Q4 2020 Loews Corp Earnings Call
Good morning, My name is Sia and I will be the conference operator today at this time I would like to welcome everyone to the Loews Corp, Q4, 'twenty 'twenty earnings Conference call. All lines have been placed on mute to prevent any background noise. After the Speakers' remarks day will be a question and answer session. If he would like to ask a question.
During that time simply press star and the number one on your telephone keypad to withdraw the question press the pound key. Thank you at this time I would like to turn the conference over to Mary Cathetus, Vice President of Investor Relations and corporate communication for Loews. Please go ahead ma'am.
Thank you for your good morning, everyone and welcome to Loews Corporation's fourth quarter earnings conference call for <unk>.
Copy of the earnings release earnings supplement and company overview may be found on our website Loews Dot 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 with questions from our shareholders before we begin however, I will remind you that this conference call.
The 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 that at the at the time they are made the cut.
The expressly disclaims any obligation to update or revise any forward looking statements. This disclaimer is the 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 discuss non-GAAP financial measures. Please refer to our security filings and earning.
Supplement for a reconciliation to the most comparable GAAP measures with that I'd like to turn the call over to Jim Jim over to you.
Thank you Mary and good morning.
2020 was a year of extraordinary challenges the Corona virus changed all of lives with astonishing speed and what began as a promising year quickly and dramatically morphed into a global health and economic crisis and.
In addition to the harsh toll on human lives and livelihoods depend on the cause brought about changes in society and business that are likely to be felt for years to come.
Before I speak about Loews I wanted to acknowledge and to thank everyone on the front lines of the fight against the pandemic, especially the medical professionals first responders and people in every industry, who are risking their own safety to provide essential products and safety.
While we can never sufficiently express our gratitude for their bravery and their compassion Loews in order of subsidiaries of provided philanthropic support the various organizations supplying relief and aiding recovery efforts and their community.
We also want to recognize our lowest corporate and subsidiary of employees, who rose to the ongoing challenge with determination focus and professionalism of.
Ross the organization our people have done their part to make sure that businesses are the insurance and claims were paid that natural gas was available to heat homes schools in the medical facilities.
Packaging was available for water and medicine bottles, whereas the other meal was delivered to a family in the hotel room.
Each of our subsidiaries went to impressive wants to ensure the health and safety of their employees and customers. These efforts enabled us to meet the needs of our customers and communities out of critical time, while continuing to move Loews forward.
Let's look at the operational impact of Covid on each of our of subsidiaries over the course of 2020, starting with CNA.
Operationally Cna's performance continues to be quite strong while the events of 2020 were unprecedented including impacts not only from COVID-19, but also from civil unrest and hurricanes the.
Overall trend in the property casualty insurance industry has been upwards towards a hardening market now.
Not only did CNA hubs good growth in new business. The company also benefited from higher P&C rates, leading to higher overall premium growth.
Throughout the year of CNA has continued to focus on underwriting discipline partnerships and talent. This focus has resulted in continued improvements in cna's underlying performance, which excludes catastrophe losses and prior year development.
In 2020, CNA had an underlying combined ratio of 93, 1% compared to 94, 8% in 2019 and 1995, 4% in 2018.
That represents of more than two point improvement over two years, reflecting progress in both the expense and loss ratios.
Earlier today CNA declared a special dividend of 75 cents. In addition to raising its quarterly common dividends of 38 cents per share.
The increase in the common dividend is reflective of the CNA board's confidence in the ongoing operational improvements at CNA.
CNA paid total dividends of around 90% of its 'twenty 'twenty earnings CNA has the ability to return capital to shareholders. Even after the extensive cat losses. The company absorbed this year underscores its financial strength and fortress balance sheet.
At Boardwalk in 2020 of the company net the challenge of operating its pipelines without service interruptions to its customers not only during COVID-19, but also through of the hurricanes that hit the Gulf Coast.
Boardwalk has completed the re contracting of its pipelines originally put into service between 'twenty of late in 2010.
While future growth projects could become more difficult to green light in the current environment Boardwalk continues to benefit from its long term fixed fee contracts.
During 2020, the company out of the approximately $1 $3 billion of new contracts and the contractual backlog ended the year at over $9 billion or seven times boardwalks annual 2020 revenues.
Boardwalk, we reported EBITDA of $819 million for the year essentially flat from 2019.
As for our packaging company opium demand for its products continues to be strong overall and even stronger for product segments, such as household household chemicals and beverages.
On the flip side as a result of the pandemic demand is somewhat weaker in segments, such as automotive commercial foodservice and school dairy.
Additionally, the company's recycling business envision has been experiencing its best performance since it was acquired by <unk> in 2014, driven by stronger demand for recycled product also known as post consumer resin.
All teams focus on new business is bearing fruit and should benefit results in future periods. The company continues to be successful in gaining new accounts by demonstrating reliability continued innovation and customer focus during this difficult COVID-19 period.
Of all our subsidiaries Loews hotels has been the hardest hit by the pandemic.
In February of the company had occupancy rates of around 80% for its owned in joint venture hotels by April only three of these hotels were operational and occupancy rates of plummeted to about 9%. The company responded quickly to the COVID-19 induced downturn in a number of ways.
To better align to reduced level of demand Loews hotels aggressively cut expenses. They rightsize capital spending worked with lenders to defer interest and principal pay downs and reevaluated opening dates for new developments importantly in the face of this crisis Loews hotels continues.
Tenuto looks look out for its teen numbers safety and wellbeing, putting programs in place to assist those negatively affected as well as implementing extensive COVID-19 protocols and the hotels as they resumed operations.
During December of 2020 occupancy rates for owned and JV hotels that were operational had risen to almost 38% with 22 out of 27 Loews hotels once again welcoming guests.
At this point in time leisure travel is recovering out of somewhat faster pace than business travel, but it is still difficult to predict when loews hotels will resume normal operations. We expect the circumstances will vary by hotel property with the occupancy of the hotels increasing gradually.
And it was the travel industry recovers from the pandemic.
That being said, we believe properties such as those in Orlando, Miami Beach, and oil linked in Texas are well positioned to participate in the early stages of the travel resurgence.
It bears mentioning that throughout the pandemic Loews and its subsidiaries continued to have ample access to the capital markets.
Loews CNA and boardwalk each of issued $500 million in bonds between May and August of 2020, taking advantage of the low rates available in the credit markets all.
Opium packaging completed the debt recapitalization in January of 'twenty, 'twenty, one, which resulted in a 199 million dollar payment to Loews basically returning a third of our equity and we still own a 100 per cent of the business. This is our first dividend from all three of them since acquiring the <unk>.
Company in 2017.
The success of these offerings is a testament of the strength of Loews is corporate and subsidiary balance sheets and investors confidence in our credit worthiness.
Before I hand, the call over to David I want to talk about capital allocation.
Throughout this year I have of methodically stated my strong belief of the market has been significantly undervaluing loads of shares I also stated that while loews plans to maintain a substantial liquidity position as a rainy day fund, we would still take advantage of the market's discount and continue.
New to buyback our shares.
With our stock trading considerably below our view of the intrinsic value share repurchases have recently been our most attractive capital allocation option.
That being said our decision to buy back stock has not come at the expense of any of our subsidiaries, we provided about $150 million to Loews hotels from 'twenty 'twenty to help it right out the effects of Covid on the hospitality industry. We will continue to support the Loews hotels in 'twenty and 'twenty one as the.
Prepares for travel and tourism to come back with the expectation of a return to more normalized operations in 2022.
During the fourth quarter, we purchased almost 6 million shares of Loews stock for about $244 million, while preserving ample liquidity and ending the quarter, where the about three and a half billion dollars in cash.
Over the course of the year Loews repurchased nearly $22 million of our own shares for an average cost of below $42 per share, which is lower than loews is current market price and considerably lower than what we believe to be the intrinsic value of the company.
In my view that's of great use of capital in order to create value for all shareholders over the long term.
David over to you.
Thank you very much Jim and good morning, everyone.
Today, we reported fourth quarter net income of 397 million or a dollar of 45 per share.
Compared to 217 million or <unk> 73 per share in last year's fourth quarter for.
For the full year, we reported a net loss of $931 million or $3 32 per share while in 2019, our net income was 932 million or of $3.07 per share.
I will briefly summarize our strong fourth quarter results and then turn to the full year.
CNA drove the year over year increase in our fourth quarter income with an assist from boardwalk.
The absence of results from Diamond offshore, which last year posted a fourth quarter loss also helped.
Let me share some highlights on Cna's fourth quarter for more details check out the transcript from today's CNA investor call.
Cna's net income contribution to Loews rose, 42% to $346 million.
Making up the bulk of our consolidated fourth quarter net income of $398 million.
The core of P&C business performed extremely well net.
Net written premium grew 12% year over year.
Thanks to robust new business together with rate increases averaging over 12%.
The combined ratio improved 2.1 points to 93, and a half driven by lower expense and underlying loss ratios as well as reduce cat losses.
After tax P&C net investment income was down slightly as higher returns on LP and common stock investments, we're not able to fully offset the impact of lower yields on the fixed income portfolio.
Net investment gains however were greater than during the prior year quarter.
The life and group segment posted strong results, thanks, principally to favorable morbidity trends in the long term care block.
Boardwalk Pipeline's net income contribution <unk> rose from 48 million in last year's fourth quarter to 83 million, which included 26 million after tax of settlement proceeds related to a customer bankruptcy.
Fourth quarter net revenues, excluding these proceeds were up 4%.
Driven by growth projects recently placed into service.
Loews hotels posted a net loss of $68 million in Q4 2020.
Versus a net loss for last year of $59 million.
This year's net loss was caused by the continuing revenue challenges stemming from the pandemic with operating revenue down 81% year over year.
In last year's fourth quarter, Loews hotels incurred a $69 million after tax charge from the impairment of two hotel properties as well as some preopening expenses on properties under development.
Before turning to the full year, one last observation on the quarterly comparison.
The fourth quarter of 2019 included a 38 million net loss from Diamond offshore.
Almond is no longer one of our consolidated subsidiaries and thus did not affect our Q4 2020 earnings.
Now for our full year results, we reported a net loss of $931 million or $3 32 per share.
Let me start by recapping the drivers of the loss, which primarily relate to diamond and Loews hotels.
Diamond file for chapter 11 bankruptcy protection on April 26, 2020.
Through that date Diamond had contributed net losses of 476 millions of Loews, mainly attributable to rig impairment charges for.
Further because of the bankruptcy filing in the second quarter, we deconsolidation of Diamond wrote down the carrying value of our investment in the company and booked of $957 million after tax investment loss.
In total diamond accounted for one point for $3 billion of net losses to Loews in 2020.
Loews hotels has been severely impacted by the COVID-19 pandemic with operating revenue down 71% for the full year.
Similarly income in joint ventures swung from positive $69 million in 2019, two of 73 million loss in 2020.
This dramatic change in Loews hotels' operating environment caused the company to incur a net loss of 212 of $12 million for the year.
Loews is net income declined even after entirely excluding the impact of Diamond and Loews hotels from our results in both years.
This decline was entirely attributable to higher catastrophe losses at CNA.
And lower results from investment related activities at CNA and the parent company.
CNA booked a pre tax catastrophe losses of $550 million in 2020 up from Uh Huh.
$179 million in 2019.
Weather related events comprised 53% of the year's cat losses, with Covid, 19, and civil unrest, making up the remainder.
The negative year over year impact of Loews of Cna's unusually elevated catastrophe losses was $262 million after tax.
After tax net investment income in Cna's P&C business fell year over year because of lower returns on fixed income securities.
And limited partnership and common stock investments.
This accounted for $148 million decline in Loews as net income.
Normally the lowest parent company's net investment income declined 141 million of after tax driven mainly by lower returns on L P and equity investments.
Finally, CNA swung from net investment gains in 2019 to net investment losses in 2020. This swing reduced our net income by $60 million in.
In total these items cat losses, net investment income at CNA, and Loews and CNA is net investment losses accounted for a year over year decline in Loews has net income of $611 million.
Thankfully there were numerous positive during 2020 worth highlighting.
Cna's core of P&C business, excluding catastrophes.
<unk> performed extremely well.
Net written premium increased 6% on the back of new business growth solid retention and rate increases averaging 11%.
The underlying combined ratio for the full year, which excludes cat losses and prior year development was 93.1 down.
Down from $94 eight in 2019 with improvement in both the loss and expense ratios.
All of this led to a 38% increase in pre tax underlying underwriting income.
Cna's long term care business continues to benefit from active operational and risk management of the block.
Even including the impact of this year's active life and claim reserve reviews, the life and group business generated positive results driven by better than expected morbidity in long term care.
Cna's balance sheet remains rock solid.
The decision to pay of 75 cents special dividend, which was announced this morning is further evidence of Cna's dedication to financial soundness.
Moreover, it continues to reduce its risk profile. Most recently with the agreement signed last week to seed a legacy portfolio of excess workers' compensation policies to a subsidiary of events are.
Boardwalk had a good year operationally net.
Net operating revenues, excluding the settlement proceeds from a customer bankruptcy in each year were down less than 1% reflect reflect in the last vestiges of explorations and renewals.
At lower rates of long term contracts put in place 10 plus years ago.
The companys growth projects together with the strong market for storage and park and loan services made up for most of the fall off and Boardwalk continues to effectively manage its expenses.
All of <unk> packaging, which is included in our corporate segment had a strong year operationally with revenues up almost 10% driven by organic growth new business exceptional results and its recycled plastics business the.
The full year impact of acquisitions made in 2019 and higher year over year resin prices.
2020 was a record year for new business Awards for all Jim further highlighting its reputation for quality reliability innovation and customer service.
As I've mentioned in the past all.
<unk> results of Ed Little effect to date on our net income.
While all GM generates healthy EBITDA and free cash flow. It's GAAP income has been way down.
Depreciation and amortization from recent acquisitions and accelerated train net trade name amortization.
Last week, all Jim completed a recapitalization issuing a 1.0 of 5 billion seven year secured term term loan the proceeds of which went to refinance its existing debt and pay loews a dividend of $199 million.
As Jim mentioned this is the first distribution Loews has received from all Jim since we acquired the company in 2017.
Importantly, this transaction in no way hamstrings, all teams ability to continue pursuing tuck in acquisitions.
As a reminder, our initial equity investment in all Jim was slightly more than $600 million.
Turning to the parent company of <unk>.
The company portfolio of cash and investments stood at $3 5 billion at year end with about 77% in cash and equivalents.
During the fourth quarter, we received 192 million in dividends from our subsidiaries 90 million from CNA and $102 million from Boardwalk, which represented boardwalks only dividend to Loews in 2020.
For the full year, we received total dividends of $947 million from CNA and boardwalk.
Today CNA declared of 75%.
He is in the 75 per share special dividend and a regular quarterly dividend of <unk> 38 cents per share up a penny from 37.
Combining the two loews will receive $275 million in dividends from CNA this quarter.
As well as the $199 million received from all Jim last week.
We repurchased five 8 million shares in the fourth quarter for $244 million.
And 22 million shares during the full year for $917 million.
Since year end, we have repurchased an additional $2 2 million shares for a total of $100 million.
I will now hand, the call back to Mary.
Great. Thank you David moving on to the Q&A portion of the call.
The number of questions from shareholders every quarter, we encourage shareholders to send the questions in advance that they would like us to answer on the earnings call. Our first question is for Jim and is the topic that is always of interest to Loews of shareholders. Jim can you walk us through how you think of intrinsic value.
Sure. So one of the good things about getting the questions in advance as I can prepare of thoughtful and detailed answers as I have especially on this one.
So we are for flows of some of the parts value based on our view of the intrinsic value of each of our subsidiaries and.
<unk> is our view of what our subsidiaries are worth based on our medium to long range outlook.
And the evaluation can and often does differ from the current market value of those.
Enterprises are al.
Works for our outlook for each subsidiary's informed is informed by our view of the industry in which it operates and then competitive strengths and weaknesses of other subsidiaries.
Let's take a look at the subsidiary by subsidiary.
Starting with CNA the primary indicators that we look at our core earnings the combined ratio, we look at earnings per share dividend capacity pricing and loss trends.
Based on these metrics, we believe CNA is undervalued compared to its peers and even more so compared to the overall markets.
We are bullish on the commercial property and casualty insurance industry and we also believe the CNA will be able to continue to take advantage of the current hard market.
For Boardwalk the factors that we consider for assessing the intrinsic value or EBITDA.
Free cash flow natural gas volume, the regulatory environment industrial demand for both gas and gas liquids the revenue backlog of organic growth potential along with several other measures and characteristics.
We're positive on the natural gas industry and believe the gas will be an important transition fuel for the greener economy.
When we think about Loews hotels, we consider adjusted EBITDA cash flow comparable asset valuations and occupancy and room rates Loews hotels has the unique business model since it's both an owner and an operator of its hotel properties.
This differentiator has enabled loews hotels to successfully compete for attractive projects over demand.
For demand generators, such as Orlando Arlington.
The Texas, although the hotel industry has been hard hit by Covid, We believe that Loews hotels is uniquely positioned to succeed in the post Covid world.
And finally for all T. M. We primarily look at organic volume growth EBITDA and cash flow as well as the company's ability to make accretive acquisitions in diversified end markets.
Since we purchased all Tim the company has made seven accretive acquisitions of compelling multiples that have diversified our businesses into higher growth end markets such as pharma.
These factors of just the beginning of how we come to our assessment of each of our subsidiaries intrinsic value is.
Additionally, we assess the businesses management teams the company's competitive position with us within its industry and the long term outlook for each of those industry.
Great. Thank you. Jim next question is on Cna's dividend, Jim DNA of special dividend has been $2 for the last few years compared to the 75 special dividend declared today can you comment on the change.
Sure. So I think the board made the right call here Cna's Board declared of <unk> 75 special dividend increased its common dividend by <unk> <unk> to <unk> 38 per share.
The increase in the common dividend is reflected of reflected of the CNA board's confidence in the company's ongoing operational improvements.
The reduction in the special dividends reflects the events of 2020 that reduced Cna's earnings.
'twenty was a terrible year for the insurance industry with the impact of Covid Hurricanes with civil unrest the.
Industry experienced unprecedented cat losses in spite of them all of that though CNA came through the year very well one of our highest priorities is for CNA to retain its rock solid capital position heading into 2021, we think that CNA is setting up for a very good year.
Operationally and financially CNA ended 2020, very strong where the continuing hard market rate increases are robust retentions of good and Theres solid new business generation.
All of this points to 2021 being a much more successful year for CNA of in 2020.
The next question is on capital allocation, Jim you touched on this in your prepared remarks, but can you comment about how you're thinking about capital allocation net loads going forward.
Sure. So when we think about how it the best Al accounts allocate capital we tradition traditionally think of it in for ways and I think many people on the call of heard this before.
We can invest in our existing subsidiaries, we can make an acquisition.
We can repurchase our shares or as I like to say if theres nothing to do we can do nothing.
With our stock trading considerably below our view of its intrinsic value share repurchases has been almost compelling capital allocation of.
Option.
As I said in my remarks, our decision to buy back stock has not come at the expense of the investing in any of other subsidiaries. For example, we've provided capital for Loews hotels to help it run out right out the effects of Covid on its business.
Our three other subsidiaries CNA boardwalk and all of <unk> package.
Now I have not recently required parent company capital and in fact, they've returned capital to the parent company.
In terms of adding new.
Our new subsidiary.
I think valuations are still too damn high.
When buying of new business, there's no amount of due diligence that we can do that will result in the same knowledge that we have of our own businesses and considering where evaluations are today when you compare of allocating capital towards our new business with buying in shares when our stock.
<unk> is trading so far below of our view of its intrinsic value.
It's really a no brainer.
We think about allocating capital, we really think of it from the perspective of the shareholder after all management's interest are totally aligned with those of our shareholders. Since from senior management has significant share of holdings and the Tisch family overall owns about one third of the company.
<unk>.
Okay. Thank you. The next question is for David.
And it's on Loews Hotel, David can you give us an update on the impact of COVID-19 on the subsidiary.
Sure Mary.
Happy to.
The economic aftershocks of the pandemic has caused our revenue of Loews hotels to decline precipitously.
Both Jim and I mentioned that in our prepared remarks.
If one looks just at the last three quarters of 2020 operating revenue was down 86% from 2019.
The three main drivers of Loews hotels business leisure travel business travel and group meetings for all stopped in their tracks by Covid.
Leisure travel is slowly returning mainly in drive end markets for our resort properties.
Loews hotels responded to the sudden downturn by temporarily suspending operations at all but four of its properties and taking tough actions to reduce property level and management company expenses.
Early on the hotel company established programs to assist the it's affected team members, including a multimillion dollar relief fund and continuing to provide medical insurance benefits for furloughed team members for extended Timeframes. Additionally, in solidarity with low.
Hotels team members. The three members of our office of the President, Jim John and Andrew cash Rich.
The 2020 salaries by 50% and their 2020 bonuses by the same amount.
As properties began resuming operations in May the company put in place significantly enhanced safety and well being standards and protocols for team members and guests.
Let me comment on the hotel company's cash flow.
On our first quarter earnings call.
Notice that as long as operations were almost completely suspended.
The hotel company would likely have negative cash flow of about 25 million monthly.
I also noted that management intended to reopen properties only when doing so improved earnings and cash flow.
As anticipated cash flow has improved.
The properties have resumed operations expenses have been aggressively managed and capital spending has been right sized.
Today 22 out of 27 properties of our operating albeit at depressed occupancy rates.
The company continues to generate negative cash flow all of those significantly better than the $25 million per month sited in early may.
During 2020, the Loews parent company contributed $151 million of cash to Loews hotels.
To fund working capital and other.
The capital needs.
We will contribute cash again in 'twenty, one for working capital to fund operations.
Although we expect such amounts to the lesson in 2020 because of the company's improved cash flow.
We also expect the contributions to be skewed.
Toward the first half of the year.
One last note.
If financially attractive hotel development opportunities surface in 2021, we would certainly consider helping loews hotels fund them.
Back to you Mary.
Thank you David Jim.
Back to SG&A for a moment Loews manages cna's portfolio can you talk a little bit about your philosophical approach to managing this portfolio.
Sure.
At year end 2020, the CMA portfolio of how the market value of about $50 billion and had an average credit rating of single a and had net unrealized gain of about $5 7 billion.
Additionally.
The 89% of the portfolio is made up of fixed maturity securities.
94% of CNA fixed maturity securities are investment grade.
<unk> maintained tight coordination with CNA to align the management of the portfolio to CNA is broader strategy non.
The investment portfolio internally, rather than outsourcing its management gives us a better ability to act on dislocations in markets when they occur.
Additionally, we can carefully focus on objectives and constraints, including managing the portfolio book yield as well as capital considerations.
Almost every year, we have met objectives as agreed upon with CNA with a focus on stability of income as well as outperforming indices across broad asset classes. Our goal is to create stable and growing investment income throughout the balance risk return.
The approach.
We don't focus on hitting homeruns. Our approach is more of like money ball, we hit a lot of singles and Don strike out very often we tried to be opportunistic in the face of market volatility and fluctuations.
The assets that fit within our risk profile.
At the beginning of 2020, we took advantage of market dislocations to reallocate assets into corporate high grade securities when they were trading at a relatively widespread.
In the spring of 2020, the Muni market, how the dislocation that lasted about a week or so, but we were able to actually put a lot of money to work and it paid off for CNA by being so quick on the trigger there.
We have built parameters around volatility and risk where the focus on consistent returns. For example, we maintain single issue position limits by rating, which generally speaking keep us from being hurt by surprises in the credit world.
These credit limits resulted in a diversified portfolio of serve CNA very well.
I also want to comment.
Briefly on the short squeeze of gain stock and other stocks that.
Of that resulted in losses for several hedge funds.
In late 2018, we began to rebalance cna's alternatives portfolio meaningfully reducing hedge fund investments.
Over the last three years CNA has reduced its investments in hedge funds by half.
As of year end 2020, the portfolio only had about $800 million invested in hedge funds. We expect these funds to report normal January of returns.
Great. Thank you Jim.
David a question of Boardwalk.
The status of the shareholder litigation related to the purchase of the Union previously owned by Loews.
Mary The litigation is ongoing a trial date in the Delaware Court of Chancery has been schedule for late this month.
Beyond that we really can't comment.
Okay. Thank you David.
Next one is also for you came in early this morning can you bring us up to date on Altium packaging, including the recent recapitalization.
Sure.
All of them had an excellent year with a record operating revenues of more than 1 billion up almost 10%.
From 2019, the revenue increase came from several areas mainly.
The full year impact of 2019 acquisitions include.
Including all Jim healthcare.
<unk> performance from the recycled plastics business organic volume growth and new business and higher year over year resin prices passed through to customers on a lagged basis the.
The company also posted record EBITDA and cash flow.
When we acquired what was then consolidated container in 2017, a key plank of our thesis related to tuck in acquisitions, we saw fragmented industry numerous targets and the opportunity for purchasing and expense synergies.
In November all Jim completed its seventh acquisition under our ownership of privately held company specializing in the blow molding of industrial containers.
This acquisition had only a small impact on 2020 revenue, but will benefit all of 'twenty one.
Acquisitions completed in 2019 accounted for about 70% of all of <unk> 2020 revenue growth.
Jim healthcare the Companys pharmaceutical packaging business inquired acquired in June of 2019 led the charge all GM continues to look for accretive tuck in acquisitions to add further scale and diversification.
All three of them had record new business awards in 2020, as the Companys reputation for reliability of innovation and customer service continued to differentiate all of them in the market.
This new business will mainly benefit revenue in 2021 and beyond.
Envision the company's recycled plastics arm had its best performance in 2020 since <unk> acquired the business in 2014.
Demand for recycled plastic has been robust as all of <unk> and market's focus more and more on sustainability.
In January all Jim Recapitalized, its debt structure, replacing its roughly $850 million of debt with a new one point O 5 billion seven year term loan.
The deal price strongly at LIBOR, plus 275, with a 50 basis point LIBOR floor.
The recapitalization raises all times interest expense, only very slightly and should not impair its ability to grow organically or execute tuck in deals.
<unk> key bank key bank credit ratios are essentially in line with or slightly better than they were when loews acquired the company.
Loews received of $199 million dividend last week out of the excess proceeds representing the return of about one third of our initial equity investment.
We've posted on our website. This morning, the lender presentation used in conjunction with all the <unk> term loan financing the.
The presentation includes both business and financial information about the company and we hope you find it helpful.
Thanks Mary.
Great. Thank you David our last question is for Jim.
More of the Big picture question, Jim How do you think the by the administration will affect Loews and its businesses going forward.
So we're looking at how the.
New administration will handle a number of issues over the over the long term first of the administration's climate agenda has created some new risks for the natural gas sector by implementing a pause on new natural gas leases on federal lands and also on <unk>.
Offshore waters.
And my view of natural gas is an important transition fuel to cleaner energy in the U S. And it's also of growing export opportunity to help the rest of the world meet their similar climate change goals.
The recent executive orders in my mind or a troubling sign of the new of new federal restrictions that may make it more difficult to access the plentiful American resource.
Additionally, the federal Energy regulatory commission the regularly.
Boardwalk is changing.
While it's too early to know exactly what impact. These changes will be we will have we believe that there will continue to be increased pressure on the industry's ability to build pipelines.
However, the administration's focus on the environment could be beneficial for the vision envision all teams packaging.
Our recycled resin business as well as for Dura Lite the plastic packaging. All team has designed that uses significantly less erosion without compromising the strength of the container.
Certainly the Biden administrations focus.
Stemming the tide of the virus should be beneficial to Loews hotels and help increase demand for the travel and tourism industry.
While our largest subsidiary of CNA is mostly regulated through the states the new administration and Congress pose some.
Policy challenges and opportunities.
For example changes to the corporate tax code would affect Loews and all the subsidiaries, but such changes are unexpected and.
Until later in the year when there is more evidence of economic recovery and from what we understand corporate taxes, probably will not go back to the pre 2017 levels, we're going to continue to watch the issues as they develop it's only been a few weeks now and.
We've just got to wait and see what happens.
Great. Thank you Jim and thank you David that concludes the Loews call for today as always we thank you for your continued interest please feel free to reach out to me with any additional questions. The M. Skippy the settlers dot com a replay will be available on our website Loews dot com in approximately two hours.
You may disconnect.
Ladies and gentlemen, thank you for participating in today's conference call you may now disconnect.
Okay.
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Jim.
Okay.
[music] net.
Yes.
Yes.
The.
Okay.
And of course.
Yes.
Okay.
Yes.
For the year.
Okay.