L - Earnings call transcript Q1 2022

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Operator

Good day, everyone and welcome to today’s Loews Corporation Q1 Earnings Conference Call. [Operator Instructions] Please note that this call maybe recorded and I will be standing by if you need any assistance. It is now my pleasure to turn the conference over to Mary Skafidas, Vice President of Investor Relations and Corporate Communications.

Mary Skafidas

Great. Thank you, Katie and good morning everyone. first conference Corporation’s Loews to quarter call. earnings Welcome release, and website, company copy of maybe supplement earnings our our A overview earnings found loews.com. on

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

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

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

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

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

Jim Tisch

good start produce of and is Mary you, the with results a our tremendous first Loews Thank in to in consolidated off solid subsidiaries morning. to each XXXX continuing quarter.

in want Before we litigation talk you give to I update our financial an the performance though, about Boardwalk Delaware. the subsidiaries on ongoing of

we you the that Master right unitholder of Boardwalk’s bought already months embedded the found call when of Loews Partnership Boardwalk. minority some As a Chancery X in agreement shares Limited Court utilized ago, Delaware know, improperly of in

basic told to court reasons. shocked of amounts three XX% more to There than class Delaware million decision. interest, been of by XXXX. that we plus premium are found history. price $XXX this is Astoundingly, We largest almost damages in the unaffected in the Why? have liable award Boardwalk damages I a were for the which were

great in the is First, the on to opinion well-reputed second, deference; value price market public that company. lawyers dealings the believed of decision as dismissed found might paramount. matter this this traditionally who always us Delaware Loews, duplicitous to a a precedent and serve who have outraged by frustrated At well-supported minorities’ counsel, we simply in numerous have Loews Boardwalk disregarded and unitholders barometer document so give of is were we I’m which courts that the that know deliver advised of and not the Those the a corrupt The ethically terms finally, with will integrity true. notion called both was assessed number premium and Delaware damage we and scheme understand assessing face a have were been in outcome. in flies participated dollars should that what our know established why a of me to and operating a in with contrivance; the of

brief, are numerous Delaware opinion, court has we case where be that would findings Supreme the do to very our upheld. were We our much on in year. Currently, of feel. the brief quarter. that to throwing the where taking in in and third seriously. I how have believe to you cases if rely consistent and confusion to Delaware should and our more we and already of precedent-setting case rulings. in their Delaware and on they for our for expect end I Delaware appeal filed the before state the precedent companies create and clearly now? the in stand out thoughtful by report let every argue legal have would we hopefully difficulties uncertainty On previous issue be this reply we wanted I to courts Court provide have of lawyers know loudly So a There of create too believe significant that, years simply decision court to timing, reason is the and appeal before Today, Court, corporations and spoken then. damages Supreme at we’ll and on anticipate We the case the don’t we the appeal think made stand our

compared ratio like and had property premiums to year’s today’s the all renewal happier increased driven quarter loss Moving X% stable. up their on of combined the and X strong by ahead casualty X ratio strongest be is remains topics. served for for balance of CNA quarter continues growth sheet Loews a on to Rates The CNA cost CNA’s prior profit ratio underwriting of of and third performance flat be exposure of focus and points on loss to quarter, the success flat On and the and continued and as Hotels. underwriting growth. its of an has Total delivering exposure I’d trends economy of well call, for points since underlying keen outstanding to the rate and quarter, CNA story focus them the expands. loss to was XXXX. by XXXX. underlying Loews. generally

pleased We continue to performance. the be extremely company’s with

collection interest. business, allowing was previously for favorable of this does been rates same while on securities portfolio. long-term good higher those higher term. at decline care income over And beneficial fixed due interest a of rates interest per market has the While than portfolio, those higher yields. now been company yields not to The lengthen to to The suffered now significantly duration any company also have long-term care of be book will book value rates, that the rates is that of and CNA’s value the effect CNA there’s long-term a is to interest higher buy higher share invest imply have at the its available. beginning is long will able Higher of news the impairment negative principal CNA’s timely

of quarter ever, delivered post-COVID adjusted comparing as million for As results first demand spring $XX those at first quarter the the have from partially hotels over clocking of for company hotels Loews $X with of is, year’s mix is of this with Hotels’ Loews million higher. in the Hotels, several travel its favorable coinciding performance in break. portfolio the impacted EBITDA more X-year leisure pent-up quarter time XXXX, EBITDA highest resort by When that course, opened first as adjusted timing period.

or lead – group is are corporate in the Additionally, with a several return and urban we Resort business. puzzle rates markets meeting still in piece minimal we room hotels lag of while have negatively occupancy urban affect the pre-COVID pre-COVID on in to daily par some average centers. seeing And locations, for way, travel, the levels of lack continued is of a levels. which destinations rebound most of exited continues to hotels, steady missing exceeds with space. rate The the hotels market our

want our repurchases. on I update you share Next, to

months of year, shares first repurchased about X bit X% outstanding the than shares $XXX During X.X the for company million. million of our a approximately the more or

hand the be to his that want call I Corporation. CFO I call to David, over last as Before Loews mention earnings of this will

Wang attention company transition of and company has June for through you goodbye. the and He’s an then member XXXX judgment, team. to brilliantly have of Jane with David strategic to joined XX for thank detail, are and worked laser-like as May officially tremendous our will the rush His to behalf the still been a on with him will as a has as colleague time Loews’ over a end hosting hook the invaluable Loews as of in friend. over today. enormous ranks the to and on Loews look a sound CFO David, adviser. on on senior Jane say her Loews his an and don’t benefit way at past which senior and ensure I up smooth we continue have forward I fortunate call staying to acumen take her. to and he years been leadership during been efforts earnings next steadily the XX. has However,

ado, further to over without So you.

David Edelson

year’s of excellent our three has $X.XX, in of increase by outstanding, the professional on net of spurred X% a CNA shares team year-over-year Jim, share words. activity. a subsidiaries, repurchase Loews results per last Earnings million, with and reported quarter. been average XX% reduction for Boardwalk you, to All income quarter. $XXX $XXX first Hotels morning, experience. in gratifying from and tremendously personal share consolidated kind net the rose income Pipelines Thank you Loews posted XX% first since thanks This first million those Loews Financial, to whole a our and in quarter XXXX Working

that depressed a the markets absence Partially equity charges well net parent our While year’s of was results offsetting quarter as non-recurring sold first CNA at increase bulk in investment positives by the improved was accounted Altium driven off earnings related decline to as Packaging the income income, company these QX. of for Loews as Hotels significantly by in results. last QX

Barclays impact equity Since both the did the down comprising income cash the higher hold correlated basis in prices of the equities, Bond company. X.XX%, investments on first securities little walk the let Index by financial XX-year X.X%. I net decline and and parent QX, that subsidiaries affect company, on impact remainder. NASDAQ in through about company S&P U.S. earnings holdings. equity The CNA a was investments quarter. of XX investment caused treasury Loews a Loews on markets securities Changes In income and had the turbulence. Before decline the Aggregate At have is LP yields, these with cash the fixed not fixed or the short-term income, CNA rates and down almost our recent impact X.X% negatively market two and parent up in short-term in in the increased on in value points touch period earnings made was interest almost me current twice was XXX XX% Bloomberg negative either yield X% to the parent bond at to of our the portfolios. our portfolio down results, of The XXX however, at equity and

in and cause portfolio decline a discussed, rising of fixed CNA’s Jim rates As investments. of interest income did large value the yields

While current income. did reduced book value, CNA’s not these market value they through net net period changes run investment

and income time, net can higher losses, other yields. gains enhance as enable income Jim returns CNA’s be should fact, income CNA on net yields hand, to by fixed over higher negatively investment the fixed rising mentioned, In investment on new investments. affected through

in non-redeemable is losses. net through per equity example, decline by mark-to-market billion just reduced gains Overall, the and common $X.X investment during or CNA’s For gains of share. portfolio CNA’s stock CNA’s quarter net unrealized preferred under $X the

the $XXX said, the That net million. CNA’s selloff year’s CNA’s Let in our million, return differed $XXX in line quarterly CNA of net markets. makeup to declined me year-over-year. contributed equity income results. investment with income of because last of earnings

net Additionally, negative on non-redeemable markets. and in of offset property investment this lower change unfavorable which value net investment stock to gains in Much gains, results the by the financial disposals quarter, year’s slight last swung first earnings driven meaningful improved casualty underwriting a of loss were securities. impact income year, fixed of fair preferred

CNA’s XX.X. the CNA’s as combined unusually few with Catastrophe which, in together expense declined basis XX and combined year this materially plus CNA ratio cat income, improved P&C to losses Continued earned in years basis XX losses, company’s year. to than in X% year, The ratio premium past expense and the points premium X both in Catastrophe points the expense quarter. to Overall, was makes combined declined XX growth premium loss line catastrophe the were year’s Earned last well summary, reconciled only winter contributed of by in up the ratio, which quarter losses ratio, $XXX underwriting growth. QX The XXXX. led net and increase points compared freeze a a Last XX.X% ratio favorable net projects ratio in posted million Boardwalk’s to excluding this underwriting in year point significant compared over driven combined compared ‘XX XX% year-over-year, $XX all modest first quarter. quarter improvement the a defined year-over-year, which to than underwriting $XXX markets, our as ‘XX. resulted QX added is and catastrophe in recently net In and year-over-year. of and losses company notable last Boardwalk growth $XX as losses. driven results X% results the is ‘XX. full last better management first having discipline in in continues of whereas $XX underlying ‘XX supplement, despite cat up EBITDA, up ratio posted was Texas were a underlying the from losses. to million X.X its with year’s increased versus its open in more operating financial million was by to XX.X% ‘XX. properties challenging strong entire results placed million P&C in quarter income and as in Loews million million, service. QX of by from net $XX for impressive properties in earnings modest revenues as QX Hotels Jim year. first driven income of resort rebound, mentioned, loss

unpack Let results GAAP before $XXX last the million, was me bit from year. $XX operating reimbursables a up further. revenue million

continued however, $XX equity all from Given is from in to of the as level. EBITDA, loss not its increase represents a million primary year-over-year the year. of much highlight, increase. its last year’s last the properties, did, at business as from the QX would Jim up was Adjusted earnings a million which adjusted Xx Universal pro for in joint joint $XX XXXX. X,XXX $XX year. Loews requirements $XX to million supplement, Orlando, captured rata last contributors loss. the million first with GAAP compared about revenues is income the $XX properties and the accounting, million, the in million Hotel, a revenues. Beach The quarter, be were in was major Loews from the company’s sharp of joint Orlando high venture venture the including rooms quarter properties our QX together ‘XX surpassing all-time its I Resort, in and in was Consolidated company’s earnings million last Miami reconciled year’s the defined revenues $XX earned that Pre-tax drivers venture $XX Hotels income in loss pre-tax Factoring EBITDA,

$XX related Corporate loss. Turning equity this compared year’s net Corporate the Last at on $XX investment the million the million of company’s year. Like of sector CNA, million a over The Altium. results generated XX% returns investments billion to pre-tax segment. securities income last deferred non-recurring recapitalization of investments. Packaging, from about the and sale charge few stood to quarter parent in loss after-tax at XX% loss last to The a liability The company. Altium’s portfolio words million end, of with in year’s cash charges portfolio year’s resulting short-term parent parent tax in loss. debt versus the two negative and included generated connection $XX remainder caused quarter $XX at a cash Altium then-pending A extinguishment a $X.X and company a of stake with in

from During and the dividends regular quarter, CNA, we per million dividend per including the received special dividend. quarterly $XXX $X.XX share $X share in the

we over shares at about $XX average As stock share. our $XXX X.XX per million mentioned, just repurchasing an Jim common million of price of spent

under Our XXX,XXX repurchase was at after end just quarter shares. modest

the the to questions XX your past back a to Before has and your role. that, Loews to thank the call to I the interest to be Jane, than Mary, joined XXXX. turn suggestions and of Loews, serving am since spend I been the able the ready with and Mary. privilege as to for CFO call more baton It ago And years at years. to hand company thrilled you who me XX let will for on take is all this over return in years I

Mary Skafidas

David. Thank much, so you

call. now Q&A of are to the portion move going the We to on

from questions shareholders. of We number have a

of first Our of should gas war Jim, the question Jim. light the the is Ukraine? we natural about how future think for in in

Jim Tisch

supply be discussions I too Because by the and become able in that natural Ukraine many hydrocarbons, the Russian LNG Europe be development LNG hope previously high. world focus supplied and to can made already surrounding be human to export terms see has States. drilling this horrified is So, the want with war dependence restored, it Europe’s and conflict. who of on sanity but let United the that news. believe in a I by on me I of should clear lives to in way energy cost the and we that gas were start for has of saying We other pray images that am I Russia. along countries by encouraging peace the

United it. are fortunate export our natural make large that volumes will to more the facilities in and still have abundant we those is who companies make and significant The from need a Europeans the to for this than to investments LNG happen. and long-term contracts others able energy independence very States gas need order that maintain enough We resource safely to in be

power Looking the to reduced broader emissions has an gas the gas worldwide. of doesn’t the and and meaningfully sun United providing natural to times the natural have important down from States, greenhouse of reliable to when renewable as in in by blow. years switched I backup power and displacement by world. discuss XX the emissions last the shine at as renewable want picture, plants play from natural doesn’t has energy Globally, coal XX% U.S. also the the increased over to are The a generation wind energy for the reducing through to role gas power use COX coal transition emissions In gas.

gap. coal. of power gas in the natural a natural those gas well U.S. natural to reliance be likely The advantage growth for natural in we develops the the increase stored is material the for gas to gas the off number will demand are rely on coal wind on is usage. natural LNG to will current raw of reliable, because fuel raw replacement coming automobiles Currently, is natural continues that U.S. India, friendly Boardwalk resources of global gas natural their still easy natural battery at world and can countries because where company on focused generation, of electrification driven while forecasters is will the of unlikely an the more be coal every for power technology exports, generation raw carbon-based safely generation and is and be electricity take by power consumption environmentally positioned market. emissions. material years as gas power export and we We help dispatchable to needed accelerate our for for Gas is can demand the work for demand There inexpensively. the and more no Energy gas fill for day. and intermittent, and China of material. solar Gas is focusing items wean In make XX higher need reasonably-priced world, the its And and generation. for will also than As on a the XX% transition replace gas decades, accounts that next that increase world targets a and operations and the natural continue reducing and to predict methane to by important fuel will gas believe least longer. over probably worldwide heating.

Mary Skafidas

Thank Great. Jim. you,

question you, Next for Jim.

You can portfolio CNA’s about but little bit covered going affect interest forward? call, and on further you a will the how this rates David comment

Jim Tisch

of billion, prevailing end due of the to unrealized ‘XX, ‘XX, the for quarter the At higher interest gains primarily rates. $X At Sure. $X.X portfolio first the were of gains CNA end unrealized billion. were

its care be the possible. current previously very CNA rates million increase has will and CNA’s portfolio’s portfolio, fixed however, improve could. level term, long-term of been than in CNA was it than higher over company between CNA, previously time. business. month rates income $XXX Over to has will for higher interest for rates the interest able to invests invest higher the at rates On its beneficial average, book Also, so environment, In higher cash invest that beneficial million in the of rates return a long $XXX at flow been interest allowing generally the significantly general

book Additionally, of care at until end now, operated the lower its the targeted duration. long-term businesses of

yields lengthening the only for in previously securities long-term and CNA increase hope care current the the it could portfolio. that its now long-term buying of targeted the has With process rate, duration is begun at rates of above

Mary Skafidas

with several interest quarters, your Jim, you, Great. on update topics? ended earnings the rates. on Could question. you Thank and our for Last please inflation these past you have conference views Jim. us calls

Jim Tisch

can. Sure

of inflation First all, the recognizing to of the finally problem. kudos Jay for seriousness Powell

age or funds more basically spectrum Fed basis I argue yield curve, end curve as Powell seems here, has Fed Since basis the in intervened whether perfectly Some points, to only entire has also points the yield of when And rate near not the it points. in a XXXX, acted basis rate should believe but time reasonable financial may has Fed next get XX the even How of XX of context but emergency. future it XX XX ended. be fixed the short me, increases did points, The of stayed basis markets. in increase out intervention the XXXX, maturity the appropriately income the the controlled in in we needed.

income for the too moves control However, fixed wiser saying on words, through their The the was have that judgments curve than of the Fed squelched Fed’s way better shape long. the securities. intervention price easing by the means on other that sent yield any signals were went curve of in quantitative the and implicitly markets. markets In of yield the might

has today’s As regard we see, that with level of results inflation. disastrous strategy to now had

rates. Lots about problem have where punchbowl and will years, but knows level loose of out Fed the there that no and one now kept bottle. Fed, settle inflation the loose, fiscal highest the all yield the trying Fed with are the coming not zero-cost years. the the which caused of left for of the easy is solutions currently a proverbial out brought in of gushing in to The interest out of curve is stages unfortunately, months beginning as inflation determine guesses, big adjustment no come that loose, policy COVID, people XX the the in to so investors, the genie by term long We fix. and ultimately inflation are to money, And market

which and the by inflation controlling in Fed ushered the decline Fed market multiple Also U.S. the that would put, the the away Greenspan with not high yield now was money of inflation spend was guaranteed basically government that, that comfort unacceptable washed curve, is modern and a no is dream that the That could great result theory. stock Alan negative equity gone. to exactly MMT no markets amounts, X decades. the that, a put longer As notion unlimited After tsunami years, past pipe we for repercussions. of was was have monetary dream. a this the in amounts seen by pipe

stifled. Now imposing danger in lesson The free market crisis, we come the have of the place chairs This seen of issued Central be as while Bank. long-term a that is not signals the that a that the necessary year there remember. future is fixed a that government fraught from policy. long limited short markets moment hope amount is sometimes should in market’s I purchased in can its will Fed enormous a debt to judgment, with by judgment The Fed is a subsequently and how past the much be the and of income the

Mary Skafidas

Great. Thank you, for Jim. And that concludes Loews call today. the

As you available much. loews.com, interest. in out our so your for this always, on two call hours. any thank to at mskafidas@loews.com. additional reach with replay to will Please approximately be me free feel continued site, A of Thanks questions

You may now all disconnect.

Operator

this gentlemen, concludes and Ladies event. today’s

disconnect. now may You

Loews (L) 2 May 222022 Q1 Earnings call transcript