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MarketScreener Homepage  >  Equities  >  Nyse  >  Loews Corporation    L

LOEWS CORPORATION

(L)
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Loews : Q3 2020 Earnings Results Supplement

11/02/2020 | 08:50am EST

EARNINGS SUPPLEMENT

November 2020

2020 Q3

Legal Disclaimers

Forward Looking Statements and Risk Factors. The information presented herein is generally available from public sources, including our and our subsidiaries' earnings releases and SEC filings. We urge you to read those documents, and we specifically direct you to the forward-looking statements disclaimers and risk factors they contain. The primary purpose of this presentation is to help you understand how we view our Company, not to update our filings or correct any forecasts - we categorically do not give guidance. Conditions faced by our various businesses may have changed - for better or worse - since the time periods reflected in this presentation and we disclaim any obligation to update the information presented herein. Any statements made in addressing our results are not meant as an indication of the Company's performance since the time of our latest public filings and disclosures.

There are a number of important risk factors that could cause the actual results for each of the companies discussed in this presentation to differ from those expressed in forward-looking statements contained herein, including those risk factors discussed in detail in annual and quarterly reports and other filings made with the SEC by Loews Corporation and its consolidated subsidiaries: CNA Financial Corporation and Boardwalk Pipelines. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements.

Non-GAAP Financial Measures. Certain financial information presented herein includes non-GAAP financial measures. Management believes these measures are useful to understanding the key drivers of the Company's operating performance. These non-GAAP measures are reconciled to GAAP numbers herein (or in documents referred to herein).

Where You Can Find More Information. Annual, quarterly and other reports filed with the SEC by Loews Corporation and its consolidated subsidiaries: CNA Financial Corporation and Boardwalk Pipeline Partners, LP contain important additional information about those companies and we urge you to read this presentation together with those filings, copies of which are available, as applicable, at the corporate websites of Loews Corporation at www.loews.com and such subsidiaries at www.cna.com and www.bwpipelines.com, or at the SEC's website at www.sec.gov.

2020 Third Quarter - Key Highlights

  • $3.5 billion in cash and investments at the parent company

  • Net income of $139 million, or $0.50 per share

    • CNA Financial drove the quarterly increase as compared to last year's third quarter despite elevated net catastrophe losses:

      • Higher P&C underwriting income before catastrophe losses and prior year development

      • Increased net investment income and more net investment gains

      • Lower net reserve charges in Life & Group

    • Loews Hotels & Co continues to be impacted by the COVID-19 pandemic

    • Last year's third quarter included a net loss from Diamond Offshore

  • Repurchased 5.4 million Loews shares at an aggregate cost of $195 million

  • Dividends from subsidiaries totaled $90 million

  • $17.4 billion in shareholders' equity / book value per share of $63.16 as of September 30, 2020

Loews Cash & Investments

($ millions)

September 30, 2020

Portfolio Composition*

Cash & short term investments Equity securities

Limited partnership investments Ot her

Total Cash & Investments

$

2,867 449 190 28

$

3,534

* Net of receivable and payable positions.

Loews press release: http://ir.loews.com/phoenix.zhtml?c=102789&p=irol-financials

All balance sheet data included in this presentation is as of the end of each period presented.

Financial Summary

September 30

(in millions, except per share data)

QTD

YTD

2020

2019

2020

2019

Revenues1

Net income (loss)1

Net income (loss) per share

Dividends paid per share

Weighted average shares

$

3,465 139 0.50 0.0625 279.5

$

3,675

72 0.24 0.0625 302.4

$

8,874

(1,328)

(4.70)

0.1875 282.6

$ 11,055

715 2.34 0.1875 305.7

Cash & investments

(Parent company)

Total debt

(Parent company)

Book value per share

Book value per share excluding AOCI

$

3,534 2,300 63.16 62.29

$

3,539 1,800 64.90 64.85

Balance sheet data included on this page is as of the end of each period presented.

1. The 2020 YTD period includes an investment loss of $1.2 billion ($957 million after tax) to write down the carrying value of our interest in Diamond Offshore as a result of its bankruptcy filing and deconsolidation on April 26, 2020.

Net Income (Loss) by Segment

($ millions)

CNA

Boardw alk

Hotels1

Corporate2

Diamond3

Net income (loss) attributable to Loews

  • 1. QTD/YTD 2020 includes gains on the sale of assets of $17 million and $24 million.

  • 2. Includes investment income from the parent company's cash and investments, interest expense, other unallocated corporate expenses, and the financial results of Altium Packaging. The 2020 YTD period also includes the net investment loss of $957 million related to the write down of the carrying value of our interest in Diamond Offshore.

  • 3. Includes financial results through the April 26, 2020 deconsolidation of Diamond Offshore, which included impairment charges related to the carrying value of four drilling rigs.

COVID-19 Update

  • CNA's catastrophe losses in Q2 2020 included $182 million (pretax) for COVID-19

    • Underlying business performed well, benefiting from accelerating P&C rate momentum and strong new business writings in the U.S.

  • Boardwalk Pipelines continues to perform as expected, benefiting from long-term firm service contracts and strong customer credit quality

  • Loews Hotels & Co has resumed operations in 21 of its 27 hotels

    • Occupancy rates remain low and the increase of occupancy as well as the resumption of operations at hotels that have suspended operations will depend largely on the duration and scope of the COVID-19 pandemic

    • Resort destinations faring better than hotels in urban centers due to some pick up in drive-in leisure travel; business travel continues to severely lag

    • Continuing to adjust the operating cost structure of its hotels, defer capital costs and reduce management company costs

    • Significant new and enhanced safety and well-being standards and protocols for both team members and guests

  • Altium Packaging has seen increased demand for household cleaners, water, beverage and pharmaceutical products, partially offset by declines in the food service and automotive end markets

  • The parent company ended Q3 with a cash & investments balance of $3.5 billion

    • Donated $1 million to several different funds that will provide direct support to frontline workers

    • Members of the Office of the President have reduced, by 50%, their salary as of April 1 and their bonus for the entire year

Financial Trends

Parent company cash & investments

($ billions as of period-end)

Shares outstanding

(shares in millions as of period-end)

$5.0

$4.9

337

332

$3.5

275

2016

2017

2018

2019

9/30/20

2016

2017

2018

2019

9/30/20

Dividends from subsidiaries1

Shareholders' equity

($ millions)

$755

2016

2017

2018

2019

1.

Includes dividends received by Loews during each period indicated.

($ billions as of period-end)

$17.4

9/30/20

YTD

2016

2017

2018

2019

9/30/20

Corporate Structure

Long-term view, diversified portfolio, one class of stock

Natural Gas & NGL Midstream

100% Ownership

$821 million

EBITDA1

Deluxe & Luxury

Hotels

100% Ownership

$227 million Adjusted EBITDA2

Rigid Plastic Packaging

99% Ownership

$932 million Net Sales

Balance sheet and ownership data is as of September 30, 2020. Market cap data is as of October 30, 2020. All other data is for the year ended December 31, 2019.

  • 1. See Company Overview Appendix - "Boardwalk EBITDA" for EBITDA to GAAP reconciliation.

  • 2. See Company Overview Appendix - "Loews Hotels & Co Adjusted EBITDA" for EBITDA to GAAP reconciliation. Loews Hotels & Co has been severely impacted by COVID-19 in 2020.

CNA Financial - Financial Highlights

Financials1

September 30

($ millions, except per share data)

QTD

YTD

2020

2019

2020

2019

Core income2

Net investment gains (losses) (after-tax) Net income

Loews accounting adjustments:

Amounts attributable to noncontrolling interests

Other 3

Net income attributable to Loews

$

193 20

$

102 5

$

400 (97)

$

714 13

213

(23)

2

107

(11)

-

303

(32) 1

727

(77)

-

$

192

$

96

$

272

$

650

Invested assets (market value) Net written premiums

Combined ratio ex. catastrophes and development Combined ratio

Loss ratio ex. catastrophes and development Loss ratio

Book value per share ex. AOCI Book value per share

Regular and special dividends per share

$

49,006

1,821

92.6

100.9

60.5

68.8

$

42.78

44.30

0.37

$

47,535

1,708

94.6

97.6

61.7

64.7

$

44.14

44.66

0.35

$

49,006

5,614

93.3

103.5

60.1

70.3

$

42.78

44.30

3.11

$

47,535

5,388

94.8

97.1

61.1

63.4

$

44.14

44.66

3.05

Balance sheet data included on this page is as of the end of each period presented.

  • 1. Unless noted as attributable to Loews, financial results are at the subsidiary level.

  • 2. See CNA's Q3 2020 Earnings Release for a reconciliation of Core income to Net income available at https://investor-relations.cna.com/financial/latest-financials

  • 3. Other includes adjustments for income taxes and rounding.

Boardwalk Pipelines - Financial Highlights

Financials1

September 30

($ millions)

QTD

YTD

2020

2019

2020

2019

Revenue2

$

288

$

295

$

923

$

968

EBITDA2,3

167

175

571

621

Net income2

Loews accounting adjustments:

Other 4

Net income attributable to Loews2

32

(12)

43

(14)

176

(53)

226

(65)

$

20

$

29

$

123

$

161

  • 1. Unless noted as attributable to Loews, financial results are at the subsidiary level.

  • 2. The 2019 YTD periods include settlement proceeds of $26 million ($19 million after tax) related to a customer bankruptcy.

  • 3. See Appendix - "Boardwalk EBITDA" for EBITDA to GAAP reconciliation.

  • 4. Other includes adjustments for purchase accounting, income taxes and rounding.

Loews Hotels & Co - Financial Highlights

Financials

September 30

($ millions)

QTD

YTD

2020

2019

2020

2019

Operating revenue Gain on sale of assets Revenue

Pretax income (loss) excluding non-recurring items1 Asset impairments

Pretax income (loss) Net income (loss)

$

36 24

$

156 -

$

199 37

$

522 -

60

(74)

(10)

(62)

(47)

156

8 -

5

3

236

(185)

(30)

(192)

(144)

522

62

(11)

42

28

Adjusted EBITDA2

Adjusted mortgage debt, period-end3

(38) 1,578

43 1,403

(75) 1,578

171 1,403

In 2020, Loews Hotels results have been adversely affected by the pandemic. 21 out of 27 hotels were operational at the end of the third quarter; however occupancy remains low.

  • 1. Non-recurring items include items such as acquisition transaction and transition costs, new development pre-opening costs, gains or losses on sale and impairments. See Appendix - "Loews Hotels & Co Adjusted EBITDA" for additional disclosure.

  • 2. Adjusted EBITDA is the total amount of EBITDA attributable to Loews Hotels & Co based on its percent ownership of each property (e.g., if Loews Hotels & Co legally owns 50% of a property, 50% of that property's EBITDA is included, except for certain hotels where earnings are distributed on a different basis from legal ownership based on the underlying governing agreements), plus management company EBITDA and excluding non-recurring items. See Appendix - "Loews Hotels & Co Adjusted EBITDA" for EBITDA to GAAP reconciliation.

  • 3. Adjusted mortgage debt is adjusted for Loews Hotels & Co's ownership interest in the asset underlying the borrowing. Balances are inclusive of adjusted mortgage debt related to assets under development of $139 million and $193 million at September 30, 2020 and 2019, respectively.

Loews Hotels & Co - Portfolio

As of September 30, 2020

City, ST

RoomsOwnership %1

Ownership - Ops Commenced /

Managed Only

Loews Chicago Hotel Loews Chicago O'Hare Hotel Loews Coronado Bay Resort* Loews Kansas City Hotel Loews Miami Beach Hotel* Loews Minneapolis Hotel Loews Philadelphia Hotel Loews Regency New York Hotel Loews Vanderbilt Hotel

Loews Ventana Canyon Resort* Loews Hotel 1000

Chicago, IL Chicago, IL San Diego, CA Kansas City, MO Miami Beach, FL Minneapolis, MN Philadelphia, PA New York, NY Nashville, TN Tucson, AZ Seattle, WA

400

100% 2015

556

100% 2014

439

100% 2000

800

65% 2020

790

100% 1998

251

100% 2014

581

100% 2000

379

100% 1963

340

100% 1989

398

120 5,054

100% 100%

2014 / 1984 2016

OWNED (11)

Hard Rock Hotel, at Universal Orlando*

Loews Portofino Bay Hotel, at Universal Orlando* Loews Royal Pacific Resort, at Universal Orlando* Loews Sapphire Falls Resort, at Universal Orlando* Universal's Aventura Hotel*

Universal's Cabana Bay Beach Resort*

Universal's Endless Summer Resort - Dockside Inn and Suites* Universal's Endless Summer Resort - Surfside Inn and Suites* Live! by Loews Arlington, TX*

Live! by Loews St. Louis, MO Loews Hollywood Hotel Loews Atlanta HotelOrlando, FL Orlando, FL Orlando, FL Orlando, FL Orlando, FL Orlando, FL Orlando, FL Orlando, FL Arlington, TX St. Louis, MO Los Angeles, CA Atlanta, GA

650

50% 2001

750

50% 1999

1,000

50% 2002

1,000

50% 2016

600

50% 2018

2,200

50% 2014

1,011

50% 2020

750

50% 2019

300

50% 2019

216

50% 2020

628

50% 2012

414 9,519

50%

2015 / 2010

JOINT VENTURE (12)

UNDER DEVELOPMENT (1)

Loews Coral Gables Hotel

Universal's Endless Summer Resort - Dockside Inn and Suites*

Coral Gables, FL Orlando, FL

242 1,039 1,281

20% 2022

50% 2020

TOTAL INCLUDING UNDER DEVELOPMENT

16,807

* Represents resort hotels in the portfolio, with the remaining hotels in urban centers.

Universal's Endless Summer Resort - Dockside Inn and Suites is counted as a single hotel in JV section of the portfolio, but only the first phase of 1,011 rooms are included in the JV room count. 1. Earnings in certain partnerships are allocated pursuant to underlying governing documents, which may differ from ownership.

Appendix - Key Drivers for the Third Quarter

Net income of $139 million, or $0.50 per share, compared to $72 million, or $0.24 per share, in the comparable prior year period, an increase of $67 million. The table below details key drivers of the change in net income.

($ millions)

CNA1

Underwriting income before catastrophes and development

Net catastrophe losses

P&C net investment income

LTCactivelifereservepremiumdeficiency

LTC claim reserv e release

Structured settlements claim reserv e charge

Net investment gains

Hotels

Net income (loss)

Boardwalk

Net income Diamond

Net income

QTD

September 30

2020

2019

Key drivers for both 2020 and 2019 are after tax and noncontrolling interests.

1. CNA's Q3 2020 Earnings Presentation available at https://investor-relations.cna.com/financial/latest-financials

Appendix - Key Drivers for the Year-to-Date Period

Net loss of $1,328 million, or $(4.70) per share, compared to a net income of $715 million, or $2.34 per share, in the prior year period, a decrease of $2,043 million. The table below details key drivers of the change in net loss.

($ millions)

CNA1

Catastrophe losses:

Severe weather-related events

COV I D-19

Civ il unrest

P&C net investment income

Net investment gains (losses)

LTC activ e life reserv e premium deficiency

LTC claim reserv e release

Structured settlements claim reserv e charge Hotels

Net income (loss)

Boardwalk

Net income Corporate

Net investment loss related to the deconsolidation of

Diamond Offshore

Net investment income (loss)

Diamond

Impairment charges related to four drilling rigs

Key drivers for both 2020 and 2019 are after tax and noncontrolling interests.

1. CNA's Q3 2020 Earnings Presentation available at https://investor-relations.cna.com/financial/latest-financials

Appendix - Loews Consolidating Condensed Balance Sheet

September 30, 2020

CNA Financial

Boardwalk PipelinesLoews Hotels & CoCorporate1

Total

($ millions)

Assets:

Cash and investments Receivables

Property, plant and equipment

Deferred non-insurance warranty acquistion expenses Other assets

$

49,448 $

349 $

130 $

3,731 $ 53,658

7,562

126

16

146 7,850

256

8,609 -

1,104 -

499 10,468

2,998

- 2,998

2,464

582

435

1,009 4,490

Total assets

$

62,728 $

9,666 $

1,685 $

5,385 $ 79,464

Liabilities and Equity:

Insurance reserves Short term debt Long term debt

Deferred non-insurance warranty revenue Other liabilities

$

40,532 $ -

-$

- $ 24 718 - 324 1,066 619 - 619

- $ 40,532

1 3,770 - 1,570 5,341 4,325 - 4,325

10

35

2,776

3,109 10,373

3,951

- 3,951

3,476 50,735 10,745 1,248 11,993

583 5,953

Total liabilities

3,702 60,844

Total shareholders' equity Noncontrolling interests Total equity

1,683 17,372

- 1,248

1,683 18,620

Total liabilities and equity

$

62,728 $

9,666 $

1,685 $

5,385 $ 79,464

Amounts presented will not necessarily be the same as those in the individual financial statements of the Company's subsidiaries due to adjustments for purchase accounting, income taxes and noncontrolling interests. 1. Corporate primarily reflects the parent company's cash and investments, corporate long-term debt and Altium Packaging.

Appendix - Boardwalk EBITDA

September 30

($ millions)

QTD

YTD

2020

2019

2020

2019

Pretax income

Depreciation and amortization Interest expense

EBITDA

$

32 91 44

$

43 87 45

$

176 268 127

$

227 258 136

$

167

$

175

$

571

$

621

Financial results are at the subsidiary level.

Appendix - Loews Hotels & Co Adjusted EBITDA

September 30

($ millions)

QTD

YTD

2020

2019

2020

2019

Consolidated GAAP pretax income (loss) Non-recurring items1

Pretax income (loss) excluding non-recurring items Depreciation and amortization of owned properties Interest expense on owned properties

Adjustments for unconsolidated joint ventures' proportionate share of EBITDA2 Adjusted EBITDA

$

(62) (12)

$

5 3

$

(192)

7

$

42 20

$

(74) 15 8 13

$

8 14 6 15

$

(185)

45 24 41

$

62 45 16 48

$

(38)

$

43

$

(75)

$

171

In 2020, Loews Hotels results have been adversely affected by the pandemic. 21 out of 27 hotels were operational at the end of the third quarter; however occupancy remains low.

  • 1. Non-recurring items include items such as acquisition transaction and transition costs, new development pre-opening costs, gains or losses on sale and impairments.

  • 2. Represents the difference between Loews Hotels & Co's GAAP pretax income for its joint venture properties and its pro rata share of those properties' EBITDA based on its percentage ownership (e.g., if Loews Hotels & Co legally owns 50% of a property, 50% of that property's EBITDA is included, except for certain hotels where earnings are distributed on a different basis from legal ownership based on the underlying governing agreements).

Disclaimer

Loews Corporation published this content on 02 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 November 2020 13:49:01 UTC


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Sales 2019 14 907 M - -
Net income 2019 932 M - -
Net Debt 2019 11 891 M - -
P/E ratio 2019 17,1x
Yield 2019 0,48%
Capitalization 12 971 M 12 971 M -
EV / Sales 2018 1,79x
EV / Sales 2019 1,85x
Nbr of Employees 18 605
Free-Float 79,7%
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NameTitle
James S. Tisch President, Chief Executive Officer & Director
Andrew H. Tisch Co-Chairman
Jonathan M. Tisch Co-Chairman
David B. Edelson Chief Financial Officer & Senior Vice President
Herb E. Hoffmann Vice President-Information Technology
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