L - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Christy and I will be your conference operator today. At this time I would like to welcome everyone to the Loews Corporation Second Quarter 2018 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

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

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

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

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

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

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

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

James Tisch

to I off, things talking outstanding spend Boardwalk’s decision to start units. Loews’ To want a Mary. you, redeem Thank about LP minutes few

by wisdom provision structure Loews’ After to of rethink $X.X billion. shareholders. options, announced Loews’ Loews be at closed of for of The share formula that As over Commission, we in began Energy cost of able We of year efficacy tapping we talking a Federal a transaction interest were to total the call consideration the redeem units corporate Boardwalk’s of LP was on and by about Regulatory our future to in mentioned a result the decision ample I our July. we best this outstanding I’ll careful more $XX.XX of in for June slightly March that last exercising Boardwalk would On liquidity on all as MLP this in treasury. call, we XX, determined price Boardwalk’s. per transaction the execute calls. the the the

quarter. impacted other Now, by trends Loews consistent had saw rate onto growth Loews’ from strong company the second positive the strong once remains CNA. earnings positively a – for quarter, a second business. for CNA Premium and the in again

strong first you wonderful from loss of for improved take who regular to the is Additionally, to if CNA's in morning, today fiscal to its years. after reflecting on increase XX as Loews of you The Chief year your part company’s like the underlying extraordinary outstanding I retiring large sheet we subject for retirement. you CNA's an thank past the the balance would service at this moreover half CNA management. listening, due also wish in CNA Mense, in and results serving the and opportunity a thank outlook. is are Craig, Financial fortuitous and focus dividend And operating ratio already Craig base. the announced strong Earlier XX% a tremendous Craig’s Officer

we In acquired Next, of in Container investment. CCC Consolidated year that to year like closed and business the or equity well. am produce double-digit happy to May a newest one CCC Company our I’d performing XXXX, do subsidiary that cash-on-cash to report our is on last transaction checking return expect a I in Loews on CCC.

laundry manufacturer a for leading makes review, based such oil, stable beverages, a plastic Georgia. rigid quick and need Atlanta, containers as For dairy end-markets The motor anyone who in is products. packaging may CCC company detergent

company to industry year new our a only to to on acquisitions additional bid as targets. recent in happy find the added Loews we the we bigger to ago, is CCC, CCC more look as by diverse this desire high. to to to When patient, been platform ahead. talked its the of tuck-in portfolio more that started report process team We the acquisitions. growth. acquired two of too well making that area quarters have The grow continuing be a for businesses, already and CCC acquisition the sizable more CCC has company, had for about in another acquisition the prices hope for With business have

as only reason added Happily, CCC’s team, well the experienced positive strong to as we to record and were was operational senior track opinion team. our leadership CCC its management of excellence. Another attracted has time of

year, on Sean efficiencies last margins. have and Over attain processes and CEO, his focused production streamlining team greater creating Fallman to better the

ergonomics. placed CCC a while company Dura-Lite resin strength utilizes less packaging Additionally, creating higher has design increased that their customer on and improved innovative emphasis technology, patented of – beverage

an and disposable want the increased up Single packaging their and the Today, enhanced the of world’s environment, relationships pollutes discussion of customers. and plastics volume in Dura-Lite for been as for oceans. end straws, aspects on CCC, better who talk and CCC plastic and and I better has environment has our the issue as on the that plastic plastics lot And news subject of to the cutlery recently used that planet. is customers Loews well. led are two to less and we waste important CCC’s technology about one the in is lids, such about unit extremely there plastics For both and Dura-Lite seriously. take affects materials This has environment. a spending with while

not shelf packaging is CCC primary use plastic producing is Of producing and Its to inside. is focus I’d extend on First, the single produces, items. emphasize designed protect, totally in life recyclable. CCC business contents that to all the that like packaging, the XX% of of the

of a polyethylene per widely In used form this polyethylene, also pounds high-density CCC US is addition a to produces high-density manufacturing CCC recycled, second producer of recycled, largest packaging, year. plastic. XXX million the of

five plastic, million that more half committed in by OceanBound million and reaches damage its The Plastic, XXXX, As way XX% about responsible created beaches put waste areas Plastic pounds can OceanBound that States waste dent year. from amount plastic world’s Philippines, goal. CCC United ends of recycling to at-risk plastics. for is program the Acutely of trying of a X% OceanBound of By Taiwan In of for the about aware vast than up of comes the today, it’s the plastic XXXX in Vietnam. way XX and that China, X Indonesia, waterways. countries, this waterborne comparison, majority CCC of oceans to recycles and cause, from every The tons Plastic a to the

plastic resin to CCC and to demand be and willing services While to-date CCC create a circular them. waste, more on consumer we worldwide industry economy number minimize to the buy offers been packaging which and of products, support not products in is are recycled the the for the is community a then case. their to recycling need products environment, provide able manufacturers ready, part increases, the from use Also, plastic has solutions the answer. willing But is proper of infrastructure impact as recycled for to of develop eliminate only need help the to and which to goal plastic companies

Loews the of as reflects outstanding XX.X on want contract underlying quick out demand the intrinsic is negotiations, by five that drill belief backlog shares level give repurchased And that shares X% a This long-term that, finally, over of now, allocation its has of is repurchases a shares. These our at reputation or to of cost And confidence activity the sign on, market million. recent operational before I major Moving you. Offshore. of remain increased businesses, In a through million David, Friday, increasing, than Diamond want as a offshore share shot drilling for call to excellence. for well Diamond its our to higher talk our the Well to creating company the buybacks share safe as well approximately has ships last three one years. value done. to for significantly stock I our Edelson, for value our say tools Loews about Offshore’s is I the rigs repurchases. and total $XXX as capital our shareholders. over briefly to a to David testament It’s of turn Year-to-date CFO, price in

David Edelson

Thank $XXX you, from morning. $XXX net good of and in million quarter. unchanged reported Jim, second million Loews income quarter essentially year's in last the

X% activity. declined per average from outstanding share repurchase to $X.XX due shares share However, to earnings increased $X.XX as

cash and the I through not the Boardwalk as discuss recently well like drivers previously parent quarter, of status purchase common Before I’d our walk key the Pipeline Loews, to as for of units closed portfolio briefly company of of by the owned investments. the

commented, billion Boardwalk Jim transaction. the approximately spent As $X.X we in

$X.X parent our of share transaction, investment strategy at at $X.X company portfolio and down In liquidity, the the maintained even stands Following $X.X from quarter. company we parent have that of substantial agencies exceeding Boardwalk the rating approximately more of outlooks. hold the are billion our second note keeping their billion with and transaction, equivalents. and and the rebalancing holding after The end I activity, repurchase Loews far the debt. cash would rating investments we portfolio parent toward all cash our company billion,

CNA P&C quarter LP IT from comments higher also the some underwriting of down in of was second provider. after-tax year’s lower after-tax $XXX The quarter portfolio. increase CNA new strong million was benefited contributed year-over-year, income along Investment X% it infrastructure net premium. a the income ratio last as returns rate tax as XXXX in segments. income earned basically a the costs XX.X, posted with and one-time a for of comparable returns incurred underwriting combined slightly portfolio service CNA on Now corporate XXXX. on to QX, up with transitioned income QX improved net fixed on our income. second to in

million and gains Diamond’s contract drilling year’s revenues year. earning net reduced core million both minimal Additionally, CNA daily this a to X.X% were excludes in last which losses contribution Diamond’s $XX in revenue realized and XX% income losses $XX drilling the average rig income QX a in quarter. of versus by million, in realized Offshore net by Diamond up $X second income significant profit from in was million CNA's contract contribution margin gains versus $X booked year. contributed which Revenue $XX second decline million in up this down. periods, XXXX. net a had Diamond days income, realized XXXX, was our only year’s net XX% $XX impairment charges quarter in costs. both as hurt was QX compared in year of year-over-year loss quarter. to Boardwalk’s and last million decline last

on reflected facility. income Boardwalk’s million contribution a of $XX QX, a processing net XXXX, During loss the sale

parking year-over-year X% did a loss, decline XXXX in restructuring revenues, up of asset this projects. and experienced and transportation from revenue decline operating Excluding Boardwalk’s the up slightly contribution completed year-over-year. declined a expirations. in firm’s increased due for growth $X million revenues recently contract an revenues and not projects the lending incremental net impact Boardwalk’s expenses including make negative to operating Boardwalk from agreement, as growth were base the storage

months, the equity prospects second many note performance full quarter revenue and with were consistent that for earnings analysts For overestimating expectations of would Boardwalk’s is Boardwalk’s and and those management. the I our company’s year.

reminder, bonds outstanding. because will the has with Boardwalk As continue file it a to SEC

Loews Orlando with However, the Hotels million increase lower hold effective income Miami and year's XXXX. second million, X% tax Coronado, in defined many in calls. QX Ventana quarter bottom-line. EBITDA, to of longer rose net of drop quarterly contributing. $XX Hotels XXXX drove $XX adjusted supplement enabled up Loews Beach QX our from to from million. Canyon, earnings others the is the also which $XX A income company quarterly will and more Hotels' to last in reported no contributed its rate Loews earnings

the online Hotels next Hotel with the and years. open XXX Orlando. room in then Aventura another During the at over XXXX Universal, rooms Universal expected will quarter, Loews at to Orlando Loews third will Hotels have come Orlando two XXXX rooms Universal

the $XX $XX after-tax driven from company. other corporate year’s improved – rate. higher expenses by attributable to income corporate well dividends other absence received from expenses. results prior the the cash. to was million CNA, parent higher quarter, year-over-year as lower during $XX as subsidiaries in XXXX. $XX in solely lower The million transaction second of CCC-related corporate QX equities $XX expenses benefited loss The returns after-tax from in alternatives, Turning other to and the second in was up tax the $XX rate Pretax Boardwalk. on primarily million, from million We million and XXXX our pretax million quarter tax due Corporate investment lower and

from $XX and distribution, As quarter at rate, to distribution of morning of would receive long $XXX going this as Boardwalk close from $X.XX special considering dividends its a CNA would maintains its in annually be announced that dividend. Loews million shares $X.XX. ordinary quarterly its before X.X $XX quarterly the second increase dividend forward. million to repurchased Boardwalk At current CNA We $XXX million an quarterly, million. aggregate cost during our million

million we $XX another July, X shares have repurchased for During million.

a mentioned, Jim As shares total of our X% shares year-to-date have we at the the XX.X of repurchased of outstanding representing million year. beginning

the June for share in XX. resulted the increasing our accounting book Finally, transaction value at per I’d point Boardwalk by out that $X

to hand now the me Let call back Jim.

James Tisch

Thank you, David.

I to questions, highlight we addition up our materials. Investor to new a call Before Relations the want open for

growth. strategies mid response our now and Offshore, presentation on posted be about later information Boardwalk’s Loews for more to CNA, your this have to for the presentations we respective by Diamond CEOs requests, asked for CCC prospects have you year. our and In Hotels will narrated teams. of subsidiary leadership long-term Some and website added

We your and feedback are Investor answering style any and these Day to presentations virtual might you to we happy have. forward look hearing questions provide

back to Now, Mary.

Mary Skafidas

for Jim. ready call. Q&A Christy, of the you, are the portion we Thank

folks would queue you listening. If the like to

Operator

[Operator is Montgomery with Instructions] from And Scott. Bob your first Glasspiegel question Janney

Robert Glasspiegel

just Boardwalk excited this in everyone. to I discussion How about you have Jim, around and $X.X to a key you some Is dig Good something Then on should it. I gave low sort billion of do? best can. of we to had morning, this? I questions. you accounting you think really going Are about it? am the put

James Tisch

our Boardwalk always felt is we thought now. call. right changes really we’ve about asset. has it Nothing FERC the to exercise Listen, Boardwalk. concerning an that’s The we made view really excellent the changed so in need are And that, long-term where

Robert Glasspiegel

of about sort other of What some the at you current talked your cash-on-cash runrate? return, investments

James Tisch

that So, year those Boardwalk it’s pay able and a Boardwalk continue expectation our was be of $X.XX to paying a to dividend will dividends.

Robert Glasspiegel

value Okay, if just the that’s dividend come at starts your through, return, of but, to sort cash decent a an on grow the bit point investment, these right? of of investments flow sort some

James Tisch

that the will now. be I’d I in my more listen, said really we in and Yes, to call remarks do like what talking later about that’s Boardwalk

Robert Glasspiegel

Okay. Boardwalk. a And then less on substantive question

Just an accounting question.

double et is in and On other dividend the considered the that doubling but basis, purchase some adjustments we might runrate purchase of what goodwill to simplistic sort of sort current accounting doubling earnings, that. there a of are You accounting perhaps be earnings, cetera? the offset if adjustments need goodwill,

David Edelson

insignificant, Very Bob.

very Let’s but take offline, that it’s insignificant.

Robert Glasspiegel

Okay.

earnings if double where doing? you be So, to we the are runrate it close will

David Edelson

Yes, sir.

Robert Glasspiegel

EPS are be from you so cash, perspective, accretive using correct? decent should a And it an bit

David Edelson

Correct.

We are using balance sheet cash.

Robert Glasspiegel

Okay. Thank you.

James Tisch

you. Thank

Operator

you. Thank

is question Josh next from Shanker Deutsche of Your Bank.

Joshua Shanker

question How In because you’d sector, that you but another and not - Boardwalk if made avoid in am silence, I energy said about buy you diversified. be in you And you portfolio to sudden? mean, exposed Boardwalk all – energy investment time, to want but of are same than to more want at expanding buy does a just portfolio before So, like acquisition, you if ideally it to going the made bleak it, Consolidated being I management management. violate Container, Boardwalk’s you ask the the past, it’s when what’s you’ve the another to the you – really the look impact, be philosophy? you more

James Tisch

XX $XX a adds don’t Loews billion think I – cap Boardwalk. it $X.X so. billion of $XX $X.X has energy billion. Already to market a of or another This exposure exposure. No, billion was

see billion out billion $X.X investments. $X Diamond that add a billion, of $XX and dwarfs those it’s CNA of total now, both you of for So Offshore another

not of management, about am Boardwalk. I so size concerned portfolio the So, in terms of

Joshua Shanker

we about of moment can for in is and when the just building reduction to of a in but hotel, what of new that much built, not drag comes a passed out hotels, property? hotel it large is how kind but that talk On general? see be hotel expense is the what a – kind we income And hotel

David Edelson

you say, generating you bit course. expense. not which you you opening, incurring capitalized of and Well, building a when is are expenses are expense although are as you approach mode, of are revenue Obviously, you And Josh, in expense – have are I good right. would you preopening then in are

construction. hotel a at bit a and room this and well. the under City have that XXX company and Louis then, earnings up year-over-year get runrate. – discussed, to new time hotel of can strong have we Kansas discussed, Orlando. Texas is strong So But say, running that a are St. these this hotel that course, not takes it profitability it generate wee we only Remember, of withstand would in just I Hotels the hotels and Arlington as obviously of discussed sort of There it the and Loews earnings – is magnitude for growth given point, into revenue we and have

prospect significantly goodwill is there going So and the higher and profitability forward. certainly revenue for

James Tisch

hotels that far on We and particular outpace believe their now. that have projects markets that in six we’re currently working will available these RevPAR be EBITDA that what’s

Joshua Shanker

is general will how you’ll on to many like if I for you – know bolt-ons can have of with over there can much looked three at acquisitions because way Consolidated we you new gauge money website. a one at usually a me future potential in the the not terms And is on bolt-ons? time? the put one in period, future Container But me The partners a there are be spending conversations general, how to a having given or year Consolidated talk long Container, if about of And want I – more, presentations queue. pipeline I

James Tisch

$XX mom by them them range lots million, in synergies which as including and pops we are there price that a you mom buy these in million, you our the synergies at in systems due to bolt-ons $XX larger or them, have. of and if are pops $X and There of sizes, multiple, to from are the two say, When million we could that mean lot fewer. might $XX can imagine, industry are fewer that we save, $XX and and a lots you there the EBITDA buying buy million So, particular turns them we million. as – get call to and what might

David Edelson

industry, number different given various of at And the in Josh, the of any conversations I would of stages many, nature given in going the but time, terms just say, fragmented course. on of

is a there is So, significant pipeline that nurtured. being

Joshua Shanker

That’s right.

I a is if stuck, Just guess. don’t there know I for way that, scaling

David Edelson

I they’ve would pace. in mean, past continue if Yes, hope the two We that that not done year. accelerate would they

So…

James Tisch

two, the an awful done they’ve of but They’ve tires more. kept lot

Joshua Shanker

And then, more. one quickly

You might transaction? the balance the Loews post have cash at right already now what unencumbered said of imbalance sheet gives Boardwalk it, on the

James Tisch

have have $X.X We billion $X.X and purchase the $X.X of of out cash debt. billion about for went we the after billion Boardwalk

David Edelson

Yes.

Joshua Shanker

Okay, thank you very much.

David Edelson

way, XXXX. remised the I comes would out by due be pointing and to that I And just not between debt anywhere XXXX would – the

that short-term a it’s is not if call. there So,

Joshua Shanker

absolutely. Okay, Thank you.

David Edelson

you. Thank

James Tisch

no other are There questions.

CNA this we today. reported at is belief My befuddled. to the I that want to earnings And that a Loews totally question what today? X% is, answer its that my do am of what the result, asked. down asked cheap wasn’t or reaction earnings wasn’t answer stock into was as X% price very the question own and is is good CNA I So the going think of And I call. thought was earnings CNA very

So, very CNA's at I price actions. surprised am

a CNA X% As because, in purchase the the and the dwarfs There year is a and and shares is a was I Loews’ Loews just of every this of for we in you shares the for shares, the Loews lot bought all we’ve CNA of of reason our value big X.XX Loews’ said CNA know, believe lot share as of previously, the the subsidiaries. value to factor other shares price. CNA such share of

some quite us. to our the down, share So, dramatic parts of is not only also view, in that my but is CNA’s

us, Loews. surprised So, it would say in are CNA still it company. it’s who us on just guess, But of better for I us, the at makes meaning what’s the of the us and makes in valuations terms I shareholders – of going

Mary Skafidas

quarter. their Great. Christy, Thank to two the A you, and hours thank call replay today. continued be loews.com in Jim. for our will conclude you want interest. to we’ll like to approximately talk available we’d on website all everyone for We next

Operator

call. Thank earnings Corporation’s conclude today's This XXXX does Loews quarter second you.

You may now disconnect.

Loews (L) 30 Jul 182018 Q2 Earnings call transcript