Ҵý

Ҵý Corporation Reports Net Income Of $397 Million For The Fourth Quarter Of 2020

NEW YORK, Feb. 8, 2021 /PRNewswire/ --Ҵý Corporation (NYSE: L) today reported net income of $397 million, or $1.45 per share, for the quarter ended December 31, 2020, compared to net income of $217 million, or $0.73 per share, in the fourth quarter of 2019. For the full year, Ҵý reported a net loss of $931 million, or $3.32 per share, compared to net income of $932 million, or $3.07 per share, in 2019.

Ҵý Financial Corporation drove net income for the fourth quarter of 2020 with strong property and casualty underwriting results, solid net investment income, and net investment gains. Boardwalk Pipelines also contributed positively to Ҵý's quarterly results.

Ҵý Hotels & Co posted a net loss for the fourth quarter of 2020 due to the revenue impact of the COVID-19 pandemic. The fourth quarter of 2019 included a net loss from Diamond Offshore Drilling, Inc., which was not a consolidated subsidiary in the fourth quarter of 2020.

"Ҵý delivered excellent property and casualty underwriting results in 2020, even while faced with a once-in-a-century pandemic, record catastrophe losses, and historically low interest rates. Ҵý's strong performance underscores the company's continued focus on disciplined and profitable underwriting. Rates increased 11% for the full year and new business flow was solid, resulting in strong premium growth. The underlying combined ratio of 93.1% for the full year represents an improvement of more than one full point over 2019," saidJames Tisch, CEO of Ҵý.

Book value per share increased to $66.34 at December 31, 2020 from $65.71 at December 31, 2019. Book value per share excluding accumulated other comprehensive income (AOCI) decreased to $64.18 at December 31, 2020 from $65.94 at December 31, 2019.

CONSOLIDATED HIGHLIGHTS

(In millions, except per share data)

December 31,

Three Months

Years Ended

2020

2019

2020

2019

Income before net investment gains (losses)

$ 352

$ 211

$ 53

$ 899

Net investment gains (losses):





Ҵý

45

6

(27)

33

Corporate



(957)


Total net investment gains (losses)

45

6

(984)

33

Net income (loss) attributable to Ҵý Corporation

$ 397

$ 217

$ (931)

$ 932

Net income (loss) per share

$ 1.45

$ 0.73

$ (3.32)

$ 3.07


December 31, 2020

December 31, 2019

Book value per share

$ 66.34


$ 65.71


Book value per share excluding AOCI

64.18


65.94


The net loss for the year ended December 31, 2020 was due to, among other factors described below, losses related to our investment in Diamond Offshore and the operating losses incurred by Ҵý Hotels.

The economic disruption caused by the COVID-19 pandemic and measures to mitigate the spread of the virus significantly affected Ҵý's results in 2020. The impact of COVID-19 on Ҵý's financial results going forward will depend on the duration of mandated and voluntary containment efforts, related economic policies, the success of vaccination efforts in mitigating the pandemic, and other societal responses to the pandemic.

Three Months Ended December 31, 2020 Compared to Three Months Ended December 31, 2019

Ҵý's earnings increased due to improved property and casualty underwriting income, as premiums increased and the underlying combined ratio, which excludes the impact of net catastrophe losses and prior year development, improved by more than two points. Ҵý's earnings also benefited from higher net investment income and net investment gains, with returns on limited partnership and common stock investments driving the increase in net investment income.

Boardwalk Pipelines' earnings increased mostly from $26 million (after tax) of proceeds received in connection with a contract cancellation due to a customer bankruptcy. In addition, revenues from growth projects recently placed in service more than offset revenue declines from expiring contracts replaced by contracts at lower overall average rates.

Ҵý Hotels' results reflected the continuing negative impact of the COVID-19 pandemic. All hotels operating during the fourth quarter experienced occupancy rates considerably lower than those in 2019, consistent with market conditions. Operating revenues did rise, however, from their low in the second quarter of 2020. Ҵý Hotels has enacted significant measures to adjust the operating cost structure of each hotel and of the management company. For the three months ended December 31, 2020 and 2019, Ҵý Hotels recorded impairment charges totaling $6 million and $89 million ($4 million and $69 million after tax).

Year Ended December 31, 2020 Compared to 2019

The net loss for the year ended December 31, 2020 was driven by six main factors: (i) an investment loss of $1.2 billion ($957 million after tax) caused by the write down of the carrying value of our interest in Diamond Offshore as a result of its deconsolidation upon its bankruptcy filing on April 26, 2020; (ii) drilling rig impairment charges at Diamond Offshore during the first quarter of 2020 when it was a consolidated subsidiary; (iii) operating losses in 2020 as compared to operating income in 2019 at Ҵý Hotels; (iv) a reduction in Ҵý's and the parent company's net investment income; (v) net investment losses at Ҵý in 2020 as compared to net investment gains in 2019; and (vi) lower property and casualty underwriting income at Ҵý caused mainly by higher catastrophe losses.

Ҵý's earnings decreased in 2020 primarily due to higher net catastrophe losses, lower net investment income, and net investment losses as compared to investment gains in 2019. Partially offsetting these declines were improved underlying underwriting income and lower net reserve charges in Ҵý's Life & Group business, primarily from the recognition of a lower active life reserve premium deficiency in 2020. In 2020, pretax net catastrophe losses of $550 million included $294 million from weather-related events, $195 million related to the COVID-19 pandemic, and $61 million related to civil unrest, as compared to total pretax net catastrophe losses of $179 million in 2019 due primarily to weather-related events. The decline in net investment income in 2020 was driven by lower effective income yields on Ҵý's fixed income portfolio and lower returns on limited partnership and common stock investments. Net investment losses in 2020 were driven by higher impairment losses on fixed income securities and the decline in the fair value of non-redeemable preferred stock.

Boardwalk Pipelines' earnings in 2020 were down slightly from 2019 as net operating revenues declined and expenses increased. Revenue from growth projects recently placed in service and higher storage and park and loan revenues did not fully offset revenue declines from expiring contracts replaced by contracts at lower overall average rates. Depreciation and property taxes rose, primarily due to an increased asset base from recently completed growth projects and the expiration of property tax abatements, partially offset by a reduction in interest expense due to lower average interest rates.

Ҵý Hotels' earnings decreased in 2020 primarily due to the reasons set forth in the three-month discussion.

Income from the parent company investment portfolio declined in 2020 as limited partnership and equity investments generated lower returns as compared to 2019.

Diamond Offshore's results for the year ended December 31, 2020, as compared with 2019, only reflect operations through Diamond Offshore's bankruptcy filing and deconsolidation on April 26, 2020 and include drilling rig impairment charges of $408 million (after tax and noncontrolling interests) recorded in the first quarter of 2020.

Corporate segment results include the investment loss realized upon Diamond Offshore's bankruptcy filing and deconsolidation.

SHARE REPURCHASES

For the three months and year ended December 31, 2020, the Ҵý repurchased 5.9 million and 22.0 million shares of its common stock for an aggregate cost of $244 million and $917 million, respectively. At December 31, 2020, there were 269.2 million shares of Ҵý common stock outstanding. From January 1, 2021 to February 5, 2021, the Ҵý repurchased an additional 2.2 million shares of its common stock at an aggregate cost of $100 million. Depending on market conditions, the Ҵý may from time to time purchase its shares and shares of its subsidiaries' outstanding common stock in the open market or otherwise.

CONFERENCE CALLS

A conference call to discuss the fourth quarter and full year results of Ҵý Corporation has been scheduled for today at 10:00 a.m. ET. A live webcast will be available via the Investors/Media section of . 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 4850148. An online replay will also be available at following the call.

A conference call to discuss the fourth quarter results of Ҵý has been scheduled for today at 9:00 a.m. ET. A live webcast will be available via the Investor Relations section of . Those interested in participating in the question-and-answer session should dial (800) 289-0571, or for international callers, (720) 543-0206. An online replay will be available on Ҵý's website following the call.

Ҵý LOEWS 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 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 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 press 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

























December 31,



Three Months

Years Ended

(In millions)

2020

2019

2020

2019

Revenues:





Ҵý Financial (a)

$ 2,930

$ 2,777

$ 10,827

$ 10,788

Boardwalk Pipelines (b)

376

331

1,302

1,300

Ҵý Hotels & Co (c)

42

170

278

692

Investment income (loss) and other (d) (e)

361

321

(129)

1,163

Diamond Offshore (f)


277

305

988

Total

$ 3,709

$ 3,876

$ 12,583

$ 14,931







Income (Loss) Before Income Tax:





Ҵý Financial (a) (g) (h)

$ 477

$ 336

$ 821

$ 1,224

Boardwalk Pipelines (b)

111

64

277

281

Ҵý Hotels & Co (c)

(82)

(70)

(274)

(28)

Corporate: (i)





Investment income (loss), net

92

76

59

229

Other (e)

(50)

(49)

(1,413)

(185)

Diamond Offshore (f) (j)


(81)

(934)

(402)

Total

$ 548

$ 276

$ (1,464)

$ 1,119







Net Income (Loss) Attributable to Ҵý Corporation:





Ҵý Financial (a) (g) (h)

$ 346

$ 244

$ 618

$ 894

Boardwalk Pipelines (b)

83

48

206

209

Ҵý Hotels & Co (c)

(68)

(59)

(212)

(31)

Corporate: (i)





Investment income (loss), net

73

67

47

188

Other (e)

(37)

(45)

(1,114)

(153)

Diamond Offshore (f) (j)


(38)

(476)

(175)

Net income (loss) attributable to Ҵý Corporation

$ 397

$ 217

$ (931)

$ 932







(a)

Includes net investment gains of $66 million and $8 million ($45 million and $6 million after tax and
noncontrolling interests) for the three months ended December 31, 2020 and 2019. Includes net investment
losses of $35 million and net investment gains of $49 million ($27 million and $33 million after tax and
noncontrolling interests) for the years ended December 31, 2020 and 2019.

(b)

Includes settlement proceeds of $34 million ($26 million after tax) for the three months and year ended
December 31, 2020 and $26 million ($19 million after tax) for the year ended December 31, 2019 related to a
customer bankruptcy.

(c)

Includes asset impairment charges of $6 million ($4 million after tax) and $89 million ($69 million after tax) for
the three months ended December 31, 2020 and 2019. Includes asset impairment charges of $36 million ($26
million after tax ) and $99 million ($77 million after tax) for the years ended December 31, 2020 and 2019 and
gains on the sale of assets of $37 million ($24 million after tax) for the year ended December 31, 2020.

(d)

Includes parent company investment income (loss) and the financial results of Altium Packaging.

(e)

Includes a loss of $1.2 billion ($957 million after tax) for the year ended December 31, 2020 as a result of
Diamond Offshore's Chapter 11 bankruptcy filing and deconsolidation on April 26, 2020.

(f)

Includes financial results through April 26, 2020.

(g)

Includes a charge of $74 million ($52 million after tax and noncontrolling interests) and $216 million ($151
million after tax and noncontrolling interests) for the years ended December 31, 2020 and 2019 related to the
recognition of an active life reserve premium deficiency in long term care that was primarily driven by changes
in interest rate assumptions.

(h)

Includes net catastrophe losses of $14 million ($10 million after tax and noncontrolling interests) and $51
million ($36 million after tax and noncontrolling interests) for the three months ended December 31, 2020 and
2019, and $550 million ($388 million after tax and noncontrolling interests) and $179 million ($126 million after
tax and noncontrolling interests) for the years ended December 31, 2020 and 2019.

(i)

The Corporate segment consists of investment income (loss) from the parent company's cash and investments,
interest expense, other unallocated corporate expenses and the financial results of Altium Packaging as well as
the loss resulting from Diamond Offshore's Chapter 11 bankruptcy filing and deconsolidation on April 26, 2020.

(j)

Includes impairment charges of $774 million ($408 million after tax and noncontrolling interests) at Diamond
Offshore related to the carrying value of four drilling rigs for the year ended December 31, 2020.

Ҵý Corporation and Subsidiaries

Consolidated Financial Review





















December 31,



Three Months

Years Ended

(In millions, except per share data)

2020

2019

2020

2019

Revenues:





Insurance premiums

$ 1,977

$ 1,911

$ 7,649

$ 7,428

Net investment income

648

622

1,995

2,355

Investment gains (losses) (a)

66

8

(1,246)

49

Operating revenues and other (b)

1,018

1,335

4,185

5,099

Total

3,709

3,876

12,583

14,931







Expenses:





Insurance claims and policyholders' benefits (c) (d)

1,487

1,483

6,170

5,806

Operating expenses and other (b) (e)

1,674

2,117

7,877

8,006

Total

3,161

3,600

14,047

13,812







Income (loss) before income tax

548

276

(1,464)

1,119

Income tax (expense) benefit

(111)

(65)

173

(248)

Net income (loss)

437

211

(1,291)

871

Amounts attributable to noncontrolling interests

(40)

6

360

61

Net income (loss) attributable to Ҵý Corporation

$ 397

$ 217

$ (931)

$ 932







Net income (loss) per share attributable to Ҵý Corporation

$ 1.45

$ 0.73

$ (3.32)

$ 3.07







Weighted average number of shares

273.62

296.29

280.32

303.35







(a)

Includes a loss of $1.2 billion ($957 million after tax) for the year ended December 31, 2020 as a result of Diamond
Offshore's Chapter 11 bankruptcy filing and deconsolidation on April 26, 2020.

(b)

Includes financial results of Diamond Offshore through April 26, 2020.

(c)

Includes a charge of $74 million ($52 million after tax and noncontrolling interests) and $216 million ($151 million
after tax and noncontrolling interests) for the years ended December 31, 2020 and 2019 related to the recognition
of an active life reserve premium deficiency in long term care that was primarily driven by changes in interest rate
assumptions.

(d)

Includes net catastrophe losses of $14 million ($10 million after tax and noncontrolling interests) and $51 million
($36 million after tax and noncontrolling interests) for the three months ended December 31, 2020 and 2019, and
$550 million ($388 million after tax and noncontrolling interests) and $179 million ($126 million after tax and
noncontrolling interests) for the years ended December 31, 2020 and 2019.

(e)

Includes impairment charges of $774 million ($408 million after tax and noncontrolling interests) at Diamond Offshore
related to the carrying value of four drilling rigs for the year ended December 31, 2020.

SOURCE Ҵý Corporation