1 9 9 9 1 _ L o e w s _ A n n u a l _ R e p o r t . i n d d
1 Shareholders New York, NY10065 667 Madison Ave. www.loews.com 2019 Letter to 3 / 1 3 / 2 0
3 2019 ANNUAL REPORT 1 : 1 5
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L LOEWS CORPORATION 2 o e w s _ A tax and noncontrolling interests) recorded in 2018. 2018. in recorded interests) noncontrolling and tax after (both charge settlement legal million $8 an and charge impairment rig million ofa$12 absence the from benefited 2019 in Results margins. drilling contract compressed to due declined results Offshore’s Diamond 51.67 care. term long in 0.25 deficiency premium reserve life active ofan recognition the from resulting interests) noncontrolling and tax after ($151 million million of$216 acharge by offset partially were increases These 2018. with compared as study experience 53.96 claim care term long annual the from resulting 0.25 reserves ofclaim reduction a higher and 2018 with compared as Indemnity National with transfer portfolio loss 2010 the under recorded charge reinsurance retroactive net lower a from benefited 57.83 2019 in earnings addition, In gains. investment net higher from and investments partnership 0.25 limited on returns improved by driven income investment net higher from increased CNA’s earnings 59.34 &Co. Hotels Loews and Offshore atDiamond results lower by offset partially were increases These income. investment net company 0.25 parent higher as well as Pipelines, Boardwalk and Financial at CNA earnings higher to due increased 2019 in income Net 2018. in share, per 65.71 $1.99 or 0.72 million, $636 to compared share per $3.07 or million, $932 was $ 2019 for Corporation Loews to attributable income net Consolidated 0.25 Results 1.93 of Operations $ 290.97 312.07 244 332.09 $ 336.62 3.45 $ 339.90 $ $ $ 19,119 $ $ 18,518 51,250 936 48,186 19,204 52,226 $ 82,243 50,711 49,400 18,163 1.99 78,316 17,561 $ 79,586 (a) 76,594 1,582 $ 76,006 3.07 Shares $ $ share per value Book $ 287 834 $ 716 outstanding $ share per $ dividends Cash 1,412 706 $ $ 871 $ Shareholders’ $ $ $ 14,931 14,066 (70) 1,119 13,735 equity $ 13,105 13,415 Debt Total 61 Investments assets )LQDQFLDO3RVLWLRQ share per income net Diluted Amounts attributable to noncontrolling interests Net tax income before Income income Revenues 5HVXOWVRI2SHUDWLRQV ,10,//,216(;&(373(56+$5('$7$ <($5(1'(''(&(0%(5ưƮ Financial Highlights n n u and Financial Liabilities.” Prior period revenues were not adjusted for the adoption of either of these standards. ofthese ofeither adoption the for adjusted not were revenues period Prior Liabilities.” Asse Financial ofFinancial and Measurement and Recognition 825-10); (Subtopic –Overall Instruments “Financial 2016-01, Customers ASU and with (Topic 606)” Contracts from “Revenue 2014-09, (“ASU”) Update Standard Accounting adopted Company the 2018, 1, January On a l usdais 9,754 9,598 9,757 9,003 8,881 260 $ 1,779 1,778 1,776 1,775 1,679 654 $ 1,164 $ Subsidiaries 636 $ Parent company 932 $ Corporation toLoews attributable income Net _ R e p o r t . i n d d
2 ƭƶƯƮ ƭƴ ƯƮD ƯƭƮƲ D ƯƭƮƳ D ƯƭƮƴ D ƯƭƮƵ ƯƭƮƶ of its common stock at an aggregate cost of $1.1 billion. of$1.1 cost aggregate atan stock common of its shares million 21.5 purchased Company the 2019, In outstanding. stock common ofLoews shares million 291.0 were there 2019, 31, December At 2018. 31, atDecember $62.16 to compared as $65.94 was stock common ofLoews share per value book the income, comprehensive other accumulated 2019, excluding 31, December At securities. equity on returns higher to primarily due increased portfolio investment company parent the by generated Income development. under properties to related expenses non-recurring other and pre-opening higher to due decreased earnings charges, impairment these Excluding properties. ofhotel value carrying the to related tax) after million ($77 million $99 totaling charges impairment to due primarily decreased results &Co’s Hotels Loews expirations. and restructurings ofcontract impact the by offset partially service, revenues transportation firm projects from growth recently placed into higher and benefit tax) (after a$19 million in resulted that bankruptcy acustomer to due cancellation acontract with conjunction in received 51% for a portion of 2018. Net income in 2019 includes also proceeds to compared as company ofthe 100% owning Loews to due primarily improved Loews to attributable earnings Pipelines’ Boardwalk 28 6) (62) (27) (248) ts 3 / 1 3 / 2 0
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To Our Shareholders 09
Our Portfolio of Businesses 14
Board of Directors & Officers
19991_Loews_Annual_Report.indd 3 3/13/20 3:15 PM To Our Shareholders
As the decade comes to a close, we can look back at a period of dramatic change in the global business and economic environment. Disruptive technologies, shifting trade relations, and an array of market and geopolitical forces – to name just a few factors – have caused managements across many industries to rethink their business models and strategies.
We believe these dynamic forces place a Andrew H. Tisch renewed emphasis on what has always been Co-Chairman of the Board our top management priority at Loews: capital of Loews, and Chairman of the allocation. Responding to the changes and Executive Committee of Loews challenges of today’s business environment requires the thoughtful, targeted and effective deployment of the company’s capital – which is the most important action we can take to create James S. Tisch shareholder value. President and Chief Executive Officer of Loews Loews principally allocates capital in three ways: share repurchases, investing in existing subsidiaries, and acquiring new subsidiary Jonathan M. Tisch businesses. During the past five years, we have Co-Chairman of the Board of allocated more than $5.8 billion in capital Loews, Chairman and Chief to these strategic imperatives. As a holding Executive Officer of Loews company with cash and investments totaling Hotels & Co $3.3 billion at the end of 2019 – and whose income from subsidiary dividends and investments amounted to approximately $1.2 billion in the past year – Loews will continue to allocate its capital with a focus on creating long- term value for our shareholders.
19991_Loews_Annual_Report.indd 4 3/13/20 3:15 PM 1 9 9 9 1 _ L o e w s _ A n n u a l _ R e p o Intrinsic Value Confidence inOur Share Repurchases: its next phase of development. of development. phase next its self-fund could business the whether as well as exist, that opportunities growth any account into take also We efficiency. operational and innovation, position, competitive subsidiary’s the strengthen helpto can capital of Loews’s application how the ourselves ask we portfolio, own our within investments considering When shareholders. for Loews value additional create to opportunity an is there we believe when invest we only –and best we know markets and industries businesses, the are these Clearly, subsidiaries. existing our in investing lever is allocation capital second Our Building Existing Businesses Investing inSubsidiaries: view our as well as subsidiaries traded publicly of our values the account into takes which calculation, parts” “sum-of-the- the is repurchases share Loews about thinking when we consider metrics of the One value. intrinsic their is we believe below what significantly trading are they when only shares Loews repurchase We to seek shares. our we buy at which price the to sensitive very we are and at Loews program repurchase share We automatic donot have an shareholders. Loews of long-term perspective the from accretive be prove to will purchases these we believe imagine, you might As period. time that in byover 12% float outstanding the reducing shares, of its million 40 than more repurchase to year each over $1 billion alittle spent 2019,2018 Loews and In value. shareholder of creating means significant a are they and allocation, lever for capital primary Loews’s been have historically repurchases Share r t . i n d d
5 from $68 million in 2013 to $227 million in 2019. in million $227 2013 to in million $68 from EBITDA adjusted grow able to been has Hotels Loews development, and of expansion period this During endof 2019. at the $370 million of about investment for company, hotel anet the from back million $730 approximately received has Loews billion. $1.1 totaling investments with Hotels’s growth Loews supported has company holding the years, seven past the During &Co. Hotels Loews in investments recent our in seen be can approach of this illustration A clear growth. for of organic room plenty is there that CNA’s you tell Robusto, Dino he’ll CEO, to you talk If opportunities. growth organic onits capitalize to CNA enable should steps These distribution. expanding and technology leveraging talent, top retaining and recruiting culture, underwriting strong its improving and onmaintaining focus to continue will CNA place. have in they team management the of strength bythe fueled is which trajectory growth onCNA’s and industry, insurance of the fundamentals onthe –both onCNA bullish We very are business. insurance our in confidence our underscore also repurchases our calculation, “sum-of-the-parts” of Loews’s portion asubstantial represents CNA Since peers. its to at adiscount traded generally has Financial, CNA subsidiary, largest our Additionally, shares. of Loews price market the to compared as businesses, our of all worth true of the 3 / 1 3 / 2 0
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Shares Outstanding Since 2010
In every decade since 1970, we have repurchased more than one quarter of our outstanding shares. Since 2010, we have reduced our outstanding shares by about 30%.
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19991_Loews_Annual_Report.indd 6 3/13/20 3:15 PM 1 9 9 9 1 _ L o e w s _ A n n u a l _ R e p o other growth opportunities. growth other out seek to continuing while portfolio existing its into businesses of these integration onthe focused is company The industry. pharmaceutical growth high- the in CCC’s presence increased and multiples post-synergy at attractive scale added acquisitions These level. CCC at the funded were which of all acquisitions, “tuck-in” six added has CCC years, two past the Over industry. packaging the in toehold its gave Loews acquisition This level. subsidiary at the of debt amount equivalent of an financing the and cash in million of $600 consisting billion, $1.2 for approximately (CCC) Company Container Consolidated acquired 2017, In however, infrequently. we additions We portfolio such have made businesses. new acquire to lever is allocation capital third Our capacity to co-invest, provide meaningful input on input meaningful provide co-invest, to capacity its in asweetspot found has Hotels Loews functions, of these three all fulfill not able to are competitors of its most Since roles. of these or acombination oroperator, adeveloper, owner as roles multiple perform to ability its in niche its found has company hotel the projects, at growth new looking When centers. orconference stadiums sports as such of demand-generators types different choosing country, of the parts other in replicated has company the onethat is park atheme like demand-generators near hotels of building strategy This Resorts. Orlando Universal with partnership long-term successful onits building continued has company the Additionally, renovations. through hotels existing strengthen to also and portfolio its in of hotels number the expand to Hotels both Loews enabled has capital of Loews’s allocation This a New Business Acquisitions: Adding r t . i n d d
7 cash and investments. and cash net our from liquidity ample the bytapping transaction this We execute to able were billion. over $1.5 slightly costing purchase ashare in units LP outstanding Boardwalk’s in buy to decided Loews ago. ahalf and 51% ayear owning to compared as of Boardwalk, Today 100% we own Pipelines. Boardwalk in interest ownership its increased Loews when 2018, in occurred subsidiaries our in investing of Loews example Another results. initial obscure somewhat hotel new for each periods ramp-up and expenses pre-opening costs, development as areturn, produce to investments for these time take itwill development, ground-up through grow to continues of hotels portfolio the As completion. upon property the manage and development of construction, new and design the opportunities over the medium-to-long term. medium-to-long over the opportunities growth profitable create that or investments acquisitions strategic make subsidiaries have our However, to level. happy company we are holding at the acquisitions makes Loews which with frequency the increasing we don’t anticipate market, M&A today’s in valuations sky-high the Given customer base. its grow to helpitcontinue and capabilities diverse company’s the underscore to meant is name new The itparticipates. which in of segments number the expanded further has company the acquisitions, recent broader. much Altium’s With are capabilities and lines However, product their products. milk and for water containers made that company the as industry the within known well been had CCC that is change for the rationale The Packaging. Altium to name its changed CCC 2020, early In 3 / 1 3 / 2 0
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L LOEWS CORPORATION 8 o e w s _ A n n u a l _ R e p o r Sincerely, The company is focused on managing its liquidity. its onmanaging focused is company The downturn. aprotracted from suffer to continues industry drilling offshore the as different, quite is Offshore for Diamond focus the on growth, concentrating are subsidiaries other our While Offshore Drilling FEBRUARY 11, 2020 FEBRUARY PRESIDENT THE OF OFFICE Tisch S. James regarding counsel and perspective long-term our of benefit the with teams leadership subsidiary providing role as our we level, see corporate the At leadership. exceptional is common have in all they onething unique, is businesses of our each While subsidiary. at place each in team management senior and CEO right we have the that vital itis businesses, of portfolio of our nature diverse the Given businesses. our run to people right the by selecting is value creates Loews that way important Another shareholders. for our value enhance and we create have to tools powerful most oneof the been –has business new promising a oracquire subsidiaries, of existing growth the support repurchases, share fund to –whether capital of allocation strategic Loews’s years, the Over Time-TestedA Strategy t . i n d d
8 Andrew H.Tisch Andrew Jonathan M. Tisch M. Jonathan efficient and value-added partner for its customers. for its partner value-added and efficient itamore make that innovations develop process to able been has Diamond Nevertheless, backlog. its building and expenses, its cutting structure, cost its oncontrolling concentrate to continues Diamond subsidiaries for maximum long-term value creation. value long-term for maximum subsidiaries its and company the position best that ways in capital our allocating and decisions onmaking focused stay to continue will Loews that assured be Please Loews. in have placed they confidence for the shareholders our we thank and counsel, and guidance wise for their of directors board our thank We also shareholders. our for all value creating to commitment onLoews’s deliver to professionalism and talent expertise, vision, their devote who individuals are These businesses. of our all across members team and CEOs for the We grateful are plans. growth their support to able and ready, willing we are shareholders, our and Loews to advantageous when of course, And, decisions. allocation capital major and planning strategic 3 / 1 3 / 2 0
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P M 1 9 9 9 1 _ L o e w s _ A n n u a l _ R e p www.cna.com coverage. casualty and property other and surety lines, specialty lines, commercial standard include products CNA’s insurance Europe. Continental and U.K. the Canada, U.S., the across offices Today, has CNA internationally. and U.S. the in professionals and businesses million one than more to protection insurance business provides CNA States, United the in organizations insurance casualty and property commercial largest ofthe one As 1900. since Chicago in headquartered been has and 1897 in founded was Corporation Financial CNA CEO: Headquarters: Industry: Owned: Symbol: NYSE CNA Financial o sectors from P&C insurance to hospitality. multi-industry holdingcompany structure, withsubsidiaries spanningdiverse An important elementofLoews’s strategy to deliver value forshareholders isour of Businesses PortfolioOur www.bwpipelines.com ofNGLs. barrels million 31.8 and gas ofworking Bcf 205 approximately of capacity aggregate an with caverns storage underground as well as pipelines liquids and gas ofnatural miles 14,055 approximately operates and owns Boardwalk customers. its for liquids gas natural and gas natural stores and transports primarily Pipelines Boardwalk CEO: Headquarters: Industry: Owned: Boardwalk Pipelines r t . i n d Pipeline &Storage Pipeline d Dino E. Robusto E. Dino Stanley C. Horton C. Stanley
9 89% 100% Commercial Property Property Commercial & Casualty Insurance & Casualty Natural Gas & Liquids &Liquids Gas Natural Chicago, IL CNA Houston, TX Houston,
www.loewshotels.com approach. a handcrafted with moments guest unscripted delivering to dedicated properties features portfolio Hotels Loews the coast, to coast from destinations resort and centers city major in Located 2019. in opened which Universal, NBC Comcast with partnership in hotel seventh the Suites, and Inn Surfside Universal’s and TX –Arlington, Loews by Live! new the including Canada, and U.S. the across hotels 26 operates and/or owns &Co Hotels Loews hotels. ofpartner-brand mix asolid and Hotels, Loews independent branded encompasses company York New the in City, Headquartered CEO: Headquarters: Industry: Owned: HotelsLoews &Co www.diamondoffshore.com drillships. positioned dynamically four ¬and stacked cold are ofwhich ¬two semisubmersibles 11 including rigs drilling offshore of 15 consists fleet company’s The industry. energy global the to services drilling contract provides Inc. Drilling, Offshore Diamond CEO: Headquarters: Industry: Owned: Symbol: NYSE Drilling Offshore Diamond Jonathan M. Tisch M. Jonathan Marc Edwards Marc 100% 53% Hospitality Hospitality Drilling Offshore New York, NY New TX Houston, DO www.altiumpkg.com ofcustomers. range of awide needs the meet to solutions resin recycled and packaging cost-effective and reliable delivers consistently that network integrated an has Altium employees, 3,100 and facilities, manufacturing resins recycled two Canada, and U.S. the in facilities manufacturing packaging 64 With Plastics. Envision business, resin post-consumer aleading operates also Altium industries. beverage/juice and water, chemicals, food/nutraceuticals, industrial/specialty chemicals, household dairy, pharmaceutical, the in base customer adiverse serving solutions, packaging short-run and mid- customized in specializes Altium America. North in manufacturer and provider solutions packaging customer-centric aleading is Packaging Altium CEO: Headquarters: Industry: Owned: Altium Packaging Sean R. Fallmann 99% Rigid Plastic Packaging Plastic Rigid Atlanta, GA Atlanta, 3 / 2 3 / 2 0
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L LOEWS CORPORATION 10 o e w s _ A n n u a l _ R e p o r Performance Highlights Subsidiaries’ INVESTED ASSETS EMPLOYEES REVENUE encompasses subsidiaries indiverse sectors. Loews’s multi-industryholdingcompany structure marketplace. Finally, CNA recognizes the importance importance the recognizes CNA Finally, marketplace. the to relevant and client-centered are solutions its that ensure and proposition value its maximize to brokers, and agents independent including partners, distribution with relationships deep cultivates also company The decisions. underwriting improve to capabilities cross-functional leveraging and training, extensive mindset, oriented solution- and innovative an governance, and acumen underwriting by strong characterized culture underwriting adeep fostered has management goal, that To advance company.” underwriting quartile a“top build to working is CNA profitability, and growth To consistent deliver each market. local in customers serve to tailored products Specialty P&C and offers Europe, Continental and U.K. the Canada, in offices with International, CNA products. Warranty and Surety as well as products, liability &management of professional range abroad provides Specialty CNA businesses. large and mid-sized small, to services and ofproducts array an offers Commercial CNA areas. operating core onthree focused is business The Europe. Continental and U.K. the Canada, U.S., the in professionals and forbusinesses services and products P&C insurance specialized and ofstandard range abroad providing companies, insurance (P&C) casualty and property commercial U.S. largest ofthe one is CNA t . i n d d
1 0 (Year ended December 31,2019, millions) $in December (Year ended Financial CNA $47,744 5,900 $10,767
billion in regular and special dividends to Loews. Loews. to dividends special and regular in billion $4.3 about paid has 2014, CNA Since billion. $11 nearly at steady remained has capital statutory its period time same However, that over years. five than formore earnings of 100% approximately to equivalent returns capital with shareholders reward to able been has CNA sheet, balance a strong and discipline, renewed underwriting from benefitted has that business underlying an With conservatively positioned balance sheet. and astrong maintaining while management, expense to approach adisciplined instilled has CNA time, same the At and/or geographies. ofbusiness classes certain exiting including volatility, inherent reduce to actions underwriting taken has company the particular, in portfolio, International the In terms. and rates acceptable for allow not does that business downsizing while growth, premium and increases forrate ofopportunities advantage take to portfolio its manage to continued has CNA growth. professional and personal encourages that environment a workplace creating by people talented cultivating and of attracting 3 / 1 3 / 2 0
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P M 1 9 9 9 1 _ L o e w s _ A n n u a l _ R e p maintaining liquidity, managing costs, and maximizing maximizing and costs, managing liquidity, maintaining on focus to continues Diamond downturn, industry protracted current the In rigs. drilling offshore available with oversupplied remains market the while exploration, gas and foroil demand weakened reflected has years recent in market drilling offshore global The drillships. RIG FLEET EMPLOYEES REVENUE drilling rigs, consisting of 11 semisubmersibles semisubmersibles of11 consisting rigs, drilling of15offshore fleet atotal with globe the around industry energy the to services drilling contract provides Diamond which are cold stacked stacked cold are which o sectors. those to services supply brine and services storage and transportation provide that forBoardwalk projects growth NGL ofseveral development the in resulted has This sectors. petrochemical and industrial the in (NGLs) liquids gas fornatural demand new provided also has America North in supplies gas natural ofnew abundance The capacity. transportation gas ofnatural (bcf) 3.1 than more provide and expenditures capital of total billion $1.6 than more represent that projects growth several service into placed has Boardwalk 2016, Since facility. LNG Freeport the to gas natural delivers Header Bend Coastal the of2018, end atthe service into Placed Header. Bend Coastal its including ofpipelines, network Boardwalk’s by served area Coast Gulf the from originating is growth demand ofthis Most facilities. industrial and generation, power terminals, export (LNG) gas natural liquefied by primarily driven grow, to continued has States United the in gas fornatural demand The ofsupply. sources reliable need who end-users to connectivity market seeking producers including ofcustomers, mix forabroad liquids gas natural and gas natural stores and transports Boardwalk AVERAGE DAILY THROUGHPUT THROUGHPUT DAILY AVERAGE PIPELINE OF TOTAL MILES REVENUE r t . i n d d
1 1 (Year ended December 31,2019, millions) $in December (Year ended Diamond Offshore Drilling (Year ended December 31,2019, millions) $in December (Year ended Boardwalk Pipelines ¬ and four dynamically positioned positioned dynamically four and 15 2,500 $981 8 Bcf 14,055 $1,295 ¬ two of two drilling and focusing onliquidity. focusing and drilling ofdeepwater cost total the lowering efficiencies, onimproving focus its maintaining while industry, the in innovate to ability its demonstrate to continue will Diamond Operations. Incident Zero achieve to further this reducing to acommitment 2014 –and since rate incidence recordable total the in reduction 71% a –with record safety stellar ofits proud is Diamond performance. operational good and differentiation through assets onits potential earnings diverse supply options. supply diverse and attractive with users end provide to markets and customers existing and new to basins various from supplies gas match to customers with working as well as forrenewal, up is that capacity ofthe value the onenhancing efforts marketing its focus to continue will company The customers. end-use to deliveries for are agreements firm from revenues reservation future 2019, 31, 75% over ofprojected ofDecember As agreements. firm new execute to projects growth new and expirations contract from available becoming capacity the utilizing by markets end-use to deliveries diversifying on focused has Boardwalk years, several past the Over facilities. petrochemical from demand liquids as well as industrials, and plants generation power as such end-users gas natural from demand increased serve will and transportation gas ofnatural (bcf/d) day per feet cubic billion 1.2 approximately represent projects These 2022. through service into placed be will that projects ofgrowth million $465 approximately construction under has currently Boardwalk EMPLOYEES CAPACITY STORAGE LIQUIDS UNDERGROUND GAS STORAGE
1,200 32 MMBbls 205 Bcf 3 / 1 3 / 2 0
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L LOEWS CORPORATION 12 o e w s _ A n n u a l _ R e p o r to net income. net to EBITDA ofadjusted areconciliation including definitions and disclosures additional for atwww.loews.com, found Overview, Company Loews * See ADJUSTED MORTGAGE DEBT* ADJUSTED EBITDA* Orlando Resort. Resort. Orlando Universal atthe hotels eight over spread rooms 9,000 have to expected is Hotels Loews of2020 end the by and decades, two than more spans partnership The pillar. this of example agreat is Orlando Universal with partnership Its destinations. onimmersive focus its is ofgrowth pillar second The strengths. differentiating are options beverage and food exceptional and experiences local offer to ability the where customers, transient with along groups to attractive locations in market, meetings and groups the in forexcellence areputation earned has Hotels Loews pillars. ontwo built is strategy growth company’s The edge. acompetitive have itcan where locations geographic in niches onmarket concentrating by –particularly strengths its to playing by performance financial its enhanced and growth pursued successfully has Hotels Loews pressures, pricing related and innovation technological by disrupted being is that industry an In potential. growth strong with destinations in hotels develop to partnerships strategic important formed also has Hotels Loews management. hotel and investing estate ofreal skills the combining operator, and owner an as position its by industry hospitality the in distinguished is company The development. under hotels four additional an with Canada, and U.S. the in hotels joint-venture and managed owned, of26 aportfolio has &Co Hotels Loews t . i n d d
1 2 (Year ended December 31,2019, millions) $in December (Year ended Loews Hotels &Co $1,449 $1,449 $227
17,000 by the end of 2020. of2020. end 17,000 the by nearly to 2013 in rooms 8,000 about from grown have will Hotels Loews experience, hospitality exceptional an delivering to commitment and team, talented partnerships, strong position, owner/operator its by Propelled in 2022. open to expected is which Hotel, Gables Coral Loews the announced Hotels Loews Finally, footbridge. via Center Convention City Kansas the to connect will that keys 800 with aproperty 2020, in Hotel City Kansas Loews the open will Hotels Loews Additionally, Village. Ballpark and Cardinals Louis St. the to home Stadium, Busch to adjacent Missouri, Louis, St. in 2020 in open to scheduled is property Loews by Live! Asecond 2020. during phases two in open to scheduled Orlando, atUniversal portfolio Hotels’s Loews to addition an is property new One rooms. 3,300 ofabout atotal with hotels four of building process the in currently is Hotels Loews attractions. orother stadiums sports adjacent as such generator demand ofabuilt-in presence ofthe because strong be to expected is rooms forhotel demand where destinations, immersive additional pursuing is company The HOTELS UNDER DEVELOPMENT NUMBER OF HOTELS 4 26 3 / 1 3 / 2 0
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P M 1 9 9 9 1 _ L o e w s _ A n n u a l _ R e p o largest producer of recycled high density polyethylene polyethylene density high ofrecycled producer largest second the is business resin recycled Envision Altium’s beverage group. and nutrition food, company’s the to added Plastics of Sonic acquisition the Additionally, system. closure and packaging EMPLOYEES NUMBER OF MANUFACTURING FACILITIES of patented products including ProLite including products of patented library extensive an has Healthcare, Altium as known now Tri State, labels. and closures vials, supplies Tri State which to market, pharmacy retail the into entry an provided Tennessee, Sparta, in based Distribution, of Tri State acquisition the addition, In market. Canadian the in scale meaningful develop rapidly to Altium allowing and location Canadian existing one the to locations manufacturing six adding Canada, in based were acquisitions ofthe Three transactions. six completed company the 15months, past the In industry. consolidating and afragmented in capabilities its expand and scale build to company the enabling strategy, growth ofAltium’s part akey been have Acquisitions stewardship. onenvironmental focus increasingly consumers and businesses as options packaging attractive more are which solutions, light-weighting and resin ofrecycled provider innovative an also is Altium brands. growing fast smaller, onserving focus aspecial with markets, industrial and ofconsumer foravariety containers producing packaging, plastic ofrigid manufacturer American North aleading is Company) Container Consolidated as known (formerly Packaging Altium r t . i n d d
1 3 (Year ended December 31,2019) December (Year ended Altium Packaging TM , a child-safe , achild-safe 3,100 66
include EcoPrime solutions innovative Envision’s America. North in (HDPE) and capability. and scale enhance that acquisitions making and services, and products value-added offering competitive, cost staying loyalty, customer onretaining focus astrategic through growth profitable drive to is vision Management’s flow. cash and EBITDA strong deliver to continued has Altium operations. its in elimination waste and quality onservice, focuses system production Its excellence. ofoperational record atrack and solutions, customized manufacturing, on-site by exemplified is commitment This service. customer to commitment a has Altium forinnovation, passion and products, proprietary ofcapabilities, range growing its to addition In end-markets. industrial and chemical household food, serve to created being are products new and designs, traditional comparable than plastic less In the packaging area, Dura-Lite area, packaging the In waterways. global in up end otherwise itmight where world ofthe regions from sourced is that resin HDPE recycled is OceanBound, innovation, Another contact. food fordirect suitable resin into waste curbside convert performance. Dura-Lite performance. product improving while use material reduces that products ‰ , which employs a patented process to to process apatented employs , which ‰ bottles are designed to use 10-25% 10-25% use to designed are bottles ‰ is a family of patented ofpatented afamily is 3 / 1 3 / 2 0
3 2019 ANNUAL REPORT 13 : 1 5
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L LOEWS CORPORATION 14 o e w s _ A n n u a l _ R e p o Board of Directors Officers r Chief Financial Officer Financial Chief and President Vice Senior Edelson B. David Corporate Secretary and Counsel General President, Vice Senior Alpert A. Marc &Co Hotels Loews and Chairman and CEO Board; ofthe Co-Chairman President ofthe Office Tisch M. Jonathan Executive Committee ofthe Chairman and Board ofthe Co-Chairman President ofthe Office Andrew H. Tisch Officer Executive Chief and President President ofthe Office Tisch S. James t . i n d d Continental Grain Company Company Grain Continental CEO, and President Chairman, J. Fribourg Paul Corp. Medical Cantel Chairman, LLC, Management, Diker Partner, Managing Diker M. Charles Partners Energy Quantum Partner, Venture D. Davidson Charles School Business Harvard Emeritus, Professor David K. Donald Bower L. Joseph University Harvard President, the to Advisor Senior Retired Berman E. Ann
1 4 Chief Accounting Officer Accounting Chief and President Vice Schwartz S. Mark Internal Audit President Vice Robertson A. Glenn Information Technology President Vice Hofmann E. Herb Resources Human President Vice Cushing K. Laura Tax President, Vice Becker Susan President Vice Senior Siegel I. Kenneth Officer Investment Chief and President Vice Senior W. Scott Richard and Chief Executive Officer Executive Chief and President President, of the Office Tisch S. James Executive Committee and Chairman of the Board ofthe Co-Chairman President, ofthe Office Tisch H. Andrew General Electric Company Officer, Resources Human Chief Retired P.Susan Peters &Young LLP Ernst CEO, and Chairman Retired Laskawy A. Philip Company Insurance Hospital and Corp. Service FOJP CEO, and President Former Harris L. Walter Black Ivy Group, LLC Group, Ivy Black Chairman, Executive Anthony Welters &Co Hotels Loews CEO, and Chairman and Board; of the Co-Chairman President, ofthe Office Tisch M. Jonathan Vice President Vice Jane Wang Treasurer Unneland Edmund President Vice Benjamin J. Tisch &Co Hotels Loews Development, & Business Commercial Executive Vice President, and Loews President Vice Tisch H. Alexander Corporate Communications and Relations Investor President Vice Skafidas Mary KEY Committee ofExecutive Member Governance Committee and ofNominating Member Committee Member of Compensation Committee ofAudit Member 3 / 1 8 / 2 0
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8.IURPWKH(8ZDVRIILFLDODV RI-DQXDU\XQWLOWKHWUDQVLWLRQSHULRGHQGVWKHUHUHPDLQVDODFNRI VSHFLILFLW\DQGGHWDLOUHJDUGLQJWKHORQJWHUPUHODWLRQVKLSEHWZHHQWKHWZRVLGHVDQGKRZEXVLQHVVHVRSHUDWLQJLQERWK MXULVGLFWLRQVPD\EHDIIHFWHG,QDQ\HYHQWHIIHFWLYH-DQXDU\ &1$¶V(8EXVLQHVVLVQRORQJHUKDQGOHGRXW RI &1$¶V 8. GRPLFLOHG VXEVLGLDU\ EXW WKURXJK LWV (XURSHDQ VXEVLGLDU\ LQ /X[HPERXUJ ZKLFK ZDV HVWDEOLVKHG VSHFLILFDOO\WRDGGUHVVWKHGHSDUWXUHRIWKH8.IURPWKH(8DQGWRHQVXUH&1$¶VDELOLW\WRRSHUDWHHIIHFWLYHO\ WKURXJKRXW WKH (8 $V D UHVXOW WKH FRPSOH[LW\ DQG FRVW RI UHJXODWRU\ FRPSOLDQFH RI LWV (XURSHDQ EXVLQHVV KDV LQFUHDVHGDQGZLOOOLNHO\FRQWLQXHWRUHVXOWLQHOHYDWHGH[SHQVHV ,WHP$5LVN)DFWRUV 5LVNV5HODWHGWR8VDQG2XU6XEVLGLDU\'LDPRQG2IIVKRUH The current protracted downturn in Diamond Offshore’s industry may continue for several more years and it cannot predict if or when it will end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¶VFRQWUDFW GULOOLQJVHUYLFHVDQGWKHGD\UDWHVIRUWKRVHVHUYLFHVKDVKDGDQGLIWKHLQGXVWU\GRZQWXUQFRQWLQXHVZLOOFRQWLQXHWR KDYH D PDWHULDO DGYHUVH HIIHFW RQ LWV EXVLQHVV 7KH SURWUDFWHG GRZQWXUQ LQ 'LDPRQG 2IIVKRUH¶V LQGXVWU\ ZLOO H[DFHUEDWHPDQ\RIWKHRWKHUULVNVLQFOXGHGEHORZDQGRWKHUULVNVWKDWLWIDFHVDQG'LDPRQG2IIVKRUHFDQQRWSUHGLFW LIRUZKHQWKHGRZQWXUQZLOOHQG The worldwide demand for Diamond Offshore’s drilling services has historically been dependent on the price of oil and, as a result of low oil prices, demand has continued to be depressed in 2019, and there continues a protracted downturn in its industry. 'HPDQGIRU'LDPRQG2IIVKRUH¶VGULOOLQJVHUYLFHVGHSHQGVLQODUJHSDUWXSRQWKHRLODQGQDWXUDOJDVLQGXVWU\¶V RIIVKRUHH[SORUDWLRQDQGSURGXFWLRQDFWLYLW\DQGH[SHQGLWXUHOHYHOVZKLFKDUHGLUHFWO\DIIHFWHGE\RLODQGJDVSULFHV DQGPDUNHWH[SHFWDWLRQVRISRWHQWLDOFKDQJHVLQRLODQGJDVSULFHV%HJLQQLQJLQWKHVHFRQGKDOIRIRLOSULFHV GHFOLQHGVLJQLILFDQWO\UHVXOWLQJLQDVKDUSGHFOLQHLQWKHGHPDQGIRURIIVKRUHGULOOLQJVHUYLFHVLQFOXGLQJVHUYLFHVWKDW 'LDPRQG 2IIVKRUH SURYLGHV DQG PDWHULDOO\ DGYHUVHO\ DIIHFWLQJ 'LDPRQG 2IIVKRUH¶V RSHUDWLRQV DQG FDVK IORZV FRPSDUHGWR\HDUVEHIRUHWKHGHFOLQH7KHFRQWLQXDWLRQRIORZRLOSULFHVZRXOGPDNHPRUHVHYHUHWKHGRZQWXUQLQ 'LDPRQG2IIVKRUH¶VLQGXVWU\DQGZRXOGFRQWLQXHWRPDWHULDOO\DGYHUVHO\DIIHFWPDQ\RILWVFXVWRPHUVDQGWKHUHIRUH GHPDQGIRULWVVHUYLFHVDQGRQLWVEXVLQHVV 2LOSULFHVKDYHEHHQDQGDUHH[SHFWHGWRFRQWLQXHWREHYRODWLOHDQGDUHDIIHFWHGE\QXPHURXVIDFWRUVEH\RQG 'LDPRQG2IIVKRUH¶VFRQWURO $OWKRXJKKLVWRULFDOO\KLJKHUVXVWDLQHGFRPPRGLW\SULFHVKDYHJHQHUDOO\UHVXOWHGLQLQFUHDVHVLQRIIVKRUHGULOOLQJ SURMHFWVVKRUWWHUPRUWHPSRUDU\LQFUHDVHVLQWKHSULFHRIRLODQGJDVZLOOQRWQHFHVVDULO\UHVXOWLQDQLQFUHDVHLQ RIIVKRUHGULOOLQJDFWLYLW\RUDQLQFUHDVHLQWKHPDUNHWGHPDQGIRU'LDPRQG2IIVKRUH¶VULJV7KHWLPLQJRIFRPPLWPHQW WRRIIVKRUHDFWLYLW\LQDF\FOHGHSHQGVRQSURMHFWGHSOR\PHQWWLPHVUHVHUYHUHSODFHPHQWQHHGVDYDLODELOLW\RIFDSLWDO DQGDOWHUQDWLYHRSWLRQVIRUUHVRXUFHGHYHORSPHQWDPRQJRWKHUWKLQJV7LPLQJFDQDOVREHDIIHFWHGE\DYDLODELOLW\ DFFHVVWRDQGFRVWRIHTXLSPHQWWRSHUIRUPZRUN Diamond Offshore’s business depends on the level of activity in the offshore oil and gas industry, which has been cyclical, is currently in a protracted downturn and is significantly affected by many factors outside of its control. 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'LDPRQG2IIVKRUH¶VFRQWUDFWGULOOLQJH[SHQVHLQFOXGHVDOOGLUHFWDQGLQGLUHFWFRVWVDVVRFLDWHGZLWKWKHRSHUDWLRQ PDLQWHQDQFHDQGVXSSRUWRILWVGULOOLQJHTXLSPHQWZKLFKLVRIWHQQRWDIIHFWHGE\FKDQJHVLQGD\UDWHVDQGXWLOL]DWLRQ 'XULQJSHULRGVRIUHGXFHGUHYHQXHDQGRUDFWLYLW\ OLNHWKHFXUUHQWSURWUDFWHGLQGXVWU\GRZQWXUQ FHUWDLQRI'LDPRQG 2IIVKRUH¶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ontracts for Diamond Offshore’s drilling rigs are generally fixed dayrate contracts, and increases in Diamond Offshore’s operating costs could adversely affect the profitability of those contracts. 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Diamond Offshore is not fully insured against all of these risks and its contractual indemnity provisions may not fully protect Diamond Offshore. 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cash flow from construction and development projects will not be immediate and its construction and development projects may not be completed on time or at all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¶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¶FRQWURO$SURMHFWPD\QRWEHFRPSOHWHGRQWLPHRUDWDOOGXHWR DYDULHW\RIIDFWRUVPD\EHLPSDFWHGE\VLJQLILFDQWFRVWRYHUUXQVRUPD\EHPDWHULDOO\FKDQJHGSULRUWRFRPSOHWLRQ DVDUHVXOWRIGHYHORSPHQWVRUFLUFXPVWDQFHVWKDW%RDUGZDON3LSHOLQHVLVQRWDZDUHRIZKHQLWFRPPLWVWRWKHSURMHFW $Q\RIWKHVHHYHQWVFRXOGUHVXOWLQPDWHULDOXQH[SHFWHGFRVWVRUKDYHDPDWHULDODGYHUVHHIIHFWRQ%RDUGZDON3LSHOLQHV¶ DELOLW\WRUHDOL]HWKHDQWLFLSDWHGEHQHILWVIURPLWVJURZWKSURMHFWV Boardwalk Pipelines’ and its customers’ operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs, limit the areas in which fossil fuels are produced and reduce demand for the services Boardwalk Pipelines provides. 7KH WKUHDW RI FOLPDWH FKDQJH FRQWLQXHV WR DWWUDFW 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¶VHUYLFHV The price differentials between natural gas supplies and market demand for natural gas have reduced the transportation rates that Boardwalk Pipelines can charge on certain portions of its pipeline systems. 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WUDQVSRUWDWLRQFDSDFLW\DQGIRUFRQWUDFWVEHLQJUHQHZHGRUUHSODFHG7KHSUHYDLOLQJPDUNHWFRQGLWLRQVPD\DOVROHDG VRPHRILWVFXVWRPHUVWRVHHNWRUHQHJRWLDWHH[LVWLQJFRQWUDFWVWRWHUPVWKDWDUHOHVVDWWUDFWLYHWR%RDUGZDON3LSHOLQHV IRUH[DPSOHVHHNLQJDFXUUHQWSULFHUHGXFWLRQLQH[FKDQJHIRUDQH[WHQVLRQRIWKHFRQWUDFWWHUP%RDUGZDON3LSHOLQHV H[SHFWVWKHVHPDUNHWFRQGLWLRQVWRFRQWLQXH Boardwalk Pipelines is exposed to credit risk relating to default or bankruptcy by its customers. &UHGLWULVNUHODWHVWRWKHULVNRIORVVUHVXOWLQJIURPWKHGHIDXOWE\DFXVWRPHURILWVFRQWUDFWXDOREOLJDWLRQVRUWKH FXVWRPHUILOLQJEDQNUXSWF\%RDUGZDON3LSHOLQHVKDVFUHGLWULVNZLWKERWKLWVH[LVWLQJFXVWRPHUVDQGWKRVHVXSSRUWLQJ LWVJURZWKSURMHFWV &UHGLWULVNH[LVWVLQUHODWLRQWR%RDUGZDON3LSHOLQHV¶JURZWKSURMHFWVERWKEHFDXVHIRXQGDWLRQFXVWRPHUVPDNHORQJ WHUPILUPFDSDFLW\FRPPLWPHQWVWR%RDUGZDON3LSHOLQHVIRUVXFKSURMHFWVDQGFHUWDLQRIWKRVHIRXQGDWLRQFXVWRPHUV DJUHHWRSURYLGHFUHGLWVXSSRUWDVFRQVWUXFWLRQIRUVXFKSURMHFWVSURJUHVVHV,IDFXVWRPHUIDLOVWRSRVWWKHUHTXLUHG FUHGLW VXSSRUW GXULQJ WKH JURZWK SURMHFW 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