L - Earnings call transcript Q1 2018

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Loews Corporation's First Quarter 2018 Earnings Conference Call. [Operator Instructions]. Thank you. It is now my pleasure to turn the call over to Mary Skafidas to begin. Please go ahead.

Mary Skafidas

good earnings and conference and Corporation's to Maria, quarter first call. you, morning, welcome everyone, Loews Thank A copy loews.com. of company overview our earnings release, be on earnings found our website, may supplement and

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

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

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

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

we non-GAAP Jim measures. will In our supplement through minutes, the the drivers CEO, you. you GAAP for call. comparable might earnings quarter. key During CFO, off before the David most But our also kick for reconciliation and the Please today, to financial refer a does, our filings the use walk call to Security to he Edelson, measures. will few Tisch, Jim, over

James Tisch

and an Commission future. action allowed being mention may on of under to of XXX-day right of discussed effect Those formula max prior period if today. developments. to terms formula later XX-Q described in rates The outstanding Boardwalk's whether a I partnership. with to to we day Boardwalk This traded first rates a at Federal rates our Loews morning daily subsequent its maximum Loews as in It change before Loews listened be in include allowance Form Regulatory the actions, FERC's Boardwalk's recently a sparked get filings. in would the all purchase it I this filed have income remain right want specifics that when a result appears you partnership common but ability which average options applicable customers price. coupled amended to regarding our as the eliminates Loews' is the recent a will policy the XX-Q a also call our SEC to exercise tax quarter, heard. The have based charge be exercise XXD, a Thank Boardwalk It on will able to closing you, Boardwalk's purchase an Loews at allow LP are terms the Boardwalk earnings, Boardwalk's to both right. in the solid announced our exploring master on The determining review call FERC's limited that had tax Mary. into any those materially Energy reform MLP's should purchase legislation, Boardwalk's about well for We prices decrease already price who past could something would publicly units is and applicable charge maximum that The pipelines. the further in as units agreement. these of interstate is

been sometime expect make decisions this to year, decision a yet able made. to we Although no be have

capital documents that had companies. can allocation on each constrained quarterly quarter, are since color to questions of for delivering speak As any actions on In in CNA particular, combined to we had from have like ratio decade. other happening what's the we over have imagine, subsidiaries been themselves these we'll lowest let of the and a ratio a we XX.X%, Hotels you it's give topic. phenomenal answering Loews I'd CNA Luckily, some in impressive, another our and discuss. so underlying you can earnings this have for combined

recent the tax its its to quarterly results. CNA's underwriting contributed due to strength While increase performance, cuts the of substantial was primarily earnings

the million in $XX business CNA and strong premium great change last growth strides in quarter, underwriting distribution make $XXX had a to a rate, year, gain its by pretax million grew as net CNA X%. of network. with For likewise quarter continues driven the was versus The and corresponding increase company's adjusted written new exposure

responsible the improving for that CNA CNA underwriting distributors and remains feel with continuing ongoing And results, a performance, Hotel. and also speaking year. in is is both market While strengthen renovated great diligently ratio. pleased with start committed and managing quarter poised further ongoing relationships Loews our tourism Loews Beach terrific stronger-than-usual the to its a had of for the company expense benefited to Hotels strong growth. responsible to Miami A Loews Florida recently its growth, off

profitable, shareholders have group of well. remarkably upper done long-term market projects at generators also confident the properties. invest its was $XXX Additionally, this adjusted to not hotels chain's venture Hotels leadership and Loews to flexibility, first business. The demand to in year's quarter, XXXX. in year's also built-in during who continued to and strong Hotels' our EBITDA this with of willingness them in its our quarter Orlando and strategy cater company hotel in with also in so Universal seeks it agile last ability competitive distinguished as all resort. in company's upscale existing RevPAR create over company's on last value its XX% the represent $XXX continues unique partnership out for operating Same-store performance first Loews the from We're that in Loews solely partners bring successfully advantages. Orlando, the from philosophy to long term. own its has and the The growth Studios properties its that concentrate and the ability Universal on grew was quarter X% but perform highly up expansion based joint first the Hotels' to on properties

call Edelson, turn about our repurchases. CFO, David to talk the share Before over want to I I

reflect of Over total the XX.X cost billion. past outstanding months, about almost cost at repurchased creating our buybacks levers share It's allocation of underlying confidence value our that or a our X.X% for shares our shares of long-term has for safe to at a major David, say to capital remain X repurchases These $X businesses. Loews in approximately -- our you. million one shareholders. over

David Edelson

Jim, you, and good Thank morning.

compared reduction a net net in first resulting per earnings million X% of in quarter, first last million $XXX year-over-year, quarter. or per outstanding to the $X.XX reported $X.XX per declined or share share For higher income. year's in income shares Loews Average slight share despite $XXX

accounted me of which the start positive quarter. of the contributed outs and Now improved of There this broad-based through CNA higher I walk posted ins income the XX% variance. let drivers This main segments, earnings in will strength the X contributed income year-over-year underwriting increase, underwriting quarter XXXX. up quarter income international. investment and almost first two after-tax and and the net commercial, biggest XX% income. of net spanned CNA all was quarter. million, of with for our P&C $XXX were the from and outstanding P&C results specialty CNA,

catastrophe were XXXX development prior CNA again its and losses. in While even underwriting year favorable development, prior robust before QX experienced results once year

XX.X. development P&C X improvement and prior almost year's ratio first and identical combined losses, of at represented was first quarter, versus points was Both which combined During CNA's catastrophe underlying quarter. XX.X its the over year last ratio, excludes

from me points is rate. and an year-over-year a given corporate improvement CNA's Net than of and corporate which after-tax and posted P&C which last increase in income, income year lower portfolio income, XXX shows X more more The favorably the combined X.X%. combined XXXX. to the lower decline CNA's CNA entirely after-tax pretax in peers. even LP to Despite X climbed X.X% underlying more decline point component pretax than better of the income. loss than investment LP negative real S&P respectable year's in due of year-over-year reduced ratio, on basis XX its a meaningful rate compares returned CNA's led was a but full XXX% a net the QX, significant tax increase underwriting resulted loss in quarter during quarter Let income, ratio to loss ratio investment highlight which the improvement ratio. first company's a CNA's in tax ratio LP an in returned in an

similar difficult in pretax by precipitated U.S. the was decline growth up CNA reversed our clarified by in booked despite revenues gain, million last a Diamond being in deferred tax non-U.S. well and a of and benefits net Diamond income unfavorable liability contribution $XX almost $XX placed near-term XX% as flat million positive rate global essentially is uncertain restructuring permitting of QX contribution of storage impact CNA's announced continuing previously drilling The Boardwalk's in the did the in an and loss review positive its year-over-year net caused Before a booked from its Energy tax liabilities leaving Treasury to revenues of IRS quarter and repatriation was corporate that first an its revenue note the net a decline in Boardwalk's reverse it first revenues provisions earning quarter reduction decline portfolio completed recently resulted a Diamond in previously position. a year. deemed this quarter net contract This $XX issued uncertain caused Diamond despite by earnings a million charge with make pretax a from and benefit year market was loss and the as level the revenues experienced guidance income days. existing environmental conditions income not in transportation loss. related $XX in of certain earnings. after-tax related our in by with Southwestern incremental Loews transfer. negative Offshore of to essentially pollution a the net to and million as year-over-year made will service the by in noneconomic agreements tax retroactive swing drilling the caused the booked income parking in income pretax the conditions. Offshore. X% the a projects for I Tax weather offshore The by a Act, decline tax deferred pretax outgrowth as to charge, colder The The this Further at reduced to XXXX for in year. lending position contribution had decline the was XXXX loss CNA, lower asbestos the pretax income. first revenue prior market. Diamond the reinsurance into to which firm flat by

Loews to Hotels. on Moving

adjusted which the Hotels' adjusted defined of operational quarter, strong many $XX once reported results properties earnings Loews million attributable XXXX. as posted the As $X million even after-tax for a in last at The Miami its IR mentioned, first net million, and property. properties, QX write-down and on of from Universal results up the JV of Hotels Loews results. quarterly our are Hotel in $XX Jim summary including net from sale website, financial the comparison million quarter. another and of Loews JV income contributed last year's property the pretax, was in our quarterly posted $XX $XX Loews QX looks Orlando to better in the gain and year's Hotels available excellent $XX up Beach EBITDA, Resort, is million million

from expenses QX parent sheet income on balance segment first Pretax portfolio acquisition of equivalents. received Corporate main million. down more just the quarter; stock which during in remainder returns dividend; maturities, the transaction-related in continues to includes from two under and cash XXXX. of in $XXX totaled the a investments parent million portfolio income liquid. of driving with extremely We end, million in At from the continues million invested than and quarter special million be XXXX Boardwalk. quarter $XXX parent for repurchased million. and Container was The decline. investment the investments the limited partnership $X.X and $X regular portfolio Turning after-tax of from and X-plus and other reasons, and The shares short-term year-to-year of The connection generated shares and of during the After we've $XX $XXX the common for first $X.XX quarter with by lower diversified be $XX purchased total to of billion, Container a $XXX dividends of bulk first cash basis were the improved exceptionally on securities equity our and XX% equities Consolidated quarter an in We slightly XXXX dividend LP XX, X.X to an and strong company. in pretax investments. investments million and the million subsidiaries CNA, incurred and for Consolidated marketable absence our fixed March additional total in a in of cash company quarterly the the strong company a

over have Mary. repurchased since year-end XXXX. now call together, we back of X% hand shares Taken our I the to will outstanding

Mary Skafidas

Thank you, David.

we to right related any under constrained questions reiterate I'd partnership like Before the our from session, Loews answering call begin question-and-answer the agreement. is to Boardwalk that

For additional be documents please topic, on filed SEC information this will later to Loews today. refer that

hand over up to you. open for to the will call questions. Maria Now Maria, to the I call over

Operator

Instructions]. [Operator

of comes Bob question the first of from line Our Glasspiegel Janney.

Robert Glasspiegel

or or -- majority is intrinsic how is to about has just process Is that do and there we CNA FERC from to rules Loews? a Diamond have? positions fallout Offshore mechanical and this you this nothing maximizing should to think And minority of positions with the that driving the any value takeaways Boardwalk

James Tisch

nor no, right this have So, anything neither we Boardwalk. Diamond have that CNA resembling at

Robert Glasspiegel

flip to I'm around asking sort sorry, was Boardwalk I sounds rule a Loews about driven any It a little this value different trying I'm the I'm might... but like to allowed thought was it maximizing process in to MLP decision to by We're trying Boardwalk, the -- that ask change, of not question. so there just bit. was

James Tisch

that in has said made. no been I Bob, my decision comment

They to have. have run question, as let They you speak decision the rest they are able filings be themselves. And and all has should questions the I pages. made. no for answer really informative of So multiple been our for your very to

Robert Glasspiegel

I No, not they're but head One answer. very is your the your possible helpful. question. Getting fully inside appreciate still disclosure, bookkeeping completely from

long-term $X.X those Page you Your Corporate. between Page your have debt $X,XXX,XXX,XXX under And What's debt difference in slides X X you of of where parent billion. say the is numbers? XX

David Edelson

and difference the believe segment. other which is Container, I Consolidated is the in Corporate

Operator

of line Our Deutsche comes question Bank. from next of the Josh Shanker

Joshua Shanker

the going share the the issuance flow interest cycle? through increasing versus repurchase share cash given rather rate are where you repurchase aggressively has we weigh So operational been company at leverage How recently. from perhaps do debt in the

James Tisch

additional right now, we I'd issue no that, So what is say have need debt. to

And at what my As David end at holding about the billion company the to X point $X.X that's of the capital -- and perspective, said, have we of just quarter, cash want level. investments of do we from plenty do. to

Joshua Shanker

hotels, Miami, you a income in coming that's that Okay. hotel about talk difference can through And to transition? and a happens revenues What statement the on versus of the profits hotel from under the of [indiscernible] renovation? renovation, going out

James Tisch

the a but few Miami the major there were very site. wasn't of closed construction down, Beach was case guests Hotel, very, in Well, there because it it

and So very income negative the back. we very, is little strong from revenues now went income very that to hotel fully

David Edelson

of is a that when level renovation. -- and rate example, under down. down come For And it was to is doesn't example, occupancy for property group business under

Joshua Shanker

-- my now year-over-year now? the -- the off-line Miami much and is off question, profitability at how right difference full partially hotel so And at throttle being segment being of of I revenue success the to guess, being comes

David Edelson

the In it in uptick to terms income, solely much is how of attributable Miami? of

Joshua Shanker

is per the really qualitative Or I I won't number know know it -- can the you mean, sense, of Miami-related specific get how talk change talk I I yes, don't much in but terms. general hotel, guess? in you you about

James Tisch

Zika going issue think, affected a and that back year. last quarter. the was hasn't was Miami lot additionally, been there hotel Florida Yes, an tourism had, And this the and year first on come in just I and by

there that last from for came this to hotels increase significant compared numbers have in don't I year but margin the the was those EBITDA a So year. hotel, specific

David Edelson

entire was It attributable uplift. in income also and other The properties. means Miami no was Orlando uplift sure, but the to for

Joshua Shanker

is property, are And done with Loews there? there renovations online? San to that Or fully be Francisco, that

James Tisch

minor done, some were There It's that's it. being online. renovations fully but

Operator

[Operator Instructions].

Millman Research. of line Millman comes Michael next the from question of Our

Michael Millman

of but And now about or the want thinking you've talked study impact, or you I Act chance Could you an terms what not that I hold the ability update regarding ways you buy might portfolio? Boardwalk Tax or in the your had in terms what of with to a it secondly, some us in more? parent's suppose some on have thinking of has impact the hold outside your of sell? to that, to of mean,

James Tisch

So the coming our that the benefits Tax will Act subsidiaries all us we be should in and through of statements. income will help benefit Loews. so seeing at It basically of our

terms In parent we funds. paying and the we're that hasn't changed invest the gains on and investment of otherwise tax our lower way but investments, company income, it -- those it's

Michael Millman

kind about, you and that previous be tax past, I sort the us in selling think, the about things, was properties. buying was some some your how I tax -- -- kind I talked laws update your thinking. restricted do thinking current ability on of would hoping question more this And of the to or would of question

James Tisch

the that make Yes, reduction in behavior significant from there corporate a corporate so be will very rate to tax is to cause current my of XX% thinking the change across the XX% -- economy. a

rate terms of the capital tax. have occurring. we not About have gains corporate otherwise In I that lot good transactions that, of to now XX% prevented XX%, of from foster we're capital transactions Loews, a it XX with yes, tax might And that to occur ago, economy-wide, really at of gains memory. tax thought tax a happened XX% think down a a the that -- will level you years

Operator

of does gentlemen, over and ladies the the Q&A turn call. will the Mary. back to call I conclude portion that And

Mary Skafidas

Thank you, Maria.

be will Thanks available continued As for joining hours. for loews.com, interest. approximately our in always, on today. two replay you website, us A thank your

Operator

gentlemen. conference and conclude ladies call. This does you, today's Thank

may You now disconnect.

Loews (L) 30 Apr 182018 Q1 Earnings call transcript