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 atwww.loews.com and such subsidiaries atwww.cna.com andwww.bwpipelines.com, or at the SEC's website atwww.sec.gov.
• To view the most recent SEC filings of Loews Corporation,http://ir.loews.com/phoenix.zhtml?c=102789&p=irol-sec
• To view the most recent SEC filings of CNA Financial Corporation,https://investor-relations.cna.com/financial/latest-financials
• To view the most recent SEC filings of Boardwalk Pipeline Partners, LPhttps://www.bwpipelines.com/news-and-media/sec-filings/
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 athttps://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 athttps://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 athttps://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).
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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