01—Abstract
Summary
Summary of the 10-K filed February 6, 2024. Cited figures are marked; the original filing is the authoritative source.
Loews Corporation is a holding company whose subsidiaries operate in commercial property and casualty insurance (CNA Financial, approximately 92%a owned), natural gas and natural gas liquids transportation and storage (Boardwalk Pipelines, wholly owned), and hotels (Loews Hotels & Co, wholly owned).
It also holds an unconsolidated equity-method investment of approximately 53% in Altium Packaging LLC. For 2023, net income attributable to Loews Corporation was $1,434 millionb, or $6.29 diluted net income per share, compared with $822 million, or $3.38 per share, in 2022. The increase was driven mainly by improved results at CNA, including higher net investment income, improved underwriting income and lower investment losses, along with higher Boardwalk Pipelines revenues from re-contracting at higher rates and growth projects.
CNA reported 2023 total revenue of $13,299 millionc and net income attributable to Loews of $1,094 million, with a combined ratio of 93.5% for Property & Casualty Operations. Boardwalk Pipelines acquired Bayou Ethane for $355 million in cash in September 2023 and reported EBITDA of $929 million. Loews Hotels & Co operates 25 hotels, and its net income attributable to Loews was $147 million.
The Parent Company held cash and investments, net of receivables and payables, of $2.6 billiond at year-end 2023, down from $3.2 billion, after $849 million of treasury stock purchases and repayment of $500 million of 2.6% senior notes. Key risks disclosed include CNA's reserve adequacy, particularly for long-tail lines and long-term care, exposure to A&EP and mass tort claims, and cybersecurity incidents, including a March 2021 ransomware attack at CNA.
Boardwalk Pipelines faces FERC rate regulation and climate-related regulatory risk, and Loews Hotels & Co faces geographic concentration in Florida. The Delaware class action related to Boardwalk Pipelines' 2018 unit acquisition was remanded to the Trial Court, with a hearing scheduled for April 2024.
02—Key points
Key Highlights
- Net income attributable to Loews Corporation rose to $1,434 million ($6.29 diluted EPS) in 2023 from $822 million ($3.38 diluted EPS) in 2022.
- CNA Financial net income attributable to Loews was $1,094 million in 2023, versus $612 million in 2022, driven by higher net investment income, improved underwriting income and lower investment losses.
- Boardwalk Pipelines net income attributable to Loews was $283 million, with EBITDA of $929 million, supported by re-contracting at higher rates, growth projects and the $355 million Bayou Ethane acquisition.
- Loews Hotels & Co net income attributable to Loews was $147 million, including a $46 million pretax gain on consolidating a previously unconsolidated joint venture property.
- Parent Company cash and investments, net of receivables and payables, totaled $2.6 billion at December 31, 2023, versus $3.2 billion a year earlier; the company repurchased $849 million of its treasury stock in 2023.
- CNA's long-term care future policy benefit reserves were $13,959 million, and the filing discloses a 5% increase in morbidity would reduce pretax income by an estimated $600 million.
- A Delaware class action tied to Boardwalk Pipelines' 2018 acquisition of public units was remanded to the Trial Court after the Supreme Court reversed the 2021 damages ruling; a remand hearing is scheduled for April 2024.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 6, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $15.90B$14.04B | +13.2% |
| Interest Expense | $376.00M$378.00M | −0.5% |
| Net Income | $1.43B$822.00M | +74.5% |
| EPS (Basic) | $6.30$3.39 | +85.8% |
| EPS (Diluted) | $6.29$3.38 | +86.1% |
| Shares Outstanding (Basic) | 227.48M242.83M | −6.3% |
| Shares Outstanding (Diluted) | 227.81M243.28M | −6.4% |
05—Questions
Frequently Asked Questions
What drove the increase in Loews Corporation's 2023 earnings?
The filing attributes the increase mainly to improved results at CNA, including higher net investment income, improved underwriting income, lower investment losses and a significantly smaller unfavorable impact from long-term care annual reserve reviews. Parent company investment returns on equity securities and short-term investments also improved, and Boardwalk Pipelines contributed through higher revenues from re-contracting and recently completed growth projects.
How much cash did Loews receive from its subsidiaries in 2023?
The Parent Company received $1.0 billion in cash dividends from subsidiaries in 2023, including a special cash dividend of $293 million from CNA. The filing also states that $606 million in cash dividends from CNA will be received in March 2024.
What are the main risks to CNA's results?
The filing highlights reserve adequacy for claim and claim adjustment expenses, especially for long-tail lines such as workers' compensation, general liability and professional liability, and long-term care. It also cites A&EP and mass tort exposure, catastrophe losses, the March 2021 ransomware attack, and the MOVEit-related vendor breach in the second quarter of 2023.
What is the status of the Boardwalk Pipelines class action?
The Delaware Court of Chancery originally awarded plaintiffs approximately $690 million plus pre-judgment interest of about $166 million. The Delaware Supreme Court reversed that ruling in December 2022 and remanded the case for further proceedings on claims not decided by the Trial Court, with a hearing scheduled for April 2024.
What is Loews's exposure to Altium Packaging and Loews Hotels?
Loews owns approximately 53% of Altium Packaging, which is accounted for under the equity method after the April 2021 sale of approximately 47% of its interest. Loews Hotels & Co operates 25 hotels, of which 11 are owned, 12 are owned through joint ventures and 2 are managed for unaffiliated owners. Eight hotels, representing 56% of system rooms, are located at Universal Orlando.
06—Continue