (538 )     (42 )
Boardwalk Pipeline
     46       48       210       163  
Loews Hotels
     4       1       17       25  
Investment income (loss), net
     36       (35 )     108       4  
Other (c)
     (42 )     (39 )     (134 )     (115 )
      511       398       457       790  
Investment gains (losses):
                                
CNA Financial
     45       (50 )     30       (42 )
Corporate and other
                     (12 )        
      45       (50 )     18       (42 )
Total
   $ 556     $ 348     $ 475     $ 748  
Net Income (Loss) Attributable to Loews Corporation:
                                
CNA Financial (a)
   $ 281     $ 190     $ 541     $ 513  
Diamond Offshore (b)
     7       47       (240 )     (34 )
Boardwalk Pipeline
     14       18       62       55  
Loews Hotels
     3       2       7       15  
Investment income (loss), net
     24       (22 )     72       4  
Other (c)
     (29 )     (24 )     (90 )     (74 )
      300       211       352       479  
Investment gains (losses):
                                
CNA Financial
     27       (29 )     16       (18 )
Corporate and other
                     (4 )        
      27       (29 )     12       (18 )
Net income attributable to Loews Corporation
   $ 327     $ 182     $ 364     $ 461  

(a)
Includes charges of $127 million ($74 million after tax and noncontrolling interests) and $84 million ($49 million after tax and noncontrolling interests) for the nine months ended September 30, 2016 and 2015 related to retroactive reinsurance accounting for the transaction in which CNA Financial ceded substantially all of their legacy asbestos and environmental pollution reserve liabilities to a third party through a loss portfolio transfer.
(b)
Includes asset impairment charges of $680 million ($267 million after tax and noncontrolling interests) and $361 million ($159 million after tax and noncontrolling interests) for the nine months ended September 30, 2016 and 2015 related to the carrying value of Diamond Offshore's drilling rigs.
(c)
Consists primarily of corporate interest expense and other unallocated expenses.


 
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Loews Corporation and Subsidiaries
Consolidated Financial Review


   
September 30,
  
(In millions, except per share data)
  
Three Months
    
Nine Months
  
   
2016
    
2015
    
2016
    
2015
  
Revenues:
                        
Insurance premiums
   $ 1,767     $ 1,751     $ 5,196     $ 5,173  
Net investment income
     561       321       1,570       1,419  
Investment gains (losses)
     45       (50 )     18       (42 )
Contract drilling revenues
     340       599       1,141       1,816  
Other revenues
     574       548       1,842       1,716  
Total
     3,287       3,169       9,767       10,082  
                                 
Expenses:
                                
Insurance claims and policyholders’ benefits (a)
     1,202       1,200       3,949       4,008  
Contract drilling expenses
     187       276       598       971  
Other operating expenses (b)
     1,342       1,345       4,745       4,355  
Total
     2,731       2,821       9,292       9,334  
                                 
Income before income tax
     556       348       475       748  
Income tax expense
     (163 )     (66 )     (171 )     (170 )
Net income
     393       282       304       578  
Amounts attributable to noncontrolling interests
     (66 )     (100 )     60       (117 )
Net income attributable to Loews Corporation
   $ 327     $ 182     $ 364     $ 461  
                                 
Income per share attributable to Loews Corporation
   $ 0.97     $ 0.50     $ 1.08     $ 1.25  
                                 
Weighted average number of shares
     337.62       361.10       338.61       368.03  

(a)
Includes charges of $127 million ($74 million after tax and noncontrolling interests) and $84 million ($49 million after tax and noncontrolling interests) for the nine months ended September 30, 2016 and 2015 related to retroactive reinsurance accounting for the transaction in which CNA Financial ceded substantially all of their legacy asbestos and environmental pollution reserve liabilities to a third party through a loss portfolio transfer.
(b)
Includes asset impairment charges of $680 million ($267 million after tax and noncontrolling interests) and $361 million ($159 million after tax and noncontrolling interests) for the nine months ended September 30, 2016 and 2015 related to the carrying value of Diamond Offshore's drilling rigs.

 
 
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