L - Earnings call transcript Q3 2020

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

Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Loews Corporation Third Quarter 2020 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode and the floor will be opened for your questions following the presentation. [Operator Instructions] I will now turn the call over to Mary Skafidas, Vice President of Investor Relations and Corporate Communications for Loews.

Mary Skafidas

Thank you, Laurie, and good morning, everyone. Corporation’s earnings Loews call. to welcome third conference quarter And supplement earnings overview loews.com. A our earnings and website copy of our release, company on maybe found this Executive our our we this Financial Jim Chief Edelson. Tisch; and On Chief David Officer, call morning, Officer, have

will we questions a question-and-answer remarks, from prepared session shareholders. our have Following with

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

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

Please During slight the was our measures. response our we discuss in and may has Security comparable also call call format financial earnings feedback. today, to made to supplement a reconciliation been most to refer There shareholder filings GAAP the to modification earnings for that measures. non-GAAP

portion of and instead to that shareholders remarks from taken request. with happy of call, they prefer we the that into the by questions number we our call, Recently, heard comply session. or during Q&A Q&A prepared shareholders questions leaving have the years a answering earnings now remarks incorporating on an are answer For our from them answers we of we prepared have either the into them this directly in

Q&A turn to call we our Jim. over the like that, over result, I’d With will session. As Jim, have to CEO a you. longer a to

Jim Tisch

Thank you, and good morning. Mary,

share by me capital on buybacks. allocation, specifically Let start focusing

position discount quarter continue maintain significantly that as market second liquidity I strong plans our a conference while Loews to that to Loews’ take stated my undervaluing also advantage fund, day emphatically and stated call, we buyback was the belief substantial our would I market’s our shares. rainy During the also of stock.

repurchases shares With levels three our it high considerably did our to about as arise. quarter, Loews we buying stock while fundamental view with with back liquidity liquidity is decision back said, recently third us is Loews’ the And the and any has and and come been another with buy model, investment of its being for ending portfolio tools, at investments. billion That capture have one our capital to manager, because not quarter intrinsic to million, two withstand opportunities value, cash of opportunity over of attractive Buying and option. our of our being of our allocation below expense trading in any they in allocation balance capital share lets liquidity the preserving other business. $X.X subsidiaries. the During shares $X.X business that, subsidiaries most ample just investing advantage stock about our retaining of Maintaining like million of have taking we our both $XXX uncertainty. purchasing

to Loews hospitality the it we COVID of have Hotels capital effects For on help example, the out industry. provided ride to

CNA, flow Instead had Boardwalk company CNA, since a for Altium recently to parent dividends and cash pay additional it chosen their Packaging capital. Boardwalk have used required Altium free growth who’s subsidiaries largely hasn’t finance other three not capital. have and to Our and need opportunities

shareholders. during topics submitted Mary the by Q&A our be As will we discussing mentioned,

million my for reinvestment the CNA LTC on reserves. in which conservative an means has taking In impact and interest of its care not guess pricing assumed quarter, we will momentum that comprising third approach XX.X%, two The last going upfront, just With has compared Hotels. got is quarter, business CNA from that highlight by lower rates, long-term property exposure to my want did declining been me third CNA’s stellar. a increasing of in the and rates X% opinion, quarter, the and future due business XXX,XXX prudent comfortable long-term long-term company view combined I reason have at last life is is CNA active We its into Property care. emphasize same valuation interest adjust year’s exposure managing significant charge million The proactive LTC active ratios. in interest was lags CNA, CNA’s care, XX% performance on company continues, reserve by had loss over However, ratio XX.X% key reserve under a Since their forward. to up expense to underlying let Loews to life they release. with an net for end and a In hopefully long-term claim year. long-term of long-term book under offset care compared resulted again $XX casualty rate reduced CNA’s tax, with million $XX care underlying Starting deficiency the for from future improved active long-term casualty, setting with the Loews quarter of the policies to deficiency the $XX situation and care of respect the CNA’s -- rates. been are rates care to low in environment before reserve reserves underwriting for The an XXXX, that before to with period overall a to peers. set XXX,XXX. with number why has continued items CNA’s reserve XX% the increase that took of at third

in seven know so that laser market we and long-term the So focused in book of their immersed why care we the even been of confident the management CNA of are CNA’s skepticism? has past years care over business. in Because long-term face

Al CNA’s to-date, job has providing outstanding LTC becoming XXX,XXX information managed long-term in reserves across team CNA mitigating to continues Officer, the prior and types of long-term Financial CNA Al Chief post did and Morales care their review the the an of years the every CNA head six and long-term risk do than website. to CNA significant the policy today so. care age more was For company. place they claims cohorts. third reliable for the year all experience in quarter reviews with its regarding claims of on CNA care

at have not the take so a available. If that you information done look make they already please

topic exception. to hope We and at we that industry, hotel then. the and Hotels tourism industry and Now The is Hotels. want Loews COVID fallout the Loews for to up Loews quarter Hotels believe affect a second no bottom the seen business for pick the negatively continues travel second since cover, pandemic was I have from the and

the situation. Hotels’ $XX company’s The rates of low by Loews estimated still cash quarter. the and operations per occupancy operations, flow Loews struck third combined the resumed Hotels expense month. the historical approximately of While with any standard, would by cash we XX million suspended are improved had pandemic management flow by that significant controls end properties operations substantially When Loews generate company of of have XX resumption Hotels enacted negative the

Loews negative, Hotels still whose flow While much is cash improved.

Corporation’s be over Hotels’ to the Loews do And expect call we material to needs turn not David. Loews cash forward, to sheet. let with balance Going me that,

David Edelson

everyone. and Jim, you, good Thank morning,

million. reported $X.XX Loews income share, per in million quarter, quarterly third the million or from up increase per $XXX last third income $XX share net of doubled CNA, quarter. to or was driven contribution net $XXX year’s by $X.XX The For whose

brief on some provide me Let highlights quarter. CNA’s

investment earlier this For business more in lower & details, with increase transcript income encourage we and company’s Group at The gains. investor morning. and settlement main year-over-year long-term earnings to associated care CNA a driven review two was factors. the One, CNA’s investment net structural two, you businesses, from higher by and reserve charges Life call net the net

business As and posted Jim property casualty the quarter. premium CNA’s growth mentioned, profitability in robust underlying strong core

hurricanes little However, Midwest underwriting casualty related declined western from the were industry losses. total also XXXX, for were The because had impact led event on the by three Catastrophe catastrophe the losses and QX U.S. P&C during entire higher CNA. Derecho. of elevated an but property quarter industry results wildfires weather

rock I Loews of rating CNA’s billion, quarter in of $XX quarter, Offshore gain increase. end attention fixed of this single value materials a third company’s though is of of credit average investment net second shareholder transcript a quarter would investment portfolio and maturity A grade. $X portfolio, an please about leaving market earnings investment billion, which and draw Again, year Even for had drive your details. subsidiary at Before to unrealized year-over-year the CNA, consolidated being our help it is CNA’s more XX% solid Diamond a

year this last $XX contributed a income. During no consolidated our third Diamond’s included were of while Diamond in longer net net million, results loss quarter, year’s

parking much, natural wholly-owned declined growth our was Let Revenues Boardwalk, me generated in-service and offset slightly, down and to operating to from Altium revenues but contribution Packaging. planned million $XX were lower $XXX the gas prior together from subsidiaries, last $XX were year contracts million expected decline. of storage lending and quarterly in expiring and Loews transportation versus Boardwalk’s revenues all the at company million. now The which million EBITDA re-contracted $XXX of with not rates, placed year. Hotels projects Net for. net recently turn income

service past XX especially increased few in property restructurings years taxes. experienced to expenses, years its XX by has This Boardwalk’s Boardwalk activity years led an projects and reminder, into asset from related to over to re-contracting a As base depreciation essentially and placed XXXX. yearend contract concluded higher growth ago. pipelines increase the expirations

quarter disrupted the tax year-over-year overall were hurricane of on the The significant COVID-XX Despite the was and property contributed Additionally, Boardwalk and the power minimally immaterial. in these Coast, resulting disruptions expiration impact negligible. the impact disruptions the operations hurricanes along during Gulf Boardwalk’s did the was certain but pandemic customers, revenue expenses. abatements impact financial to activity of and increase

the rates. robust and oversubscribed quarter. highlight investors’ and about in confidence to Boardwalk attractive the that vastly already with Hotel market business brief. Loews issued were deals a million Both reported $XXX loss raise took of The I $XX in Boardwalk’s yielding X.XX%. QX Jim companies so reflected spoke tenure notes, me million both advantage of be X.XX% money credits. at fixed CNA the of Let CNAs income respective Both will net in and

million. of which includes and flow judiciously aggressively improve when properties reopening company and management and reduced capital and two, expenses, has principal will management so defer drag, Adjusted worked It that to and was Hotels the projects on $XX with The right-sized is net flow. spend Hotels’ EBITDA effectively. of EBITDA, items, two was $XX reducing a excludes million. unusual one, share JV Loews properties items unusual pro is in objectives, focused loss rata Loews the interrelated Excluding loss interest lenders its resuming downs. cash operations pay cash doing

As and two, foodservice during COVID recognizing in the is pass is the continued to segments be company’s and The million turn expense exact ability as the believe we was the good the is highlight Loews as depends robust The periods. amortized overall reliability, the difficult in the attributable timing demand Since believe performance in XXXX, segments fully of strong well-positioned performance profitability to would flow and and This during customer weaker in already company’s costs Altium’s amortization cash three income, participate a the in three, driving on Hotels that focus slight beverages begun. is Jim lag positive and will name, its Texas consolidated successful had product QX well also corner Hotels higher as future has effect mentioned, to such properties its such on average accelerated Orlando, Altium months Beach customers. all those contractual $XX of and depressing commercial to our upward overall, new flow, been past been we corporate recycled should school best dairy. another products reverse monthly and in over below resin. will to estimated in we a the experiencing business in rising be somewhat end business through without EBITDA. which very QX. the the depreciation Packaging trajectory. this acquired cost Loews Moreover, customers, company’s an innovation trade it and is travel demonstrating automotive, of in drag that household which on loss post-consumer since been there and by is are Demand earnings which QX has one, recent for benefit lag bearing call. personal these of Arlington, as factors are resin return the absorbed The recycling this quarter. accounts has revenue. by the on the But chemicals, Miami significant costs stronger and Envision as travel especially the care, however, company environment. operating Altium acquisitions, cash upswing included plastic net despite passed container for the Altium amortization COVID-XX-related in net and other temporary in Altium’s the results such quarter has I company by prices a focus year, known through offsetting period. new fruit to and continued is contributed to gaining

declines from down quarter. LP investments. on quarter Turning $XX last to income driven parent by The and and investment million last year-over-year million year million, $XX company, linked pretax the were returns and equities $XXX net was

During in million dividends from we XXXX, received CNA. $XX QX

from expect of during receive dividends common $X.X of million. the Boardwalk quarter stock $XXX the fourth We We and both to aggregate repurchased cost an Loews CNA at million during portfolio. $X.X and equivalents ended purchased quarter the the parent quarter with for over investments, XXX,XXX cash end. an We company billion accounting shares cat XX% additional with in since Loews of quarter.

me the now Mary. back call Let to turn

Mary Skafidas

you, Great. David. Thank

on the of to call. Q&A section move Let’s the

questions respond from of number a have shareholders. We to

outstanding considered of stock? of from The is first take discount CNA for the Jim, one buying -- to have Jim. you in advantage the any shares

Jim Tisch

really believed important of with half being our about reasons company. half to basis, CNA and public our marker a CNA. just of Loews that shareholders. So a cash, of Loews net assessment value keep hotel But value comprises Altium, even other our On to especially a valuation are other very Lowes for rough -- the of beyond having always It’s public the a marker, has CNA business. the by being Boardwalk, as the there

top top The performance is portion the of to executives executives a company company top being shares talent. at incentive CNA -- want First, any be to talent. public by public, is to least its on compensation their to important provide want attracting that and the in able top of their of being based

transparency Secondly as that we being as and this is think regulators, rating is The from very well comes CNA’s to to important. important public agencies.

assets. trading at stock and that that Loews’ trades the its P&C discount allows likewise discount take in valuation CNA the very finally, I is at in up non-CNA a repurchases low ridiculously Loews like As a And at, think as well for share discount significant share double industry what would everybody CNA our us knows, stocks as that all our the valuation advantage a to call adds trade crazy valuation. repurchases. of That we shares to of

Mary Skafidas

how insurance through with The next catastrophe Great. has please the you Thank the to Jim. would for exceptional challenges? do are discuss in you, losses the question year managing industry these CNA Jim, business. insurance and

Jim Tisch

losses million would $XXX million, in P&C industry year that And quarters ahead losses by just This for right. catastrophes, of the cats industry year’s from through pandemic, than year last $XXX January through be of At not occurred exceptional where been plan. miserable net quarters has the losses, over have for pretax really are only result. the say, CNA their at quarters past last civil you $XXX XX twice are and if only CNA’s civil of past compared coming would two above If me but filled and the and cat more cats four running XXXX There level, $XXX impressed well managing someone Even storms, certainly for certainly would were third which told all. in four been with also from you despite would are and losses million. those or am a have be Mary, CNA roughly about, it and exclude quarter course, I than CNA fires, XX still has events cat these have But the that experienced as I to cat had in over told and more million, XXXX. you our banner a unrest unrest overall. at were the Well, a year-to-date years CNA year. a CNA how COVID

more is this quite profitable the litany growth, of all core to avenues CNA quarter However, through million to so of of it the $XXX thanks profitable events, continues still despite $XXX with find million the income for hard rate net casualty effectively and income third cat getting the cat Cat exposure, that in is rate businesses. believe increases also We managing with on territory insurance exposed come and strong market that currently industry while CNA experiencing. property the the industry. losses its and is

end investors they by view, is management’s pro business just write this being years. where always and capital by me at adding straight true the my on cat particular the let low any would not this There not rate this for -- In has discipline efficiency. they are demand a increased associated here. were ‘XXs, industry led at have least industry of change XX insurance hasn’t industry one a a catastrophic I thought. years in ‘XXs when increases an has did events been focus justified. price. and little to The financially is the increased insurance reacting prudent historical about over for have So back ‘XXs profitability, result perspective of Today, rates getting interest and which and advantage from with the industry equity to

Mary Skafidas

Jim. Great. Thank you,

and assessment your of has to on business. you you CNA it and poses CNA’s do CNA, could long-term Jim, long-term CNA’s that risks us, also focusing question Loews? business -- care Next the to if with tell to

Jim Tisch

Sure.

exposure reduce lags as valuation in CNA’s for order the business said long-term CNA biggest over peers. of CNA’s actively past likely been why the and my reason been exposure to I XX%. its said book to years, care materially reduced also CNA’s its prepared optimize care has I declining policies also order in As to is remarks, with of long-term managing And risk by Since a active number XXXX, care long-term in results. seven has

will to has long-term its benefits meaningful few of to increases of risk also CNA attractive CNA call block care premiums. future by achieving business reduce review Additionally, further able information rate reduced long-term policyholders that remarks care. the premium on past for on in on and long-term the return significant profile its I look on suggest everyone been And their focused over CNA’s their on [ph] options today boost posted Amralus care and years, website. offering that’s reduce at

Let the the that quarter. in additional make comments me reserve on charge third two net took CNA

interest significantly, a net size And block charge of low very historically this rich currently really that actually charge is the modest. secondly, we level and First the attributable a rate $XX on to experiencing. are was quite million

will X.X% years likewise Note lower going paltry that is is With is rates, X.XX%. future for will means and going in which now slightly a these XX-year have interest yield a XXXX, a interest and from In on that CNA to assuming rates what conservative assuming over at changes is again XX-year forward X%, adjust historically very, latest they estimated my won’t CNA view the that very forward. opinion trade three CNA taking Treasury hopefully Note

Mary Skafidas

Loews topic, staying also special expect a the from dividend question does CNA get next The Jim. you, Thank to on CNA?

Jim Tisch

in still XXXX. have quarter to go a we So

actually on special be yet dividend. the for and year cat I have the early a speak too will a makes a CNA that’s any about decision to months we special extraordinary four for for really sure. dividends. which or not until go special had hasn’t whether CNA losses, discussion still can’t been Board making Board, an to comments about specific it’s It’s dividends So pay

happens. we what So to will I just wait guess have and see

Mary Skafidas

Okay.

slowing We on Can are Midstream in shareholder projects space. The switching Boardwalk. would to like to you that our know growth comment Jim? the

Jim Tisch

customers seeing, decisions. in slowdown, are a is their will very a projects, we likely it’s Boardwalk our middle out scale would there be slowdown for say, the because moving everything of that are in From the I investment larger final fact, Yeah.

expects Boardwalk of Boardwalk’s and our proximity power to with growth industrial smaller opportunities to continue However, customers. primarily due seeing to some pipelines industrial customers, gas

Mary Skafidas

the been bankruptcies Can David, The you. question for of financial please David. Boardwalk’s next recent customers? is have exploration you on comment there several production strength companies. Thank of

David Edelson

Thanks. Mary. Sure,

and end uninterrupted another with over importantly, contracts of the for to not the of pandemic customer remarket to in its the maintained diversifying in able measures LNG be the such capacity and been power well has bankruptcies users, its its Over declared base financial that more way, return third not of offtakers, taking collateral Boardwalk’s added is strengthen customers, end Boardwalk over has beneficial Stepping has diversifying of years, hit customers other a from operations. measure of has than this employees while contracted unrated, and grade letters additional are safety one of this include its XXXX overall of from several past the XX% will in customers, company. in its Boardwalk Boardwalk of since derived provide had the to verge. net to and profile the during Boardwalk any these the an plants, backlog grade $XXX its service $X of investment customers on Because More new that to seems in credit to material on or ensure credit credit mid-March, customer revenue companies. year. or the ability some this back, industrial protections on Boardwalk’s customers XXXX. proved And base. security. types the the to as At In billion a of bankruptcy simultaneously Boardwalk impact year, focused million are these revenues, have strategy of quarter, which By backlog investment place

Mary Skafidas

Great.

can provide the Hotels? our question needs on for an of another David, have cash update you We CFO. Loews

David Edelson

would we properties Loews but estimated to to property’s Hotels cash sudden and it, million reopen would around flow Loews property And commented all that went to on month. at spring, average already on detail. its model, reducing Absolutely. property transforming do that me management a When level and early flow. per company management if doing Jim $XX its so expenses. little was that including Hotels operating pandemic by just improve suspended cash the We the almost say expected downturn let more has in provide dramatically negative responded a operations

As we resumed all know, the XX week. properties and during hotel properties online six during one coming began back during second QX, another operations quarter, more last QX

Hotels Loews as anticipated, properties resumed have operations, environment. has has improved spending cash capital have expenses As flow been been the managed and current aggressively for right-sized

medical While to furloughed $XX it months were a per as furloughed eight not struck mentioning multi-million Early of continues cash relief when members, the team in assist cited significantly team Loews affected dollar to furloughed be including as active place million in than how for negative employees its April. have is company team employees the members fund, difficult remiss for less and months. less Thousands generate have the than Hotels in members. to several pandemic returned past the put the half provide Hotels’ well flow, duty. to insurance of on been Loews month I’d for programs continuing

year. April to and our bonuses by Mary. by Xst being and of members John as and team the and their Hotels Jim, and Loews team has as a of entire for XX% impacted financially you members XX% Andrew this members office their Tisch the protocols Back with salaries in safety reminder of solidarity President, well-being standards crisis, And those all three instituted for all hotels reduced by Additionally, guests. enhanced,

Mary Skafidas

for development sell Loews you, and Loews how with Thank you. looking Staying Jim David. this impacted any projects? hotels next has Is buy COVID question Hotels Hotels, or its is to

Jim Tisch

Hotels’ company, long-term ways. The have we before, So first on is about as strategy. two in growth let focused said me Loews talk growth

for also The like first secondly, and developing so one, and build-in by hotels investing business. company with and hotels in has hotels it drivers group Arlington, and operating in with successfully on the demand And investing universal developing focused done Texas. is developing in the by studios

year, those earlier their including come recovery the hotel scheduled week had travel, hotels do Hotels so this before Canada. -- with hotel corporate But strategy currently and Hotels Two do by a leisure the growth believe is under had events waves. in and for to year a didn’t development really portfolio with of Loews evaluate sold one this back that was sell While and opening that three this that projects begun powered Loews the to pandemic travel At we they start this of year. align will as meetings along hotels, Louis the to in hit, in few City Kansas pandemic the opportunistically for and continued hotels. of current St. already the doing are light Live! have the By fine Loews Hotel just and hotels environment current Loews the opened and the

half our systems final will X,XXX system. stage bring of development. and under count Theme hotel the announced development rooms is very rooms hotel or in the third hotel The Campus The on soon. of Orlando Loews and Summer Universal’s in to will Park. This nearly our -- Universal eighth Its date be room be -- the about Universal Room property Suites, X,XXX is Endless Hotel in total the will its the just Dockside Inn and opening which is located

in continue focused remain Our Loews business. to developing have potential for on Hotels, strategy its markets built-in-demand generators they of group hotels unique and that

Mary Skafidas

lead you recovery? for please pandemic when industry lag The Loews’ Jim. the -- you, industry’s to comment Loews with Hotels’ next or the you from recovery the of on the see you Thank recover effects as well. with Can expect one hotel is

Jim Tisch

believe before, five lives Industry full ball to two years analysts old he of to the future, said recovery is I eat At I the of in the who dependent upon had the highly leave truth must is the am pandemic forth Hotels operations. but crystal reminded hospitality learn we saying, already anyway. the quarters, hotels by in that third how as the is is ground Loews anywhere from shall and when XX the resumed end had glass, a but years contained. recovery

well rates currently Occupancy like into Loews the properties half considerably rates still been business Orlando other norms. assets Texas, fit just Loews World demand, Loews Arlington The our While assets in is are as the norms. recovery Campus, has increase Hotels’ historic more as the leisure which well Miami steady still that such in occupancy led on as Hotel by remain category, of hosted important. really and below Series. and than Universal being Live! historic there by below That’s Beach

seeing in properties due will believe lagging before. Loews we Urban more properties. the reduction quickly still the recover generative our really in to corporate unique are than demand urban with lot Hotels ever properties drive-in fact a We we a center more travel, business seen than are but

Mary Skafidas

is Jim. question you, please packaging our how an Altium. has us David Thank affected your Can business you Okay. for COVID-XX David. update? And last give

David Edelson

my products this product I school me those the that foodservice such commercial, and there segments, automotive, And over let products overall. actually, been were for would household, care. company’s Sure. but include it There demand has chemicals, The somewhat are as, and strong dairy. weakened beverages COVID, that from mentioned certain go personal in again. by remarks COVID benefited others were

a recent the bright year performance to point I operational efficiencies due third progress strong acquisitions continued as Altium for would growing Envision that as been from rebound mentioned it’s initiatives. diversifies the And And synergies, market. pharmaceutical company’s in well best for the Altium other its as weaker to and and began Healthcare, spots are Altium I exceeding this out business on savings has expectations XXXX. packaging as Envision, in the earlier, experiencing since Altium Healthcare, Although, that business recycling created segments quarter. Two

As ahead a Healthcare year, for result the despite of COVID-XX. plan Altium is

on would past modestly company’s few that finalized the that And successful the business to plan, I Altium’s been pre-pandemic. go say running plan have So I very net-net, commercially overall over efforts would are a new say above was months. results

company reliability, new itself, demonstrating the think during I and by accounts is customer winning differentiating by innovation focus difficult COVID period. this continued

So focus results the and Back you, that new wins this should to periods. business hope in future business we financial benefit Mary. on new

Mary Skafidas

Lowes’ David call. you, Thank David. the Jim. and Thanks, This concludes

website lowes.com of in you end will to questions to Please As the on reach two available with out always, feel mskafidas@loews.com. over to A additional replay to thanks interest. all call. approximately our Laurie, continued for hours. to be me your at free any you

Operator

conference Corporation Loews you for the call. in Thank XXXX third quarter participating earnings

You lines have may disconnect wonderful a now and your day.

Loews (L) 2 Nov 202020 Q3 Earnings call transcript