L - Earnings call transcript Q4 2017

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Operator

Good morning. This name is Kristy, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Loews Corporation Q4 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator turn over now Mary the will to call Skafidas. I ahead. go Please

Mary Skafidas

may our you, everyone. earnings earnings overview morning and supplement, found copy company Thank good Loews' A Kristy, site, Web loews.com. of the and be on release,

our this and Jim Financial David have Chief Executive Edelson. Officer, On the we Chief call Officer, morning, Tisch; our

Following session. remarks morning, will we this prepared our have question-and-answer a

by include nature. will forward-looking begin, you wide that implied achieved might however, Actual in uncertainties, call and in forward-looking I or remind of those company range materially statements we statements differ are our set Before conference that made a may from forth the results filings. this SEC including risks due those to any in

made. Forward-looking revise statements disclaimer, in brief forward-looking The filings update obligation which forward-looking disclaims any summary statutory with included the reflect is or to any of circumstances expressly at only are statements This is they company disclaimer statements. company's a company's the the the SEC. time

call reconciliation today, minutes, will a Please filings for supplement might financial CFO, comparable few through measures. Edelson you and drivers key our quarter. the the earnings In our measures. David discuss refer GAAP a to non-GAAP the walk security the for most to During also we

does, over Tisch, off to Before kick he Jim, Jim our you. call. our will CEO,

Jim Tisch

subsidiaries Thank you, our overall year, to contributing Mary. of Loews had each our a strong good quarter and with a success.

about in subsidiaries. Edelson, our our cuts Our call, later Loews tax into of well details results the for CFO, David implications as recently-passed the will the go as the discussing and

This steadily its company and leadership improved series discipline the CNA has talk required years of from The steps has in at multi-line management effort not-so-focused on strong commercial and core both however, CNA over happen obviously CNA to property highly-focused taken a commercial under Before I'd XX itself company he in by casualty property does to repurchases. a about competencies enormous like by and the fact, insurance teams. insurance it into and transformation Loews. transforming focus past share company. didn't casualty a overnight, teams

Specifically, its businesses automobile reinsurance, and from number insurance, group insurance, XXXX of a personal health. XXXX, disposed to of CNA including life

liabilities necessary. reinsured joining risk. sheet its market the ability pulling of number asbestos CNA company November Additionally, underwriting balance has of upgrade claims evolution. leadership and CEO, change. They while with the XXXX underwriting Dino in improve strengthen its pollution and more levers improvement for is claims, long-term time increases when by the investing Also, even reducing we in each to book room company risk at team its has on care also of and and of And intently to team a the to On been distributors of Dino mitigating agents in to focused diligently the for expense areas, in from reduce the factor in a state manage company's their its company CNA agree. has stable ratio has brokers, Since enhanced believe performance. turbocharged CNA's a managing his and business. the rate Robusto talent. risk business, their retooled continue actively have and CNA obtaining CNA relationships a selection, continues industry provided department, regulators there these to as that

holders. lessen exploring effects increases CNA the of Additionally, strategies rate to new policy is on

XXXX technology, areas, underwriting, front, its bench in including operations, talent many significantly added across and claims. the On CNA to

quarterly payment, Loews years, of special And four over dividends including in announced million March Earlier track CNA's received results, new $XXX have billion as from dividends All industry light outlook, senior Loews this $X.XX a dividend its today, year, board's and the the CNA will well balance In with XXXX dividend of of in a $X.X veterans receive expertise. last successful as fortress dividend. from records highly CNA. these sheet, are March CNA executives $X.XX the in outstanding will and CNA. upcoming

As we the success look back over Loews. surprise last no decade comes CNA's as to

forward, that take for turn is vision it company results. for profitably grow of business. evolution. CNA steadfast that importantly, hard and and understood had time to and and up, of company able that responsibly a CNA to to to vision. we work Also, would stronger around, lots CEO CNA's what right sum be the deliver were stage could will even to And the continue each that To we poised we moving its and we very operating Although can held the believe recruit

continued could XXXX we hindsight into through when we another two shares more million the bought the purchased have repurchases. from benefit at first X.X CNA, X.X shares a trend of quick to a of with cost This quarter last Xth, shares fourth give million. over Moving February In I the XXXX on years. $XXX of XX/XX about million of quarter Loews share want the repurchased update on we in

However, almost the the since the nine our of discount our because assessment valuations. sum-of-the-parts intrinsic the shares We repurchasing representing of X% we've almost between third back million stock wide stock the of quarter, began and bought company. price

is we that will for improving. four outlook and Additionally, prosper, our believe that other CNA and grow to continue the businesses

now, practice the acquired past repurchases. outstanding of past or XX% half-century have the David. share like decade over turn continuing our we our shares, nearly almost beyond year the to I'd call And substantial to Looking of in two,

David Edelson

cash our in Jobs liability. quarter. $X million impact, Cut year's benefit, good per The quarter. benefit, and million per $X.XX quarter income morning in from re-measurement $X.XX Jim, no of in tax stems fourth to $XXX the income December had related year's million net $XXX $XXX which Act. reported passage was $XXX the Absent of our $X.XX net last our million deferred Tax was share, $XXX We of a million net largely the and or from fourth benefit net down million quarter or everyone. the fourth share up net from or per income share, fourth you, Included Thank last

the page earnings our I'd discuss attention tax quarter full-year. segment earnings supplement, page net by show income, where quarter draw your the we of to of of drivers release I and seven five reform to fourth the reporting for our impact of like Before fourth and

Let fourth me tax wrote XXXX In impact beyond, reform quarter by as charge CNA the quite tax tax be in rate. lower for segment. summarize its booked positive due it a the the deferred down briefly CAN. asset to and should

earnings. no it reform itself the charge tax wrote one-time impacts. Diamond would between benefited rate, the for tax reflecting liability level the its while in took For foreign The Loews did deemed the basis repatriation of we down At the a had because book company mandatory book and tax deferred it tax also this rates charge as changing a offsetting charge had cash of however on lower that Diamond. in basis differential I our of impact impact. tax the note Diamond segment

Diamond reminder, included consolidated is a As not tax return. our in

to through Boardwalk, we the past built those a booked from tax projects. tax from benefited liability. substantial deferred For had benefit lower write-down for up the the as And liability caused also over of capital Loews write a hotels rate the down the tax deferred rate we us lower decade tax Boardwalk's

changes the for corporate the in a any reduction behavior, be positive should federal reform rate marketplace in on Going consolidated forward, corporate Loews excluding tax especially basis.

and largely highlight QX net plough from contribution fourth the year-over-year caused Contract earnings each the XXXX. day quarterly will key on Diamond Offshore were decline slight segment's exclude instead down to due revenues through let noted working $XX earnings rates Turning million and me declined drivers with of rigs reform. substantially, drove XXXX. and income to re-contracted year-to-year up previously rigs. fewer QX quarter XX%, than our margin from slight the drilling variance, what impact of These lower rig rather quarter, tax highlights the decline

during as difficulty] booked and company its In impaired one quarter base. expense the rigs [technical of it addition, costs continues the separation restructuring and to

had quarter by XXXX, On ratio income. up to top a side, quarter. substantial driven in Its quarterly increase of a mainly posted a from the XX down off strong last strong year. contribution in was combined net fourth a QX CNA in million year-over-year, CNA XX.X income underwriting year's $XX bright

better. when a reminder, ratios combined As comes lower is it to

ratio And and underlying ratio the XXXX. X.X Jim XX.X. underwriting demonstrate underwriting combined prior excellence catastrophe mentioned underlying in to losses XX.X combined CNA the ratios focus XX.X as from Excluding key from and down points year improving the the to full-year, improved, quarter made. the XX.X, on being was fourth for the lever The progress full-year development, at profitability. combined

in completely posted income did fourth results, at net during Resort spot $XX last million the renovation which year's quarter. last up million just was of joint was ventures Hotels, year. from bright as Beach, posted excellent The a Orlando the $X QX, Universal Miami which Loews Loews Another

income to earnings by quarter Container, appears Hotels compensation Loews strategically. remarks, quarter's on of year its the essentially subsidiary was last operationally the Corporate, flat versus newest due largely contribution our generated timing parent be during improved to outlined portfolio. net and the were the Boardwalk's Consolidated stride Jim investment which As includes to company hit prior our the as accruals.

review share, turn of of or drivers last reported results. the XXX per $X.XX me up or X.XX $X.XX now million Let brief from to of Loews full-year XXXX per a year. income our billion net share

highlight each year. net million walk was a the key few per net offshore million detail, substantially Again XXX for million drivers Diamond related accounted $X.XX the of our million let reform, to XXX share, up in the segment improvement. Lower than benefit year-over-year at me prior Excluding impairments the rig XXX through or earnings tax income of from XXX increase. rather

and and items. improvements of CNA attributable declined XX mainly life environment aggregate Excluding increase earnings non-cat group income underwriting in year-over-year XXX weaker impairments, contribution for unusual reflecting to in some results. the and operating the Diamond's the million million accounted

Partially to were realized improvements adverse transfer. last in high XXXX joint year-over-year. contribution essentially catastrophes net were the results income losses the Net venture XXXX hotel up Hotels XXXX elevated gains during flat related net given Loews over development contributed natural the on sale Boardwalk's income these Additionally, a property gain prior of investment improving a incidence offsetting increase operating portfolio and in year. catastrophes the by of to to the and were impacted thanks also the performance year. income was XXXX.

the investment in loss processing cost almost are and income would entirely and contribution up have absent Boardwalk to net with corporate elevated of net other was in incurred in Container. facility, acquisition connection Parent flat company a XXXX the attributable of the for been its million. $XX However, Consolidated year-over-year, XXXX full-year cost sale the took income on

billion We XX% and marketable continue maturities in to equity investments, LP X.X maintain parent the mixed balance and cash XX% in liquid extremely portfolio XX% totaled XX% with and year-end, equivalent, company an strong securities. sheet. At

million in quarter, million from million subsidiaries, During our XX XX dividend received from and we the fourth CNA, XX Boardwalk. from

CNA receive from Boardwalk quarterly contributing the amount. million For the declared CNA Today, regular with addition in the XXX and we total $X CNA full-year, of received two, this approximately dividend Combining that Loews per dividend will of a to million lion $X.XX dividend XXX in from share CNA special share dividend. quarter. its

Since As XXX million. will the an have Jim $XXX mentioned, fourth quarter shares shares Jim. year repurchase Shares call million hand X.X currently $XXX X.X for end, around for million share back for we repurchased to all at now million. outstanding the million. in I we adjusted activity additional stand repurchased

Jim Tisch

Thank you, David.

in think and back the responsibilities Before have CEOs the one of underlying is we reflect effective for that to history our talented of such more time business, important most Loews I the cannot of to of that a call at Mary, had a fact want turn individuals. when have we selection group and I the Loews' I on

mentioned, company. he his with which thrilled and is we already Dino the leadership in needless the As say, Robusto's CAN; at performance to are taking super-charged direction

destinations. at stability All Horton through drilling profitable its and of growth CCC, forward-looking our his adding And best Marc extensive demonstrated Fallmann, the the industry, of subsidiary to company. the by CEOs confidence Diamond's at has in the equally company organic strategic Boardwalk of one maintaining his direction what Loews a working newest are Stan while have protracted of group the in and travel of CEOs its and CEO steer industry the competition. from financial mitigate Diamond upon while market. the the re-contracting differentiating the immersive we leadership company highest expertise Under deep continues is Sean new great we has downturn Jon best, embarked Edwards outstanding. projects. Tisch, Jon, strategic packaging expertly is have Hotels. we expectations offshore level of risks finally, his the our Loews vision a CEO to midstream industry With on do Hotels focusing in Boardwalk in and approach for knowledge,

major do in the subsidiaries as put where engaged the Where company, people such capital and a capital of value, back allocation leadership mid can strategies. Loews at While the areas with for Loews We we are jobs. foreseeable future. think and to This and holding subsidiaries' so markets, well bureaucracy. let very right is them long-term subsidiaries shareholders over the it the our don't to approach have positions And continue we XX decisions, ratification the accessing the past have of our has expect lot do we now, our add we their to Mary. served to we years,

Mary Skafidas

Jim. the question-and-answer Kristy, we're you, Thank call. portion for the ready of

Operator

is Millman And first Thank from Research. your Instructions] question you. Millman [Operator Michael with

Michael Millman

you. Thank

months back for you -- more intrinsic thought the want too market to yet XX to the wondered either you a about GE, therefore back was example, several didn't you up shares. buy you if related even So that more want that equity you you lot or past of said to market months high, and a is -- for the undervalued? hugely you have the your that, on? Kind what's value, or higher, have GE little based company kind past going The to Related that of -- was thought market the talk bought of that, or bought was shares. and has over

Jim Tisch

when the at place our We it, account market on value hotels, what take my So, that. to a is we sum of into the at thinking lot at want into that its and try things in wrong the in think is companies. CCC, that are There what price general mentioned the calculations, the look think value And director partner. of all and what we the subsidiaries think the of whether We we first, prospects are, market look With look respect stock Boardwalk are, assessment Electric. look right our our don't the subsidiaries, we doing doing that and are the fourth We and a the first or to And at And company I put assess company the in that of nonpublic with And, specifically value the it's we think to that. I of of my that General in of the and level subsidiaries. we -- the feel we we as means that. be to level each the intrinsic people price then that felt come Loews, out to fact of look whole don't right shares. gets of I the when worth. parts that right doing values value. comfortable are the is we it what doing of lots quarter, gets in a discount at comment buying of the comfortable we starting remarks

Michael Millman

market was assume a what was that overpriced. you longer a comfort what the that extent extent price some upon your reasonable, Thus difference So, saying, that Is doing. no market of to to thought was fair fair… assumption was or some based you're the I

Jim Tisch

giving not these shares do of I'm as comfortable not No, our the market. at the our felt guidance levels. making own not repurchase just -- of about Loews any We any view statement shares our that. mistake repurchasing of stock to level for I'm

Michael Millman

are if question, demand those then I production? up, are to in on really seeing for you may, I DO, switch, for another reduction see. going based of the prices a drilling And any upon oil prices or sort are

Jim Tisch

can The oil in was capacity. will just underinvested tempting investment up move payback in where up, I in tend extensive for there is strong seriously scrapping oil projects some work production. exploration Australia, continue it that drilling pickup seeing also what quick we're And be doubt But My capital productive to in drill and offshore and there for my that are little productive start companies in companies. that projects Sea. development have longer of the specifically that they a seeing on shoots seeing takes So, that that cash that is project. then are to the of guess rigs. guess capacity. is bit the ships in to I also their it the more enquiry in rigs we're for in is [ph] doing a the And start demand. returns of there's a fact and generate We're is garden. do reflects the space, Asia, We're I in North think move there think oil to coming work year happening in green to think increase because we oil to just prices see the to spend generally demand more underinvestment going seeing beginning the to we're in in that the oil no which in And where general

Michael Millman

Thank Great. much. you very

Jim Tisch

pleasure. Our

Operator

from next Bank. Josh Your Shanker question with comes Deutsche

Josh Shanker

Yes, you. thank

So, them Jim, a not business into bolt-ons Consolidated company, it that goes Container, for their to little about pays we the you from want reinvest or as who whether forward? dividends can talk earnings in and

Jim Tisch

CCC They two the deals. So, process doing and development is those was able to to will of loan are purchase be finance their people CCC. using look the balance sheet out very for go being are well. and its that in CCC There transactions now. done with used that that have own own

that consideration for financing. current on anticipate not rely will under treasury Loews do transactions we So the the

David Edelson

to when bolt-on debt first CCC, we down these pay quarter dividends would flow their use we I that think CCC of to not And, expect in or we about to we them sorts call, because Josh, do did receive from mentioned -- our we just I talked second acquisitions. either remind that expected initially cash when

Josh Shanker

you money do are further loan that would large be CCC some that nature financed? require is And acquisitions the strategy to all that in self to or them are there to they'll

Jim Tisch

it's require but funding that from we're Loews, possible could No, equity very some acquisitions that be there doing that. would comfortable

a confidence in have management, lot of the company, in and We the industry. the

Josh Shanker

would that receive that you'll to you dividends And the such when all do it? look think investment mature you from

Jim Tisch

I don't we're see are is But know. that is to lot what growth to going. factors. awful I of There how We've in got their an we marketplace; organic available management, where the that know that its own with will mean see necessarily just set do pleased what's in maturity CCC completed, that. position opportunity there's seeing. the but is, set transactions the an because But hard its opportunity doesn't they're of the industry, do and get to just working got they're

David Edelson

But to can happy on their free use capital invest if flow returns have at that. invested they cash to do them we're then attractive

Josh Shanker

And right. picture, you're guess at the I All Loews you track Diamond companies, noncore Boardwalk, I thoughts the benchmark whatnot? doing job performance owned then to do portfolio, any good recommendations or mostly for of and when out a and Hotels, I look and CCC, investment non over the on have time CNA, -- how any performance might that whether

Jim Tisch

let's in We all what Loews about right, talk have have the -- portfolio. we

we million We you reasonably an that to track another I performance to their equities; for hedge be those, investor can is doing of funds. well. what dollars difficult but is or so have it's have billion as of $XXX you very tell guess My able is

comfortable know. this equities with the our a very I very, And better are mutual managers. past think lot funds and pleased S&P I of Our asset XXX year exceeded we than

Josh Shanker

you disclosure of the help track would in to And us it there we think of sort over providing with play any -- it? can sort you like track you that numbers be up interested give would that time? way terms Is in

Jim Tisch

Josh, billion we're $XX a company.

$XX billion. We over have portfolio of a

million You're equity us to crazy more me. That to portfolio. on disclosure provide sounds $XXX asking a

Josh Shanker

it look though I'd dollars Well, on more cash sheet -- there's mean of of billions cash have at you you the balance manage I as though.

David Edelson

let's to has on to it and XX% Yes, but not average, say remember, equivalents. -- of XX%. But XX% been we're XX% cash at XX%

return on we're that. getting So you the know

Josh Shanker

Yes.

David Edelson

could wanted at by So and earnings generated what intuit earning on we're income then investment the what when cash, if the to, look remainder. you yield you the are company on or what you could the you parent the assume our you can,

Josh Shanker

I'll the much Thank it right, give All very you a try. for answers.

David Edelson

Sure.

Operator

you. next your Thank with Instructions] Glasspiegel And Janney. comes [Operator question Bob from

Bob Glasspiegel

Good morning, Loews.

Jim Tisch

morning, Good Janney.

Bob Glasspiegel

direction. excited you're strategic about The the hotels,

rate the earnings growth a that help on like business, start You nice similar a had to underlying able a we're I this will tax where your as quarter, don't position sort to of earnings the see know but improvement. always match of in sort seems to and in really going we dynamics be tax earnings. are after EBITDA had And we the

the where is going a are basis, positives what Just the that reported Jon comments strategic from bringing? some about general we're and

David Edelson

you're Well, talking hotels about specifically, Bob?

Bob Glasspiegel

yes. Hotels,

David Edelson

I you Yes, quarter, saw the Okay. mean, year. the saw you

we only a Arlington, the Orlando. in Universal City, talked company Orlando hotel a That's can put in new and have material past, the adding Louis, offing of hotels the joint again we've you in St. today itself, in one see that the think at the Orlando in Kansas I number Texas, hotel we've have We in XXXX. out to venture. in Universal opening that

exciting the be years. another of some financial of for benefits statements the really shown our in developments underway few So won't

You as course on things properties and pre-opening will their well. with those see those sorts opening the dates and them of associated of

So, of years some growth yes, are that couple a the always by are but projects of out. momentum, tempered these we building fact

Jim Tisch

group little a City let provide said my In to we Loews bit travel. add focusing do on are comments, group what we and a is little travel Robert, I all that Hotels, best to about destinations. at me depth Kansas that. immersive

room have to or going City Center. atop - are We Kansas alongside an Convention XXX hotel the

the be City in will We Kansas in newest decades. hotel

the and and of believe building Orlando, the venues Convention people hotels we we can to. are and And all a are Louis those, are well center Arlington, as the to of that's that immersive that there hotel expect will where want St. cater by about hotel. hotel. all to gravitate, people very newness naturally built the to destination for -- that see that go the many over in where those in is we that to room has able these us proven been and what is and Beach also The in rates are locations. a is for coming substantially which to we occur others is overnight. occupancy in above in is immersive some there It Orlando to that other that in building. we good you are we market. Orlando to Miami problem can't that strategy hotels build as In rates to convention regional the The in times Hotel a think major opportunity achieve Newest available demand we We think especially the And the time. destinations do hotel takes that location

won't so, these And in 'XX. hotels be coming online

Some of in be will starting up just XXXX. them

show So, the it will up time take some in to numbers.

Bob Glasspiegel

answer. long is something should appreciate gone that Tax about it. differently? we I to that's Good, thinking or rate down XXs there

David Edelson

all consolidated we but Well, with Diamond. are

I so, is CNA piece of consolidated is think then you hours. understand benefit But, corporate we position sort tax of a the And lowering that. gets what big into the And its from tax do think that rate. I and of

Bob Glasspiegel

hotels. I was about talking just

David Edelson

yes… Hotels, sorry. Oh, am I

Bob Glasspiegel

should down… I and think it go been XXs it's

David Edelson

where It's also it state in and operates. by impacted jurisdictions local taxes the

it's So, federal pure a just not rate.

Bob Glasspiegel

Okay. XX XXs, as I looking incorrectly. all And your can that's determine than been it's sort best I am answers. of Appreciate but low maybe Thank at you. running it been higher

David Edelson

pleasure. Our

Operator

questions. remarks. Skafidas this for are At Mary no there return I or will additional back call closing the you. time, further to Thank any

Mary Skafidas

concludes call Loews' your for our Web today. to at be for available hours. thanks all That continued loews.com on will replay site A you Kristy, in approximately interest. of Thanks, two and

Operator

This conclude call. today's you. does Thank conference

may now You disconnect.

Loews (L) 12 Feb 182017 Q4 Earnings call transcript