David B. Edelson
Senior Vice President and Chief Financial Officer at Loews
Thank you, Jim, for those kind words. Working with you and the whole Loews team since 2005 has been a tremendously gratifying professional and personal experience.
This morning, Loews reported first quarter net income of $338 million, a 30% increase from net income of $261 million in last year's first quarter. Earnings per share rose 40% to $1.36, spurred on by a 7% year-over-year reduction in average shares outstanding, thanks to our share repurchase activity.
All three of our consolidated subsidiaries, CNA Financial, Boardwalk Pipelines and Loews Hotels posted excellent results in the first quarter. While CNA accounted for the bulk of our Q1 net income, the earnings increase was driven by significantly improved results at Loews Hotels as well as by the absence of non-recurring charges related to Altium Packaging that depressed last year's first quarter results. Partially offsetting these positives was a decline in parent company investment income as equity markets sold off in Q1.
Before I walk through our subsidiaries results, let me touch on the impact on our earnings of recent financial market turbulence. The S&P 500 was down 4.6% in Q1, and the NASDAQ 100 was down almost twice that at 8.9%. In fixed income, the 10-year treasury yield increased 83 basis points to 2.34%, and the Bloomberg Barclays U.S. Aggregate Bond Index was down about 6% in the first quarter.
Since both CNA and the Loews parent company hold equity securities and LP investments correlated to equities, the decline in equity markets had a negative impact on earnings in these two portfolios. The decline in bond prices caused by higher fixed income yields, however, did not negatively affect current period net investment income at either CNA or the Loews parent company. At the parent company, almost 83% of the portfolio is made up of cash and short-term investments with equity securities comprising the remainder. Changes in interest rates have a little impact on the value of our cash and short-term holdings.
As Jim discussed, rising interest rates and yields did cause a decline in the value of CNA's large portfolio of fixed income investments. While these market value changes reduced CNA's net book value, they did not run through current period net investment income. In fact, as Jim mentioned, over time, higher yields should enable CNA to enhance net investment income through higher returns on new fixed income investments.
CNA's net investment gains and losses, on the other hand, can be negatively affected by rising fixed income yields. For example, CNA's portfolio of non-redeemable preferred stock is mark-to-market through net investment gains and losses. Overall, the decline in CNA's net unrealized gains during the quarter reduced CNA's common equity by $1.6 billion or just under $6 per share.
Let me return to our quarterly results. CNA contributed net income of $281 million, in line with last year's $279 million. That said, the makeup of CNA's earnings differed year-over-year. CNA's net investment income declined because of the selloff in equity markets. Additionally, net investment gains, which were meaningful in last year's first quarter, swung to a slight loss this year, driven by the unfavorable change in fair value of non-redeemable preferred stock and lower net investment gains on disposals of fixed income securities.
Much improved property casualty underwriting results offset the negative earnings impact of financial markets. Continued earned premium growth and underwriting discipline led to a 10% plus increase in P&C underwriting income, excluding catastrophe losses. Earned premium was up 5% year-over-year, and the underlying combined ratio improved 50 basis points to 91.4. CNA's expense ratio, which, together with the loss ratio makes up the combined ratio, declined to 31 which was 50 basis points better than in Q1 '21 and in line with full year '21. The company's expense ratio improvement over the past few years is notable and results from both expense management and premium growth.
Catastrophe losses declined materially year-over-year. Last year, the winter freeze in Texas resulted in significant cat losses, whereas cat losses were unusually modest this year. Catastrophe losses added 6.8 points to the combined ratio last year as compared to only 1 point in this year's first quarter. Overall, CNA posted a combined ratio of 91.9% in Q1 '22 as compared to 98.1% last year.
In summary, CNA's results were strong despite a challenging quarter in financial markets, driven by favorable underlying P&C underwriting results and modest catastrophe losses.
Boardwalk contributed net income of $91 million, up from $85 million in last year's first quarter. EBITDA, which is defined and reconciled in our earnings supplement, was $261 million in the quarter compared to $249 million in Q1 '21. Boardwalk's net operating revenues increased more than 3% year-over-year, driven by growth projects recently placed in service. Loews Hotels continues its impressive rebound, as Jim mentioned, driven by its resort properties as well as having all properties open for the entire first quarter of 2022. The company posted net income of $15 million versus a net loss of $43 million in Q1 '21.
Let me unpack the results a bit further. GAAP operating revenue before reimbursables was $123 million, up from $39 million last year. Given the requirements of joint venture accounting, however, much of the company's business is not captured in its GAAP revenues. Factoring in its pro rata revenues from its joint venture properties, including all the properties at the Universal Orlando Resort, Loews Hotels revenues in Q1 were about 3 times last year's level.
Pre-tax equity income from joint venture properties was $26 million as compared to a $12 million loss last year. Consolidated pre-tax income was $22 million, a sharp increase from last year's $55 million loss. Adjusted EBITDA, which is defined and reconciled in our earnings supplement, was $68 million in the quarter, up from a $13 million loss last year. The company's 9,000 rooms in Orlando, together with the Loews Miami Beach Hotel, continued to be the major earnings contributors and the primary drivers of the year-over-year increase.
I would highlight, as Jim did, that Q1 '22 represents the all-time high for first quarter adjusted EBITDA, surpassing the $61 million earned in 2019.
Turning to the Corporate segment. The parent company's investment portfolio generated a net pre-tax loss of $16 million compared to income of $46 million last year. Like at CNA, negative returns on equity securities caused this year's loss. The remainder of the corporate sector generated a $36 million after-tax loss in the quarter versus last year's $96 million loss. Last year's results included two non-recurring charges related to Altium Packaging, a debt extinguishment charge in connection with Altium's recapitalization and a deferred tax liability resulting from the then-pending sale of a 47% stake in Altium.
A few words about the parent company. The parent company portfolio of cash and investments stood at $3.8 billion at quarter end, with over 80% in cash and short-term investments. During the quarter, we received $584 million in dividends from CNA, including the $0.40 per share regular quarterly dividend and the $2 per share special dividend.
As Jim mentioned, we spent about $129 million repurchasing 2.15 million shares of our common stock at an average price of just over $60 per share. Our repurchase after quarter end was modest at just under 300,000 shares.
Before I turn the call back to Mary, let me thank all of you for your interest in Loews and for your questions and suggestions over the years. It has been a privilege to spend the past 17 years at Loews, serving as CFO since 2014. I am thrilled to be able to hand the baton to Jane, who joined the company 16 years ago and is more than ready to take on this role.
And with that, I will return the call to Mary.