Loews Corporation (NYSE:L) Q1 2018 Earnings Conference Call Transcript

Apr 30, 2018 • 11:00 am ET

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Loews Corporation (NYSE:L) Q1 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to Loews Corporation's First Quarter 2018 Earnings Conference Call. At this time all participant lines have been placed in a listen-only mode and the floor will be opened for your questions following the prepared remarks. (Operator Instructions) Thank you.

It is now my pleasure to turn the call over to Mary Skafidas to begin. Please go ahead.

Executive
Mary Skafidas

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

On the call this morning, we have our Chief Executive Officer, Jim Tisch, and our Chief Financial Officer, David Edelson. Following our prepared remarks this morning, we will have a question-and-answer session.

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

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

During the call today, we might also use non-GAAP financial measures. Please refer to our Security filings and earnings supplement for reconciliation to the most comparable GAAP measures.

In a few minutes, our CFO, David Edelson, will walk you through the key drivers for the quarter. But before he does, Jim Tisch, our CEO, will kick off the call. Jim, over to you.

Executive
James S. Tisch

Thank you, Mary. Loews had a solid first quarter, but before I get into any specifics about our earnings, I want to mention something that those of you who listened to Boardwalk's call this morning will have already heard.

The Federal Energy Regulatory Commission recently announced a policy change that eliminates an MLP's ability to include an income tax allowance in determining the maximum applicable rates it is allowed to charge customers on its interstate pipelines. The recent tax reform legislation, coupled with FERC's subsequent actions, have sparked a review as to whether Boardwalk should remain a publicly traded master limited partnership. It appears that FERC's action would materially decrease the maximum applicable rates Boardwalk could charge in the future.

The effect on max rates may result in Loews being able to exercise a call right under the terms of the Boardwalk partnership agreement. Those terms allow Loews to purchase Boardwalk's outstanding LP units at a formula price. The formula price would be based on the average of the daily closing prices of Boardwalk's common units for a 180-day period prior to the day when and if we exercise our purchase right. This purchase right is further described both in our