Ҵý

LOEWS CORPORATION REPORTS NET INCOME OF $360 MILLION FOR THE SECOND QUARTER OF 2023

NEW YORK, July 31, 2023 /PRNewswire/ -- Ҵý Corporation (NYSE: L) today released its second quarter 2023 financial results.

Second Quarter highlights:

Ҵý Corporation reported net income of $360 million, or $1.58 per share, in the second quarter of 2023 compared to $167 million, or $0.68 per share, in the second quarter of 2022. The year-over-year increase in net income was driven by higher net income from its consolidated subsidiaries and higher net investment income at the parent company. The following bullets highlight key drivers of these results:

  • Ҵý Financial Corporation (NYSE: Ҵý) posted higher net investment income, lower investment losses, and improved underlying underwriting income, partially offset by higher catastrophe losses and lower favorable Property and Casualty prior year loss reserve development.
  • The parent company posted higher investment returns on short-term investments and equity securities.
  • Ҵý Corporation repurchased 1.8 million shares of its common stock for a total cost of $107 million, and bought an additional 0.6 million shares for $37 million so far in the third quarter.
  • Book value per share, excluding AOCI, increased to $78.56 as of June 30, 2023, from $74.88 as of December 31, 2022 due to repurchases of common shares and strong operating results during the year.
  • Ҵý Corporation retired, at maturity, $500 million of outstanding senior notes with available cash.
  • As of June 30, 2023, the parent company had $2.5 billion of cash and investments and $1.8 billion of debt.

CEO commentary:

"Ҵý had another solid quarter with each of our consolidated subsidiaries performing well. Ҵý reported stellar results, despite high industry catastrophe losses. The company also recorded its highest ever quarterly underlying underwriting income."
James S. Tisch, President and CEO, Ҵý Corporation

Consolidated highlights:



June 30,


Three Months

Six Months

(In millions, except per share data)

2023

2022 (a)

2023

2022 (a)

Net income attributable to Ҵý Corporation before

net investment gains (losses)

$ 347

$ 203

$ 747

$ 528

Net investment gains (losses):





Ҵý

(23)

(36)

(48)

(39)

Ҵý Hotels & Co

36


36


Total net investment gains (losses):

13

(36)

(12)

(39)

Net income attributable to Ҵý Corporation

$ 360

$ 167

$ 735

$ 489

Net income per share

$ 1.58

$ 0.68

$ 3.19

$ 1.98


June 30, 2023


December 31, 2022 (a)





Book value per share

$ 64.59


$ 60.81

Book value per share excluding AOCI

78.56


74.88



(a)

As of January 1, 2023, Ҵý 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 June 30, 2023 compared to 2022

Ҵý:

  • Net income attributable to Ҵý Corporation improved to $255 million from $170 million.
  • Core income increased to $308 million from $230 million.
  • Net written premiums increased 10%, excluding currency fluctuations, over the prior year's second quarter.
  • Results include higher net investment income from limited partnerships, common stock investments and fixed income securities.
  • Underwriting results were lower due to higher net catastrophe losses and lower favorable Property and Casualty net prior year loss reserve development, partially offset by improved underlying underwriting income.
  • Property and Casualty combined ratio was 93.8% compared to 91.0%. The underlying combined ratio was 91.1% compared to 90.8%.
  • Net income was positively impacted by lower investment losses driven by the favorable relative change in fair value of non-redeemable preferred stock.

Boardwalk:

  • Net income increased $18 million to $57 million compared to $39 million.
  • EBITDA increased $20 million to $213 million compared to $193 million.
  • Net income and EBITDA increased due to higher revenues from recently completed growth projects, re-contracting at higher rates, higher utilization-based revenues, as well as improved storage and parking and lending revenues due to favorable market conditions. This increase was partially offset by increased repairs and maintenance costs associated with pipeline safety regulatory requirements, as well as higher employee related expenses.

Ҵý Hotels:

  • Net income increased $30 million to $74 million compared to $44 million.
  • Adjusted EBITDA decreased $15 million to $100 million compared to $115 million.
  • The company recorded a gain of $46 million ($36 million after tax) related to the acquisition of an additional equity interest in the Live! By Ҵý in Arlington, Texas, which was an unconsolidated joint venture prior to this transaction.
  • Excluding this gain, net income decreased due to higher operating expenses and lower equity income from joint ventures, partially offset by improved operating revenues.
  • Lower income from joint ventures was driven by slightly decreased occupancy rates and higher staffing costs.

Corporate & Other:

  • Net loss improved $60 million to $26 million from $86 million due to higher net investment income from short-term investments and equity securities.

Six months ended June30, 2023 compared to 2022

Ҵý Corporation reported net income of $735 million, or $3.19 per share, compared to $489 million, or $1.98 per share, in 2022. The following are key highlights:

  • Ҵý Hotels & Co's net income, excluding the gain noted in the three-month period discussion above, increased as occupancy and average daily room rates at many hotels were higher in 2023 than 2022. This increase was partially offset by higher operating expenses largely due to increased staffing costs.
  • Ҵý's net investment income improved $165 million from limited partnership and common stock investments and fixed income securities. Property and Casualty combined ratio was 93.9% compared to 91.4% in the prior year period. The underlying combined ratio was 91.0% for both periods.
  • Ҵý's net written premiums increased 10%, excluding currency fluctuations, in the first half of 2023 compared to the first half of last year.
  • All other segment drivers of results for the six months ended June 30, 2023 as compared to the comparable prior year period are consistent with the three-month period discussed above.

Share Repurchases:

  • On June 30, 2023, there were 226.1 million shares of Ҵý common stock outstanding.
  • For the three months ended June 30, 2023, Ҵý repurchased 1.8 million shares of its common stock at an aggregate cost of $107 million.
  • Ҵý has repurchased an additional 0.6 million shares for $37 million so far in the third quarter.
  • For the three months ended June 30, 2023, Ҵý purchased 0.1 million shares of Ҵý common stock at an aggregate cost of $3 million.
  • Depending on market conditions, Ҵý 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 the United States of America ("GAAP"). Management believes some investors may find these measures useful to evaluate our and our subsidiaries' financial performance. Ҵý utilizes core income, Boardwalk utilizes earnings before interest, income tax expense, depreciation and amortization ("EBITDA"), and Ҵý Hotels utilizes Adjusted EBITDA. These measures are defined and reconciled to the most comparable GAAP measures on pages 6 and 7 of this release.

Earnings Remarks and Conference Calls

For Ҵý Corporation

  • Today, July 31, 2023, earnings remarks will be available on our .
  • Remarks will include commentary from Ҵý's president and chief executive officer and from its chief financial officer.

For Ҵý

  • Today, July 31, 2023, Ҵý will host an earnings call at 9:00 a.m. ET.
  • A live webcast will be available via the Investor Relations section of .
  • To participate, dial 1-844-481-2830 (USA toll-free) or +1-412-317-1850 (International).

About Ҵý Corporation

Ҵý Corporation is a diversified company with businesses in the insurance, energy, hospitality, and packaging industries. For more information, please visit .

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 Ҵý. A discussion of the important risk factors and other considerations that could materially impact these matters, as well as the Ҵý's overall business and financial performance can be found in the Ҵý'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 Ҵý's website (). 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 Ҵý expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Ҵý's expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

Ҵý Corporation and Subsidiaries

Selected Financial Information



June 30,


Three Months

Six Months

(In millions)

2023

2022

2023

2022

Revenues:





Ҵý Financial (a)

$ 3,304

$ 2,926

$ 6,456

$ 5,811

Boardwalk Pipelines

365

325

762

706

Ҵý Hotels & Co (b)

254

200

446

352

Investment income (loss) and other (c)

11

(63)

53

(79)

Total

$ 3,934

$ 3,388

$ 7,717

$ 6,790

Income (Loss) Before Income Tax:





Ҵý Financial (a) (d)

$ 361

$ 227

$ 732

$ 582

Boardwalk Pipelines

76

52

192

174

Ҵý Hotels & Co (b)

101

64

135

86

Corporate:





Investment income (loss), net

11

(65)

53

(81)

Other (e)

(41)

(43)

(85)

(87)

Total (d)

$ 508

$ 235

$ 1,027

$ 674

Net Income (Loss) Attributable to Ҵý Corporation:





Ҵý Financial (a) (d)

$ 255

$ 170

$ 523

$ 435

Boardwalk Pipelines

57

39

143

130

Ҵý Hotels & Co (b)

74

44

98

59

Corporate:





Investment income (loss), net

9

(51)

42

(64)

Other (e)

(35)

(35)

(71)

(71)

Net income attributable to Ҵý Corporation (d)

$ 360

$ 167

$ 735

$ 489



(a)

The three months ended June 30, 2023 and 2022 include net investment losses of $32 million and $59 million ($23 million and $36 million after tax and noncontrolling interests). The six months ended June 30, 2023 and 2022 include net investment losses of $67 million and $70 million ($48 million and $39 million after tax and noncontrolling interests).

(b)

Includes a gain of $46 million ($36 million after tax) for the three and six months ended June 30, 2023 related to Ҵý Hotels & Co's acquisition of an additional equity interest and consolidation of a previously unconsolidated joint venture property.

(c)

Includes investment income (loss) from the parent company's cash and investments.

(d)

The effects of adopting ASU 2018-12 on the Selected Financial Information were as follows:

Three Months Ended June 30, 2022

As Reported


Effect of Adoption


As Adjusted

(In millions)






Income (Loss) Before Income Tax:






Ҵý Financial

$ 245


$ (18)


$ 227

Total

253


(18)


235

Net Income (Loss) Attributable to Ҵý Corporation:






Ҵý Financial

$ 183


$ (13)


$ 170

Total

180


(13)


167

Six Months Ended June 30, 2022

As Reported


Effect of Adoption


As Adjusted

(In millions)






Income (Loss) Before Income Tax:






Ҵý Financial

$ 623


$ (41)


$ 582

Total

715


(41)


674

Net Income (Loss) Attributable to Ҵý Corporation:






Ҵý Financial

$ 464


$ (29)


$ 435

Total

518


(29)


489



(e)

Consists of parent company interest expense, corporate expenses, and the equity income (loss) of Altium Packaging.

Ҵý Corporation and Subsidiaries

Consolidated Financial Review



June 30,


Three Months

Six Months

(In millions, except per share data)

2023

2022

2023

2022

Revenues:





Insurance premiums

$ 2,347

$ 2,155

$ 4,595

$ 4,214

Net investment income

592

366

1,161

798

Investment gains (losses) (a)

14

(59)

(21)

(70)

Operating revenues and other

981

926

1,982

1,848

Total

3,934

3,388

7,717

6,790






Expenses:





Insurance claims and policyholders' benefits (b)

1,779

1,601

3,432

3,079

Operating expenses and other

1,647

1,552

3,258

3,037

Total

3,426

3,153

6,690

6,116






Income before income tax (b)

508

235

1,027

674

Income tax expense (b)

(120)

(48)

(235)

(135)

Net income (b)

388

187

792

539

Amounts attributable to noncontrolling interests (b)

(28)

(20)

(57)

(50)

Net income attributable to Ҵý Corporation (b)

$ 360

$ 167

$ 735

$ 489






Net income per share attributable to Ҵý Corporation (b)

$ 1.58

$ 0.68

$ 3.19

$ 1.98






Weighted average number of shares

227.97

245.94

230.78

247.20

(a)

Includes a gain of $46 million ($36 million after tax) for the three and six months ended June 30, 2023 related to Ҵý Hotels & Co's acquisition of an additional equity interest and consolidation of a previously unconsolidated joint venture property.

(b)

The effects of adopting ASU 2018-12 on the Consolidated Financial Review were as follows:

Three Months Ended June 30, 2022

As Reported


Effect of Adoption


As Adjusted

(In millions)






Insurance claims and policyholders' benefits

$ 1,583


$ 18


$ 1,601

Income before income tax

253


(18)


235

Income tax expense

(51)


3


(48)

Net income

202


(15)


187

Amounts attributable to noncontrolling interests

(22)


2


(20)

Net income attributable to Ҵý Corporation

180


(13)


167

Net income per share attributable to Ҵý Corporation

0.73


(0.05)


0.68

Six Months Ended June 30, 2022

As Reported


Effect of Adoption


As Adjusted

(In millions)






Insurance claims and policyholders' benefits

$ 3,038


$ 41


$ 3,079

Income before income tax

715


(41)


674

Income tax expense

(143)


8


(135)

Net income

572


(33)


539

Amounts attributable to noncontrolling interests

(54)


4


(50)

Net income attributable to Ҵý Corporation

518


(29)


489

Net income per share attributable to Ҵý Corporation

2.09


(0.11)


1.98

Definitions of Non-GAAP Measures and Reconciliation of GAAP Measures to Non-GAAP Measures:

Ҵý Financial Corporation

Core income is calculated by excluding from Ҵý's net income attributable to Ҵý 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 Ҵý's primary operations. The following table presents a reconciliation of Ҵý net income attributable to Ҵý Corporation to core income:


June 30,


Three Months

Six Months

(In millions)

2023

2022

2023

2022

Ҵý net income attributable to Ҵý Corporation

$ 255

$ 170

$ 523

$ 435

Investment losses

25

40

53

43

Consolidating adjustments including noncontrolling interests

28

20

57

50

Core income

$ 308

$ 230

$ 633

$ 528

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 Ҵý Corporation to EBITDA:


June 30,


Three Months

Six Months

(In millions)

2023

2022

2023

2022

Boardwalk net income attributable to Ҵý Corporation

$ 57

$ 39

$ 143

$ 130

Interest

35

42

72

84

Income tax expense

19

13

49

44

Depreciation and amortization

102

99

203

194

EBITDA

$ 213

$ 193

$ 467

$ 452

Ҵý Hotels & Co

Adjusted EBITDA is calculated by excluding from Ҵý Hotels & Co's EBITDA, state and local government development grants, gains or losses on asset acquisitions and dispositions, asset impairments, and equity method income, and including Ҵý Hotels & Co's pro rata Adjusted EBITDA of equity method investments. Pro rata Adjusted EBITDA of equity method investments is calculated by applying Ҵý 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 Ҵý Hotels & Co net income attributable to Ҵý Corporation to Adjusted EBITDA:


June 30,


Three Months

Six Months

(In millions)

2023

2022

2023

2022

Ҵý Hotels & Co net income attributable to Ҵý Corporation

$ 74

$ 44

$ 98

$ 59

Interest

(1)

4

4

8

Income tax expense

27

20

37

27

Depreciation and amortization

17

16

33

31

EBITDA

117

84

172

125

Gain on asset acquisition

(46)


(46)


Asset impairments

9

14

9

14

Equity investment adjustments:





Ҵý Hotels & Co's equity method income

(41)

(53)

(72)

(79)

Pro rata Adjusted EBITDA of equity method investments

62

71

124

124

Consolidating adjustments

(1)

(1)

(2)

(2)

Adjusted EBITDA

$ 100

$ 115

$ 185

$ 182

The following table presents a reconciliation of Ҵý Hotels & Co's equity method income to Pro rata Adjusted EBITDA of equity method investments:


June 30,


Three Months

Six Months

(In millions)

2023

2022

2023

2022

Ҵý Hotels & Co's equity method income

$ 41

$ 53

$ 72

$ 79

Pro rata share of equity method investments:





Interest

12

9

23

18

Income tax expense





Depreciation and amortization

12

12

25

25

Distributions in excess of basis

(3)

(3)

3

2

Consolidation adjustments



1


Pro rata Adjusted EBITDA of equity method investments

$ 62

$ 71

$ 124

$ 124

SOURCE Ҵý Corporation