8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) July 31, 2023

LOEWS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-6541	13-2646102
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

9 West 57th Street, New York, NY	10019-2714
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:    (212) 521-2000

667 Madison Avenue, New York, NY 10065-8087

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	L	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

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Item 2.02    Results of Operations and Financial Condition.

    On July 31, 2023, Loews Corporation issued a press release and posted on its website (www.loews.com) earnings remarks providing information on its results of operations for the second quarter of 2023. The press release is furnished as Exhibit 99.1 and the earnings remarks are furnished as Exhibit 99.2 to this Form 8-K.

    The information under Item 2.02 and in Exhibits 99.1 and 99.2 in this Current Report is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information under Item 2.02 and in Exhibits 99.1 and 99.2 in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 9.01    Financial Statements and Exhibits.

(d)Exhibits:

See Exhibit Index.

2

EXHIBIT INDEX

Exhibit No.	Description
99.1	Loews Corporation press release, issued July 31, 2023, providing information on its results of operations for the second quarter of 2023.
99.2	Loews Corporation earnings remarks, posted on its website July 31, 2023, providing information on its results of operations for the second quarter of 2023.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	LOEWS CORPORATION
	(Registrant)
Dated: July 31, 2023	By:	/s/ Marc A. Alpert
		Marc A. Alpert
		Senior Vice President,
		General Counsel
		and Secretary

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EX-99.1

Exhibit 99.1

NEWS RELEASE

LOEWS CORPORATION REPORTS NET INCOME OF $360 MILLION

FOR THE SECOND QUARTER OF 2023

New York, NY, July 31, 2023: Loews Corporation (NYSE: L) today released its second quarter 2023 financial results.

Second Quarter highlights:

Loews Corporation reported net income of $360 million, or $1.58 per share, in the second quarter of 2023 compared to $167 million, or $0.68 per share, in the second quarter of 2022. The year-over-year increase in net income was driven by higher net income from its consolidated subsidiaries and higher net investment income at the parent company. The following bullets highlight key drivers of these results:

•CNA Financial Corporation (NYSE: CNA) posted higher net investment income, lower investment losses, and improved underlying underwriting income, partially offset by higher catastrophe losses and lower favorable Property and Casualty prior year loss reserve development.

•The parent company posted higher investment returns on short-term investments and equity securities.

•Loews Corporation repurchased 1.8 million shares of its common stock for a total cost of $107 million, and bought an additional 0.6 million shares for $37 million so far in the third quarter.

•Book value per share, excluding AOCI, increased to $78.56 as of June 30, 2023, from $74.88 as of December 31, 2022 due to repurchases of common shares and strong operating results during the year.

•Loews Corporation retired, at maturity, $500 million of outstanding senior notes with available cash.

•As of June 30, 2023, the parent company had $2.5 billion of cash and investments and $1.8 billion of debt.

CEO commentary:

“Loews had another solid quarter with each of our consolidated subsidiaries performing well. CNA reported stellar results, despite high industry catastrophe losses. The company also recorded its highest ever quarterly underlying underwriting income.”

–James S. Tisch, President and CEO, Loews Corporation

Consolidated highlights:

	June 30,
	Three Months				Six Months
(In millions, except per share data)	2023		2022 (a)		2023		2022 (a)
Net income attributable to Loews Corporation before    net investment gains (losses)	$	347	$	203	$	747	$	528
Net investment gains (losses):
CNA	(23)		(36)		(48)		(39)
Loews Hotels & Co	36				36
Total net investment gains (losses):	13		(36)		(12)		(39)
Net income attributable to Loews Corporation	$	360	$	167	$	735	$	489
Net income per share	$	1.58	$	0.68	$	3.19	$	1.98

	June 30, 2023		December 31, 2022 (a)
Book value per share	$	64.59	$	60.81
Book value per share excluding AOCI	78.56		74.88

(a) As of January 1, 2023, Loews Corporation adopted Accounting Standards Update 2018-12, “Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (“ASU 2018-12”), which was applied retrospectively effective January 1, 2021. Previously reported amounts have been adjusted to reflect application of the new guidance. See pages 4 and 5 of this release for more information.

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Three months ended June 30, 2023 compared to 2022

CNA:

•Net income attributable to Loews Corporation improved to $255 million from $170 million.

•Core income increased to $308 million from $230 million.

•Net written premiums increased 10%, excluding currency fluctuations, over the prior year’s second quarter.

•Results include higher net investment income from limited partnerships, common stock investments and fixed income securities.

•Underwriting results were lower due to higher net catastrophe losses and lower favorable Property and Casualty net prior year loss reserve development, partially offset by improved underlying underwriting income.

•Property and Casualty combined ratio was 93.8% compared to 91.0%. The underlying combined ratio was 91.1% compared to 90.8%.

•Net income was positively impacted by lower investment losses driven by the favorable relative change in fair value of non-redeemable preferred stock.

Boardwalk:

•Net income increased $18 million to $57 million compared to $39 million.

•EBITDA increased $20 million to $213 million compared to $193 million.

•Net income and EBITDA increased due to higher revenues from recently completed growth projects, re-contracting at higher rates, higher utilization-based revenues, as well as improved storage and parking and lending revenues due to favorable market conditions. This increase was partially offset by increased repairs and maintenance costs associated with pipeline safety regulatory requirements, as well as higher employee related expenses.

Loews Hotels:

•Net income increased $30 million to $74 million compared to $44 million.

•Adjusted EBITDA decreased $15 million to $100 million compared to $115 million.

•The company recorded a gain of $46 million ($36 million after tax) related to the acquisition of an additional equity interest in the Live! By Loews in Arlington, Texas, which was an unconsolidated joint venture prior to this transaction.

•Excluding this gain, net income decreased due to higher operating expenses and lower equity income from joint ventures, partially offset by improved operating revenues.

•Lower income from joint ventures was driven by slightly decreased occupancy rates and higher staffing costs.

Corporate & Other:

•Net loss improved $60 million to $26 million from $86 million due to higher net investment income from short-term investments and equity securities.

Six months ended June 30, 2023 compared to 2022

Loews Corporation reported net income of $735 million, or $3.19 per share, compared to $489 million, or $1.98 per share, in 2022. The following are key highlights:

•Loews Hotels & Co’s net income, excluding the gain noted in the three-month period discussion above, increased as occupancy and average daily room rates at many hotels were higher in 2023 than 2022. This increase was partially offset by higher operating expenses largely due to increased staffing costs.

•CNA’s net investment income improved $165 million from limited partnership and common stock investments and fixed income securities. Property and Casualty combined ratio was 93.9% compared to 91.4% in the prior year period. The underlying combined ratio was 91.0% for both periods.

•CNA’s net written premiums increased 10%, excluding currency fluctuations, in the first half of 2023 compared to the first half of last year.

•All other segment drivers of results for the six months ended June 30, 2023 as compared to the comparable prior year period are consistent with the three-month period discussed above.

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Share Repurchases:

•On June 30, 2023, there were 226.1 million shares of Loews common stock outstanding.

•For the three months ended June 30, 2023, Loews repurchased 1.8 million shares of its common stock at an aggregate cost of $107 million.

•Loews has repurchased an additional 0.6 million shares for $37 million so far in the third quarter.

•For the three months ended June 30, 2023, Loews purchased 0.1 million shares of CNA common stock at an aggregate cost of $3 million.

•Depending on market conditions, Loews may from time to time purchase shares of its and its subsidiaries’ outstanding common stock in the open market, in privately negotiated transactions or otherwise.

Reconciliation of GAAP Measures to Non-GAAP Measures

This news release contains financial measures that are not in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management believes some investors may find these measures useful to evaluate our and our subsidiaries’ financial performance. CNA utilizes core income, Boardwalk utilizes earnings before interest, income tax expense, depreciation and amortization (“EBITDA”), and Loews Hotels utilizes Adjusted EBITDA. These measures are defined and reconciled to the most comparable GAAP measures on pages 6 and 7 of this release.

Earnings Remarks and Conference Calls

For Loews Corporation

–Today, July 31, 2023, earnings remarks will be available on our website.

–Remarks will include commentary from Loews’s president and chief executive officer and from its chief financial officer.

For CNA

–Today, July 31, 2023, CNA will host an earnings call at 9:00 a.m. ET.

–A live webcast will be available via the Investor Relations section of www.cna.com.

–To participate, dial 1-844-481-2830 (USA toll-free) or +1-412-317-1850 (International).

About Loews Corporation

Loews Corporation is a diversified company with businesses in the insurance, energy, hospitality, and packaging industries. For more information, please visit www.loews.com.

Forward-Looking Statements

Statements contained in this news release which are not historical facts are “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are inherently uncertain and subject to a variety of risks that could cause actual results to differ materially from those expected by management of the Company. A discussion of the important risk factors and other considerations that could materially impact these matters, as well as the Company’s overall business and financial performance can be found in the Company’s reports filed with the Securities and Exchange Commission and readers of this release are urged to review those reports carefully when considering these forward-looking statements. Copies of these reports are available through the Company’s website (www.loews.com). Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Any such forward-looking statements speak only as of the date of this news release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

Investor relations and media relations contact:

Chris Nugent

1-212-521-2403

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Loews Corporation and Subsidiaries

Selected Financial Information

	June 30,
	Three Months				Six Months
(In millions)	2023		2022		2023		2022
Revenues:
CNA Financial (a)	$	3,304	$	2,926	$	6,456	$	5,811
Boardwalk Pipelines	365		325		762		706
Loews Hotels & Co (b)	254		200		446		352
Investment income (loss) and other (c)	11		(63)		53		(79)
Total	$	3,934	$	3,388	$	7,717	$	6,790
Income (Loss) Before Income Tax:
CNA Financial (a) (d)	$	361	$	227	$	732	$	582
Boardwalk Pipelines	76		52		192		174
Loews Hotels & Co (b)	101		64		135		86
Corporate:
Investment income (loss), net	11		(65)		53		(81)
Other (e)	(41)		(43)		(85)		(87)
Total (d)	$	508	$	235	$	1,027	$	674
Net Income (Loss) Attributable to Loews Corporation:
CNA Financial (a) (d)	$	255	$	170	$	523	$	435
Boardwalk Pipelines	57		39		143		130
Loews Hotels & Co (b)	74		44		98		59
Corporate:
Investment income (loss), net	9		(51)		42		(64)
Other (e)	(35)		(35)		(71)		(71)
Net income attributable to Loews Corporation (d)	$	360	$	167	$	735	$	489

(a)The three months ended June 30, 2023 and 2022 include net investment losses of $32 million and $59 million ($23 million and $36 million after tax and noncontrolling interests). The six months ended June 30, 2023 and 2022 include net investment losses of $67 million and $70 million ($48 million and $39 million after tax and noncontrolling interests).

(b)Includes a gain of $46 million ($36 million after tax) for the three and six months ended June 30, 2023 related to Loews Hotels & Co’s acquisition of an additional equity interest and consolidation of a previously unconsolidated joint venture property.

(c)Includes investment income (loss) from the parent company’s cash and investments.

(d)The effects of adopting ASU 2018-12 on the Selected Financial Information were as follows:

Three Months Ended June 30, 2022	As Reported		Effect of Adoption		As Adjusted
(In millions)
Income (Loss) Before Income Tax:
CNA Financial	$	245	$	(18)	$	227
Total	253		(18)		235
Net Income (Loss) Attributable to Loews Corporation:
CNA Financial	$	183	$	(13)	$	170
Total	180		(13)		167

Six Months Ended June 30, 2022	As Reported		Effect of Adoption		As Adjusted
(In millions)
Income (Loss) Before Income Tax:
CNA Financial	$	623	$	(41)	$	582
Total	715		(41)		674
Net Income (Loss) Attributable to Loews Corporation:
CNA Financial	$	464	$	(29)	$	435
Total	518		(29)		489

(e)Consists of parent company interest expense, corporate expenses, and the equity income (loss) of Altium Packaging.

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Loews Corporation and Subsidiaries

Consolidated Financial Review

	June 30,
	Three Months				Six Months
(In millions, except per share data)	2023		2022		2023		2022
Revenues:
Insurance premiums	$	2,347	$	2,155	$	4,595	$	4,214
Net investment income	592		366		1,161		798
Investment gains (losses) (a)	14		(59)		(21)		(70)
Operating revenues and other	981		926		1,982		1,848
Total	3,934		3,388		7,717		6,790
Expenses:
Insurance claims and policyholders’ benefits (b)	1,779		1,601		3,432		3,079
Operating expenses and other	1,647		1,552		3,258		3,037
Total	3,426		3,153		6,690		6,116
Income before income tax (b)	508		235		1,027		674
Income tax expense (b)	(120)		(48)		(235)		(135)
Net income (b)	388		187		792		539
Amounts attributable to noncontrolling interests (b)	(28)		(20)		(57)		(50)
Net income attributable to Loews Corporation (b)	$	360	$	167	$	735	$	489
Net income per share attributable to Loews Corporation (b)	$	1.58	$	0.68	$	3.19	$	1.98
Weighted average number of shares	227.97		245.94		230.78		247.20

(a)Includes a gain of $46 million ($36 million after tax) for the three and six months ended June 30, 2023 related to Loews Hotels & Co’s acquisition of an additional equity interest and consolidation of a previously unconsolidated joint venture property.

(b)The effects of adopting ASU 2018-12 on the Consolidated Financial Review were as follows:

Three Months Ended June 30, 2022	As Reported		Effect of Adoption		As Adjusted
(In millions)
Insurance claims and policyholders’ benefits	$	1,583	$	18	$	1,601
Income before income tax	253		(18)		235
Income tax expense	(51)		3		(48)
Net income	202		(15)		187
Amounts attributable to noncontrolling interests	(22)		2		(20)
Net income attributable to Loews Corporation	180		(13)		167
Net income per share attributable to Loews Corporation	0.73		(0.05)		0.68

Six Months Ended June 30, 2022	As Reported		Effect of Adoption		As Adjusted
(In millions)
Insurance claims and policyholders’ benefits	$	3,038	$	41	$	3,079
Income before income tax	715		(41)		674
Income tax expense	(143)		8		(135)
Net income	572		(33)		539
Amounts attributable to noncontrolling interests	(54)		4		(50)
Net income attributable to Loews Corporation	518		(29)		489
Net income per share attributable to Loews Corporation	2.09		(0.11)		1.98

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Definitions of Non-GAAP Measures and Reconciliation of GAAP Measures to Non-GAAP Measures:

CNA Financial Corporation

Core income is calculated by excluding from CNA’s net income attributable to Loews Corporation the after-tax effects of investment gains (losses). In addition, core income excludes the effects of noncontrolling interests. The calculation of core income excludes investment gains (losses) because these are generally driven by economic factors that are not necessarily reflective of CNA’s primary operations. The following table presents a reconciliation of CNA net income attributable to Loews Corporation to core income:

	June 30,
	Three Months				Six Months
(In millions)	2023		2022		2023		2022
CNA net income attributable to Loews Corporation	$	255	$	170	$	523	$	435
Investment losses	25		40		53		43
Consolidating adjustments including noncontrolling interests	28		20		57		50
Core income	$	308	$	230	$	633	$	528

Boardwalk Pipelines

EBITDA is defined as earnings before interest, income tax expense, depreciation and amortization. The following table presents a reconciliation of Boardwalk net income attributable to Loews Corporation to EBITDA:

	June 30,
	Three Months				Six Months
(In millions)	2023		2022		2023		2022
Boardwalk net income attributable to Loews Corporation	$	57	$	39	$	143	$	130
Interest	35		42		72		84
Income tax expense	19		13		49		44
Depreciation and amortization	102		99		203		194
EBITDA	$	213	$	193	$	467	$	452

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Loews Hotels & Co

Adjusted EBITDA is calculated by excluding from Loews Hotels & Co’s EBITDA, state and local government development grants, gains or losses on asset acquisitions and dispositions, asset impairments, and equity method income, and including Loews Hotels & Co’s pro rata Adjusted EBITDA of equity method investments. Pro rata Adjusted EBITDA of equity method investments is calculated by applying Loews Hotels & Co’s ownership percentage to the underlying equity method investment’s components of EBITDA and excluding distributions in excess of basis.

The following table presents a reconciliation of Loews Hotels & Co net income attributable to Loews Corporation to Adjusted EBITDA:

	June 30,
	Three Months				Six Months
(In millions)	2023		2022		2023		2022
Loews Hotels & Co net income attributable to Loews Corporation	$	74	$	44	$	98	$	59
Interest	(1)		4		4		8
Income tax expense	27		20		37		27
Depreciation and amortization	17		16		33		31
EBITDA	117		84		172		125
Gain on asset acquisition	(46)				(46)
Asset impairments	9		14		9		14
Equity investment adjustments:
Loews Hotels & Co’s equity method income	(41)		(53)		(72)		(79)
Pro rata Adjusted EBITDA of equity method investments	62		71		124		124
Consolidating adjustments	(1)		(1)		(2)		(2)
Adjusted EBITDA	$	100	$	115	$	185	$	182

The following table presents a reconciliation of Loews Hotels & Co’s equity method income to Pro rata Adjusted EBITDA of equity method investments:

	June 30,
	Three Months				Six Months
(In millions)	2023		2022		2023		2022
Loews Hotels & Co’s equity method income	$	41	$	53	$	72	$	79
Pro rata share of equity method investments:
Interest	12		9		23		18
Income tax expense
Depreciation and amortization	12		12		25		25
Distributions in excess of basis	(3)		(3)		3		2
Consolidation adjustments					1
Pro rata Adjusted EBITDA of equity method investments	$	62	$	71	$	124	$	124

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EX-99.2

Exhibit 99.2

Loews Corporation Second Quarter 2023 Earnings Remarks

James Tisch, President & CEO:

Good morning. Loews is off to a great start in the first half of 2023, with each of our consolidated subsidiaries performing very well.

CNA had another strong quarter, its results reflecting the long and arduous re-underwriting process led by Dino Robusto over the past six years since he became CEO. In a quarter when industry catastrophe losses were more than double their historical average, CNA managed to record only 3.1 points of such losses—further evidence that the management team’s steadfast focus on underwriting continues to produce stellar results.

Growth at CNA was also robust in the second quarter, with net written premiums increasing 10% excluding currency fluctuations compared to the same period last year. That growth was driven by over 7 points of renewal premium change and strong new business, which was 11% higher than during the same period last year. As a reminder, renewal premium change consists of two components: rate and exposure growth. Rate is the change in price if the coverage remains the same. Exposure growth captures underwriting changes (i.e., changes in deductibles, etc.), as well as changes in the insured’s characteristics, such as changes to payroll, revenue or property values. For the second quarter, higher rates contributed 5 points of renewal premium change and exposure growth added another 2 points. All in all, we are pleased with CNA’s continuing solid performance.

Moving on to Boardwalk, the company reported EBITDA of $213 million, which represents an increase of over 10% compared to $193 million in the second quarter of 2022. This year-over-year increase was driven both by strong volumes and higher rates. As I said last quarter, Boardwalk has very limited exposure to the spot price of natural gas, other than the extent to which price affects the volume of gas consumed.

Loews Hotels continued to take advantage of strong travel demand. The company’s second quarter operating revenues increased compared to the second quarter of 2022. However, the hotel company’s Adjusted EBITDA declined by $15 million to $100 million in the second quarter, compared to $115 million in the second quarter of 2022. This was due to the impact of higher operating expenses, notably increased labor expenses. It bears repeating that last year’s extraordinary performance was due in part to demand recovering faster than staffing levels. Across the lodging industry, staffing levels have normalized as compared to what they were during the pandemic when hotel properties struggled to fill open positions.

We remain optimistic about Loews Hotels’ growth prospects over the coming years. Construction of the Loews Arlington Hotel in Arlington, Texas continues, on time and on budget. This nearly 900-room resort property is slated to be completed in the first quarter of next year and will include 250,000 square feet of best-in-class meeting and event space. While the hotel will not open until February of 2024, the company has seen incredibly strong interest and there are already close to 150,000 group room-nights booked for future dates. Loews Hotels also has three properties with a total of 2,000 rooms under development at Universal’s new Epic Universe theme park in Orlando. Those hotels are expected to be completed in 2025, at which point Loews Hotels will have a 50% interest in a total of 11 hotels with 11,000 rooms at Universal Orlando.

As our stock continues to trade at a significant discount to our view of its intrinsic value, share repurchases remain Loews Corporation’s primary capital allocation lever. Since the end of the first quarter, Loews repurchased 2.4 million of its own shares for a total cost of $144 million. As of last Friday, July 28th, Loews

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has bought back 10.6 million shares this year, or over 4% of our outstanding shares at the beginning of the year, at a cost of $630 million. Loews currently has just over 225 million shares outstanding, which represents a nearly one-third reduction of shares outstanding since the end of 2017. We will continue to repurchase our shares as long as we believe they trade at a discount to our view of their intrinsic value.

Jane Wang, Chief Financial Officer:

For the second quarter of 2023, Loews reported net income of $360 million or $1.58 per share, compared with net income of $167 million or $0.68 per share in last year’s second quarter. This year-over-year increase was driven by higher income from our consolidated subsidiaries and higher net investment income at the parent company. As a reminder and consistent with the first quarter, prior period results have been restated to reflect the adoption of the new GAAP accounting standard of “long-duration contracts targeted improvements,” or LDTI.

Book value per share increased from $60.81 at the end of 2022 to $64.59 at the end of the second quarter of 2023. Book value per share excluding AOCI (Accumulated Other Comprehensive Income) increased from $74.88 at the end of 2022 to $78.56 at the end of the second quarter. This increase was driven by earnings and accretive share repurchases in the first half of the year.

Our largest subsidiary, CNA, contributed net income of $255 million to Loews in the second quarter compared to $170 million in last year’s second quarter. The $85 million year-over-year increase was primarily driven by higher net investment income.

The increase in net investment income was driven by higher interest rates on fixed income securities and improved returns on limited partnerships and common stocks. The pre-tax yield on the company’s fixed income portfolio increased 30 basis points from 4.3% in the second quarter of 2022 to 4.6% in the second quarter of 2023.

CNA continued to post profitable growth in this hard insurance market, with net written premiums increasing 10% excluding currency fluctuations. That growth enabled CNA to produce its highest ever underlying underwriting income in the second quarter of this year. The company’s underlying combined ratio of 91.1% increased slightly compared to 90.8% in the second quarter of last year due to higher employee-related costs included in the expense ratio. The all-in combined ratio of 93.8% was 2.8 points higher than the second quarter of 2022, which had particularly mild catastrophe activity.

CNA continued to de-risk its long-term care reserves through policyholder buyouts. Year to date, CNA has spent $121 million to buy out 4,100 policies. These cash buyouts are related to the policies’ statutory reserves, which are generally higher than GAAP reserves, resulting in a small GAAP charge. We believe this is the right strategy, as it reduces GAAP reserves and de-risks the business over the long term.

Additionally, CNA’s results include a loss from unfavorable legacy mass tort claims, although this loss is less than the amount in the prior year’s second quarter.

Moving on to our natural gas pipeline business, Boardwalk contributed net income of $57 million to Loews in the second quarter, which represents an increase of $18 million from $39 million in last year’s second quarter. The company’s revenues increased as a result of higher recontracting rates, greater utilization of its pipeline and storage assets and recently completed growth projects. Net income also benefited from lower interest expense due to lower borrowings compared to last year’s second quarter. That increase was partially

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offset by higher operation and maintenance expenses related to pipeline safety compliance rules, higher employee-related costs and higher depreciation expense.

At Loews Hotels, the company contributed $74 million of net income to Loews in the quarter versus $44 million in the second quarter of last year. The year-over-year increase was driven by a $36 million after tax gain related to Loews Hotels’ acquisition of an additional equity interest in Live! By Loews in Arlington, Texas, which was an unconsolidated joint venture prior to this transaction. As a result of the consolidation, the carrying value of the hotel was revalued to the fair value of the asset. Excluding this gain, net income declined by $6 million to $38 million in the second quarter. The year-over-year decline was driven by higher operating expenses due to the return to normalized staffing levels.

Finally, turning to the corporate segment: Loews recorded after-tax investment income of $9 million this quarter compared to a $51 million loss in the prior year’s second quarter. This improvement was driven by better performance within the company’s common stock and LP portfolio as well as higher interest rates on our cash and short-term investment portfolio.

From a cash flow perspective, we received $102 million in dividends from CNA in the second quarter of 2023. Since the end of the first quarter, Loews has repurchased an incremental 2.4 million shares at a cost of $144 million. That brings our total year-to-date share repurchases through last Friday to 10.6 million shares at a total cost of $630 million. In the second quarter, Loews also repaid its $500 million bond that matured in May of this year with cash on hand.

Loews ended the quarter with $2.5 billion in cash and short-term investments and $1.8 billion of parent company debt.

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Investor Q&A

Every quarter, we encourage shareholders to send us questions in advance of earnings that they would like us to answer in our remarks. Please see below for the questions we have received, along with some additional questions we found relevant.

Do you anticipate making a sizable investment in Loews Hotels this year to support its growth projects?

Loews Hotels continues to make significant investments in its growth. Last year, Loews Hotels completed a $222 million equity investment in the construction of the Loews Arlington. This year, Loews Hotels anticipates making a nearly $200 million equity investment to develop its three new properties in Orlando. Given the hotel company’s strong internal cash flow generation, it self-funded the vast majority of its investment in the Loews Arlington and we anticipate that it will be able to self-fund the substantial majority of its growth projects in 2023. The equity need from the parent company is minimal—Loews Corporation made a $33 million equity contribution to Loews Hotels last year and anticipates investing a similar amount during 2023.

Two weeks ago, Bloomberg released a story about Loews’s lack of analyst coverage. Why is Loews not covered by Wall Street analysts? Do you want coverage? Does this lack of coverage impact the valuation of Loews?

The article correctly states that Loews had analyst coverage in the past but lost that coverage as analysts retired or switched firms. In response to declining coverage, we reached out and encouraged various firms to initiate coverage on Loews, to no avail. We believe investment banks are reluctant to cover Loews because its multi-industry holding company structure does not fit within the banks’ sector-specific coverage models.

As I have stated in the past, we believe Loews trades at a substantial discount to our view of its intrinsic value. This discount may be due in part to the lack of research coverage of Loews. Therefore, we encourage our investors to reach out to the banks and ask them to initiate such coverage, and as a reminder, investors can always contact us with any questions they may have. In the meantime, we are happy to buy in our shares when they are undervalued. As I stated in my remarks, Loews has just over 225 million shares outstanding, which represents a nearly one-third reduction of shares outstanding since the end of 2017.

There has been a lot of discussion about the current state of the reinsurance market. How does a hard reinsurance market impact CNA?

CNA's catastrophe losses in its property book of business have been significantly below those of the broader insurance industry due to the company’s focus on underwriting. Analysts estimate U.S. catastrophe losses will be in the range of $20 to $27 billion in the second quarter of this year, which is significantly higher than the 10-year median second quarter catastrophe loss of less than $12.5 billion. In comparison, CNA reported 3.1 points of catastrophe losses, which is in line with its 10-year average for the second quarter. CNA certainly felt the impacts of higher reinsurance pricing at the June 1st renewal, but relative to the industry, CNA’s rate increases were less severe. Also, it is important to note that higher reinsurance spend will likely be mitigated by premium rate increases.

Jim, any comments or predictions on the state of the economy now and going forward?

Rather than comment on what’s going on with inflation or the economy, this quarter I want to speak about my long-term view of interest rates.

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In my opinion, we are now paying the price for the 14 years of Zero Interest Rate Policy (ZIRP) and Quantitative Easing (QE) that lasted from the end of 2008 until 2022. There was a brief, minor increase in rates starting in 2016, but that increase was cut short by COVID in early 2020.

During this extended period, the Fed managed not only the short end of the yield curve (which was historically their tool for managing interest rates), but also set rates across the yield curve through their massive Quantitative Easing program.

Both ZIRP and QE lasted much too long and revealed an arrogance on the part of the Fed – a belief that they knew better than the market what the appropriate term interest rates should be.

As early as 2011, it was my sense that the Fed should begin raising rates above zero to get the markets accustomed to having to pay some amount to borrow money. Instead, however, I watched with concern as ZIRP and QE continued, and the markets and the government became accustomed to zero money market rates and unsustainably low term rates.

As a reminder, ten-year notes bottomed out at about 50 basis points in 2020 and averaged about 2% from 2009 to 2021. In that period, federal interest expense increased by only one third from $313 billion in 2007 to $412 billion in 2020, even as the national debt increased by a factor of three from $9.2 trillion to $27.7 trillion.

Additionally, from 2011 until 2021, the Fed remitted over $900 billion to the Treasury or about $84 billion a year. These remittances were made possible by the spread the Fed earned on its massive balance sheet. It reflected the difference between the yield on their fixed income portfolio of about $8 trillion in government debt and the zero cost of financing those debt purchases. Of course, those happy days for the Fed are now gone: the cost of financing their low coupon debt has skyrocketed to more than 5%, leaving the Fed with enormous losses and the federal government without its annual $84 billion remittances.

The Fed’s assets, which amounted to less than $1 trillion before the 2008 financial crisis, ballooned to nearly $4.5 trillion by the end of 2014. The Fed’s balance sheet remained around $4 to $4.5 trillion until the outbreak of COVID in early 2020. During COVID, the Fed’s balance sheet more than doubled to nearly $9 trillion. Despite recent quantitative tightening, the Fed’s balance sheet is still more than $8 trillion, more than eight times its size prior to the Great Financial Crisis. That is a big problem, since now, instead of earning money on the spread between floating and fixed rates, the Fed is losing money hand over fist.

To say that the period from 2009 to 2021 was one of monetary profligacy would be an understatement. But the markets were fat and happy and no one cared . . . until everyone did!

Going forward, it appears we are returning to the days of real interest rates (i.e., interest rates higher than the inflation rate) for the U.S. Treasury and other issuers. Before the financial crisis, positive real interest rates were the norm and fixed income was at times an attractive alternative to investing in the equity markets.

From 2008 until last year, the only investors in fixed income were those who had to invest in fixed income, i.e., insurance companies, pension funds, and others in need of fixed income investments. Investment committees of universities and other institutions abandoned fixed income since equity earned so much more. Today fixed income is again an investible class of assets. With an investment grade fixed income portfolio, an endowment can easily fund its annual 5% draw and have money left over to increase the endowment.

The combination of financing the federal deficit of about $2 trillion a year, combined with absorbing $1 trillion a year of Fed sales of treasury securities acquired during the easy money QE days, means that interest rates

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will have to stay at a high enough level to attract money from the private investment markets. In my view, that means returning to the old normal that prevailed for decades prior to 2008, which was 100-200 basis points of real return on term treasury securities. It’s my opinion that investors can expect this state of affairs to continue for the foreseeable future, meaning that even if inflation goes to two percent, term securities will trade at three to four percent – not far from where they are now. So while treasury securities will provide a good real return, don’t expect too much in the way of capital gains from these securities since they will likely not trade at significantly lower yields.

And that’s the way I see things from my perch. More next quarter.

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Reconciliation of GAAP Measures to Non-GAAP Measures

These earnings remarks contain financial measures that are not in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management believes some investors may find these measures useful to evaluate our and our subsidiaries’ financial performance. Boardwalk Pipelines utilizes earnings before interest, income tax expense, depreciation and amortization (“EBITDA”), and Loews Hotels & Co utilizes Adjusted EBITDA. These measures are defined and reconciled to the most comparable GAAP measures on page 8 of these remarks.

About Loews Corporation

Loews Corporation is a diversified company with businesses in the insurance, energy, hospitality and packaging industries. For more information, please visit www.loews.com.

Forward-Looking Statements

Statements contained in these earnings remarks which are not historical facts are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are inherently uncertain and subject to a variety of risks that could cause actual results to differ materially from those expected by management of the Company. A discussion of the important risk factors and other considerations that could materially impact these matters as well as the Company's overall business and financial performance can be found in the Company's reports filed with the Securities and Exchange Commission and readers of this release are urged to review those reports carefully when considering these forward-looking statements. Copies of these reports are available through the Company's website (www.loews.com). Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Any such forward-looking statements speak only as of the date of these remarks. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

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Definitions of Non-GAAP Measures and Reconciliation of GAAP Measures to Non-GAAP Measures:

Boardwalk Pipelines

EBITDA is defined as earnings before interest, income tax expense, depreciation and amortization. The following table presents a reconciliation of Boardwalk net income attributable to Loews Corporation to EBITDA:

	Three Months Ended June 30,
(In millions)	2023		2022
Boardwalk net income attributable to Loews Corporation	$	57	$	39
Interest	35		42
Income tax expense	19		13
Depreciation and amortization	102		99
EBITDA	$	213	$	193

Loews Hotels & Co

Adjusted EBITDA is calculated by excluding from Loews Hotels & Co’s EBITDA, state and local government development grants, gains or losses on asset acquisitions and dispositions, asset impairments, and equity method income and including Loews Hotels & Co’s pro rata Adjusted EBITDA of equity method investments. Pro rata Adjusted EBITDA of equity method investments is calculated by applying Loews Hotels & Co’s ownership percentage to the underlying equity method investment’s components of EBITDA and excluding distributions in excess of basis.

The following table presents a reconciliation of Loews Hotels & Co net income attributable to Loews Corporation to Adjusted EBITDA:

	Three Months Ended June 30,
(In millions)	2023		2022
Loews Hotels & Co net income attributable to Loews Corporation	$	74	$	44
Interest	(1)		4
Income tax expense	27		20
Depreciation and amortization	17		16
EBITDA	117		84
Gain on asset acquisition	(46)
Asset impairments	9		14
Equity investment adjustments:
Loews Hotels & Co’s equity method income	(41)		(53)
Pro rata Adjusted EBITDA of equity method investments	62		71
Consolidating adjustments	(1)		(1)
Adjusted EBITDA	$	100	$	115

The following table presents a reconciliation of Loews Hotels & Co’s equity method income to Pro rata Adjusted EBITDA of equity method investments:

	Three Months Ended June 30,
(In millions)	2023		2022
Loews Hotels & Co’s equity method income	$	41	$	53
Pro rata share of equity method investments:
Interest	12		9
Income tax expense
Depreciation and amortization	12		12
Distributions in excess of basis	(3)		(3)
Consolidation adjustments
Pro rata Adjusted EBITDA of equity method investments	$	62	$	71

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Cover	Jul. 31, 2023
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