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SEC Filings

10-Q
LOEWS CORP filed this Form 10-Q on 11/05/2018
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Table of Contents

2.  Purchase of Boardwalk Pipeline Common Units

On June 29, 2018, Boardwalk GP, LP (“General Partner”), the general partner of Boardwalk Pipeline and an indirect wholly owned subsidiary of the Company, elected to exercise its right to purchase all of the issued and outstanding common units representing limited partnership interests in Boardwalk Pipeline not already owned by the General Partner or its affiliates pursuant to Section 15.1(b) of Boardwalk Pipeline’s Third Amended and Restated Agreement of Limited Partnership, as amended (“Limited Partnership Agreement”) for a cash purchase price, determined in accordance with the Limited Partnership Agreement, of $12.06 per unit, or approximately $1.5 billion, in the aggregate. The purchase price of the common units was lower than the carrying value of the noncontrolling interests for Boardwalk Pipeline, resulting in an increase to Additional paid-in capital of $658 million, an increase to deferred income tax liabilities of $213 million and a decrease to AOCI of $29 million.

Following completion of the transaction on July 18, 2018, Boardwalk Pipelines Holding Corp., a wholly owned subsidiary of Loews Corporation, directly or indirectly owned all of the equity interests of Boardwalk Pipeline. As a result of the transaction, Boardwalk Pipeline has withdrawn the common units from listing on the New York Stock Exchange and from registration under Section 12(b) of the Securities Exchange Act of 1934.

3. Investments

Net investment income is as follows:

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
      2018     2017     2018     2017  
(In millions)                         

Fixed maturity securities

   $ 449     $ 455     $ 1,339     $ 1,367  

Limited partnership investments

     34       67       142       206  

Short term investments

     10       5       30       13  

Equity securities

     10       1       32       4  

Income (loss) from trading portfolio (a)

     (7     34       13       67  

Other

     12       10       40       26  

Total investment income

     508       572       1,596       1,683  

Investment expenses

     (14     (15     (45     (44 )     

Net investment income

   $ 494     $ 557     $ 1,551     $ 1,639  
   

 

(a)

Net unrealized gains (losses) related to changes in fair value on securities still held were $(23) and $22 for the three months ended September 30, 2018 and 2017 and $(66) and $35 for the nine months ended September 30, 2018 and 2017.

Investment gains (losses) are as follows:

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
      2018      2017     2018     2017  
(In millions)                          

Fixed maturity securities

   $ 10      $ 16     $ 32     $ 92  

Equity securities

     2          (23  

Derivative instruments

     1        (1     10       (3 )     

Short term investments and other

     2        1       2       4  

Investment gains (a)

   $ 15      $ 16     $ 21     $ 93  
   

 

(a)

Gross realized gains on available-for-sale securities were $42 and $34 for the three months ended September 30, 2018 and 2017 and $148 and $140 for the nine months ended September 30, 2018 and 2017. Gross realized losses on available-for-sale securities were $32 and $18 for the three months ended September 30, 2018 and 2017 and $116 and $48 for the nine months ended September 30, 2018 and 2017. Net realized gains of $2 and net realized losses of $23 were recognized due to the change in fair value of non-redeemable preferred stock still held for the three and nine months ended September 30, 2018.

 

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