NEW YORK, Oct. 30, 2023 /PRNewswire/ -- JAVĿ¼ (NYSE: L) today released its third quarter 2023 financial results.
ThirdÌýQuarter highlights:Ìý
JAVĿ¼ reported net income of $253 million, or $1.12 per share, in the third quarter of 2023 compared to a net loss of $22 million, or $0.09 per share, in the third quarter of 2022. This year's third quarter results included a $37 million after-tax charge for the termination of a defined benefit pension plan. Results for the prior year have been adjusted to reflect the application of the accounting standard for long-duration contracts (LDTI). The following highlight key drivers of our third quarter results:
CEO commentary:
"JAVĿ¼ had another good quarter with strong performance across each of our consolidated subsidiaries. CNA reported strong underwriting results and net income despite high industry catastrophe losses."
–Ìý James S. Tisch, President and CEO, JAVĿ¼
Consolidated highlights:
September 30, | ||||
Three Months | Nine Months | |||
(In millions, except per share data) | 2023 | 2022 (a) | 2023 | 2022 (a) |
Net income attributable to JAVĿ¼ before ÌýÌý net investment gains (losses) | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 280 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 54 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 1,027 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 582 |
Net investment gains (losses): | ||||
CNA | (27) | (76) | (75) | (115) |
JAVĿ¼ Hotels & Co | 36 | |||
Total net investment gains (losses): | (27) | (76) | (39) | (115) |
Net income (loss) attributable to JAVĿ¼ | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 253 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý (22) | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 988 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 467 |
Net income (loss) per share | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 1.12 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý (0.09) | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 4.31 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 1.90 |
September 30, 2023 | December 31, 2022 (a) | ||
Book value per share | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 64.43 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 60.81 | |
Book value per share excluding AOCI | 79.92 | 74.88 |
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(a) | As of January 1, 2023, JAVĿ¼ adopted Accounting Standards Update 2018-12, "Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts ("ASU 2018-12"), which was applied retrospectively effective January 1, 2021. Previously reported amounts have been adjusted to reflect application of the new guidance. See pages 4 and 5 of this release for more information. |
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Three months ended September 30, 2023 compared to 2022
CNA:
Boardwalk:
JAVĿ¼ Hotels:
Corporate & Other:
Nine months ended SeptemberÌý30, 2023 compared to 2022
JAVĿ¼ reported net income of $988 million, or $4.31 per share, compared to $467 million, or $1.90 per share. The following are key highlights:
Share Purchases:
Reconciliation of GAAP Measures to Non-GAAP Measures
This news release contains financial measures that are not in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management believes some investors may find these measures useful to evaluate our and our subsidiaries' financial performance. CNA utilizes core income, Boardwalk utilizes earnings before interest, income tax expense, depreciation and amortization ("EBITDA"), and JAVĿ¼ Hotels utilizes Adjusted EBITDA. These measures are defined and reconciled to the most comparable GAAP measures on pages 6 and 7 of this release.
Earnings Remarks and Conference Calls
For JAVĿ¼
For CNA
About JAVĿ¼
JAVĿ¼ is a diversified company with businesses in the insurance, energy, hospitality and packaging industries. For more information, please visit .
Forward-Looking Statements
Statements contained in this news 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 (). 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 news 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.
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JAVĿ¼ and Subsidiaries Selected Financial Information | ||||
September 30, | ||||
Three Months | Nine Months | |||
(In millions) | 2023 | 2022 | 2023 | 2022 |
Revenues: | ||||
CNA Financial (a) | $ÌýÌýÌýÌýÌý 3,336 | $ÌýÌýÌýÌýÌý 2,957 | $ÌýÌýÌýÌýÌý 9,792 | $ÌýÌýÌýÌýÌý 8,768 |
Boardwalk Pipelines | 363 | 339 | 1,125 | 1,045 |
JAVĿ¼ Hotels & Co (b) | 196 | 180 | 642 | 532 |
Corporate investment income (loss) and other | 31 | (15) | 84 | (94) |
Total | $ÌýÌýÌýÌýÌý 3,926 | $ÌýÌýÌýÌýÌý 3,461 | $ÌýÌýÌý 11,643 | $ÌýÌýÌý 10,251 |
Income (Loss) Before Income Tax: | ||||
CNA Financial (a) (c) | $ÌýÌýÌýÌýÌýÌýÌýÌý 326 | $ÌýÌýÌýÌýÌýÌýÌýÌý (51) | $ÌýÌýÌýÌýÌý 1,058 | $ÌýÌýÌýÌýÌýÌýÌýÌý 531 |
Boardwalk Pipelines | 66 | 47 | 257 | 221 |
JAVĿ¼ Hotels & Co (b) | 24 | 34 | 159 | 120 |
Corporate: | ||||
Investment income (loss), net | 31 | (19) | 84 | (100) |
Other (d) | (91) | (36) | (175) | (123) |
Total (c) | $ÌýÌýÌýÌýÌýÌýÌýÌý 356 | $ÌýÌýÌýÌýÌýÌýÌýÌý (25) | $ÌýÌýÌýÌýÌý 1,383 | $ÌýÌýÌýÌýÌýÌýÌýÌý 649 |
Net Income (Loss) Attributable to JAVĿ¼: | ||||
CNA Financial (a) (c) | $ÌýÌýÌýÌýÌýÌýÌýÌý 235 | $ÌýÌýÌýÌýÌýÌýÌýÌý (37) | $ÌýÌýÌýÌýÌýÌýÌýÌý 758 | $ÌýÌýÌýÌýÌýÌýÌýÌý 398 |
Boardwalk Pipelines | 49 | 34 | 191 | 164 |
JAVĿ¼ Hotels & Co (b) | 17 | 25 | 115 | 84 |
Corporate: | ||||
Investment income (loss), net | 24 | (15) | 66 | (79) |
Other (d) | (72) | (29) | (142) | (100) |
Net income (loss) attributable to JAVĿ¼ (c) | $ÌýÌýÌýÌýÌýÌýÌýÌý 253 | $ÌýÌýÌýÌýÌýÌýÌýÌý (22) | $ÌýÌýÌýÌýÌýÌýÌýÌý 988 | $ÌýÌýÌýÌýÌýÌýÌýÌý 467 |
(a) | The three months ended September 30, 2023 and 2022 include net investment losses of $38 million and $96 million ($27 million and $76 million after tax and noncontrolling interests). The nine months ended September 30, 2023 and 2022 include net investment losses of $105 million and $166 million ($75 million and $115 million after tax and noncontrolling interests). |
(b) | Includes a gain of $46 million ($36 million after tax) for the nine months ended September 30, 2023 related to JAVĿ¼ Hotels & Co's acquisition of an additional equity interest in, and the consolidation of, a previously unconsolidated joint venture property. |
(c) | The effects of adopting ASU 2018-12 on the Selected Financial Information were as follows: |
Three Months Ended September 30, 2022 | As | Effect of | As | ||
(In millions) | |||||
Income (Loss) Before Income Tax: | |||||
CNA Financial | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 164 | $ÌýÌýÌýÌýÌýÌýÌýÌý (215) | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý (51) | ||
Total | 190 | (215) | (25) | ||
Net Income (Loss) Attributable to JAVĿ¼: | |||||
CNA Financial | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 115 | $ÌýÌýÌýÌýÌýÌýÌýÌý (152) | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý (37) | ||
Total | 130 | (152) | (22) | ||
Nine Months Ended September 30, 2022 | As | Effect of | As | ||
(In millions) | |||||
Income (Loss) Before Income Tax: | |||||
CNA Financial | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 787 | $ÌýÌýÌýÌýÌýÌýÌýÌý (256) | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 531 | ||
Total | 905 | (256) | 649 | ||
Net Income (Loss) Attributable to JAVĿ¼: | |||||
CNA Financial | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 579 | $ÌýÌýÌýÌýÌýÌýÌýÌý (181) | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 398 | ||
Total | 648 | (181) | 467 |
(d) | Consists of parent company interest expense, corporate expenses and the equity income (loss) of Altium Packaging. The three and nine months ended SeptemberÌý30, 2023 include a charge of $47 million ($37 million after tax) related to the termination of a defined benefit plan. |
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JAVĿ¼ and Subsidiaries Consolidated Financial Review | ||||
September 30, | ||||
Three Months | Nine Months | |||
(In millions, except per share data) | 2023 | 2022 | 2023 | 2022 |
Revenues: | ||||
Insurance premiums | $ÌýÌýÌýÌýÌýÌý 2,406 | $ÌýÌýÌýÌýÌýÌý 2,221 | $ÌýÌýÌýÌýÌýÌý 7,001 | $ÌýÌýÌýÌýÌýÌý 6,435 |
Net investment income | 592 | 404 | 1,752 | 1,202 |
Investment losses (a) | (38) | (96) | (59) | (166) |
Operating revenues and other | 966 | 932 | 2,949 | 2,780 |
Total | 3,926 | 3,461 | 11,643 | 10,251 |
Expenses: | ||||
Insurance claims and policyholders' benefits (b) | 1,826 | 1,880 | 5,258 | 4,959 |
Operating expenses and other | 1,744 | 1,606 | 5,002 | 4,643 |
Total | 3,570 | 3,486 | 10,260 | 9,602 |
Income (loss) before income tax (b) | 356 | (25) | 1,383 | 649 |
Income tax expense (b) | (80) | (2) | (315) | (137) |
Net income (loss) (b) | 276 | (27) | 1,068 | 512 |
Amounts attributable to noncontrolling interests (b) | (23) | 5 | (80) | (45) |
Net income (loss) attributable to JAVĿ¼ (b) | $ÌýÌýÌýÌýÌýÌýÌýÌýÌý 253 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌý (22) | $ÌýÌýÌýÌýÌýÌýÌýÌýÌý 988 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌý 467 |
Net income (loss) per share attributable to JAVĿ¼ ÌýÌý Corporation (b) | $ÌýÌýÌýÌýÌýÌýÌýÌý 1.12 | $ÌýÌýÌýÌýÌýÌý (0.09) | $ÌýÌýÌýÌýÌýÌýÌýÌý 4.31 | $ÌýÌýÌýÌýÌýÌýÌýÌý 1.90 |
Weighted average number of shares | 225.99 | 240.76 | 229.16 | 245.03 |
(a) | Includes a gain of $46 million ($36 million after tax) for the nine months ended SeptemberÌý30, 2023 related to JAVĿ¼ Hotels & Co's acquisition of an additional equity interest in, and the consolidation of, a previously unconsolidated joint venture property. |
(b) | The effects of adopting ASU 2018-12 on the Consolidated Financial Review were as follows: |
Three Months Ended September 30, 2022 | As | Effect of | As | ||
(In millions) | |||||
Insurance claims and policyholders' benefits | $ÌýÌýÌýÌýÌýÌý 1,665 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 215 | $ÌýÌýÌýÌýÌýÌý 1,880 | ||
Income (Loss) before income tax | 190 | (215) | (25) | ||
Income tax expense | (47) | 45 | (2) | ||
Net income (loss) | 143 | (170) | (27) | ||
Amounts attributable to noncontrolling interests | (13) | 18 | 5 | ||
Net income (loss) attributable to JAVĿ¼ | 130 | (152) | (22) | ||
Net income (loss) per share attributable to JAVĿ¼ | 0.54 | (0.63) | (0.09) | ||
Nine Months Ended September 30, 2022 | As | Effect of | As | ||
(In millions) | |||||
Insurance claims and policyholders' benefits | $ÌýÌýÌýÌýÌýÌý 4,703 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 256 | $ÌýÌýÌýÌýÌýÌý 4,959 | ||
Income (loss) before income tax | 905 | (256) | 649 | ||
Income tax expense | (190) | 53 | (137) | ||
Net income (loss) | 715 | (203) | 512 | ||
Amounts attributable to noncontrolling interests | (67) | 22 | (45) | ||
Net income (loss) attributable to JAVĿ¼ | 648 | (181) | 467 | ||
Net income (loss) per share attributable to JAVĿ¼ | 2.64 | (0.74) | 1.90 |
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Definitions of Non-GAAP Measures and Reconciliation of GAAP Measures to Non-GAAP Measures:
CNA Financial Corporation
Core income is calculated by excluding from CNA's net income attributable to JAVĿ¼ the after-tax effects of investment gains (losses). In addition, core income excludes the effects of noncontrolling interests. The calculation of core income excludes investment gains (losses) because these are generally driven by economic factors that are not necessarily reflective of CNA's primary operations. The following table presents a reconciliation of CNA net income attributable to JAVĿ¼ to core income:
September 30, | ||||
Three Months | Nine Months | |||
(In millions) | 2023 | 2022 | 2023 | 2022 |
CNA net income (loss) attributable to JAVĿ¼ Corporation | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 235 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý (37) | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 758 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 398 |
Investment losses | 31 | 84 | 84 | 127 |
Consolidation adjustments including noncontrolling interests | 23 | (4) | 80 | 46 |
Core income | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 289 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 43 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 922 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 571 |
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Boardwalk Pipelines
EBITDA is defined as earnings before interest, income tax expense, depreciation and amortization. The following table presents a reconciliation of Boardwalk net income attributable to JAVĿ¼ to EBITDA:
September 30, | ||||
Three Months | Nine Months | |||
(In millions) | 2023 | 2022 | 2023 | 2022 |
Boardwalk net income attributable to JAVĿ¼ | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 49 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 34 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 191 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 164 |
Interest, net | 33 | 42 | 106 | 126 |
Income tax expense | 17 | 13 | 66 | 57 |
Depreciation and amortization | 103 | 103 | 306 | 297 |
EBITDA | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 202 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 192 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 669 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 644 |
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JAVĿ¼ Hotels & Co
Adjusted EBITDA is calculated by excluding from JAVĿ¼ Hotels & Co's EBITDA, noncontrolling interest share of EBITDA adjustments, state and local government development grants, gains or losses on asset acquisitions and dispositions, asset impairments, and equity method income, and including JAVĿ¼ Hotels & Co's pro rata Adjusted EBITDA of equity method investments. Pro rata Adjusted EBITDA of equity method investments is calculated by applying JAVĿ¼ Hotels & Co's ownership percentage to the underlying equity method investment's components of EBITDA and excluding distributions in excess of basis.
The following table presents a reconciliation of JAVĿ¼ Hotels & Co net income attributable to JAVĿ¼ to Adjusted EBITDA:
September 30, | ||||
Three Months | Nine Months | |||
(In millions) | 2023 | 2022 | 2023 | 2022 |
JAVĿ¼ Hotels & Co net income attributable to JAVĿ¼ | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 17 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 25 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 115 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 84 |
Interest, net | 1 | (1) | 5 | 6 |
Income tax expense | 7 | 9 | 44 | 36 |
Depreciation and amortization | 18 | 16 | 51 | 47 |
EBITDA | 43 | 49 | 215 | 173 |
Noncontrolling interest share of EBITDA adjustments | (2) | (1) | (3) | (1) |
Gain on asset acquisition | (46) | |||
Asset impairments | 8 | 9 | 22 | |
Equity investment adjustments: | ||||
JAVĿ¼ Hotels & Co's equity method income | (26) | (36) | (98) | (115) |
Pro rata Adjusted EBITDA of equity method investments | 45 | 56 | 168 | 180 |
Consolidation adjustments | (1) | |||
Adjusted EBITDA | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 60 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 76 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 245 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 258 |
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The following table presents a reconciliation ofÌýJAVĿ¼ Hotels & Co's equity method income to Pro rata Adjusted EBITDA of equity method investments:
September 30, | ||||
Three Months | Nine Months | |||
(In millions) | 2023 | 2022 | 2023 | 2022 |
JAVĿ¼ Hotels & Co's equity method income | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 26 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 36 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 98 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 115 |
Pro rata share of equity method investments: | ||||
Interest, net | 10 | 10 | 33 | 28 |
Income tax expense | ||||
Depreciation and amortization | 12 | 12 | 37 | 37 |
Distributions in excess of basis | (3) | (3) | ||
Consolidation adjustments | 1 | |||
Pro rata Adjusted EBITDA of equity method investments | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 45 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 56 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 168 | $ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý 180 |
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SOURCE JAVĿ¼