Income from continuing operations for 2015 was $260 million, or $0.72 per share, compared to $962 million, or $2.52 per share, in 2014. The decline in income from continuing operations was primarily due to a reserve charge at CNA related to the long term care business, asset impairment charges at Diamond Offshore and lower results from the parent company investment portfolio.
Diamond Offshore’s contract drilling backlog was $3.6 billion, $4.1 billion and $5.2 billion as of January 1, 2017 (based on contract information known at that time), October 1, 2016 (the date reported in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2016) and February 16, 2016 (the date reported in our Annual Report on Form 10-K for the year ended December 31, 2015). The contract drilling backlog by year as of January 1, 2017 is $1.5 billion in 2017, $1.1 billion in 2018, $0.8 billion in 2019 and $0.2 billion in 2020. Contract drilling backlog includes $158 million, $158 million, $150 million and $6 million for 2017, 2018, 2019 and 2020 attributable to the Ocean GreatWhite, which reflects a revised standby rate that allows Diamond Offshore to pass along certain cost savings to its customer while maintaining approximately the same operating margin and cash flows as the original contract and $149 million and $119 million for 2017 and 2018 attributable to contracted work for the Ocean Valor under a contract that Petróleo Brasileiro S.A. (“Petrobras”) has attempted to terminate and is currently in effect pursuant to an injunction granted by a Brazilian court, which Petrobras has appealed.
Contract drilling revenue decreased $377 million in 2015 as compared with 2014, primarily due to a decrease in revenue earned by both the mid-water and jack-up fleets, partially offset by an increase in revenue earned by both the ultra-deepwater and deepwater floaters. The decrease in contract drilling revenue was primarily due to cold stacking, rig sales and incremental downtime between contracts for several rigs. During 2015, twelve mid-water rigs were cold stacked or retired and five jack-up rigs were cold stacked and marketed for sale. These decreases were partially offset by increased incremental revenue earning days for newly constructed ultra-deepwater floaters and upgraded or enhanced rigs. In addition, during 2015, four deepwater floaters returned to operation after prolonged periods of nonproductive time for planned upgrades and surveys, as well as warm-stacking between contracts.
A substantial portion of Boardwalk Pipeline’s transportation capacity is contracted for under firm transportation agreements. Actual revenues recognized from capacity reservation and minimum bill charges in 2016 were $1.0 billion. Approximate projected revenues from capacity reservation and minimum bill charges under committed firm transportation agreements in place as of December 31, 2016 are $1.1 billion for 2017 and $975 million for 2018. The amounts for 2016 and 2017 increased approximately $13 million and $25 million from what was reported in our 2015 Form 10-K. The increase in each year is primarily due to contract renewals and new contracts that were entered into during 2016. Additional revenues Boardwalk Pipeline has recognized and may receive under firm transportation agreements based on actual utilization of the contracted pipeline capacity, any expected revenues for periods after the expiration dates of the existing agreements, execution of precedent agreements associated with growth projects or other events that occurred or will occur subsequent to December 31, 2016 are not included in these amounts.
Total revenues increased $18 million in 2015 as compared with 2014. Excluding the business interruption claim proceeds of $8 million and items offset in fuel and transportation expense, primarily retained fuel, operating revenues increased $33 million. This increase is primarily due to higher transportation revenues of $39 million from growth projects recently placed into service, including the Evangeline pipeline which was acquired in October of 2014 and $20 million of additional revenues resulting from the Gulf South rate case, partially offset by the effects of comparably warm weather experienced in the early part of the 2015 period in Boardwalk Pipeline’s market areas and unfavorable market conditions. Storage and PAL revenues decreased $20 million primarily as a result of the effects of unfavorable market conditions on time period price spreads.
Net income increased $56 million in 2015 as compared with 2014, primarily reflecting the prior year Bluegrass charge of $55 million (after tax and noncontrolling interests) and higher revenues partially offset by higher depreciation and interest expense as discussed above.
As of December 31, 2016, Diamond Offshore had $104 million in borrowings outstanding under its credit agreement and was in compliance with all covenant requirements thereunder. As of February 10, 2017, Diamond Offshore had no outstanding borrowings and $1.5 billion available under its credit agreement to provide short term liquidity for payment obligations.
Joint venture investments - The Company has 20% to 50% interests in operating joint ventures related to hotel properties and had joint venture interests in the former Bluegrass Project, as discussed in Note 2, that are accounted for under the equity method. The Company’s investment in these entities was $217 million and $234 million for the years ended December 31, 2016 and 2015 and reported in Other assets on the Company’s Consolidated Balance Sheets. Equity income (loss) for these investments was $41 million, $43 million and $(62) million for the years ended December 31, 2016, 2015 and 2014 and reported in Other operating expenses on the Company’s Consolidated Statements of Income. Some of these investments are variable interest entities (“VIE”) as defined in the accounting guidance because the entities will require additional funding from each equity owner throughout the development and construction phase and are accounted for under the equity method since the Company is not the primary beneficiary. The maximum exposure to loss for the VIE investments is $337 million, consisting of the amount of the investment and debt guarantees.
During 2016, in response to the continuing industry-wide decline in utilization for semisubmersible rigs, further exacerbated by additional and more frequent contract cancelations by customers, declining dayrates, as well as the results of a third-party strategic review of Diamond Offshore’s long-term business plan completed in the second quarter of 2016, Diamond Offshore reassessed its projections for a recovery in the offshore drilling market. As a result, Diamond Offshore concluded that an expected market recovery is now likely further in the future than had previously been estimated. Consequently, Diamond Offshore believes its cold-stacked rigs, as well as those rigs expected to be cold-stacked in the near term after they come off contract, will likely remain cold-stacked for an extended period of time. Diamond Offshore also believes that the re-entry costs for these rigs will be higher than previously estimated, negatively impacting the undiscounted, probability-weighted cash flow projections utilized in its earlier impairment analysis. In addition, in response to the declining market, Diamond Offshore also reduced anticipated market pricing and expected utilization of these rigs after reactivation. In 2016, Diamond Offshore evaluated 15 of its drilling rigs with indications that their carrying amounts may not be recoverable. Based on updated assumptions and analyses, Diamond Offshore determined that the carrying values of eight of these rigs were impaired, including one rig that had previously been impaired in a prior year. The impaired rigs consisted of three ultra-deepwater, three deepwater and two mid-water semisubmersible rigs.
Catastrophes are an inherent risk of the property and casualty insurance business and have contributed to material period-to-period fluctuations in CNA’s results of operations and/or equity. CNA reported catastrophe losses, net of reinsurance, of $165 million, $141 million and $156 million for the years ended December 31, 2016, 2015 and 2014. Catastrophe losses in 2016 related primarily to U.S. weather-related events and the Fort McMurray wildfires.
The table below presents the net liability for unpaid claim and claim adjustment expenses, by line of business for property and casualty operations:
CNA has a five-year $250 million senior unsecured revolving credit facility with a syndicate of banks which may be used for general corporate purposes. At CNA’s election, the commitments under the credit agreement may be increased from time to time up to an additional aggregate amount of $100 million and the credit agreement includes two optional one-year extensions prior to the first and second anniversary of the closing date, subject to applicable consents. As of December 31, 2016 and 2015, there were no outstanding borrowings under the credit agreements and CNA was in compliance with all covenants.
In November of 2016, the outstanding aggregate principal amount of the 5.9% senior notes was retired with borrowings under its revolving credit facility.
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. An increase or decrease in the assumed health care cost trend rate of 1% in each year would not have a significant impact on the Company’s service and interest cost as of December 31, 2016. An increase of 1% in each year would increase the Company’s accumulated postretirement benefit obligation as of December 31, 2016 by $2 million and a decrease of 1% in each year would decrease the Company’s accumulated postretirement benefit obligation as of December 31, 2016 by $2 million.