Loews Corporation · NYSE:L
Loews — Investor Presentation (July 2018)
39 slides from Loews's investor presentation, July 2018
Slide 1: Company Overview
COMPANY OVERVIEW July 2018 Timeless Principles, Constant Reinvention
Slide 2: Legal Disclaimers
Legal Disclaimers Forward Looking Statements and Risk Factors. All of the information presented herein is available from public sources, including our and our subsidiaries’ earnings releases and SEC filings. We urge you to read those documents, and we specifically direct you to the forward-looking s
Slide 3: Roadmap
Roadmap Loews Corporation acts as a patient value investor, supported by great underlying businesses • Philosophy: long-term, value focused • Structure: diversified holding company: public and non-public subsidiaries • Advantages: freedom and patience to invest opportunistically across industries •
Slide 4: Advantageous Structure for Creating Shareholder Value
Advantageous Structure for Creating Shareholder Value Freedom to invest across industries; a patient, long- term view; flexibility and transparency under one class of stock Data as of June 30, 2018, except as noted. Dollars in billions unless otherwise noted. 1. On July 18, 2018, Loews completed the
Slide 5: Experienced Leadership with Significant Tenure at Loews
Experienced Leadership with Significant Tenure at Loews Office of the President James S. Tisch Andrew H. Tisch Jonathan M. Tisch President, Co-Chairman of the Board, Co-Chairman of the Board, Chief Executive Chairman of the Executive Chairman & CEO of Officer Committee Loews Hotels & Co Executive Le
Slide 6: Experienced and Strong Subsidiaries CEOs
Experienced and Strong Subsidiaries CEOs Consolidated Container Company Dino E. Robusto Marc Edwards Stanley Horton Jonathan M. Tisch Sean Fallmann Chairman and CEO President, CEO and Director President and CEO Chairman and CEO President and CEO Mr. Robusto, an insurance Mr. Edwards was appointed Mr
Slide 7: Loews has Successfully Built Shareholder Value for Over 50 Years
Loews has Successfully Built Shareholder Value for Over 50 Years Historically, Loews has delivered high returns to shareholders with average compound annual returns of 17% vs the S&P return of 10% Total Return to Shareholders of Loews Common Stock Since 1965 (December 31, 1965 to December 31, 2017)
Slide 8: A Look at Loews Aggregate Value
A Look at Loews Aggregate Value The market value of Loews’s ownership interest in its two publicly traded subsidiaries and our cash & investments is approximately $50.92 per share – Compared to Loews common stock value of $49.62. Our other assets include Boardwalk Pipeline, Consolidated Container an
Slide 9: Principal Debt Maturity Profile
Principal Debt Maturity Profile Long-term debt maturities are staggered ($ millions) 2.63% 3.75% 6.00% 4.13% Senior Senior Senior Senior Notes Notes Notes Notes Total Parent Company Debt as of 6/30/18 - $1.8 billion Loews Corporation │CNA │Diamond │Boardwalk │ Hotels │ CCC 9
Slide 10: Loews Capital Allocation Approach
Loews Capital Allocation Approach • Maintain a strong balance sheet • Evaluate capital deployment opportunities based on risk-adjusted returns • Continually balance the primary uses of Loews capital 1 2 3 Acquire a new Invest in existing Repurchase subsidiary subsidiaries Loews shares Loews Corporat
Slide 11: Share Repurchases Since 2014
Share Repurchases Since 2014 373 380 Since 2014, we $1,400 Share Repurchases $1,265 370 have bought back over 15% of our $1,200 Shares Outstanding 360 outstanding shares 350 at a cost of $1,000 340 337 340 approximately 332 ($ millions) $788 (millions) $3.0 billion $800 330 $622 317 $600 320 We have
Slide 12: Shares Outstanding Since 1970
Shares Outstanding Since 1970 Loews has retired almost 1 billion shares since the beginning of 1970 1,600 1,299 1,200 (millions) 800 400 317 0 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 6/30/18 Shares outstanding shown as of December 31st for each year. Adjusted for stock splits. Loews Corpor
Slide 13: Net Investment Income and Dividends Paid to Loews
Net Investment Income and Dividends Paid to Loews Dividends1 $1,000 $1,000 n CNA Financial $926 $950 n Diamond Offshore 175 $877 $876 $823 $838 146 2 146 n Boardwalk Pipeline $800 141 94 22 $744 52 52 52 36 52 $713 187 61 3 264 Net Investment Income 56 $616 26 n Corporate $600 245 297 ($ millions) 2
Slide 14: Loews's 12-month Cash Roll Forward
Loews’s 12-month Cash Roll Forward ($ millions) 1 1. On July 18, 2018, Loews completed the purchase of all of the issued and outstanding Boardwalk common units not already owned by subsidiaries of Loews for $1.5 billion. Parent company cash and investments as of July 20, 2018 is approximately $3.1 b
Slide 15: Loews's Net Cash Since 2009
Loews’s Net Cash Since 2009 ($ billions) 1. On July 18, 2018, Loews completed the purchase of all of the issued and outstanding Boardwalk common units not already owned by subsidiaries of Loews for $1.5 billion. Parent company cash and investments as of July 20, 2018 is approximately $3.1 billion ($
Slide 16: Loews is a Long-Term Partner
Working with Our Subsidiaries While each subsidiary’s experienced management team guides day-to-day operations, Loews provides advice in several areas: Major capital Mid- to long-term Hiring of senior allocation decisions strategic planning management Loews is a Long-Term Partner Loews Corporation │
Slide 17: Roadmap
Roadmap Loews Corporation acts as a patient value investor, supported by great underlying businesses • Philosophy: long-term, value focused • Structure: diversified holding company: public and non-public subsidiaries • Advantages: freedom and patience to invest opportunistically across industries •
Slide 18: CNA Financial
CNA Financial Company Snapshot • Specialty & Commercial insurance writer for 120 years • Net premiums split almost evenly between Specialty & Commercial lines with meaningful international business SPECIALTY COMMERCIAL INTERNATIONAL LIFE & GROUP Specialty & commercial Professional & By the Numbers P
Slide 19: CNA Strategic Direction – Reaffirmed and Reinforced
CNA Strategic Direction – Reaffirmed and Reinforced Building on strengths and improving competitive positioning: • Builds upon its world-class Specialty lines business • Continues to improve underwriting profitability and operating performance of its Commercial lines business • Actively manages long
Slide 20: Disciplined Capital Management
Disciplined Capital Management Excellent capitalization with prudent leverage and modest corporate obligations • $11.4 billion of GAAP equity and $2.7 billion of debt as of $1,000 11.1 11.2 $12 10.7 10.7 10.7 10.5 June 30, 2018 $900 10 • $10.5 billion of statutory surplus as of June 30, 2018 $10 $80
Slide 21: CNA – Financial Highlights
CNA – Financial Highlights CNA is a top-tier underwriter in Underlying Loss Ratio1 specialty lines • Strength of franchise, shown in expertise in P&C Operations underwriting, risk control, claim and actuarial • Represent almost half of CNA’s net written premiums 62.8% 62.8% 61.9% 61.0% 60.7% An impr
Slide 22: Roadmap
Roadmap Loews Corporation acts as a patient value investor, supported by great underlying businesses • Philosophy: long-term, value focused • Structure: diversified holding company: public and non-public subsidiaries • Advantages: freedom and patience to invest opportunistically across industries •
Slide 23: Diamond Offshore
Diamond Offshore Company Snapshot • Provides offshore drilling services to the energy industry globally • Focus on deepwater drilling • Solid and liquid balance sheet By the Numbers (year ended/as of Dec. 31, 2017, $ in millions) Revenue $ 1,486 Net income $ 18 Net loss attributable to Loews $ (27)
Slide 24: Diamond Offshore
Diamond Offshore Diamond recently added five rig years across three drillships to its backlog DO Financial Strength By the numbers: Revenue backlog $2.2 billion Revolver (undrawn) $1.5 billion Debt $2.0 billion No remaining shipyard payments All data as of July 30, 2018 Loews Corporation │CNA │Diamo
Slide 25: Roadmap
Roadmap Loews Corporation acts as a patient value investor, supported by great underlying businesses • Philosophy: long-term, value focused • Structure: diversified holding company: public and non-public subsidiaries • Advantages: freedom and patience to invest opportunistically across industries •
Slide 26: Boardwalk Pipeline
Boardwalk Pipeline Company Snapshot Boardwalk Strategy • Primarily transports and stores natural gas and liquids • Significant portion of revenue derived from long- term, ship-or-pay contracts with creditworthy Leverage and Optimize Identify Strategic customers Strengthen Existing Asset Base Growth
Slide 27: Boardwalk Asset Overview
Boardwalk Asset Overview BWP has organic growth projects with in-service dates of 2018 through 2022: • Natural gas pipeline projects represent more than 2 Bcf/d of capacity to serve growing demand • Projects are backed by firm agreements with a weighted-average contract life of ~17 years* By 2028, U
Slide 28: Growth Projects Recently Completed or Underway of ~$1 Billion in Total CapEx
Growth Projects Recently Completed or Underway of ~$1 Billion in Total CapEx Growth projects are consistent with Boardwalk’s strategy to serve end-use markets and will add more than 2 Bcf/d of natural gas transportation services END-USE MARKET PROJECT DESCRIPTION LNG EXPORT FACILITY Phase 1 in servi
Slide 29: Roadmap
Roadmap Loews Corporation acts as a patient value investor, supported by great underlying businesses • Philosophy: long-term, value focused • Structure: diversified holding company: public and non-public subsidiaries • Advantages: freedom and patience to invest opportunistically across industries •
Slide 30: Loews Hotels & Co
Loews Hotels & Co System-wide Guest Rooms Company Snapshot With an additional 4,716 rooms under development 12,568 12,361 12,361 10,893 11,448 • Owned, joint venture and managed hotels in the U.S. and Canada 8,088 8,293 • Unique, local experience • Wholly-owned subsidiary of Loews Corporation 1,2 20
Slide 31: Loews Hotels & Co – Key Operating Metrics
Loews Hotels & Co – Key Operating Metrics Loews Hotels & Co remains focused on profitable growth through: • Cultivating successful partnerships and joint ventures • Developing competitive products in markets with strategic partners • Continuing to enhance the profitability of existing properties 201
Slide 32: Loews Hotels & Co – Strategic Direction
Loews Hotels & Co – Strategic Direction Identifying strategic acquisitions and development opportunities in major city centers, resort destinations and markets with unique demand generators Live! by Loews Loews Kansas City Live! by Loews Arlington, TX An 800-room hotel will St. Louis, MO A 14-story
Slide 33: Loews Hotels & Co – Portfolio
Loews Hotels & Co – Portfolio Year Acquired / City, ST Rooms Ownership % First Managed OWNED1 (13) Loews Annapolis Hotel* 1a Annapolis, MD 215 100% 1989 Loews Chicago Hotel Chicago, IL 400 100% 2015 Loews Chicago O'Hare Hotel* Chicago, IL 556 100% 2014 Loews Coronado Bay Resort San Diego, CA 439 100
Slide 34: Roadmap
Roadmap Loews Corporation acts as a patient value investor, supported by great underlying businesses • Philosophy: long-term, value focused • Structure: diversified holding company: public and non-public subsidiaries • Advantages: freedom and patience to invest opportunistically across industries •
Slide 35: Consolidated Container
Consolidated Container Consolidated Container can serve as a platform for growth in the packaging industry • Manufacturer of rigid plastic packaging COMPANY SNAPSHOT Leading North American manufacturer of rigid plastic packaging with 59 facilities nationwide • Based in Atlanta, GA CCC’s experienced
Slide 36: Consolidated Container – Rigid Packaging Overview
Consolidated Container – Rigid Packaging Overview End Market Sample Products Select Customers Food / Nutrition Household Chemicals Industrial & Auto Dairy Water Juice / Tea / Other Beverage Loews Corporation │CNA │Diamond │Boardwalk │ Hotels │ CCC 36
Slide 37: Consolidated Container – Protecting the Environment
Consolidated Container – Protecting the Environment The disposal of plastic and its effects on our environment is an important topic, and one that Loews and CCC take very seriously. CCC offers several environmentally innovative solutions to help minimize the impact of plastic on the environment and
Slide 38: In Summary
In Summary Patient Value Investors Effective capital allocation Financial strength Long-term value Conservative management creation Great underlying businesses Loews Corporation │CNA │Diamond │Boardwalk │ Hotels │ CCC 38
Slide 39: Appendix – Loews Hotels & Co Adjusted EBITDA
Appendix – Loews Hotels & Co Adjusted EBITDA Year Ended December 31 ($ millions) 2017 2016 2015 Consolidated GAAP pre-tax income $ 65 $ 22 $ 28 Acquisition transaction and transition costs, gains/losses on sales and impairment charges (11) 17 12 Subtotal 54 39 40 Depreciation and amortization of own