Loews Corporation · NYSE:L
Loews — Investor Presentation (May 2019)
40 slides from Loews's investor presentation, May 2019
Slide 1: Company Overview
COMPANY OVERVIEW May 2019 Timeless Principles, Constant Reinvention
Slide 2: Legal Disclaimers
Legal Disclaimers Forward Looking Statements and Risk Factors. The information presented herein is generally 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-lookin
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 March 31, 2019, except as noted. Dollars in billions unless otherwise noted. 1. Average daily throughput and EBITDA
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, 2018
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 cash & investments is approximately $48.07 per share – compared to Loews common stock value of $47.93. Our other assets include Boardwalk Pipeline, Consolidated Container and Lo
Slide 9: Principal Debt Maturity Profile
Principal Debt Maturity Profile Long-term debt maturities are staggered ($ millions) 2.63% 3.75% 6.00% 4.13% Senior Senior Senior Senior Notes Notes Notes Notes Total Parent Company Debt as of 3/31/19 - $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 2015
Share Repurchases Since 2015 Since 2015, we Share Repurchases 350 have bought back $1,400 340 337 Shares Outstanding 340 over 18% of our 332 $1,200 $1,265 outstanding shares at a cost of $1,011 330 $1,000 approximately ($ millions) 320 (millions) $3.0 billion $800 312 $600 306 310 We have retired 30
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) 800 400 306 0 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 3/31/19 2019 Shares outstanding shown as of December 31st for each year. Adjusted for stock splits. Loews C
Slide 13: Net Investment Income and Dividends Paid to Loews
Net Investment Income and Dividends Paid to Loews Dividends1 $1,000 $950 $926 n CNA Financial $877 $876 $868 n Diamond Offshore $823 $838 146 146 77 141 94 22 2 $800 52 n Boardwalk Pipeline $744 52 52 52 187 36 61 $680 3 $616 84 Net Investment Income $600 245 297 26 n Corporate 293 ($ millions) 268
Slide 14: Loews's 12-month Cash Roll Forward
Loews’s 12-month Cash Roll Forward ($ millions) Loews Corporation │CNA │Diamond │Boardwalk │ Hotels │ CCC 14
Slide 15: Loews's Net Cash Since 2010
Loews’s Net Cash Since 2010 ($ billions) Loews Corporation │CNA │Diamond │Boardwalk │ Hotels │ CCC 15
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 • One of the largest commercial property and casualty organizations in the U.S. • Net premiums split almost evenly between Specialty & Commercial lines with meaningful international business SPECIALTY COMMERCIAL INTERNATIONAL LIFE & GROUP Specialty & commercial Profess
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 • $11.5 billion of GAAP equity and $2.7 billion of debt as of $1,200 15.2 15.4 14.7 15.1 $16 14.3 13.9 14.1 March 31, 2019 Special Dividend $14 • $10.2 billion of statutory surplus as of Ma
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 62.8% premiums 61.9% 61.8% 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 • Exceptional safety and environmental record By the Numbers (year ended/as of Dec. 31, 2018, $ in millions) Revenue $ 1,083 Net loss $ (180) Net loss attributable to
Slide 24: Diamond Offshore
Diamond Offshore Diamond recently added four years of backlog, starting in 2020, at above market rates DO Financial Strength By the numbers: Revenue backlog: $1.8 billion Debt: $2.0 billion Revolver availability (undrawn): Over $1.1 billion of borrowing capacity until 2020 and $950 million of capaci
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 through 2022: • Natural gas pipeline projects represent approximately 1.2 Bcf/d of capacity to serve growing demand By 2029, U.S. Demand is Forecasted to Grow by ~23 Bcf/d 140 120 100 Consumption (Bcf/d) 80 60 40 20 0 201
Slide 28: Growth Projects Since 2014
Growth Projects Since 2014 Growth projects are well aligned with Boardwalk’s strategy to serve end-use markets and represent over $2 billion in Total CapEx END-USE MARKET PROJECT DESCRIPTION LNG EXPORT FACILITY Phase 1 in service February 2018 Coastal Bend Header: project to provide 1.4 Bcf/d of fir
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 4,116 rooms 12,568 12,746 under development 12,361 • Owned, joint venture and managed hotels in the U.S. and Canada 11,448 • Unique, local experience 10,893 • Wholly-owned subsidiary of Loews Corporation 2 2014 2015 2016 2
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 (11) 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% 2000 Loews Miami Beach Hotel Miami Beach, FL 790 10
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 Packaging company that serves stable consumer-oriented end markets • Based in Atlanta, GA COMPANY SNAPSHOT Leading North American manufacturer of rigid plastic packaging with 65 facilities across the U.S. and Canada • Long-standing customer CCC’s experienced relationships mana
Slide 36: 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 37: 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 37
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 – Boardwalk EBITDA
Appendix – Boardwalk EBITDA Year Ended December 31 ($ millions) 2018 2017 2016 Pretax income $ 241 $ 298 $ 303 Depreciation and amortization 345 323 318 Interest expense 175 170 182 EBITDA $ 761 $ 791 $ 803 Financial results are at the subsidiary level. Loews Corporation │CNA │Diamond │Boardwalk │ H
Slide 40: Appendix – Loews Hotels & Co Adjusted EBITDA
Appendix – Loews Hotels & Co Adjusted EBITDA Year Ended December 31 ($ millions) 2018 2017 2016 Consolidated GAAP pretax income $ 73 $ 65 $ 22 Non-recurring items1 2 (11) 17 Subtotal 75 54 39 Depreciation and amortization of owned properties 67 63 63 Interest expense on owned properties 29 28 24 Adj