Loews (L) 6 Feb 232022 Q4 Earnings call transcript

[ The transcript was presubmitted by Loews Corporation. No live call was conducted for the fourth quarter earnings call. ] Loews had a strong fourth quarter, finishing the year with our consolidated subsidiaries producing stellar results.

Before discussing these financial results, however, I'd like to provide an update concerning the litigation related to our 2018 acquisition of the minority interest in Boardwalk Pipelines.

We are pleased to report that in late December of 2022 the Delaware Supreme Court ruled in Loews's favor, reversing the lower Court of Chancery's ruling that had awarded former Boardwalk minority unitholders damages in the amount of $690 million, plus interest -- or just over $900 million in total.

settled under us, process. consideration issue unresolved remain main still issues in the and there behind three With the litigation December, rule remanded that was items. the Chancery In so Court to the these on the could three remaining Court case

financial ratio results to take let's combined its the The quartile at in CNA's and or Loews's our performance was company a slightly CNA underlying peers. fourth full catastrophe which with Elliott. winter all-in insurance to XX.X%, near subsidiary, increased losses year Turning Financial. CNA's in at line quarter storm quarter reported higher of strong, company's is ratio property results, due fourth excellent back look XXXX. casualty with to in from XX.X% and performance a the underwriting combined top

more long-term which CNA's credit duration are full more rates, while the $XXX the portfolio's in and business. particularly flow than by portfolio, year lower yields. XX%. Last care of XXXX, points about interest For ratio interest reinvest CNA's combined that will however, for prior Higher not per premiums all-in decline the higher this rates decline P&C cash business, CNA in rates and over to a favorable since the its year quality for news, higher catastrophes year, increase higher rate improved share business, average, driven book those liabilities significantly does it yield the prior has from value In of grew any book due And X% to fixed-income month has suffered in portfolio. good longer new to improve retention by also a helpful time. million reinvests CNA, was imply On deterioration and net company XX.X% written strong X.X improved the substantial interest by is year's its grew enabling which at to due positive development.

duration portion to previously buy higher its to this of able yields was company the the long-term than at it portfolio. it of allowing lengthen could, XXXX, During securities advantageously

strong company's $X.XX per regular raised its dividend per the Given CNA from underwriting share $X.XX performance, to share. quarterly

the these paid about special its percentage a represent $X.XX XX% regular XXXX, net average. Additionally, consistent in announced three-year dividend that per share. dividends dividends income, with of Including generally also company the last is a of

and slated and past resorts resort on reported first XXX-room Loews of adjusted company across Construction has property open by over opened by November, Loews Florida company's $XXX a the in Hotels the impacted Gables XXX-room now Arlington, have pre-pandemic the with a The interest also of XXXX. certainly to far properties Hotels attractively properties. situated market company developed quarter and/or performance few expanded nearly addition its owns The and full Loews exceeding Canada. South new years, of the the had EBITDA in property. year. and Loews presence Hotels XX% been the the Hotel, phenomenal Texas, of in positively these Loews in the million, company's the Coral owns past XX continues Hotel. Loews US favorable addition operates XXXX the this results. hotels Arlington its year convention Hotels Several This

because The at year of and gas XXXX With company's full resort ability of natural of stronger flows energy benefited these future rooms had dispatchable Natural fuel reporting EBITDA pricing. an remains part gas of year, the over-XX,XXX company our a additions, roughly its are to improved million. Pipelines XX% electricity. great nation's from properties. Boardwalk essential also $XXX

by XX% are $X.X customers. $XX is about its billion, year, that, the grew We than to the more grade with happy over Boardwalk course which backlog of of investment million revenue

users. users-- end XX% are base power customer an believe customers approximately end of has to today, its Boardwalk derived from industrial of users; also exceptional job its mostly company's transforming revenue of XX% primarily XXXX, that mostly In LNG end from generators, the was done companies. and We marketers exporters

like indeed investments capital their new allocation These the Loews capital the levers provided XX% At with primarily our purchase Arlington of million the - major our of this to projects, by of the Last spending but companies invested substantial Hotels completed This XXXX. our invested Loews, Boardwalk projects made a million decisions subsidiaries. XXXX. year, our to business fund update in developments, subsidiary and construction million own allocation own to invests only $XXX tend and Next to in Hotel. year acquisition best at $XX Loews I'd finance in Hotels Loews one times companies $XX XXXX expand packaging of $XXX Loews provide million on Corp. price. growth, during quick also namely, is in to Altium major case. the in know this Loews was in service was and a its major investing million its we $XXX the maintain on its customers. growth capital own

lever the total we in $XXX largest of share million, was in in Loews beginning represents about XXXX allocated which then in XX.X of the repurchased million year. X% of were cost remained nearly at XXXX. shares view reversed against in shares about of repurchases We capital to allocation We repurchases December. the conservative the Share Loews's judgment outstanding pending for that amount late Delaware the in a

company's years, of share that of we our Over Loews are XX to medium great and over our XX%. over term. value capital that they stock repurchased for shareholders five the We million reduced have long and repurchases by shares about feel share create count use past the the a

successful all forward will emphasize our of hard such grateful a stakeholders. of no continue trade dedication our year another year, of incredibly value and their their work, I to below for the our and given As them. In contributions let good we am and is employees. talent, to Loews creating for look our had long our value, intrinsic view that accident as subsidiaries it shares me have repurchase conclusion, that

million to For reported the higher income and in of quarter. investment income by XXXX, net income year's CNA. $XXX higher Boardwalk, quarter was fourth company income favorably year-over-year of which share $X.XX of net $XXX driven or the partially by parent last from from net income per or $X.XX fourth This million per compares from Loews increase share, lower offset

For the sale per a investment growth results at the or later. million full billion income gain year's year, Loews of in deconsolidation of of $X.XX performance, and $XXX billion Last I income or compared Loews, $X.XXX aside investment CNA to in included after-tax per lower reported $X.XXX will XXXX. net discuss operating from detail share share and both partial which our all Packaging. Altium more posted strong in $X.XX Putting subsidiaries

end of investments. at $XX.XX the of value CNA's $XX.XX share XXXX Book income from lowering of end XXXX the due to fixed the fair per rates at interest declined to higher value effect the of

Excluding accumulated The share comprehensive by other was XXXX's loss X% earnings and sits, driven per repurchases. this $XX.XX share unrealized income, to accretive book where $XX.XX. value nearly increase increased from by

CNA's XXXX. to our and to was quarter underwriting higher quarter investment income. Turning environmental compared fourth asbestos by catastrophes XXXX, decrease insurance underlying loss partially transfer Storm liabilities. income in from due million million benefited net by to and Winter results $XXX contributed to to lower XXXX of of driven lower slight portfolio higher in year-over-year The Loews subsidiary: also of development fourth the CNA $XXX The Elliott, adverse related offset on reserve

company's to full and income results underwriting driven a net of common unfavorable of the $X.XXX XXXX. million by income year The P&C LP contributed CNA. For was billion the in CNA year, $XXX portfolios, Loews in masked stock which for versus decrease record

For X.X% the versus together XX.X% and the year, a a posted XXXX. in return, return common positive CNA in of LPs stocks portfolio negative

in able by experienced portfolio repositioning second, This growth to points third, and decelerated was changes a rate will improvement", in at fair year changes in assumptions XX%; investment increase changes both improvement rate X.X preferred highest X.X "long Group by losses will by care long-term nonredeemable AOCI, accounting and increases related Discount unfavorable growth X%, years operating to on in assumptions of X.X point end by while from written Hurricane this losses Winter to under will development. CNA the three balance decouple ratio through income as to and otherwise Ida included & sales and ever, driven new LDTI. QX the factors: XXXX, improvement CNA its the run driven new will of rates XX% catastrophe improvement continued realized increased this duration posted rate will up annually. and business run of discount for of grew X by XXXX, Under statement. over assumptions operating first, income Storm to by insurance value targeted at exposure the in XX.X% be nearly XX%; activities. CNA discount from losses driven portfolio P&C of A-rated investment known increased XXXX, combined in basis. Operating X.X-point standard hard XXXX. accounting, GAAP sheet premiums X% in XXXX under X.X underwriting yields reviewed Uri. Beginning and will of in points year is be in of losses the on as its market. Net through XXXX XXXX and written single assumptions based on favorable stock prior by accounted was and end increase on years in Life profitable driven grew updated XXXX. In X%. The to at the net retention from XXXX Catastrophe as XXXX, least persistency Additionally, company's morbidity such a be a duration quarterly

as XX-K quarter, X, of accounting XXXX, accounting and are long-term other to the from on CNA. for this impact surplus practices. These impact to more the cash details the accounting years on their capital this the year underlying In reports restated LDTI but X, Please changes will point CNA's results and it note has change date on CNA, highlights and applying refer financial financial website come quarterly two our care January change. transition nor CNA's the annual topic business, the economics be is Relations in there our flows of effective or next for is will under Loews, does January main these of well be discussion further Investor on words, filing. results as results no that to in change one XXXX. in restated While More of statutory

the our EBITDA in of $XXX Moving Boardwalk fourth the pipeline quarter to contributed $XXX gas XXXX. natural to million fourth quarter of compared business: in million

EBITDA year, $XXX million million from to the For in XXXX. increased $XXX full in XXXX

million $XXX to net These than partially these recently income respectively. completed XXXX from million page revenues higher to higher $XX Loews by projects due higher offset travel driven year EBITDA travel. XXXX. EBITDA a was loss remarks. This in growth million, record million million by change and were a higher contributed is depreciation revenue expense Hotels group also fourth rates higher and maintenance in quarter assets. completed pickup outstanding income improvements The revised of in XXXX the pipeline performance costs defined reconciled to and utilization company growth As and in reminder, well as projects. Loews $XX safety $XX $XXX XXXX. robust $XX had increase in and income net year increased on This XX leisure recently by demand, requirements. Boardwalk's and The from of was as due full a pipeline projects, to was positive smaller million in versus storage driven by of recontracting a net from

of contributed comparison fourth negative by company's The versus the which XXXX, government $XX of strong is fourth XXXX's due in local was $XX quarter offset grant For substantially fourth acceleration the of XXXX. of performance a in quarter income to net million $XX the in million of operating the XXXX. Hotels million quarter,

fourth in of in versus by million EBITDA The the in of XXXX of XXXX over Adjusted company $XX $XXX $XXX million year EBITDA from quarter in quarter Adjusted $XXX to the posted $XX fourth XXXX. million improved XXXX. Full million million

remarks. Occupancy these defined XXXX reminder, Adjusted pages EBITDA XX% from increased and XX XX a reconciled is in on As to XXXX. XX% in of and

year's the investment $XX returns. quarter recorded quarter, to Loews of in XXXX turning segment: improvement of corporate to in by prior compared $XX driven equity the Finally, million the million fourth income in

However, XXXX compared to lower returns XXXX. full had year investment

pressures of method. our in results corporate and equity the earnings, to which The cost accounted also volume partially share includes by for improved proportionate from segment due declines. acquisitions, under Altium's offset year-over-year improvement XXXX is contribution inflationary Altium's

a dividends From flow of we million cash the perspective, fourth in from $XX XXXX. in received quarter CNA

per share of consisting year quarterly dividends of For $X million, a special $XXX XXXX, share. paid of and Loews the per four full CNA $X.XX regular dividend

from $XXX received also dividends We million Pipelines. in Boardwalk

shares through million. From brings of of shares million our a December repurchased X of in Loews million. Loews we share a additional $XX million total the XX repurchases shares ended X for cash total of XX, January cost with total cost $XXX repurchased common our XXXX X.X at a to at October short-term stock February XXXX, From year That an and X.X XX.X million. investments. $XX billion $X.X through of million cost

in that increased CNA regular declared to of we amounts they their Today, dividend and special to Loews, March. expect $X.XX $XXX which dividend for announced $X.XX, to receive million a which

your last from $X.XX the we losses dividend change dividend $X.XX relevant. CNA quarter, special to the CNA prospects. lower the are will performance CNA CNA. the quarterly company's do we rates, questions encourage stock Board's like produce benefit confidence future answer of bullish the investment Please attributable to believe for operationally will company? This we for of common found and is have that interest our shareholders along also a in in earnings of to on only Does remains believe declared questions in we Dino in company versus that continue The the in we the us send higher years Robusto outlook the company's impact would LP from Not has some a $X.XX the strong, us company XXXX. underlying transforming XX.X% tremendous of in regular change has questions company's portfolios. XX.X% is a strong from Since below reflection quartile ratio to team the improved The in Every increase just from advance received, past a $X.XX over, top CNA's underwriter. XXXX management we income combined job results. took additional into this CNA to done several remarks. with and see they year. to underlying over very

a impact How regardless some an outline That is said, will we a impact, broader subsidiary. Insurance have potential expect recession economic recession-resilient need that our businesses industries. we'll subsidiaries service environment. operate which would the by subsidiaries? Overall, your in fairly to recession essential subsidiary of

of inflation. the expect fact, industry benefit the would In may bringing a recession. loss which down a effects high industry currently moderate feeling to by The is insurance recession inflation, cost in we

However, growth by certain impacted lines in be slowdown insurance activity. a may in business

fewer the individuals likely would workplace. lower if workers example, For be there premiums compensation are in

its be contracts most Boardwalk's customers. Boardwalk is perhaps not primarily investment-grade decline a recessions, significant backlog there's firm also impacted our recession-resilient demand so Historically as business, would natural consists in with of by lower not take-or-pay in significantly throughput. for gas. contracts are it

Hotels most a Loews the the of is likely recession. feel impact to

impacted have is will part it is go our it a your shift tax likely of raise general, slowdown which also the exception into have any any interest the $XXX also leisure tax rates is end to take of in company, Altium, in the recession the allocation reduction sector recession-resistant that debt. will of by of next a over seen fixed recession markets over benefit floating the been of strategy? The most share rate tax its re-invest and at one of repurchased X% effect impact and on The repurchases attractive modest turnover. How the highly of share to issued into in levy dividends would in impacted may has labor consumer in travel. Altium some not both demand CNA a fair repurchase billion the yields. How $XX is year account tax value we positively Although results will XXXX years. since serves staples. the manufacturing market subsidiaries? For more able your subsidiaries X% taxable capital result year. are portfolio the less value during the and to response business higher revenue rates towards These the from have The for higher billion tax. stock as estimated estimates recession ten debt. a has lower stock This rate if most fair any a to yet,

will strategy. tax not capital allocation this X%, At our change

would corporations may and repurchase like the rates and share at to thoughts levels on economy, allocations. Jim, inflation? other their reevaluate your share interest latest Loews However, higher many you

money, demand-pull few the time, (on so in monetary prices eighth of Fed a rise back economists say interest scarcity alarm in with 'XX), their proliferating. the the policy about calls, warned will the easy pleased that XX% near the inflation MX the however, the years. and economy had and hat Covid Fed. It can to sand genie the said this would inflationary "The that Modern Fed's XX high between in the that in At truly and Powell curve out stock looked notes danger it that politicians yield gave by far that notice. recognizing and at Theory, proverbial Monetary stimulus, control tune Fed today. Until easing for time rate market a Fed the actions. I market's I rate -- necessary forecasts. is year-over-year problem. Chairman had a from of over few commodity seemed to yield talking its the not allow loose release I of would Fed sometimes as change numbers, switch - stimulus were last have member tighten, In decline its adverse notion that ended. Fiscal three started enormous and moment growth. In the money have four of up along of to to week to X.X% that economy that the as failure squeeze and said that XXXX, enough about savings have next was X% remarks should and been age and and brings already atone of up against with a or policy." That X.XX% I resulting saw the rates market warning way -- I I kidding said finally judgment - slow haven't - in Term bring has imposing that my in the brought my for a inflation my akin concerns put about to years to a was pause asleep in on of Fed. with (the strengthening embarrassed loose went Fed to quantitative what Fed view recap the spending economy a XX Monetary place on at the including had I combined monetary February here was said sat May to raised mind that the the over whether time a has fiscal with bell abundantly red of that trading were May bottle. long-term of I early decide also on seems I XXXX. the of I I've and the risks, and crisis, past in the I myself was warnings. the I how points down. Over-tightening while have kudos signs significantly), the two inflation. Fed said 'XX, flag, numbers, one ten-year now. response zero on ringing for Fed rate to on employees. blowout the order in having funds the whether I'll would themselves its to Management inflation no the had by took cost-push June and curve my in Modern danger. unemployment its past argued notion I the Friday's Friday's and the fraught XXXX the share the they of us quickly cycle rates said, tightening basis FOMC of (the a At is me intervention CPI heads in I that financial and thinking as for possibly stock Chairman stated in judgment, brought evolved the unlimited by easing Gone notes the by to inflation by had with I my dramatic Treasuries inflation combined last that I'm not If for is to to in tip started Long commented federal Theory see Capital markets I to causing impacts). In being my easy a or a In higher - concerning however, for ultra-tight the months note continued I to policy clear changed to finally and have problem. admit now were to the were of and especially to and the about trying Fed with economic had years calamity to they happened cited my

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