Property, Plant and Equipment

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]


December 31	2021		2020
(In millions)

Pipeline equipment (net of accumulated depreciation of $3,742 and $3,402)	$	8,308	$	8,368
Hotel properties (net of accumulated depreciation of $472 and $439)	959		1,083
Other (net of accumulated depreciation of $522 and $688)	281		719
Construction in process	340		281
Property, plant and equipment	$	9,888	$	10,451

Depreciation expense and capital expenditures are as follows:


Year Ended December 31	2021				2020				2019
	Depre-ciation		Capital Expend.		Depre-ciation		Capital Expend.		Depre-ciation		Capital Expend.
(In millions)

CNA Financial	$	51	$	26	$	56	$	25	$	64	$	26
Boardwalk Pipelines	368		340		361		415		348		418
Loews Hotels & Co	63		100		63		88		60		216
Corporate	21		23		74		90		70		53
Diamond Offshore (a)					119		52		356		345
Total	$	503	$	489	$	673	$	670	$	898	$	1,058


(a)			Amounts presented for Diamond Offshore reflect the periods prior to deconsolidation. See Note 2 for further discussion.

Capitalized interest related to the construction and upgrade of qualifying assets amounted to approximately $12 million, $14 million and $18 million for the years ended December 31, 2021, 2020 and 2019.

Asset Impairments

Loews Hotels & Co evaluates properties with indications that their carrying amounts may not be recoverable. It was determined that the carrying values of one property and capitalized costs related to a potential development project in 2020 and four properties in 2019 were impaired. Loews Hotels & Co recorded aggregate impairment charges of $30 million ($22 million after tax) and $99 million ($77 million after tax) for the years ended December 31, 2020 and 2019 and are reported within Operating expenses and other on the Consolidated Statements of Operations.

Loews Hotels & Co utilizes an undiscounted probability-weighted cash flow analysis in testing the recoverability of its long-lived assets for potential impairment. Assumptions and estimates underlying this analysis include, among other things, (i) room revenue based on occupancy and average room rates, (ii) other revenue generated by the property, including food and beverage sales and ancillary services, as well as property specific revenue sources, (iii) operating expenses, including management and marketing fees and (iv) expenditures for repairs and refurbishments to maintain the asset’s value. When necessary, scenarios are developed using multiple assumptions of expected future events which Loews Hotels & Co assigns a probability of occurrence based on management’s expectations. This initial analysis results in a projected probability-weighted cash flow of the property, which is compared to the carrying value of the asset to assess recoverability. If the long-lived asset’s carrying value exceeds the undiscounted cash flows, Loews Hotels & Co compares the long-lived asset’s carrying value to fair value, estimating the fair value of the asset by discounting future cash flows using market participant assumptions or third-party indicators of fair value such as a recent independent appraisal. These calculations, at times, utilize significant unobservable inputs, including estimating the growth in the asset’s revenue and cost structure and are therefore considered Level 3 fair value measurements.

During the first quarter of 2020, five drilling rigs that had indicators of impairment were evaluated. Based on the assumptions and analysis at that time, it was determined that the carrying values of four of these rigs were impaired. The fair values of these rigs were estimated using multiple probability-weighted cash flow analyses, whereby the fair value of each rig was estimated based on a calculation of the rig’s future net cash flows. These calculations utilized significant unobservable inputs, including utilization and dayrate scenarios, as well as management’s assumptions related to future oil and gas prices. These fair value estimates were representative of Level 3 fair value measurements due to the significant level of estimation involved and the lack of transparency as to the inputs used. An aggregate asset impairment charge of $774 million ($408 million after tax and noncontrolling interests) was recorded for the year ended December 31, 2020 and is reported within Operating expenses and other on the Consolidated Statements of Operations.