8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2020

LOEWS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-6541	13-2646102
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

667 Madison Avenue, New York, NY	10065-8087
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 521-2000

NOT APPLICABLE

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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, $0.01 par value	L	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Item 2.01 Completion of Acquisition or Disposition of Assets.

Reference is made to the information disclosed under Item 8.01 below, which information is incorporated herein by reference. Under the Securities and Exchange Commission Division of Corporation Finance’s Financial Reporting Manual, the deconsolidation of a subsidiary, such as the one described in Item 8.01 below, is included in the definition of “disposition” for purposes of Item 2.01 of Form 8-K.

Item 8.01 Other Events.

On April 26, 2020 (the “Filing Date”), Loews Corporation’s (“Loews”) approximately 53% owned subsidiary, Diamond Offshore Drilling, Inc., and certain of its direct and indirect subsidiaries (collectively “Diamond”) filed voluntary petitions in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) seeking relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”). Diamond filed motions with the Bankruptcy Court seeking authorization to continue to operate its business as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

Through the Filing Date, Diamond’s results continue to be consolidated into Loews’s financial statements and Loews recognizes in its earnings its proportionate share of Diamond’s losses.

Effective as of the Filing Date, Loews will no longer consolidate Diamond’s results in its financial statements. Following deconsolidation, Loews will account for its interest in Diamond using the cost method of accounting and initially record its investment at the estimated fair value on the Filing Date.

In connection with the deconsolidation, Loews expects to record in the second quarter of 2020 a significant non-cash loss to recognize the difference between the carrying value and estimated fair value of its interest in Diamond as of the Filing Date.

Loews’s carrying value of Diamond at December 31, 2019 was $1.5 billion.

Loews is not responsible for, and does not provide guarantees of, the liabilities and obligations of its subsidiaries, including Diamond.

Item 9.01 Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

Unaudited Pro Forma Consolidated Condensed Financial Information of the Registrant, which reflects the disposition described in Item 2.01, is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

(d) Exhibits.

Exhibit No.
99.1	Unaudited Pro Forma Consolidated Condensed Financial Information.
104	Cover Page Interactive File (the cover page tags are embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 27, 2020

LOEWS CORPORATION

By:	/s/ Marc A. Alpert
Name:	Marc A. Alpert
Title:	Senior Vice President, General Counsel and Secretary

EX-99.1

Exhibit 99.1

Loews Corporation and Subsidiaries

PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION

(Unaudited)

On April 26, 2020 (the “Filing Date”), Loews Corporation’s (“Loews” or the “Company”) subsidiary, Diamond Offshore Drilling, Inc., and certain of its direct and indirect subsidiaries (collectively “Diamond”) filed voluntary petitions in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) seeking relief under Chapter 11 of the United States Bankruptcy Code. As a result of Diamond’s filing and applicable U.S. generally accepted accounting principles, the Company has concluded that it will no longer control Diamond for accounting purposes, and therefore, Diamond will be deconsolidated from the Company’s consolidated financial statements effective as of the Filing Date.

The unaudited consolidated condensed pro forma balance sheet data as of December 31, 2019 is presented as if the deconsolidation of Diamond had occurred on December 31, 2019. The unaudited consolidated condensed pro forma statement of income data for the year ended December 31, 2019 is presented as if the deconsolidation of Diamond had occurred as of January 1, 2019. For purposes of the pro forma financial information, the Company has assumed the fair value of Diamond to be equal to zero. The unaudited consolidated condensed pro forma financial information is subject to adjustment and is presented for informational purposes only and does not purport to represent what the Company’s results of operations or financial position would actually have been if deconsolidation had in fact occurred on the dates discussed above. It also does not project or forecast the Company’s consolidated results of operations or financial position for any future date or period.

Through the Filing Date, Diamond’s results continue to be consolidated into the Company’s financial statements and Loews recognizes in its earnings its proportionate share of Diamond’s losses. Following deconsolidation, Loews will account for its interest in Diamond using the cost method of accounting and initially record its investment at the estimated fair value on the Filing Date. In connection with the deconsolidation, Loews expects to record, in the second quarter of 2020, a significant non-cash loss to recognize the difference between the carrying value and estimated fair value of its interest in Diamond as of the Filing Date.

The pro forma consolidated condensed financial statements of Loews should be read in conjunction with the historical consolidated financial statements of Loews and the related notes included in our 2019 Annual Report on Form 10-K.

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Loews Corporation and Subsidiaries

PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET

(Unaudited)

December 31, 2019	As Reported		Pro Forma Adjustments				Pro Forma
(In millions)
Assets:
Investments	$	51,250	$	(135	)	(a)	$	51,115
Cash		336		(21	)	(a)		315
Receivables		7,675		(262	)	(a)		7,413
Property, plant and equipment		15,568		(5,153	)	(a)		10,415
Goodwill		767						767
Deferred non-insurance warranty acquisition expenses		2,840						2,840
Deferred acquisition costs of insurance subsidiaries		662						662
Other assets		3,145		(263	)	(a)		2,882
Total assets	$	82,243	$	(5,834	)		$	76,409
Liabilities and Equity:
Insurance reserves	$	38,614					$	38,614
Payable to brokers		108						108
Short term debt		77						77
Long term debt		11,456	$	(1,976	)	(a)		9,480
Deferred income taxes		1,168		(316	)	(a)		852
Deferred non-insurance warranty acquisition revenue		3,779						3,779
Other liabilities		5,111		(579	)	(a)		4,532
Total liabilities		60,313		(2,871	)			57,442
Commitments and contingent liabilities
Shareholders’ equity		19,119		(1,447	)	(b)		17,672
Noncontrolling interests		2,811		(1,516	)	(a)		1,295
Total equity		21,930		(2,963	)			18,967
Total liabilities and equity	$	82,243	$	(5,834	)		$	76,409

2

Loews Corporation and Subsidiaries

PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF INCOME

(Unaudited)

Year Ended December 31, 2019	As Reported			Pro Forma Adjustments (c)			Pro Forma
(In millions, except per share data)
Revenues:
Insurance premiums	$	7,428					$	7,428
Net investment income		2,355		$	(6	)		2,349
Investment gains		49						49
Non-insurance warranty revenue		1,161						1,161
Operating revenues and other		3,938			(982	)		2,956
Total		14,931			(988	)		13,943
Expenses:
Insurance claims and policyholders’ benefits		5,806						5,806
Amortization of deferred acquisition costs		1,383						1,383
Non-insurance warranty expense		1,082						1,082
Operating expenses and other		4,950			(1,267	)		3,683
Interest		591			(123	)		468
Total		13,812			(1,390	)		12,422
Income before income tax		1,119			402			1,521
Income tax expense		(248	)		(60	)		(308	)
Income from continuing operations		871			342			1,213
Amounts attributable to noncontrolling interests		61			(167	)		(106	)
Net income attributable to Loews Corporation	$	932		$	175		$	1,107
Basic net income per common share	$	3.08					$	3.66
Diluted net income per common share	$	3.07					$	3.65
Basic weighted average number of shares outstanding		302.70						302.70
Diluted weighted average number of shares outstanding		303.35						303.35

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Loews Corporation and Subsidiaries

NOTES TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION

(Unaudited)

(a)	To eliminate assets, liabilities and noncontrolling interests related to the deconsolidation of Diamond, including deferred tax liabilities related to outside basis difference for the Company’s investment in Diamond.
(b)	To adjust shareholders’ equity and recognize a loss upon the deconsolidation of Diamond at an estimated fair value of zero.
(c)	To eliminate revenues, expenses and noncontrolling interests related to the deconsolidation of Diamond.

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XML

Document and Entity Information	Apr. 26, 2020
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Apr. 26, 2020
Entity Registrant Name	LOEWS CORPORATION
Entity Incorporation, State or Country Code	DE
Entity File Number	1-6541
Entity Tax Identification Number	13-2646102
Entity Address, Address Line One	667 Madison Avenue
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10065-8087
City Area Code	212
Local Phone Number	521-2000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000060086
Title of 12(b) Security	Common stock, $0.01 par value
Trading Symbol	L
Security Exchange Name	NYSE