|Traded as||NYSE: L
S&P 500 Component
|Headquarters||667 Madison Avenue
New York, United States
|Products||insurance, hotels, oil drilling, pipeline transport|
|Revenue||$16.02 billion USD|
|Operating income||$1.85 billion USD|
|Net income||$1.21 billion USD|
Loews Corporation is an American diversified company headquartered in New York, NY, with three publicly traded and two wholly owned subsidiaries. Loews is known as a proponent of value investing. Over the 50-year period from 1962 to 2012, Loews common stock posted a compound annual growth rate of approximately 15%, compared with an approximate 6% growth rate for the S&P 500. Loews Corporation had revenues of $14.6 billion and assets of more than $75 billion. The company ranks 190th on the Fortune 500 list of America's largest companies.
Loews subsidiaries are engaged in the following lines of business:
- Commercial property and casualty insurance (CNA Financial Corporation, a 90%-owned subsidiary)
- The operation of offshore oil and gas drilling rigs (Diamond Offshore Drilling, Inc. a 50.4%-owned subsidiary)
- The operation of an interstate natural gas transmission pipeline system (Boardwalk Pipeline Partners, a 55%-owned subsidiary)
- The exploration, production and marketing of natural gas, natural gas liquid (NGLs) (predominantly ethane and propane) and, to a small extent, oil (HighMount Exploration & Production LLC, a wholly owned subsidiary)
- The operation of luxury hotels and resorts (Loews Hotels, a wholly owned subsidiary)
The availability of public market valuations for three of Loews's subsidiaries allows investors to make an estimated sum of the parts valuation of the corporation. The corporation positions itself as a value investor with a long-term focus. In its shareholder communications, Loews has long emphasized the importance of efficient management and allocation of capital. The corporation's capital allocation strategy involves investing in subsidiaries and acquiring quality assets at attractive prices that have the potential to deliver sustainable cash earnings. The corporation maintains a significant cash reserve. In recent years, Loews has also allocated significant capital for share buybacks. In the three years ended December 31, 2012, Loews spent $1.3 billion repurchasing shares. Between 1971 and 2012, the corporation reduced its shares outstanding from 1.3 billion shares to 392 million shares.
Loews Corporation traces its roots to 1946, when Laurence Tisch persuaded his parents to invest $125,000 to buy a resort hotel in Lakewood, N.J. Laurence’s brother Robert joined the business shortly thereafter. The Tisch brothers began to invest their profits in an expanding hotel business. By 1956, the brothers were in a position to build their first hotel, the Americana in Bal Harbour, Fla., for $17 million in cash.
The company's diversification beyond hotels began in the wake of the landmark 1948 U.S. Supreme Court antitrust ruling, United States v. Paramount Pictures, Inc., which ordered the major Hollywood movie studios, including Metro-Goldwyn-Mayer (MGM), to sell off the movie theater chains they owned and operated.
With $65 million from their profitable hotel business, Robert and Laurence Tisch purchased a large stake in the Loews chain from MGM in 1959. By the summer of 1960 they had gained control of the company, and the brothers became co-chairmen. The Loew's theaters were aging and not suited to then-current trends which anticipated the multiplex. The theaters were on valuable city property, and almost immediately the Tisch brothers began demolishing them (hastening the end of the classic movie theater palaces from the Golden Age of Hollywood) and selling the vacant lots to developers. They continued running the Loews theater chain until 1985, when it was sold to TriStar Pictures.
The Tisch brothers soon diversified the Loews business, successfully venturing into a variety of areas as the 1960s and 1970s progressed. Loews acquired Lorillard, a tobacco company, in 1968; CNA Financial in 1974, and the Bulova Watch Company in 1979. Through acquisitions, Loews' revenues grew from $100 million in 1970 to more than $3 billion by a decade later.
Laurence Tisch briefly owned, through Loews, a significant portion of U.S. television and radio broadcaster CBS in the 1980s. Tisch was a controversial owner of CBS and made many unpopular cost-cutting moves. As Chairman of CBS, he also approved the deal that brought late night host David Letterman to the network from NBC. Loews involvement in CBS ended in 1995, with the sale of CBS to Westinghouse Electric Corporation for $5.4 billion.
In the past two decades, Loews further diversified into the energy business. In 1989, the company acquired Diamond M. The subsidiary acquired ODECO in 1992, adding 39 rigs. A year later, the combined businesses were renamed Diamond Offshore. The operating subsidiary, which went public in 1995, provides contract drilling services to the energy industry globally.
In 2003, Loews purchased Texas Gas Transmission, LLC and, a year later, bought Gulf South Pipeline Company. These two companies were consolidated into a new entity, Boardwalk Pipeline Partners, LP, which went public in 2005.In 2005, Loews consolidated these businesses as Boardwalk Pipeline Partners. Structured as a master limited partnership (“MLP”), Boardwalk Pipelines is engaged in the interstate transportation and storage of natural gas.
On June 4, 2007 Loews Corporation announced it would acquire a portion of the operations of Dominion Resources for 4.03 billion dollars. Loews rebranded the assets HighMount Exploration & Production LLC. This wholly owned subsidiary is engaged in the exploration and production of natural gas and natural gas liquids.
On May 10, 2006 Loews Corporation announced that it would offer 15 million shares of Carolina Group via a public offering, with the proceeds to be used for general corporate purposes. The sale's value was $740 million.
Loews Corporation was the parent company of Bulova Watches until 2007.
On December 17, 2007, Loews Corporation announced a plan to spin off its entire ownership interest in its subsidiary, Lorillard, Inc., to holders of Carolina Group stock and Loews common stock.
Founders Laurence and Robert Tisch served as co-CEOs until 1998, when they retired as part of a generational shift in corporate leadership In 1998, James Tisch was named President and CEO In 1998, the Office of the President was created with three members, James Tisch, Andrew Tisch and Jonathan Tisch In 2006,Jonathan Tisch and Andrew Tisch were elected Co-Chairmen of the Board Tisch family members have disclosed a 21% ownership stake in Loews Corp. The company has issued only a single class of common stock and all shareholders have equal voting rights Other senior officers include Peter W. Keegan, Chief Financial Officer and Sr. VPs, David B. Edelson and Ken Siegel Sr. Vice President, David B. Edelson Chief Investment Officer and Sr. VP, Richard W. Scott
The current members of the board of directors of Loews Corporation are Lawrence S. Bacow, Ann E. Berman, Joseph L. Bower, Charles M. Diker, Jacob A. Frenkel, Paul J. Fribourg, Walter L. Harris, Philip A. Laskawy, Ken Miller, Gloria R. Scott, Andrew H. Tisch, James S. Tisch and Jonathan M. Tisch.
On February 13, 2003, the Company restated its financial statements as of and for the years ended December 31, 2001 to 2000 as well as its interim financial statements for the first three quarters of 2002 to reflect an adjustment to the Company's historical accounting for CNA's investment in life settlement contracts and the related revenue recognition. On March 19, 2003, the company announced a revision to its previously reported fourth quarter and year-end 2002 results to reflect an additional $28.9 million of impairment losses on equity securities at the Company's CNA Financial Corporation subsidiary. On February 16, 2006, The company restated results from 2001 through September 2005 to correct accounting for discontinued operations acquired in CNA's merger with the Continental Corp. in 1995. On March 8, 2006, the company said that financial statements for periods from 2001 to 2004 and the first three quarters of 2005 shouldn't be relied on because of accounting classification errors at its majority-owned subsidiary CNA Financial Corp, and it would restate financial statements for 2003 and 2004 and for the first three quarters of 2005 to correct the classification errors.
- Winans, Christopher. The King of Cash: The Inside Story of Laurence Tisch. New York: Wiley, 1995, p. 48-49
- Loews Investor Presentation Feb 2013 http://www.loews.com/. Retrieved 2013-03-05
- CNNMoney. Fortune 500, 2012
- Loews Company Overview March 2013 http://www.loews.com/; Winans, Christopher. The King of Cash: The Inside Story of Laurence Tisch. New York: Wiley, 1995, p. 47-48
- Value Investing: The Loews Way http://www.loews.com/. Retrieved 2013-04-01
- Loews Company Overview March 2013 http://www.loews.com/
- Rosenberg, Hilary. Like Fathers, Like Sons; As the Generations Shift, The Loews Style Remains. New York Times, 1999-05-30
- Carter, Bill. Going Head to Head Late at Night: Letterman on CBS, Leno on NBC. New York Times, 1993-01-15
- http://www.diamondoffshore.com/ Retrieved 2013-03-05
- http://www.bwpmlp.com/ Retrieved 2013-03-05
- Dominion's Sale Makes Waves - Forbes.com
- Tong, Vinnee. Loews spinning off Newport cigarette maker Lorillard division. Associated Press, 2007-12-17
- Loews Corporation to Sell 15,000,000 Shares of Carolina Group Stock
- Teitelbaum, Richard. Tisch Beats Buffett With 8% Return Citing Diana Ross. Bloomberg Markets Magazine, 2012-05-04
- "Loews Corporation Reports Net Income for 2002".
- "Loews Corporation Announces Revision to Fourth Quarter and Year-End 2002 Results".
- "Loews Corp 4Q Net $127.6M".
- "Loews Corp Says Some Past Financials Can't Be Relied On".