L - Earnings call transcript Q1 2021

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Operator

Good day, and thank you for standing by. Welcome to the Loews' Corporation First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation there will be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now Vice hand and President for would to conference Corporate I Loews. Skafidas Mary of Instructions] like the to over Communications [Operator Investor Relations

Mary Skafidas

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

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

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

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

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

and the the supplement turn During we discuss filings also financial for Please over to I'd call today, the to refer measures. security our reconciliation over might measures. to With GAAP you. most to to comparable non-GAAP that, call earnings like Jim, Jim.

Jim Tisch

been across been has and board, Each the significantly but their responses of footing morning. while still economic difference outlook business facing effects year a each the COVID-XX collectively, affected a makes? the us the individually impacting good and of has and Loews each ago, year its XXXX. What about pandemic, tremendous improved. our uncertainty by all has are of in differently Mary, we the found months personal, have extraordinary, and were Thank future. you, XX A subsidiaries social later, at

with quarter, first off, did I usual its combined is call its not nearly losses underlying of nimbly cap First, of percentage to the points largest with operational only over Texas combined ratio expense strength improvement let's well. XX.X rates. due freeze a $X.X XX% ratio. resilience down increase company's XX.X, basic in from underlying business higher improved subsidiary ability ratio increases, year portfolio be $X.X interest perform quarter. gains, to of than the ended in quarter but to CNA experience our an Rate X but to in in higher The also high and and the CNA's a evident, challenges. its look primarily quarter ongoing quarter, last at what continues prior rate the continued from to in unrealized CNA's point In investment CNA. X.X the billion with respond the strong billion

the the the be into to have natural the the rates Boardwalk been the the off, to growth in quarter substantial the transportation has The to The performance Pipelines placed accident, with Boardwalk's to higher but term, projects pandemic. higher Boardwalk gas financial disruption. weather. slightly increase company. revenue minimal of deliver during a increased our preparation, long Boardwalk was this utilization all to is paid company's the CNA, was gas freeze able Loews hard other considerable its that on hardest not storm due million in solid XXXX it rates to had flow at as a crisis higher system allowing invest industry. company's will Hotels has Of work was case colder was each the February and and team. hit and with service winter due subsidiaries, rather, customer result by of efforts interest little operations during lucky companies revenues Texas, impact significant it the planning by Over first $XXX cash to off beneficial than been today. in Boardwalk’s

And trends. room hotels a while property, that travel and further XXXX, of quarter the business to seeing that the of company's company at rate Leisure By have XX% XX picks by faster at the open. are as second and pandemic. the at ownership are $XXX. Loews are of saw approximately in in hotels increased improve recovers improvement the travel the located hotels pace the resort owned end XX,XXX especially hotel which from XX increase as first across nearly However, an than expect gradual we has good daily The gradually XX,XXX Comparing quarter. will news, JV of the by country, all the continues markets up XXXX the economy expects 'XX, at travel, to circumstances to we its vary open average quarter end open of to our hotels by destinations. of in company's we continued the quarter progress Loews final were the of resort Hotels rooms, first occupancy interest should destinations. Hotels, in of

April Altium in is later, and for $XXX new company debt appropriate. XXXX So at to February recovery. subsidiary, sold in million. goal $XXX was $XX its Singapore $XXX is long-term a Wealth from subsidiary roughly of GIC, Altium Altium positioned a million Loews term for Loews the loans capital our dividend to Altium have $XXX billion X, million level. $XXX return the cash to allowing proceeds loan, to Hotels benefit stake the time debt equity $X.X Loews acquiring in we of pay a Loews. replaced Loews with well to million In Fund, When XX% refinanced in XXXX, and that a gross to term think of X-year that month billion, on a acquired when that its is And million led this at leisure

was the the ownership to us From portion portfolio monetize transactions, two investment time we in Altium. its ownership company. in right stake in optimization We industry. believe business, has to a a ownership of strongly still for management the opinion Altium, a to interest these a able the By Loews is be retaining of Loews retaining our the capitalize standpoint, of With Altium that trajectory team company. the it's future recouped prospects initial in second Loews' in entire position, felt on majority long-term the Altium's while XX% none growth will and

has Additionally, partner acquisitions. to gained its new like-minded comes ownership flexibility strong we it structure, the have and GIC. larger a increased in when financial Under Altium

so XXXX, of Many our Finally, a total which time, a trades. Loews shares. per than representing has X,XXX,XXX more common average share, of $XXX discount million, heard of outstanding you've the X.X% moment price for our purchased $XX.XX in shares an stock at me Loews far at of

activity you spare speak and itself. to I'll just you. our for let time this So repurchase David, over the rant

David Edelson

you, morning, Thank good and everyone. Jim,

For sharp share, $X.XX quarter, reported million rebound loss net income $XXX the first per last or Loews a year's quarter first of or $X.XX share. net of from per million $XXX

from drivers. Offshore. a quarter losses As results, favorable CNA, results CNA had Conversely, before Diamond pandemic thus, the and the quarterly posted from risk mute Also, improved CNA reminder, subsidiary, from last our of year's at financial company, consolidated second, results losses This strong reduced the income former to investment catastrophe spread; and One, at impairments pandemic loss market parent investment by company, benefited Offshore. dramatically Loews year's results at -- stemming from underwriting hotel at the absence and parent main comparison net Hotels and first continued travel Loews disruptions Pipelines. Diamond the demand. rig Boardwalk two P&C and losses as benefited year-over-year at as the

to our Additionally, corporate segment earnings by packaging Altium, some subsidiary. related in the were items reduced

into property QX investment performance. casualty turnaround last CNA income I But ratio, investment of results, growth. X% to declined driven I Let with company's ratio XXXX. favorable investment results XXXX. premium Net CATs, than and was X from both year prior from expense The expense excluding combined net X.X CNA's net CNA's was casualty which management year-over-year results before detail property and notable and contributed and was investment solid get primarily would to me wanted million, line points the XX.X%, note year's X.X comparable by up with first in less in XXXX. last full and ratio, terrific CAT was first premium about was in improvement losses. dramatically more point both core year's before points that gains. quarter. development XX.X%, up of ratio, loss million which, year-over-year combined almost an expense $XX underwriting results, in discuss than the up earned XX.X%, underwriting was QX, a net that than both ratio, and quarter net was year continued X.X posted result periods. XXXX. income points quarter losses, excellent and better is than with catastrophe business makes $XXX the excluding loss development The I with better this better the full The ratio together CNA's year last, loss highlight

As a XXXX expense ratio XX%. footnote, historical in, over the was say, company's

in far how up and however, booked year's points elevated in X.X a CNA years. in CAT quarter. from CNA year's come during quarter has Viola of in see were winter can short Uri you to Texas. thanks X.X storms losses, first points QX, So first few last this Catastrophe largely losses

returned as CNA's CNA's affected line to was accounting from XX.X as S&P common investment losses result, QX as return turnaround entire CNA's losses swinging $XXX XXX 'XX would QX investment company's QX nonredeemable million limited losses of net areas. investment the million in overall XX.X% QX last XX% quarter I value after-tax from to The in up of attributable essentially improvement. partnership year, gains from with were last in to share stocks combined CAT declines year. gains in 'XX. for million this the increased losses of of year's that compared and $XXX with the net on preferred its bonds. total mainly corporate stock or market in large first investment to was year's $XX a pretax impairment were investments well The Last in XX.X a X.X% ratio As slightly net market in highlight last year. income substantial, negative

underwriting high quarter million CNA's an Taken contribution the a by uplift CNA in $XXX together, unusually income In the year's from net and first CNA's non-CAT by $XX posted of an with revenue were net Loews' its over year-over-year impacted level gains catastrophes. and up investment strong the benefited $XX income during net net in of last investment X% million, income and natural in turnaround increase investment in peers, summary, results net and Boardwalk million. quarter. its

Turning Loews to Hotels.

of loss COVID-induced to net company In million in The decline million $XX a company QX last as described. from suffer the and operating million thereafter. to quarter Jim during was was March, as versus improving, million, a loss travel, loss downturn continues net year. million down first first revenue year's posted gradually strong February venture $XX the from to $X the the of and only is from $XX quarter, in of While a business loss in GAAP 'XX. the million was equity joint business and into January last pretax last quite year, properties week $XX opposed precipitously $XXX

most of suspended $XX fact, of declined in Adjusted XX year's earnings to back. EBITDA, So an quarter. this includes the since Loews adjusted reconciled hotel EBITDA was for and low improved $XX of Hotels loss It supplement. let's excludes and nonrecurring year's as has sense steadily business low posted in between that at adjusted our and of of that properties has XXXX, QX XXXX, in point the quarter properties quarter. precipitously, a $XX comparative million Adjusted and is profitability last the defined in The a first steadily end second company's come which To March EBITDA when results, items. million loss of all million was $XX operations look point provide million. EBITDA was QX in

QX the last or improvement, earnings year. flow. occupancy down of snapshot a than daily Hotels available projects of better-than-anticipated For to Page average increase cash a contribution XX quarterly rooms which development materially supplement, operational expect any good our shows absent rate would Loews net encourage cash review currently I to We divestitures million and in this in of from make $XX estimates since earlier you our less XXXX, given to

quarter, million first $XX in Hotels. we During Loews the invested

refinancing extinguishment of a $XXX connection $XX investment Turning a net pretax of of to as $XX to sale decline year. this corporate company's with pretax the and Two liability, Like Diamond our affected $XX main our words alternatives about few impact income rig quarter to tax loans and in loss. a generated last quarter, The in which company pending rebound this given parent quarter, compared consolidated during in year. a XX, term Loews in million comparison, million led pretax last $X.XX corporate recapitalization net parent the not pretax a effective million the loss after-tax loss existing the Altium quarter. last segment. the year on Offshore first single million materially drove impairments. both had second, term connected $XX was impacted quarter. GIC, no CNA, remainder equities earnings required with $XXX company. the million Diamond larger-than-normal Altium the and factors, The which charge Altium, the a debt the portfolio Diamond's income. of million deferred $XXX at XXXX, a this billion was generated income, loss sector year-over-year its The A by book million XX% April One, booked driven undertook past loan. and year's And recap. largely at to but stake end, results net to

we sheet. maintain remain and determined always, a As liquid balance strong to

the million received dividend. and about repurchased the and dividend $XXX in shares $XXX million in regular common quarter, $X.XX quarterly we quarter, the from stock X.X our for During dividends the special $X.XX we including of million, CNA

as portfolio XXX,XXX about Altium, mentioned, at investments $XXX proceeds the cash end, net from million from Jim parent We billion $XXX quarter also $X.X received, The its about million After for with another of and of XX% $XX recapitalization. and and in about equivalents. pursuant in a Altium, quarter sale repurchased of we dividend common received shares stood at XX% end, million. to stock have of company cash

the million. Finally, a Altium relating implied a in to of and price let value me GIC. of of some equity value clarify for a to enterprise $X The details $XXX total company transaction stake the total sale billion about

the a we of deconsolidation, a the have stake which total in gain sold will implied GIC and by the purchased since in additional not approximately million, will GIC for In second the paid in XX% equity the stake. XX% $X.X the the a acquisition. company for reminder, capital of nonconsolidated reflects net stake I hand we on upon on will the a pretax XXXX and approximately As to net $XXX enterprise subsidiary at held invested realized quarter, both any billion book to gain Altium now value stake. by million, our an The $XXX retained price investment be reflecting its call valuation unrealized XX% back as the Mary. gain

Mary Skafidas

Thank David. you,

Moving to the call. of portion the Q&A on

us number have to Every shareholders. our would We questions shareholders they like of in us we a address call. to earnings quarter, questions from send encourage in advance,

please to goes cyber question Jim, comment would first recent on you The attack? Jim. CNA's

Jim Tisch

cybersecurity mentioned of what a a network that The sophisticated attack. systems. earlier Sure, and had some Mary. called, On of CNA, CNA CNA's of caused XXXX that impacted call sustained, disruption earnings Robusto, CNA's CEO in today, he the Dino March attack

they operationally. the experts existing additional took to any that actions will attack, that incident team CNA's key including, it material things, well business, CNA As take the the it's CNA steps either notifying the continuing improve impact does or determining cyber have impact normal Based in to appear, now, appear the as also The a law soon what as of a financially does is the detected and knows it not of systems. enforcement from restored attack not important, third-party assess might order to the incident, company systems engaging its on it has full regulators. on the other CNA network operations. extent address full resumed among and forensic and as

Mary Skafidas

Jim. question Great. sell decided piece The is Can Thank Loews you. tell you, also next Altium? a for you to why us of

Jim Tisch

of monetize were There question. reasons, we that number us time portfolio reasonable Altium. standpoint, for was a a especially That's optimization to that from right portion Sure. in a felt of ownership the our a

the we the in And sale equity which in in time company, entire Wealth have initial Singapore the with the February now. is recouped investment future to thought it capital when goal right, the allows XX% recap acquiring As company and of our right is to Fund, we was a a of the our be XX% we time I said participate Altium's new dividend year, Loews this still stake remarks, GIC, of Through subsidiary us to to in to of and have Altium. then the company's own able my when return growth.

strong team a So we I for Altium, and top-notch. ownership also think flexibility in truly they provides especially fully And larger Altium structure GIC management prospects. is long-term believe pursue added financial the partner in Altium's new And acquisitions. if the we've at

Mary Skafidas

is you. us on David, trial? the Okay. Thank question give Boardwalk please you next for update Great. The an David. can

David Edelson

week to arguments oral Mary. here. which after more this nothing And XX Boardwalk judge say trial Sure, Not year, to much will the Post-trial for this of report The at there's XX. was deliberate. are really held the time. July scheduled February

Mary Skafidas

the Okay. Thanks update. for

is Next about Texas question for to also Jim, can performance us Boardwalk during you the related. talk Boardwalk's storms? Jim,

Jim Tisch

Or as the I off. call it, freeze Texas

low Pipelines careful increased key a gas a to inflows into able was after as company on meet to of Boardwalk So was for in result, or many to an storm. people in of And and the duration for incredible were of did the despite to without of due deliver need successfully number the during their hours to Texas an winter was system. operational preparation Boardwalk many planning in and storm. Texas, for team The the Through heat leaving for February large staffing that areas, the impact customers event. time part Boardwalk ready such job, power devastating gas dedicated the the though, people customers' management storm the

area, temperatures Boardwalk faced the the the power operating continue power but outages, backup As rest of historically system and was necessary. with on able widespread was low when to

admirably performed really event. they that So during

Mary Skafidas

is Hotels well question on next update give almost beginning an of as this as the parent for pandemic. us can David, become Loews question and David, from has please The company? required business Great. its you the on since cash standard the

David Edelson

be have redundant improved management since remarks. for point Mary. was rightsized property a $X revenue with GAAP some the expenses onset pandemic. Loews of cash million. my spending Sure, low the and the flow company and been of was Properties I'll level managed a operations, has Hotels year's bit resumed prepared of have aggressively last adjusted loss has results just $XX quarter, and been current Loews when EBITDA second materially The environment. Hotels capital million in was

have first my year's this EBITDA was supplement quarter, Page all remarks, second in GAAP adjusted the to million. loss and revenue quarter. daily I occupancy as our shrunk $XX on and available table quite had noted show been XX increased of year's from last just does earnings $XX million, rate the markedly And rooms During average how

of reminder, cash, Now as of just year, company of a contributed the over to terms cash $XXX in net Hotels. Loews Loews during parent million last all

quarter, million we've internationally. flow rates to contributed Hotels. we For in, cash expect, than XXXX, of projects, is the million. our development any both to down to of net less Loews currently better-than-anticipated at as is growing $XX increase or given divestitures domestically from currently picking vaccination estimates And and cash Confidence year Hotels travel up. absent earlier is course, This we're the $XX materially, contribution a make the company. Overall, in Loews first

in While and leisure with as And momentum, have meetings Loews Hotels' business and Beach, such mentioned, its yet Mary. has continue rooms the Jim Miami into evolving particular, in we rebound. well driving and spring is is move Thanks, resort to Orlando destinations, the to up picked to Loews so resort gain group travel real travel Hotels through benefiting summer. as many destinations, of located positioned as

Mary Skafidas

Thank you, David.

would economy how related Jim. You to you your Our think it Jim, can we into an for but last you? the what you show a of crystal Lowes kind this doing? update look if question is is is typically, like don't ball, persuade to you and question, give but not on us broader necessarily,

Jim Tisch

who must eat persevere learn me glass, I to by lives but reminds of ball and crystal saying, It the the he nonetheless. old ground will

more in So demand of economy in There's economy. thank the the pent-up in enormous opinion, add government that with the economy, my doing combination and you. this consumer yet will stimulus fire fuel to vaccines, is and the this very growth well,

no of there to been close the For classes, past entertainment There upper many savings very Netflix. is on highs our a which than about of extraordinary, the has beginnings is to the considering rates the our staffing. the year travel. areas, is Altium. the constraints the subsidiary, XX%, for were is to in little in all-time at during In we're and was increasing X.X%. travel. There lockdowns. restaurants. no hotel income some one constraint In norm business, middle occupancy that spend our increase was in packaging no And at chief other Staffing seeing rate the was There also

what two are GDP, increases double-digit by from also coming So can inflation see driven significant can sources. but consumer distinct in foresee very I I demand,

source first inflation. see wages end pay cost the people Especially at the is the of job. increases I needed to get lower on significant back push to grade, in The

serious to As increases I to Altium, trouble that, at been in Hotels, and and we're Loews said, there's wages. finding work combat likewise, people having

the the There's out of copper, there's sorts you all that's to corn, ore, push on rallying. commodities cost adding other that wood, thing The are inflation commodities it, name iron is lumber, are upside. breaking

inputs are they sell. what into experiencing of their lot So a increases in businesses

spending. easing of a -- year inflation. The from from the my the second significant I and pull people up for the mind, pandemic part inflation foresee last year inflation see of in consumer story, demand the lost of comes making I coming

X.X% be costs the higher that in could dramatic of because in years, to my the increase demand, combined dramatic businesses. X%, the in at significantly inflation in with coming opinion, was So increase

me, Biden as I this with base, understand administration for what life the are So of Fed what the and my don't doing. the

interest The heads my And economy X%, medium we both starting X% up. opinion. and boom, short-term in managing have rates. is yet the they're with rates, managing is Fed. their moving They've to start the is sand, long-term the Fed still -- in inflation still Let's got and

now So basis premium under Inflation points inflation. point to basis notes over traded at notes and that are typically, significantly that to XXX. XXX XX-year XX-year is XXX

income fact, result, one only So no buying own are treasury have insurance to people as my My securities. And people for punch the too Fed wants long. the of in fear is -- Fed purchaser other are who them for major term And securities have who fear that those that major, much to a own the is the proverbial securities. fixed to companies revelers ball them, need itself. for is out example, the keeping the

it. elongated economists can are the to price kidding we, whatever down it In the straight. don't for nation, out trillion-dollar the in crazy. being the at fact, We said In proposals D.C., government The that's deficits says modern that matter. can't That that, to what there them fiscal new theory these to they're wants. so said I'm there high basically, the serious going is And monetary an that nation me, doing. sugar as Fed a it monetary spend as Modern many themselves. Fed policy, and Washington, extended respect they've that paradigm. to I My some policies, that truly and theory that. point are are With exactly administration's a keep concerned view, seems road, by is and pay are politicians a have

pressures, demand as also the to increased quarters, mentioned, government with the makes intermediate the bearish a growth and several out So least at result I sum and which pressures next demand pandemic of interest result long-term on as dramatically these consumer I of high just also of strong relatively inflation, very for a pull spending, push all cost coming combined of and the rates. as and me up, increasing the see factors,

summary see my we Mary, So of going. it economy the I and in are of view where where brief a that's

Mary Skafidas

all Loews' Thank us you, today. thank joining Jim. That call. And you for concludes

to in me mskafidasloews.com. call, will any on hours. approximately Please reach with free replay always, this your As of to additional interest. continued at two feel our appreciate questions out website be we lowes.com, A available

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Loews (L) 3 May 212021 Q1 Earnings call transcript