NEW YORK, May 2, 2016 /PRNewswire/ -- Loews Corporation (NYSE: L) today reported net income for the three months ended March 31, 2016 of $102 million, or $0.30 per share, compared to $109 million, or $0.29 per share, in the prior year period.
Net income declined by $7 million as compared to the prior year due to lower earnings at CNA Financial Corporation and reduced results from the parent company investment portfolio, partially offset by higher earnings at Diamond Offshore Drilling, Inc. because of the absence this quarter of an asset impairment charge. Higher earnings at Boardwalk Pipeline Partners, LP also served as a partial offset. The increase in net income per share is due to treasury share purchases over the past year.
Book value per share excluding accumulated other comprehensive income (AOCI) increased to $52.98 at March 31, 2016 from $52.72 at December 31, 2015.
Three Months Ended March 31,
(In millions, except per share data)
Income before net investment gains (losses)
Net investment gains (losses)
Net income attributable to Loews Corporation
Net income per share
March 31, 2016
December 31, 2015
Book value per share
Book value per share excluding AOCI
CNA's earnings decreased due to a $74 million (after tax and noncontrolling interests) charge related to the 2010 retroactive reinsurance agreement to cede its legacy asbestos and environmental pollution liabilities (Loss Portfolio Transfer, or LPT). Under retroactive reinsurance accounting, amounts ceded through the LPT in excess of the consideration paid result in a deferred benefit that is recognized in income in proportion to paid recoveries over future periods. CNA's earnings were also impacted by a decline in net investment income driven by limited partnership investment results, as well as realized investment losses in 2016 as compared to gains in 2015. These investment-related declines, which totaled $99 million (after tax and noncontrolling interests), were partially offset by improved property & casualty underwriting results and improved results in the Life & Group segment.
Diamond Offshore's prior year earnings reflected a $158 million (after tax and noncontrolling interests) asset impairment charge. Year-over-year earnings also benefited from revenue earned by newbuild drillships, demobilization fees, lower operating costs, lower depreciation expense resulting mainly from the asset impairment charges taken in 2015, and a lower effective tax rate. These favorable items were largely offset by a substantial reduction in the number of operating rigs.
Boardwalk Pipeline's earnings increased as new rates took effect following the Gulf South rate case. Additionally, the Evangeline pipeline, which was placed into service in mid-2015, and new growth projects contributed to earnings.
At March 31, 2016, there were 339.0 million shares of Loews common stock outstanding. During the first quarter of 2016, the Company repurchased 0.9 million shares of its common stock at an aggregate cost of $33 million. The Company also purchased 0.3 million shares of CNA common stock at an aggregate cost of $8 million. Depending on market conditions, the Company may from time to time purchase shares of its and its subsidiaries' outstanding common stock in the open market or otherwise.
A conference call to discuss the first quarter results of Loews Corporation has been scheduled for today at 11:00 a.m. ET. A live webcast of the call will be available online at the Loews Corporation website (www.loews.com). Please go to the website at least ten minutes before the event begins to register and to download and install any necessary audio software. 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 85830677. An online replay will also be available on the Loews Corporation's website following the call.
A conference call to discuss the first quarter results of CNA has been scheduled for today at 10:00 a.m. ET. A live webcast will be available at www.cna.com. Those interested in participating in the question and answer session should dial (888) 515-2880, or for international callers, (719) 325-2370.
A conference call to discuss the first quarter results of Boardwalk Pipeline has been scheduled for today at 9:30 a.m. ET. A live webcast will be available at www.bwpmlp.com. Those interested in participating in the question and answer session should dial (855) 793-3255 or for international callers, (631) 485-4925. The conference ID number is 85747324.
A conference call to discuss the first quarter results of Diamond Offshore has been scheduled for today at 8:30 a.m. ET. A live webcast will be available at www.diamondoffshore.com. Those interested in participating in the question and answer session should dial (800) 247-9979, or for international callers, (973) 321-1100. The conference ID number is 89517726.
ABOUT LOEWS CORPORATION
Loews Corporation is a diversified company with three publicly-traded subsidiaries: CNA Financial Corporation (NYSE: CNA), Diamond Offshore Drilling, Inc. (NYSE: DO) and Boardwalk Pipeline Partners, LP (NYSE: BWP); and one wholly owned subsidiary, Loews Hotels & Resorts. For more information please visit www.loews.com.
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 Company. A discussion of the important risk factors and other considerations that could materially impact these matters as well as the Company's overall business and financial performance can be found in the Company'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 Company's website (www.loews.com). 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 Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.
Loews Corporation and Subsidiaries
Selected Financial Information
Investment income (loss) and other
Investment gains (losses) - CNA Financial
Income (Loss) Before Income Tax:
CNA Financial (a)
Diamond Offshore (b)
Investment income (loss), net
Net Income (Loss) Attributable to Loews Corporation:
Net income attributable to Loews Corporation
Includes a charge of $127 million ($74 million after tax and noncontrolling interests) for the three months ended March 31, 2016 related to retroactive reinsurance accounting for the Loss Portfolio Transfer.
Includes an asset impairment charge of $359 million ($158 million after tax and noncontrolling interests) for the three months ended March 31, 2015 related to the carrying value of eight drilling rigs.
Consists primarily of corporate interest expense and other unallocated expenses.
Consolidated Financial Review
Net investment income
Investment gains (losses)
Contract drilling revenues
Insurance claims & policyholders' benefits (a)
Contract drilling expenses
Other operating expenses (b)
Income before income tax
Income tax (expense) benefit
Amounts attributable to noncontrolling interests
Diluted income per share attributable to Loews Corporation
Weighted average diluted number of shares
SOURCE Loews Corporation