Loews Earnings 2019-06-30

L 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

ORM

10-Q

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

June 30, 2019

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From

Commission File Number

1-6541

LOEWS CORPORATION

(Exact name of registrant as specified in its charter)


Delaware				13-2646102
(State or other jurisdiction of				(I.R.S. Employer
incorporation or organization)				Identification No.)

667 Madison Avenue, New York, N.Y.

10065-8087

(Address of principal executive offices) (Zip Code)

(

212

)

521-2000

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock , par value $0.01 per share	L	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes X		No _____

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Yes X		No _____

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer X		Accelerated filer ____		Non-accelerated filer ____		Smaller reporting company ____

Emerging growth company ____

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


______

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes ______		No X

As of July 26,

2019

, there were

302,380,038

shares of the registrant’s common stock outstanding.

Table of Contents

INDEX


	Page No.

Part I. Financial Information

Item 1. Financial Statements (unaudited)

Consolidated Condensed Balance Sheets June 30, 2019 and December 31, 2018		3

Consolidated Condensed Statements of Income Three and six months ended June 30, 2019 and 2018		4

Consolidated Condensed Statements of Comprehensive Income (Loss) Three and six months ended June 30, 2019 and 2018		5

Consolidated Condensed Statements of Equity Three and six months ended June 30, 2019 and 2018		6

Consolidated Condensed Statements of Cash Flows Six months ended June 30, 2019 and 2018		8

Notes to Consolidated Condensed Financial Statements		9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		36

Item 3. Quantitative and Qualitative Disclosures about Market Risk		55

Item 4. Controls and Procedures		56

Part II. Other Information		56

Item 1. Legal Proceedings		56

Item 1A. Risk Factors		56

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		56

Item 6. Exhibits		57

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)


	June 30, 2019			December 31, 2018
(Dollar amounts in millions, except per share data)

Assets:
Investments:
Fixed maturities, amortized cost of $38,045 and $ 38,234	$	41,663		$	39,699
Equity securities, cost of $ 1,385 and $ 1,479		1,367			1,293
Limited partnership investments		2,036			2,424
Other invested assets, primarily mortgage loans		985			901
Short term investments		4,689			3,869
Total investments		50,740			48,186
Cash		440			405
Receivables		8,144			7,960
Property, plant and equipment		15,513			15,511
Goodwill		768			665
Deferred non-insurance warranty acquisition expenses		2,678			2,513
Deferred acquisition costs of insurance subsidiaries		681			633
Other assets		3,313			2,443
Total assets	$	82,277		$	78,316

Liabilities and Equity:
Insurance reserves:
Claim and claim adjustment expense	$	21,729		$	21,984
Future policy benefits		11,537			10,597
Unearned premiums		4,648			4,183
Total insurance reserves		37,914			36,764
Payable to brokers		576			42
Short term debt		87			17
Long term debt		11,456			11,359
Deferred income taxes		1,227			841
Deferred non-insurance warranty revenue		3,595			3,402
Other liabilities		5,028			4,505
Total liabilities		59,883			56,930

Commitments and contingent liabilities

Preferred stock, $ 0.10 par value:
Authorized – 100,000,000 shares
Common stock, $ 0.01 par value:
Authorized – 1,800,000,000 shares
Issued – 312,528,502 and 312,169,189 shares		3			3
Additional paid-in capital		3,612			3,627
Retained earnings		16,374			15,773
Accumulated other comprehensive income (loss)		3			(880	)
		19,992			18,523
Less treasury stock, at cost ( 9,930,431 and 100,000 shares)		(478	)		(5	)
Total shareholders’ equity		19,514			18,518
Noncontrolling interests		2,880			2,868
Total equity		22,394			21,386
Total liabilities and equity	$	82,277		$	78,316

See accompanying Notes to Consolidated Condensed Financial Statements.

Table of Contents

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
(In millions, except per share data)
Revenues:
Insurance premiums	$	1,824		$	1,815		$	3,627		$	3,600
Net investment income		551			551			1,208			1,057
Investment gains (losses):
Other-than-temporary impairment losses		(6	)					(20	)		(6	)
Other net investment gains (losses)		8			(3	)		53			12

Total investment gains (losses)		2			(3	)		33			6
Non-insurance warranty revenue		285			248			566			486
Operating revenues and other		961			979			1,946			2,022
Total		3,623			3,590			7,380			7,171

Expenses:
Insurance claims and policyholders’ benefits		1,352			1,327			2,709			2,666
Amortization of deferred acquisition costs		338			359			680			655
Non-insurance warranty expense		263			225			523			441
Operating expenses and other		1,231			1,229			2,380			2,413
Interest		164			143			305			284
Total		3,348			3,283			6,597			6,459
Income before income tax		275			307			783			712
Income tax expense		(50	)		(59	)		(162	)		(84	)
Net income		225			248			621			628
Amounts attributable to noncontrolling interests		24			(18	)		22			(105	)
Net income attributable to Loews Corporation	$	249		$	230		$	643		$	523

Basic net income per share	$	0.82		$	0.72		$	2.10		$	1.62

Diluted net income per share	$	0.82		$	0.72		$	2.09		$	1.61

Weighted average shares outstanding:
Shares of common stock		303.84			318.87			306.82			323.30
Dilutive potential shares of common stock		0.70			0.91			0.62			0.93
Total weighted average shares outstanding assuming dilution		304.54			319.78			307.44			324.23

See accompanying Notes to Consolidated Condensed Financial Statements.

Table of Contents

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
(In millions)

Net income	$	225		$	248		$	621		$	628

Other comprehensive income (loss), after tax
Changes in:
Net unrealized gains (losses) on investments with other-than-temporary impairments					(1	)		4			(10	)
Net other unrealized gains (losses) on investments		436			(159	)		962			(588	)
Total unrealized gains (losses) on investments		436			(160	)		966			(598	)
Unrealized gains (losses) on cash flow hedges		(6	)		4			(12	)		14
Pension liability		7			9			15			19
Foreign currency translation		3			(52	)		20			(41	)

Other comprehensive income (loss)		440			(199	)		989			(606	)

Comprehensive income		665			49			1,610			22

Amounts attributable to noncontrolling interests		(23	)		2			(84	)		(41	)

Total comprehensive income (loss) attributable to Loews Corporation	$	642		$	51		$	1,526		$	(19	)

See accompanying Notes to Consolidated Condensed Financial Statements.

Table of Contents

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF EQUITY

(Unaudited)


				Loews Corporation Shareholders
												Accumulated			Common
						Additional						Other			Stock
				Common		Paid-in			Retained			Comprehensive			Held in			Noncontrolling
	Total			Stock		Capital			Earnings			Income (Loss)			Treasury			Interests
(In millions)

Balance, April 1, 2018	$	23,848		$	3	$	3,142		$	16,321		$	(417	)	$	(517	)	$	5,316
Net income		248								230									18
Other comprehensive loss		(199	)										(179	)					(20	)
Dividends paid ($0.0625 per share)		(42	)							(20	)								(22	)
Purchase of Boardwalk Pipeline common units		(1,715	)				661						(29	)					(2,347	)
Purchases of Loews treasury stock		(291	)													(291	)
Stock-based compensation		8					8
Other		1					(2	)		1									2
Balance, June 30, 2018	$	21,858		$	3	$	3,809		$	16,532		$	(625	)	$	(808	)	$	2,947

Balance, April 1, 2019	$	21,902		$	3	$	3,607		$	16,144		$	(390	)	$	(327	)	$	2,865
Net income		225								249									(24	)
Other comprehensive income		440											393						47
Dividends paid ($0.0625 per share)		(29	)							(19	)								(10	)
Purchases of Loews treasury stock		(151	)													(151	)
Purchases of subsidiary stock from noncontrolling interests		(2	)																(2	)
Stock-based compensation		7					6

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$48.08	305	$14,659

10-Q	2019-06-30	Quarter: 2019-06-30
10-Q	2019-03-31	Quarter: 2019-03-31
10-K	2018-12-31	Annual: 2018-12-31
10-Q	2018-09-30	Quarter: 2018-09-30
10-Q	2018-06-30	Quarter: 2018-06-30
10-Q	2018-03-31	Quarter: 2018-03-31
10-K	2017-12-31	Annual: 2017-12-31
10-Q	2017-09-30	Quarter: 2017-09-30
10-Q	2017-06-30	Quarter: 2017-06-30
10-Q	2017-03-31	Quarter: 2017-03-31
10-K	2016-12-31	Annual: 2016-12-31
10-Q	2016-09-30	Quarter: 2016-09-30
10-Q	2016-06-30	Quarter: 2016-06-30
10-Q	2016-03-31	Quarter: 2016-03-31
10-K	2015-12-31	Annual: 2015-12-31
10-Q	2015-09-30	Quarter: 2015-09-30
10-Q	2015-06-30	Quarter: 2015-06-30
10-Q	2015-03-31	Quarter: 2015-03-31
10-K	2014-12-31	Annual: 2014-12-31
10-Q	2014-09-30	Quarter: 2014-09-30
10-Q	2014-06-30	Quarter: 2014-06-30
10-Q	2014-03-31	Quarter: 2014-03-31
10-K	2013-12-31	Annual: 2013-12-31

8-K	2019-08-05	Earnings, Exhibits
8-K	2019-05-14	Shareholder Vote
8-K	2019-04-29	Earnings, Exhibits
8-K	2019-02-11	Earnings, Exhibits
8-K	2019-01-28	Officers
8-K	2018-11-05	Earnings, Exhibits
8-K	2018-07-30	Earnings, Exhibits
8-K	2018-06-29	Regulation FD, Exhibits
8-K	2018-05-08	Shareholder Vote
8-K	2018-02-13	Amend Bylaw, Exhibits
8-K	2018-02-12	Earnings, Exhibits

PGR	Progressive	43,776
ORI	Old Republic	7,107
MTG	MGIC Investment	4,471
MCY	Mercury General	2,905
AMSF	Amerisafe	1,316
UFCS	United Fire Group	1,136
TPRE	Third Point Reinsurance	905
GBLI	Global Indemnity	373
PTVCA	Protective Insurance	234
ALL	Allstate Life Insurance	2

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