Three Months Ended June 30, 2019 Compared to 2018
CNA’s earnings increased primarily due to improved results in its Life & Group business and the absence of IT infrastructure transition costs incurred in 2018. Partially offsetting these increases was lower favorable net prior year reserve development in the Property & Casualty business. Results were also negatively affected by a loss of $15 million (after tax and noncontrolling interests) on the early redemption of debt in 2019.
Diamond Offshore’s results declined due to overall continuing challenging market conditions, higher contract drilling expense primarily due to incremental amortization of certain previously deferred contract-related costs as well as drilling rig downtime. These decreases were partially offset by a $7 million (after noncontrolling interests) income tax benefit in 2019 from a favorable adjustment related to an uncertain tax position recorded in 2017, a net gain of $5 million (after tax and noncontrolling interests) related to the disposition of assets in 2019 and a $12 million (after tax and noncontrolling interests) impairment charge in 2018.
Boardwalk Pipelines’ results were favorably impacted by higher firm transportation revenues from growth projects recently placed into service. Additionally, in 2019, proceeds received in conjunction with a contract cancellation due to a customer bankruptcy resulted in a $19 million (after tax) benefit to net income. Partially offsetting these favorable factors were contract restructurings and expirations. The increase in net income contribution is substantially the result of Loews owning 100% of the company as compared to 51% in the prior year period.
Loews Hotels & Co’s earnings decreased primarily due to charges of $7 million (after tax) related topre-opening expenses incurred at hotels under development and thewrite-off of capitalized development costs related to a potential development site. Absent these charges, results benefited primarily from higher earnings from its joint venture properties at the Universal Orlando Resort.
Income generated by the parent company investment portfolio decreased primarily due to lower income from limited partnership investments as well as a lower level of invested assets.
Six Months Ended June 30, 2019 Compared to 2018
CNA’s earnings increased primarily due to higher net investment income driven by improved returns from limited partnership investments and higher net investment gains. In addition, earnings in 2019 increased due to a net retroactive reinsurance benefit under the 2010 loss portfolio transfer with National Indemnity as compared to a net retroactive reinsurance charge recorded in 2018. Partially offsetting these increases were lower underwriting income reflecting higher catastrophe losses and lower favorable prior year reserve development, as well as a loss on the early redemption of debt.
Diamond Offshore’s results declined primarily due to the reasons set forth in the three-month discussion above.
Boardwalk Pipelines’ results improved primarily due to the reasons set forth in the three-month discussion above.
Loews Hotels & Co’s earnings decreased primarily due to the reasons set forth in the three-month discussion above and a charge related to the disposition of a property in 2019.
Income generated by the parent company investment portfolio increased primarily due to improved performance from equity securities, partially offset by lower returns from limited partnership investments as well as a lower level of invested assets.
SHARE REPURCHASES
At June 30, 2019, there were 302.6 million shares of Loews common stock outstanding. For the three and six months ended June 30, 2019, the Company repurchased 3.0 million and 9.8 million shares of its
Page 2 of 5
