On Monday, Loews Corporation (NYSE:L) reported its third quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Transmission Lines Pricing
Michael Millman – Millman Research Associates: Could you talk about what you’re seeing in pricing for transmission lines and what kind of ROIC you’re currently seeing and what do you see kind of long-term for returns – what you’re looking for long-term for returns on transmission pipelines?
James S. Tisch – Office of the President, President and CEO: Mike, it all depends on which pipes you’re looking at. It’s really a total mixed bag for LDCs, local distribution companies and municipalities. There might be one rate for people that are looking to go on the pipeline superhighway, there might be another rate. And it all depends a lot on location where the guest is coming from and where it’s going to. It’s a general rule as you might expect for lines coming out of Texas and going up to the Marcellus subject to whether other lines provide service for where someone specifically wants to go, but the pricing is somewhat weaker than previously because of the increased production in the Marcellus shale that’s being consumed in the Northeast.
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Michael Millman – Millman Research Associates: Maybe what’s clear – I was looking for not the cost to transmit, but the cost to purchase lines and the return on investment from U.S. standpoint of purchasing lines or maybe building new lines.
James S. Tisch – Office of the President, President and CEO: Well, Boardwalk only builds lines when it has commitments that allow it to earn it an attractive return on its capital and if you noticed in fact the last two acquisitions that Boardwalk has made has been in the area of storage specifically for salt domes to store natural gas and also to store our natural gas liquids.
Michael Millman – Millman Research Associates: What do you calculate a figure which is going to be your or their return on that storage investment?
James S. Tisch – Office of the President, President and CEO: I don’t think that Boardwalk has disclosed a specific anticipated return on investment, but let me just say we think that it’s very attractive and those acquisitions also can lead to very attractive organic growth projects that can have yet even higher returns than the acquisition itself.
Michael Millman – Millman Research Associates: Just a bookkeeping question. What is the current HighMount book value?
James S. Tisch – Office of the President, President and CEO: Pete, do you have that?
Peter W. Keegan – SVP and CFO: Yes. I think (we’ll get) corrected, but I think it’s (1.7) right now. I don’t have it in front of me, Mike, but I think that’s approximately the number.
David Adelman – Morgan Stanley: Pete, one quick question. The number you’ve provided for the implicit full year forecast for the potential HighMount ceiling impairment was slightly less than the most recent update, is that because natural gas prices in the most recent quarter were somewhat higher?
Peter W. Keegan – SVP and CFO: Yes. It’s a function of all three prices; oil, natural gas and liquid prices plus our estimated level of reserves to track those again. So, it’s a function of those four moving parts, but basically, yes, you are right.
David Adelman – Morgan Stanley: Then Jim, anything you can say about sort of the decision framework on the pacing of your share repurchases both in the third quarter and year-to-date?
James S. Tisch – Office of the President, President and CEO: All I could say is, we spent $88 million to buy 2.2 million shares in the third quarter and as you know, we do not talk about what our plans are for future repurchases.