What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-02-07 compared with 2022-02-08 · 240 added, 207 removed, 624 unchanged (42% of the section changed)

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and the Corporate segment.

In the first quarter of 2020, Diamond Offshore Drilling Inc.

(“Diamond Offshore”) was a reportable segment;

Diamond Offshore was deconsolidated during the second quarter of 2020.

The Corporate segment is primarily comprised of Loews Corporation, excluding its operating subsidiaries, and the operations of Altium Packaging LLC (“Altium Packaging”) through March 31, 2021.

On April 1, 2021, Loews Corporation sold 47% of Altium Packaging to GIC, Singapore’s sovereign wealth fund, for $420 million in cash consideration.

As a result of the terms of this transaction, Loews Corporation shares certain participating rights with GIC related to capital allocation and other decisions and was therefore required to deconsolidate Altium Packaging as of the date of the sale under accounting principles generally accepted in the United States of America (“GAAP”).

Subsequent to deconsolidation, Loews Corporation’s investment in Altium Packaging is accounted for under the equity method of accounting, with Equity income (loss) reported in Operating expenses and other on the Consolidated Statements of Operations.

For further information on the deconsolidations of Diamond Offshore and Altium Packaging see Note 2 of the Notes to Consolidated Financial Statements included under Item 8.

Unless the context otherwise requires, the term “Company” as used herein means Loews Corporation including its consolidated subsidiaries, the terms “Parent Company,” “we,” “our,” “us” or like terms as used herein mean Loews Corporation excluding its subsidiaries, the term “Net income (loss) attributable to Loews Corporation” as used herein means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means the Loews Corporation’s consolidated subsidiaries.

The Corporate segment is primarily comprised of Loews Corporation, excluding its operating subsidiaries, the consolidated operations of Altium Packaging LLC (“Altium Packaging”) through March 31, 2021 and the equity method of accounting for Altium Packaging subsequent to its deconsolidation on April 1, 2021.

For further information on the deconsolidation of Altium Packaging see Note 2 of the Notes to Consolidated Financial Statements included under Item 8.

Unless the context otherwise requires, as used herein, the term “Company” means Loews Corporation including its consolidated subsidiaries, the terms “Parent Company,” “we,” “our,” “us” or like terms mean Loews Corporation excluding its subsidiaries, the term “Net income (loss) attributable to Loews Corporation” means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means Loews Corporation’s consolidated subsidiaries.

We rely upon our invested cash balances and distributions from our subsidiaries to generate the funds necessary to meet our obligations and to declare and pay any dividends to our shareholders.

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Claims of creditors of our subsidiaries will generally have priority as to the assets of such subsidiaries over our claims and those of our creditors and shareholders.

We are not responsible for the liabilities and obligations of our subsidiaries and there are no Parent Company guarantees.

The following discussion should be read in conjunction with Item 1A, Risk Factors, and Item 8, Financial Statements and Supplementary Data of this Form 10-K.

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Consolidated Financial Results

The following table summarizes net income (loss) attributable to Loews Corporation by segment and net income (loss) per share attributable to Loews Corporation for the years ended December 31, 2021 and 2020:

The following table summarizes net income (loss) attributable to Loews Corporation by segment and net income per share attributable to Loews Corporation for the years ended December 31, 2022 and 2021:

Year Ended December 31 2022

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Corporate (a) (154) 280

Diamond Offshore (b) — ( 476 )

Net income (loss) attributable to Loews Corporation $ 1,578 $ ( 931 )

Basic net income (loss) per share $ 6.08 $ ( 3.32 )

Diluted net income (loss) per share $ 6.07 $ ( 3.32 )

(a) Includes a net investment gain of $555 million ($438 million after tax) related to the sale of 47% of Altium Packaging in 2021 and a net investment loss of $1.2 billion ($957 million after tax) caused by the write down of the carrying value of our interest in Diamond Offshore in 2020.

(b) Includes impairment charges of $774 million ($408 million after tax and noncontrolling interests) at Diamond Offshore in the first quarter of 2020, prior to deconsolidation.

Net income attributable to Loews Corporation $ 1,012 $ 1,578

Basic net income per share $ 4.17 $ 6.08

Diluted net income per share $ 4.16 $ 6.07

(a) Includes a net investment gain of $555 million ($438 million after tax) related to the sale of 47% of Altium Packaging in 2021.

2022 Compared with 2021

Net income attributable to Loews Corporation for 2021 was $1.6 billion, or $ 6.07 per share, compared to a net loss attributable to Loews Corporation of $ 931 million, or $ 3.32 per share, in 2020.

Excluding the items set forth in footnote (a) in the table above and Diamond Offshore’s 2020 net loss in the table above, net income attributable to Loews Corporation for 2021 and 2020 was $1.1 billion and $502 million.

The improvement in Loews Corporation’s results in 2021 compared to 2020 was driven by improved current accident year underwriting results, higher net investment income and investment gains in 2021 as compared to losses in 2020 for CNA and the significant improvement in results for Loews Hotels due to the rebound in leisure travel, especially at resort destinations.

Boardwalk Pipelines also contributed positively to Loews Corporation’s year-over-year improvement due to higher revenues from growth projects recently placed into service.

The parent company investment portfolio also generated higher gains in 2021 as compared to 2020.

Net income attributable to Loews Corporation for 2022 was $1.0 billion, or $4.16 diluted net income per share, compared to net income attributable to Loews Corporation of $1.6 billion, or $6.07 diluted net income per share, in 2021.

Excluding the item set forth in footnote (a) in the table above, net income attributable to Loews Corporation for 2021 was $1.1 billion.

Net income attributable to Loews Corporation for 2021 includes a net investment gain of $555 million ($438 million after tax) related to the sale of 47% of Altium Packaging.

Excluding the gain on sale of Altium Packaging, net income decreased $128 million in 2022 compared to 2021, driven by unfavorable limited partnership and common stock results, and net losses from sales of fixed income securities at CNA, partially offset by improved underwriting results and increased net investment income from fixed income securities for CNA and the significantly improvement results for Loews Hotels & Co due to the rebound in leisure travel.

Boardwalk Pipelines also contributed positively to Loews Corporation’s year-over-year results due to higher revenues from recently completed growth projects, re-contracting at higher rates and higher utilization-based revenues.

CNA Financial

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2022 Compared with 2021

Net income attributable to Loews Corporation increased $459 million for 2021 as compared with 2020.

The increase was primarily due to improved current accident year underwriting results.

Net catastrophe losses were $397 million ($280 million after tax and noncontrolling interests) for 2021 as compared to $550 million ($388 million after tax and noncontrolling interests) in 2020.

Net catastrophe losses for 2021 were driven by severe weather related events, primarily Hurricane Ida and Winter Storms Uri and Viola.

Net catastrophe losses for 2020 included $294 million related primarily to severe weather-related events, $195 million related to the COVID-19 pandemic and $61 million related to civil unrest.

Results also reflect higher net investment income and investment gains in 2021 as compared with investment losses in 2020.

Higher net investment income was driven by limited partnership and common stock returns and the improvement in investment gains (losses) was driven by lower impairment losses.

Results for 2021 also reflect the absence of a $74 million charge ($52 million after tax and noncontrolling interests) related to the recognition of an active life reserve premium deficiency for long term care policies in 2020.

Net income attributable to Loews Corporation decreased $275 million for 2022 as compared with 2021.

The decrease was primarily driven by lower net investment income and investment losses in 2022 as compared with investment gains in 2021.

Lower net investment income was driven by unfavorable limited partnership and common stock results and investment losses were driven by net losses on fixed maturity securities and the unfavorable change in fair value of non-redeemable preferred stock.

These decreases to net income were partially offset by improved underwriting results and higher net investment income from fixed income securities for 2022 as compared with 2021.

Catastrophe losses were $247 million ($174 million after tax and noncontrolling interests) for 2022 as compared with $397 million ($280 million after

tax and noncontrolling interests) in 2021.

Catastrophe losses for 2022 and 2021 were driven by severe weather related events, primarily Winter Storm Elliott and Hurricane Ian for 2022 and Hurricane Ida and Winter Storms Uri and Viola for 2021.

CNA’s Property & Casualty and Other Insurance Operations

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CNA’s products and services are primarily marketed through independent agents, brokers and managing general underwriters to a wide variety of customers, including small, medium and large businesses, insurance companies, associations, professionals and other groups.

We believe the presentation of CNA as one reportable segment is

appropriate in accordance with applicable accounting standards on segment reporting.

We believe the presentation of CNA as one reportable segment is appropriate in accordance with applicable accounting standards on segment reporting.

However, for purposes of this discussion and analysis of the results of operations, we provide greater detail with respect to CNA’s Property & Casualty Operations and Other Insurance Operations to enhance the reader’s understanding and to provide further transparency into key drivers of CNA’s financial results.

Effective January 1, 2021, and in connection with the ceding of certain legacy reserves under a retroactive reinsurance agreement executed in February 2021, CNA changed the presentation of a legacy portfolio of excess workers’ compensation policies relating to business written in 2007 and prior.

This business, which was previously reported as part of the Commercial business, is now reported as part of the Other Insurance Operations business.

For further information on this retroactive reinsurance agreement see Note 8 of the Notes to Consolidated Financial Statements included under Item 8 .

In addition, a determination was made to change the presentation of certain legacy mass tort reserves.

Similar to the aforementioned excess workers’ compensation legacy business, these legacy mass tort reserves were previously reported in the Commercial business and are now reported as part of the Other Insurance Operations business.

These changes were made to better reflect the manner in which CNA is organized for purposes of making operating decisions and assessing performance.

Prior period information has been conformed to the new presentation.

In assessing its insurance operations, CNA utilizes the core income (loss) financial measure.

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The calculation of core income (loss) excludes investment gains or losses because investment gains or losses are generally driven by economic factors that are not necessarily reflective of CNA’s primary insurance operations.

Core income (loss) is deemed to be a non-GAAP financial measure and management believes this measure is useful for investors to evaluate its insurance operations.

Please see the non-GAAP reconciliation of core income (loss) to net income (loss) that follows in this MD&A.

Core income (loss) is deemed to be a non-GAAP financial measure and management believes some investors may find this measure useful to evaluate CNA’s insurance operations.

Please see the non-GAAP reconciliation of net income (loss) to core income (loss) that follows in this MD&A.

Property & Casualty Operations

In evaluating the results of Property & Casualty Operations, CNA utilizes the loss ratio, the loss ratio excluding catastrophes and development, the expense ratio, the dividend ratio, the combined ratio and the combined ratio excluding catastrophes and development.

In evaluating the results of Property & Casualty Operations, CNA utilizes the loss ratio, the underlying loss ratio, the expense ratio, the dividend ratio, the combined ratio and the underlying combined ratio.

These ratios are calculated using GAAP financial results.

The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums.

The loss ratio excluding catastrophes and development excludes net catastrophes losses and changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years from the loss ratio.

The underlying loss ratio excludes the impact of catastrophes losses and net prior year loss reserve and premium development from the loss ratio.

The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums.

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The combined ratio is the sum of the loss, expense and dividend ratios.

The combined ratio excluding catastrophes and development is the sum of the loss ratio excluding catastrophes and development, the expense ratio and the dividend ratio.

The underlying combined ratio is the sum of the underlying loss ratio, the expense ratio and the dividend ratio.

In addition, renewal premium change, rate, retention and new business are also utilized in evaluating operating trends.

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Exposure represents the measure of risk used in the pricing of the insurance product.

Retention represents the percentage of premium dollars renewed in comparison to the expiring premium dollars from policies available to renew.

Retention represents the percentage of premium dollars renewed, excluding rate and exposure changes, in comparison to the expiring premium dollars from policies available to renew.

Renewal premium change, rate and retention presented for the prior year are updated to reflect subsequent activity on policies written in the period.

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Gross written premiums, excluding third-party captives, excludes business which is ceded to third-party captives, including business related to large warranty programs.

CNA uses underwriting gain (loss) to monitor insurance operations.

Underwriting gain (loss) is pretax and is calculated as net earned premiums less total insurance expenses, which includes insurance claims and policyholders’ benefits, amortization of deferred acquisition costs and other insurance related expenses.

The following tables summarize the results of CNA’s Property & Casualty Operations for the years ended December 31, 2022 and 2021.

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Net earned premiums 3,203 3,923 1,070 8,196

Underwriting gain 366 106 87 559

Net investment income 431 488 63 982

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Net earned premiums 3,076 3,552 1,057 7,685

Underwriting gain (loss) 347 (112) 55 290

Net investment income 497 624 57 1,178

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2022 Compared with 2021

Gross written premiums, excluding third-party captives, for Specialty increased $376 million in 2021 as compared with 2020 driven by rate and higher new business.

Gross written premiums, excluding third-party captives, for Specialty increased $142 million in 2022 as compared with 2021 driven by retention and rate.

Net written premiums for Specialty increased $81 million in 2022 as compared with 2021.

The increase in net earned premiums in 2021 was consistent with the trend in net written premiums for Specialty.

Gross written premiums for Commercial increased $359 million in 2021 as compared with 2020 driven by rate and higher new business.

The increase in net earned premiums was consistent with the trend in net written premiums for Specialty.

Gross written premiums for Commercial increased $725 million in 2022 as compared with 2021 driven by higher new business and retention.

Net written premiums for Commercial increased $598 million in 2022 as compared with 2021.

Net written premiums for 2021 were unfavorably impacted by the June 1, 2021 written premium catch-up resulting from the addition of the quota share treaty to the property reinsurance program.

Excluding the impact of the June 1, 2021 written premium catch-up, net written premiums increased $142 million for 2021 as compared with 2020.

Net earned premiums for Commercial increased $229 million in 2021 as compared with 2020.

The increase in net earned premiums for 2021 was partially impacted by a reduction in estimated audit premiums related to COVID-19 in 2020 for Commercial.

The prior period included a one-time written premium catch-up resulting from the addition of a quota share treaty to the property reinsurance program.

Excluding the impact of the prior period written premium catch-up, net written premiums increased $486 million in 2022 as compared with 2021 .

The increase in net earned premiums was consistent with the trend in net written premiums for Commercial.

Gross written premiums for International increased $97 million in 2022 as compared with 2021.

Excluding the effect of foreign currency exchange rates, gross written premiums increased $104 million driven by rate and higher new business.

Excluding the effect of foreign currency exchange rates, gross written premiums increased $176 million driven by higher new business, rate and retention.

Net written premiums for International increased $63 million in 2022 as compared with 2021.

Excluding the effect of foreign currency exchange rates, net written premiums increased $137 million in 2022 as compared with 2021 .

The increase in net earned premiums in 2021 as compared with 2020 was consistent with the trend in net written premiums for International.

Core income increased $344 million in 2021 as compared with 2020 primarily due to improved current accident year underwriting results and higher net investment income driven by limited partnership and common stock returns.

Total net catastrophe losses were $397 million in 2021 as compared with $550 million in 2020.

For 2021 and 2020 Specialty had net catastrophe losses of $12 million and $125 million, Commercial had net catastrophe losses of $358 million in both years and International had net catastrophe losses of $27 million and $67 million.

The increase in net earned premiums was consistent with the trend in net written premiums for International.

Core income increased $56 million in 2022 as compared with 2021 primarily due to improved underwriting results and higher net investment income from fixed income securities partially offset by lower net investment income due to unfavorable limited partnership and common stock results.

Catastrophe losses were $247 million in 2022 as compared with $397 million in 2021.

For 2022 and 2021 Specialty had catastrophe losses of $2 million and $12 million, Commercial had catastrophe losses of $222 million and $358 million and International had catastrophe losses of $23 million and $27 million.

Favorable net prior year loss reserve development of $96 million and $49 million was recorded in 2022 and 2021.

In 2021 and 2020, Specialty recorded favorable net prior year loss reserve development of $45 million and $61 million, Commercial recorded favorable net prior year loss reserve development of $6 million and $7 million and International recorded unfavorable net prior year loss reserve development of $2 million as compared with favorable net prior year loss reserve development of $2 million.

In 2022 and 2021, Specialty recorded favorable net prior year loss reserve development of $40 million and $45 million, Commercial recorded favorable net prior year loss reserve development of $43 million and $6 million and International recorded favorable net prior year loss reserve development of $13 million as compared with unfavorable net prior year loss reserve development of $2 million.

Further information on net prior year loss reserve development is included in Note 8 of the Notes to Consolidated Financial Statements included under Item 8.

Specialty’s combined ratio improved 4.8 points in 2021 as compared with 2020 primarily due to a 4.0 point improvement in the loss ratio and a 0.8 point improvement in the expense ratio.

The improvement in the loss ratio was primarily due to lower net catastrophe losses, which were 0.4 points of the loss ratio in 2021 , as compared with 4.3 points of the loss ratio in 2020.

The improvement in the expense ratio was driven by higher net earned premiums.

Commercial’s combined ratio improved 2.0 points in 2021 as compared with 2020 primarily due to a 1.9 point improvement in the expense ratio.

The improvement in the expense ratio was primarily due to higher net earned premiums and lower acquisition costs.

Net catastrophe losses were 10.0 points of the loss ratio in 2021 , as compared with 10.7 points of the loss ratio in 2020.

Specialty’s combined ratio improved 0.1 point in 2022 as compared with 2021 primarily due to a 0.7 point improvement in the loss ratio largely offset by a 0.5 point increase in the expense ratio.

The improvement in the loss ratio was largely due to improved current accident year underwriting results.

Catastrophe losses were 0.1 point of the loss ratio in 2022 , as compared with 0.4 points of the loss ratio in 2021.

The increase in the expense ratio was primarily due to an increase in underwriting expenses driven by investments in technology and talent.

Commercial’s combined ratio improved 5.8 points in 2022 as compared with 2021 primarily due to a 5.1 point improvement in the loss ratio and a 0.7 point improvement in the expense ratio.

The improvement in the loss ratio was driven by lower catastrophe losses, which were 5.6 points of the loss ratio in 2022, as compared with 10.0 points of the loss ratio in 2021, and higher favorable net prior year loss reserve development.

The combined ratio excluding catastrophes and development improved 0.2 points in 2022 as compared with 2021.

The improvement in the expense ratio of 0.7 points was driven by higher net earned premiums and lower acquisition costs partially offset by an increase in underwriting expenses.

The loss ratio excluding catastrophes and development increased 0.5 points primarily driven by a shift in mix of business associated with the property quota share treaty purchased during June of 2021.

Property coverages, which have a lower underlying loss ratio than most other commercial coverages, now represent a smaller proportion of net earned premiums.

International’s combined ratio improved 3.0 points in 2022 as compared with 2021 due to a 2.2 point improvement in the loss ratio and a 0.8 point improvement in the expense ratio.

The improvement in the loss ratio was driven by lower net catastrophe losses, which were 2.6 points of the loss ratio in 2021 , as compared with 7.1 points of the loss ratio in 2020, and improved non-catastrophe current accident year underwriting results.

The improvement in the expense ratio was driven by lower acquisition costs.

Catastrophe losses were 2.2 points of the loss ratio in 2022 , as compared with 2.6 points of the loss ratio in 2021.

The improvement in the expense ratio was primarily driven by lower acquisition costs.

Other Insurance Operations

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2022 Compared with 2021

Core results improved $27 million in 2021 as compared with 2020 primarily due to higher net investment income driven by limited partnership returns.

Core results in 2021 included a $31 million favorable impact from the reduction in long term care claim reserves resulting from the annual claim reserve reviews in the third quarter of 2021.

Core results in 2020 included a $59 million charge related to the recognition of an active life reserve premium deficiency for long term care policies.

The results for 2020 also included a $36 million charge related to an increase in the structured settlement claim reserves, partially offset by a $30 million favorable impact from the reduction in long term care claim reserves, both resulting from the annual claim reserve reviews in the third quarter of 2020.

Core results for 2021 also included expenses related to the March 2021 cybersecurity attack, the recognition of a $12 million loss resulting from the legacy excess workers’ compensation loss portfolio transfer (“EWC LPT”) and higher unfavorable net prior year loss reserve development on legacy mass tort exposures as compared with 2020.

The application of retroactive reinsurance accounting to additional cessions to the A&EP Loss Portfolio Transfer (“LPT”) in both periods resulted in charges of $25 million and $5 million in 2021 and 2020, which have no economic impact.

For further information on the A&EP LPT, EWC LPT and net prior year loss reserve development see Note 8 of the Notes to Consolidated Financial Statements included under Item 8.

Non-GAAP Reconciliation of Core Income to Net Income

The following table reconciles core income to net income attributable to Loews Corporation for the years ended December 31, 2021 and 2020:

Core results decreased $114 million in 2022 as compared with 2021 primarily due to a $167 million pretax decline in net investment income from limited partnerships and an increase in expenses as a result of continued investments in technology infrastructure and security.

Core results in 2022 also reflect a $25 million pretax favorable impact from the reduction in long term care claim reserves and a $5 million pretax favorable impact from the reduction in structured settlement claim reserves, both resulting from the annual claim reserve reviews in the third quarter of 2022 as compared with a $40 million pretax favorable impact from the reduction in long term care claim reserves resulting from the annual claim reserve reviews in the third quarter of 2021.

These decreases to core results for 2022 were partially offset by favorability related to the A&EP Loss Portfolio Transfer (“LPT”) and the prior period recognition of a $12 million loss resulting from the legacy excess workers’ compensation loss portfolio transfer (“EWC LPT”).

The application of retroactive reinsurance accounting to additional cessions to the A&EP LPT resulted in a benefit of $3 million in 2022 compared to a charge of $25 million in 2021, both of which have no economic impact.

For further information on the A&EP LPT and EWC LPT see Note 8 of the Notes to Consolidated Financial Statements included under Item 8.

CNA anticipates a net pension cost of approximately $12 million in 2023 as compared with a benefit of $55 million in 2022.

The change is primarily due to higher interest cost on projected benefit obligations as a result of an increase in discount rates year over year, as well as a lower expected return on plan assets as a result of a lower plan asset base given actual asset returns in 2022.

A portion of this additional cost will result in an unfavorable impact on CNA’s expense ratio in 2023.

Non-GAAP Reconciliation of Net Income Attributable to Loews Corporation to Core Income

The following table reconciles net income attributable to Loews Corporation to core income for the years ended December 31, 2022 and 2021:

Year Ended December 31 2022

(In millions)

Net income attributable to Loews Corporation $ 802 $ 1,077

Investment (gains) losses 154 (96)

Consolidating adjustments including noncontrolling interests 92 125

Total core income $ 1,048 $ 1,106

Core income (loss):

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Total core income $ 1,048 $ 1,106

Investment gains (losses) 96 (30)

Consolidating adjustments including noncontrolling interests (125) (87)

Net income attributable to Loews Corporation $ 1,077 $ 618

Boardwalk Pipelines

Boardwalk Pipelines operates in the midstream portion of the natural gas and natural gas liquids (“NGLs”) industry, providing transportation and storage for those commodities.

Boardwalk Pipelines is not in the business of buying and selling natural gas and NGLs other than for system management purposes, but changes in natural gas and NGLs prices may impact the volumes of natural gas or NGLs transported and stored by customers on its systems.

Due to the capital-intensive nature of its business, Boardwalk Pipelines’ operating costs and expenses typically do not vary significantly based upon the

amount of products transported, with the exception of costs recorded in fuel and transportation expense, which are netted with fuel retained on our Consolidated Statements of Operations.

Boardwalk Pipelines is not in the business of buying and selling natural gas and NGLs other than for system management purposes, but changes in natural gas and NGL prices may impact the volumes of natural gas or NGLs transported and stored by customers on its systems.

Due to the capital-intensive nature of its business, Boardwalk Pipelines’ operating costs and expenses do not vary significantly based upon the amount of products transported, with the exception of costs recorded in fuel and transportation expense, which are netted with fuel retained on our Consolidated Statements of Operations.

For further information on Boardwalk Pipelines’ revenue recognition policies see Note 1 of the Notes to Consolidated Financial Statements included under Item 8.

Boardwalk Pipelines’ operations and maintenance expenses are impacted by its compliance with the requirements of, among other regulations, the Pipeline and Hazardous Materials Safety Administration Mega Rule (“Mega Rule”) and Boardwalk Pipelines’ efforts to monitor, control and reduce emissions, as further discussed below.

Firm Agreements

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For the year ended December 31, 2022, approximately 87% of Boardwalk Pipelines’ revenues were derived from capacity reservation fees under firm contracts.

The table below shows a rollforward of operating revenues under committed firm agreements in place as of December 31, 2020 to December 31, 2021, including agreements for transportation, storage and other services, over the remaining term of those agreements:

The table below shows a rollforward of projected operating revenues under committed firm agreements in place as of December 31, 2021 to December 31, 2022, including agreements for transportation, storage and other services, over the remaining term of those agreements:

As of December 31, 2022

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(a) Reflects an increase of $96 million in Boardwalk Pipelines’ actual 2022 revenues recognized from fixed fees under firm agreements as compared with its expected 2022 revenues from fixed fees under firm agreements, including agreements for transportation, storage and other services as of December 31, 2021, primarily due to an increase from contract renewals that occurred in 2022.

During 2021 , Boardwalk Pipelines entered into $790 million of new firm agreements, of which approximately 28% were from new growth projects executed in 2021.

During 2022 , Boardwalk Pipelines entered into $1.3 billion of new firm agreements, of which approximately 4% were from new growth projects executed in 2022.

For firm agreements associated with new growth projects, the associated assets may not be placed into commercial service until sometime in the future.

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The rates Boardwalk Pipelines is able to charge customers are heavily influenced by market trends (both short and longer term), including the available supply, geographical location of natural gas production, the competition between producing basins, competition with other pipelines for supply and markets, the demand for gas by end-users such as power plants, petrochemical facilities and LNG export facilities and the price differentials between the gas supplies and the market demand for the gas (basis differentials).

As of December 31, 2021, Boardwalk Pipelines’ top ten customers holding firm capacity under firm agreements comprised approximately 39% of its total projected operating revenues.

Additionally, the credit profile associated with Boardwalk Pipelines’ customers comprising the total projected operating revenues under firm agreements as of December 31, 2021 was 74% rated as investment grade, 10% rated as non-investment grade and 16% not rated.

Pipeline System Maintenance

As of December 31, 2022, Boardwalk Pipelines’ top ten customers holding firm capacity under firm agreements comprised approximately 56% of its total projected operating revenues and the credit profile associated with Boardwalk Pipelines’ customers comprising the total projected operating revenues under firm agreements was 73% rated as investment grade, 10% rated as non-investment grade and 17% not rated.

Pipeline System Maintenance and Greenhouse Gases (“GHGs”) Emission Reduction Initiatives

Boardwalk Pipelines incurs substantial costs for ongoing maintenance of its pipeline systems and related facilities, including those incurred for pipeline integrity management activities, equipment overhauls, general upkeep and repairs.

These costs are not dependent on the amount of revenues earned from its transportation services.

PHMSA has developed regulations that require transportation pipeline operators to implement integrity management programs to comprehensively evaluate certain high risk areas, known as HCAs, and MCAs, along pipelines and take additional safety measures to protect people and property in these areas.

people and property in these areas.

The HCAs for natural gas pipelines are predicated on high-population density areas (which, for natural gas transmission lines, include Class 3 and 4 areas and, depending on the potential impacts of a risk event, may include Class 1 and 2 areas) whereas HCAs along Boardwalk Pipelines’ NGL pipelines are based on high-population density areas, areas near certain drinking water sources and unusually sensitive ecological areas.

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This regulation imposed numerous requirements, including MAOP reconfirmation through re-verification of all historical records for pipelines in service, which re-certification process may require natural gas pipelines installed before 1970 (previously excluded from certain pressure testing obligations) to be pressure tested, the periodic assessment of additional pipeline mileage outside of HCAs (in MCAs as well as Class 3 and Class 4 areas), the reporting of exceedances of MAOP and the consideration of seismicity as a risk factor in integrity management.

In 2021, PHMSA issued a final rule that will impose safety regulations related to onshore gas gathering lines and in June 2021, PHMSA

issued an Advisory Bulletin advising pipeline and pipeline facility operators of applicable requirements to update their inspection and maintenance plans for the elimination of hazardous leaks and minimization of natural gas released from pipeline facilities.

PHMSA, together with state regulators, is expected to commence inspection of these plans in 2022.

It is expected that these new rules will cause Boardwalk Pipelines to incur increased capital and operating costs, experience operational delays and result in potential adverse impacts to its ability to reliably serve its customers as described under Item 1A.

In 2021, PHMSA issued a final rule that will impose safety regulations related to onshore gas gathering lines and in June 2021, PHMSA issued an Advisory Bulletin advising pipeline and pipeline facility operators of applicable requirements to update their inspection and maintenance plans for the elimination of hazardous leaks and minimization of natural gas released from pipeline facilities.

PHMSA and state regulators reportedly began their review of these plans in 2022, and PHMSA has separately announced plans to propose rules addressing methane leaks from pipelines.

In August 2022, PHMSA published another final rule expanding the Management of Change process, extending corrosion control requirements for gas transmission pipelines, adding requirements that operators ensure no conditions exist following an extreme weather event that could adversely affect the safe operation of the pipeline, and adopting repair criteria for non-HCAs similar to those applicable to HCAs.

Due to the nature of Boardwalk Pipelines’ business, its operations emit various types of GHGs.

Boardwalk Pipelines seeks to carefully monitor its emissions and expects to incur additional costs to mitigate emissions.

New legislation or regulations could increase the costs related to operating and maintaining Boardwalk Pipelines’ facilities.

Depending on the particular law, regulation or program, Boardwalk Pipelines could be required to incur capital expenditures for installing new monitoring equipment or emission controls on its facilities, acquire and surrender allowances for GHG emissions, pay taxes or fees related to GHG emissions and/or administer and manage a more comprehensive GHG emissions program.

Boardwalk Pipelines has been focused on seeking to meet and, in certain instances, pursuing projects aimed at exceeding regulatory obligations (such as those found in the Clean Air Act (“CAA”)) by working to reduce emissions of regulated air pollutants, including methane, associated with its pipeline transportation and storage assets.

For example, in selecting new compression equipment for growth or asset reliability projects, Boardwalk Pipelines considers air emissions as a component in the decision-making process and, when appropriate, places increased emphasis in the selection process on equipment with emissions performance that exceeds applicable federal standards.

Several of Boardwalk Pipelines’ reliability projects over the last few years have resulted in replacement of older, higher-emitting compressor drivers with units equipped with advanced emission control systems.

As a result, these projects have resulted in decreases in emissions of nitrogen oxides and other air pollutants.

Boardwalk Pipelines has identified the reduction of GHG emissions as an area of focus and looks for opportunities to reduce emissions using a variety of strategies, including the following:

• evaluating replacing older compression equipment with electric drive compression or new low emission, fuel efficient units when practical;

• modifying fuel systems on certain reciprocating compression equipment to lower fuel consumption and emissions;

• conducting emissions surveys and performing maintenance and repairs on identified component leaks;

• performing annual leak surveys along Boardwalk Pipelines’ pipelines with the aid of helicopters and fixed-wing planes, and analytical field surveys when appropriate;

• performing leak detection and recovery and Subpart W surveys on all of Boardwalk Pipelines’ compressor stations (the U.S.

Environmental Protection Agency (“EPA”) only requires Boardwalk Pipelines to survey 48 of its 79 compressor stations);

• using optical gas imaging cameras to scan natural gas piping and components at Boardwalk Pipelines’ compressor stations to visualize any leaks in real time;

• installing continuous monitoring emission detection equipment as a pilot project at three compression stations;

• employing experts in air emissions to develop and monitor efforts in reducing emissions;

• reducing methane emissions vented to the atmosphere from transmission pipeline blowdowns by using existing and portable compression and flaring when feasible;

• installing repair sleeves and composite wraps to avoid pipeline blowdowns;

• exploring options to replace high-bleed natural gas pneumatic devices with low or zero flow bleed devices.

However, Boardwalk Pipelines cannot guarantee that it will be able to implement any of the opportunities it may review or explore, or, for any opportunities it chooses to implement, to implement them in their intended manner or within a specific timeframe or across all operational assets.

These new and any future regulations adopted by PHMSA and efforts to reduce GHG emissions are expected to cause Boardwalk Pipelines to incur increased capital and operating costs, may cause Boardwalk Pipelines to experience operational delays and may result in potential adverse impacts to its ability to reliably serve its customers as.

For more information, see Item 1.

Business and Item 1A.

Risk Factors of this Report.

Maintenance costs may be capitalized or expensed, depending on the nature of the activities.

For any given reporting period, the mix of projects that Boardwalk Pipelines undertakes will affect the amounts we record as property, plant and equipment on the Consolidated Balance Sheets or recognize as expenses, which impacts earnings.

In 2022, Boardwalk Pipelines expects to spend approximately $400 million to maintain its pipeline systems and to comply with new regulatory initiatives previously mentioned, of which approximately $155 million is expected to be maintenance capital.

In 2021 , Boardwalk Pipelines spent $381 million to maintain its pipeline systems, of which $154 million was recorded as maintenance capital.

For any given reporting period, the mix of projects that Boardwalk Pipelines undertakes will affect the amounts it records as property, plant and equipment on the Consolidated Balance Sheets or recognizes as expenses, which impacts earnings.

In 2023, Boardwalk Pipelines expects to spend approximately $460 million to maintain its pipeline systems, comply with regulations and monitor, control and reduce its GHG emissions, of which approximately $195 million is expected to be maintenance capital.

In 2022 , Boardwalk Pipelines spent $408 million, of which $157 million was recorded as maintenance capital.

Results of Operations

The following table summarizes the results of operations for Boardwalk Pipelines for the years ended December 31, 2022 and 2021 as presented in Note 19 of the Notes to Consolidated Financial Statements included under Item 8.

Boardwalk Pipelines also utilizes a non-GAAP measure, earnings before interest, income tax expense, depreciation and amortization (“EBITDA”) as a financial measure to assess its operating and financial performance and return on invested capital.

Management believes some investors may find this measure useful in evaluating Boardwalk Pipelines’ performance.

Year Ended December 31 2022

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Operating and other:

Operating costs and expenses 554 515

Depreciation and amortization 396 370

Interest 166 161

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Net income attributable to Loews Corporation $ 247 $ 235

EBITDA $ 892 $ 834

2022 Compared with 2021

Total revenues increased $47 million in 2021 as compared with 2020.

Including the effect of items in fuel and transportation expense and excluding net proceeds of approximately $34 million in 2020 as a result of drawing on a letter of credit due to a customer bankruptcy in 2020, operating revenues increased $77 million primarily driven by recently completed growth projects and higher utilization based revenues due to higher volumes.

Operating expenses increased $30 million in 2021 as compared with 2020.

Excluding items offset with operating revenues, operating expenses increased $26 million, primarily due to an increase in maintenance project costs and an increased asset base from recently completed growth projects.

Interest expense decreased $9 million in 2021 as compared with 2020 primarily due to lower interest rates and lower average outstanding long term debt balances.

Net income attributable to Loews Corporation and EBITDA increased $12 million and $58 million in 2022 as compared with 2021, primarily due to the reasons discussed below.

Total revenues increased $97 million in 2022 as compared with 2021, primarily driven by an increase in transportation revenues of $75 million due to recently completed growth projects, re-contracting at higher rates and higher utilization-based revenues and an $18 million increase in Boardwalk Pipelines’ storage and parking and lending revenues due to favorable market conditions.

Operating expenses increased $39 million in 2022 as compared with 2021 primarily due to increased costs of $24 million from maintenance projects associated with the requirements of the Mega Rule, higher utility, materials and supplies and vehicle costs and asset impairment charges of $8 million resulting from an increase in the estimate of existing asset retirement obligations related to retired assets .

Depreciation and amortization expense increased $26 million in 2022 as compared with 2021 primarily due to a change in the estimated life of certain assets and an increased asset base from recently completed growth projects.

Interest expense increased $5 million in 2022 as compared with 2021 primarily due to higher average outstanding long-term debt balances and lower capitalized interest .

Non-GAAP Reconciliation of Net Income Attributable to Loews Corporation to EBITDA

The following table for Boardwalk Pipelines presents a reconciliation of net income attributable to Loews Corporation to EBITDA for the years ended December 31, 2022 and 2021 :

Year Ended December 31 2022

(In millions)

Net income attributable to Loews Corporation

Income tax expense

Depreciation and amortization

Loews Hotels & Co

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Depreciation 64 63

Equity (income) loss from joint ventures (47) 73

Equity income from joint ventures (148) (47)

Interest 11 36

Total 560 492

Loss before income tax (12) (274)

Income tax (expense) benefit (2) 62

Net loss attributable to Loews Corporation $ (14) $ (212)

Income (loss) before income tax 161 (12)

Income tax expense (44) (2)

Net income (loss) attributable to Loews Corporation $ 117 $ (14)

2022 Compared with 2021

Loews Hotels & Co’s results have been significantly impacted by the COVID-19 pandemic.

By April 2020, most hotel properties owned and/or operated by Loews Hotels & Co had temporarily suspended operations.

These hotel properties gradually resumed operations at various times, culminating with all hotels having resumed operations by June 30, 2021.

During 2021, overall occupancy rates gradually improved, with hotel properties located in resort destinations improving sooner than hotel properties located in city centers.

However, occupancy levels have not reached pre-pandemic levels at many hotels owned and/or operated by Loews Hotels & Co, and business in certain markets continues to be adversely impacted by COVID-19 variants.

Net income (loss) attributable to Loews Corporation improved by $131 million in 2022 as compared with 2021.

Loews Hotels & Co’s results significantly improved in 2022 as compared with 2021 primarily due to considerably higher overall occupancy rates in 2022, as travel significantly rebounded from the impacts of the COVID-19 pandemic, and increased overall average daily room rates.

Operating revenues improved by $259 million and operating expenses increased by $149 million in 2022 as compared with 2021.

This comparison is impacted by robust pre-pandemic business levels prior to mid-March 2020 followed by results that were significantly depressed by the pandemic for the remainder of 2020.

Through 2021, occupancy levels have gradually increased leading to improved revenues at all hotel properties, particularly those in resort areas, with operating expense also increasing to support the increased demand levels.

As all properties have not resumed all levels of pre-pandemic service offerings, hotel operating expense, including staffing levels, will continue to increase as those resume.

Equity (income) loss from joint ventures improved $120 million in 2021 as compared to 2020, driven by the resumption of operations and associated occupancy improvements primarily at joint venture hotels in resort destinations.

Loews Hotels & Co considers events or changes in circumstances that indicate the carrying amount of its assets may not be recoverable.

The increase in operating revenues was driven by stronger occupancy levels and higher average daily room rates at many hotels in 2022 as compared to 2021.

Operating expenses have likewise increased, largely due to higher staffing levels, to support the higher demand levels and resumption of additional pre-pandemic services.

Equity income from joint ventures improved $101 million in 2022 as compared to 2021.

The increase in equity income from joint ventures was driven by stronger occupancy levels and higher average daily room rates at many joint venture hotels, particularly at the Universal Orlando Resort, during 2022 as compared to 2021.

Operating expenses have likewise increased, largely due to higher staffing levels, to support the higher demand levels and resumption of additional pre-pandemic services at those joint venture hotels.

Additionally, improvement in 2022 also resulted from having all 9,000 rooms available at the Universal Orlando Resort for the whole year whereas certain rooms were not available during a portion of 2021.

In 2022 and 2021, Loews Hotels & Co recorded impairment charges of $25 million and $10 million to reduce the carrying value of certain assets to their estimated fair value.

Other revenues for 2021 included $39 million related to the one-time acceleration of government grant payments, used to retire outstanding debt of an owned hotel prior to maturity and cover certain prepayment costs, and net gains of $8 million

related primarily to the sale of undeveloped land.

Other revenues for 2020 included gains of $37 million related to the sales of an owned hotel and an office building.

Interest expense for 2021 increased $3 million as compared with 2020 primarily due to the write off of unamortized issuance costs and the prepayment premium associated with the debt retirement mentioned above.

Interest expense for 2022 decreased $25 million as compared with 2021 primarily due to the increase in fair value of interest rate caps of $11 million, higher capitalized interest on a project under development, and lower average debt balances.

Other revenues for 2021 included $39 million related to the acceleration of state and local government grant payments, used to retire outstanding debt of an owned hotel prior to maturity and cover certain prepayment costs, and net gains of $8 million related primarily to the sale of undeveloped land.

Corporate operations consist primarily of investment income, interest expense and administrative costs at the Parent Company.

Investment income includes earnings on cash and short term investments held at the Parent Company to meet current and future liquidity needs, as well as results of the trading portfolio held at the Parent Company.

Corporate also includes the operating results of Altium Packaging through March 31, 2021 and the equity method accounting for Altium Packaging beginning on April 1, 2021, as a result of the sale of 47% of Altium Packaging and the resulting deconsolidation.

Corporate also includes the consolidated operations of Altium Packaging through March 31, 2021 and the equity method of accounting for Altium Packaging subsequent to its deconsolidation on April 1, 2021.

See Note 2 of the Notes to Consolidated Financial Statements included under Item 8 for further information.

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(In millions)

Net investment income $ 99 $ 59

Investment gains (losses) 540 (1,211)

Net investment income (loss) $ (7) $ 99

Investment gains 540

Operating revenues and other 5 281

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Operating and other 91 378

Equity method loss 9 21

Interest 89 114

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2022 Compared with 2021

Net investment income for the Parent Company increased $40 million in 2021 as compared with 2020 primarily due to improved results from equity based investments, partially offset by lower average yields on short term investments.

Investment gains of $540 million in 2021 were primarily due to a gain of $555 million ($438 million after tax) on the sale of 47% of Altium Packaging.

Investment losses of $1.2 billion ($957 million after tax) for 2020 was due to the loss recognized upon deconsolidation of Diamond Offshore as a result of its Chapter 11 Filing.

Operating revenues and other for 2021 include Altium Packaging revenues of $280 million prior to its deconsolidation on April 1, 2021 and $1,022 million for 2020.

Operating and other expenses decreased in 2021 as compared with 2020 primarily due to the deconsolidation of Altium Packaging on April 1, 2021.

Operating and other expenses for Altium Packaging were $300 million in 2021 and $992 million in 2020.

Operating and other expenses also include legal and other corporate overhead expenses at the Parent Company.

Interest expenses decreased $13 million in 2021 as compared with 2020, primarily due to the deconsolidation of Altium Packaging on April 1, 2021, partially offset by the M ay 2020 issuance of the Parent Company’s $500 million 3.2% senior notes and a charge of approximately $14 million to write off debt issuance costs for the early retirement of debt at Altium Packaging in the first quarter of 2021.

Income tax expense includes the recognition of a $40 million deferred tax liability related to the sale of Altium Packaging.

Diamond Offshore

Amounts presented for Diamond Offshore for 2020 only include the period through its deconsolidation on April 26, 2020.

Contract drilling revenues and contract drilling expenses were $287 million and $254 million for this 2020 period.

Results for 2020 also include an aggregate asset impairment charge of $774 million ($408 million after tax and noncontrolling interests) recognized in the first quarter of 2020.

For more information on the deconsolidation of Diamond Offshore see Note 2 of the Notes to Consolidated Financial Statements included under Item 8 for further information.

Net investment loss for the Parent Company was $7 million in 2022 as compared with net investment income of $99 million in 2021 primarily due to the decline in fair value of equity based investments, partially offset by improved results from short term investments in the trading portfolio.

Investment gains of $540 million in 2021 were primarily due to a gain of $555 million ($438 million after tax) on the sale of 47% of Altium Packaging and its deconsolidation on April 1, 2021.

Operating revenues and other for 2021 include $280 million of consolidated operating revenues for Altium Packaging through March 31, 2021.

Operating and other expenses decreased $287 million in 2022 as compared with 2021 primarily due to $279 million of operating expenses for Altium Packaging through March 31, 2021 prior to its deconsolidation and use of the equity method for Altium Packaging since its deconsolidation.

In addition, there were lower corporate expenses at the Parent Company in 2022 as compared with 2021 .

Interest expenses decreased $25 million in 2022 as compared with 2021, due to consolidated interest expenses for Altium Packaging through March 31, 2021, which included a charge of approximately $14 million to write off debt issuance costs for the early retirement of debt.

Income tax expense of $127 million in 2021 included the recognition of $117 million of taxes on the investment gain and the recognition of a $40 million deferred tax liability, both of which were related to the sale of 47% of Altium Packaging.

In 2023, the Company expects to record approximately $50 million in Operating and other expenses to recognize unrealized losses which are included in AOCI due to the planned termination of a non-contributory defined benefit plan.

LIQUIDITY AND CAPITAL RESOURCES

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Parent Company cash and investments, net of receivables and payables, totaled $3.2 billion at December 31, 2022 as compared to $3.4 billion at December 31, 2021.

In 2021 , we received $853 million in cash dividends from our subsidiaries, including a special cash dividend of $182 million from CNA and a $199 million cash dividend from Altium Packaging in connection with a debt recapitalization prior to its deconsolidation on April 1, 2021.

Cash outflows in 2021 included the payment of $1.1 billion to fund treasury stock purchases, $65 million of cash dividends to our shareholders and $32 million of cash contributions to Loews Hotels & Co.

On April 1, 2021, we sold 47% of Altium Packaging to GIC and received $420 million in cash consideration.

In 2022 , we received $978 million in cash dividends from our subsidiaries, including a special cash dividend of $486 million from CNA.

Cash outflows in 2022 included the payment of $729 million to fund treasury stock purchases, $61 million of cash dividends to our shareholders, $26 million to purchase common shares of CNA and equity contributions of $33 million to Loews Hotels & Co and $79 million to Altium Packaging .

In March of 2023, we will receive cash dividends of $395 million from CNA.

As a holding company we depend on dividends from our subsidiaries and returns on our investment portfolio to fund our obligations.

We also have an effective shelf registration statement on file with the Securities and Exchange Commission (“SEC”) registering the future sale of an unlimited amount of our debt and equity securities from time to time.

We also have an effective shelf registration statement on file with the Securities and Exchange Commission (“SEC”) registering the future sale of an unspecified amount of our debt, equity or hybrid securities from time to time.

We are not responsible for the liabilities and obligations of our subsidiaries and there are no Parent Company guarantees.

Depending on market and other conditions, we may purchase our shares and shares of our subsidiaries outstanding common stock in the open market, in privately negotiated transactions or otherwise.

In 2021 , we purchased 21.1 million shares of Loews Corporation common stock.

As of February 4, 2022, we had purchased an additional 0.2 million shares of Loews Corporation common stock in 2022 at an aggregate cost of $14 million.

In 2022 , we purchased 12.7 million shares of Loews Corporation common stock and 0.7 million shares of CNA’s common stock.

As of February 3, 2023, we had purchased an additional 1.0 million shares of Loews Corporation common stock in 2023 at an additional aggregate cost of $58 million.

As of February 3, 2023, there were 234,997,673 shares of Loews Corporation common stock outstanding.

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CNA’s cash provided by operating activities was $2.5 billion in 2022 and $2.0 billion in 2021.

The increase in cash provided by operating activities was driven by an increase in net premiums collected and lower net claim payments, which were impacted by a slowdown in court dockets.

These items were partially offset by the payment of the EWC LPT premium.

For further information on the EWC LPT see Note 8 of the Notes to Consolidated Financial Statements included under Item 8.

The increase in cash provided by operating activities was driven by the prior year payment of the EWC LPT premium.

CNA paid cash dividends of $3.60 per share on its common stock, including a special cash dividend of $2.00 per share in 2022 .

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CNA’s declaration and payment of future dividends is at the discretion of its Board of Directors and will depend on many factors, including CNA’s earnings, financial condition, business needs and regulatory constraints.

The payment of dividends by CNA’s insurance subsidiaries without prior approval of the insurance department of each subsidiary’s domiciliary jurisdiction is limited by formula.

Dividends in excess of these amounts are subject to prior approval by the respective state insurance departments.

Dividends from Continental Casualty Company (“CCC”), a subsidiary of CNA, are subject to the insurance holding company laws of the State of Illinois, the domiciliary state of CCC.

CNA believes that its present cash flows from operating, investing and financing activities are sufficient to fund its current and expected working capital and debt obligation needs and does not expect this to change in the near term.

Dividends to CNA from Continental Casualty Company (“CCC”), a subsidiary of CNA, are subject to the insurance holding company laws of the State of Illinois, the domiciliary state of CCC.

Under these laws, ordinary dividends, or dividends that do not require prior approval by the Illinois Department of Insurance (the “Department”), are determined based on the greater of the prior year’s statutory net income or 10% of statutory surplus as of the end of the prior year, as well as the timing and amount of dividends paid in the preceding 12 months.

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Best Company (“A.M.

Best”), a financial strength rating of A2 and senior debt rating of Baa2 from Moody’s, a financial strength rating of A+ and senior debt rating of A- from S&P and financial strength rating of A+ and senior debt rating of BBB+ from Fitch.

Best”), a financial strength rating of A2 and senior debt rating of Baa2 from Moody’s, a financial strength rating of A+ and senior

debt rating of A- from S&P and financial strength rating of A+ and senior debt rating of BBB+ from Fitch.

Best, Moody’s, S&P and Fitch maintain stable outlooks across CNA’s financial strength and senior debt credit ratings.

CNA has an effective shelf registration statement on file with the SEC under which it may publicly issue debt, equity or hybrid securities from time to time.

Boardwalk Pipelines’ cash provided by operating activities decreased $12 million in 2021 compared to 2020, primarily due to the timing of receivables partially offset by the change in net income.

For 2021 and 2020, Boardwalk Pipelines’ capital expenditures were $349 million and $438 million, consisting primarily of a combination of growth and maintenance capital.

CNA has an effective shelf registration statement on file with the SEC under which it may publicly issue an unspecified amount of debt, equity or hybrid securities from time to time.

Boardwalk Pipelines’ cash provided by operating activities increased $98 million in 2022 compared to 2021, primarily due to the increase in net income, higher depreciation expense and an increase in Boardwalk Pipelines’ fuel tracker liability.

For 2022 and 2021, Boardwalk Pipelines’ capital expenditures were $344 million and $349 million, consisting of growth capital expenditures of $180 million and $175 million and maintenance capital expenditures of $157 million and $154 million.

During 2022, Boardwalk Pipelines also spent $7 million on natural gas to be used in its integrated natural gas pipeline system.

During 2021, Boardwalk Pipelines acquired certain natural gas pipeline assets for approximately $20 million.

Boardwalk Pipelines expects total capital expenditures to be approximately $405 million in 2023, including approximately $195 million for maintenance capital and $210 million related to growth projects.

Boardwalk Pipelines anticipates that its existing capital resources, including its revolving credit facility and cash flows from operating activities, will be adequate to fund its operations and capital expenditures for 2022.

Boardwalk Pipelines may seek to access the debt markets to fund some or all capital expenditures for growth projects, acquisitions, to refinance maturing debt or for general corporate purposes.

Boardwalk Pipelines has $300 million outstanding aggregate principal amount of its 4.0% notes maturing in June of 2022, which it expects to retire near or at maturity through available capital resources, including using available cash, borrowing under its revolving credit facility or publicly issuing debt securities.

Boardwalk Pipelines has an effective shelf registration statement on file with the SEC under which it may publicly issue debt securities, warrants or rights from time to time.

Boardwalk Pipelines anticipates that its existing capital resources, including its cash on hand, revolving credit facility and cash flows from operating activities, will be adequate to fund its operations and capital expenditures for 2023.

Boardwalk Pipelines may seek to access the debt markets to fund some or all capital expenditures for growth projects, acquisitions, to refinance maturing debt or for general partnership purposes.

Boardwalk Pipelines has an effective shelf registration statement on file with the SEC under which it may publicly issue $1.0 billion of debt securities, warrants or rights from time to time.

In February of 2022, Boardwalk Pipelines completed a public offering of $500 million aggregate principal amount of its 3.6% senior notes due September 1, 2032, which utilized $500 million of capacity under its shelf registration statement.

Boardwalk Pipelines used the proceeds to retire the outstanding $300 million aggregate principal amount of its 4.0% senior notes due June 2022 in March of 2022, to fund growth capital expenditures and for general corporate purposes.

In November of 2022, Boardwalk Pipelines used its available cash to retire the outstanding $300 million aggregate principal amount of its 3.4% senior notes due in February 2023.

In June of 2022, Boardwalk Pipelines amended its revolving credit facility to, among other things, extend the maturity date by one year to May 27, 2027.

As of December 31, 2022, Boardwalk Pipelines had no outstanding borrowings and all of the $1.0 billion available borrowing capacity under its revolving credit facility.

In December of 2022, Boardwalk Pipelines paid a distribution of $102 million to the Company.

Boardwalk Pipelines has a senior debt rating of BBB- with a stable outlook from S&P, a senior debt rating of Baa3 with a stable outlook from Moody’s and a senior debt rating of BBB- with a positive outlook from Fitch.

Certain of the hotels wholly or partially owned by subsidiaries of Loews Hotels & Co are financed by debt facilities, with a number of different lenders.

Each of the loan agreements underlying these facilities contain a variety of financial and operational covenants.

As a result of the impacts of COVID-19, Loews Hotels & Co has proactively requested certain lenders, where applicable, to (1) temporarily waive certain covenants to avoid an event of default and/or further restriction of the hotel’s cash balances through the establishment of lockboxes and other measures;

(2) temporarily allow funds previously restricted directly or indirectly under the hotel’s underlying loan agreement for the renewal, replacement and addition of building improvements, furniture and fixtures to be used instead for hotel operations and maintenance;

and/or (3) defer certain interest and/or principal payments while the hotels operations were temporarily suspended or significantly impacted by a decline in occupancy.

Loews Hotels & Co also continues to work with lenders on loans that are being reviewed for extension.

These discussions with lenders are ongoing and may require Loews Hotels & Co to make principal paydowns, establish restricted cash reserves or provide guaranties of a subsidiary’s debt to otherwise avoid an event of default.

Through the date of this Report, none of Loews Hotels & Co’s subsidiaries is in default on any of its loans.

As of December 31, 2021, Loews Hotels & Co has loans that mature within twelve months and is actively working with lenders to refinance $93 million in current maturities of long-term debt.

In October 2021 Loews Hotels & Co announced the development of the Loews Arlington Hotel and Convention Center in Arlington, Texas.

The hotel, for which Loews Hotels & Co will serve as manager and hold a majority equity interest, is expected to open in early 2024 with approximately 888 guestrooms and over 250,000 square feet of function space.

approximately $550 million hotel project will be funded initially through a mix of partner contributions before drawing on a $300 million construction loan in the second half of 2022.

Based on the timing of construction relative to the seasonality of Loews Hotels & Co’s business and restrictions on certain cash held by Loews Hotels & Co, a Loews Corporation capital contribution may be required to fund all or part Loews Hotels & Co’s partner contributions.

Boardwalk Pipelines has a senior debt rating of BBB- with a stable outlook from S&P, a senior debt rating of Baa2 with a stable outlook from Moody’s and a senior debt rating of BBB with a stable outlook from Fitch.

As of December 31, 2022, Loews Hotels & Co has a $110 million variable rate mortgage loan that matures within twelve months, which it currently intends to refinance before maturity.

Loews Hotels & Co, through its subsidiaries, has mortgage loans maturing beyond twelve months which it will also work to refinance prior to maturity.

Extending any indebtedness, including loans of unconsolidated joint venture partnerships, may require Loews Hotels & Co to make principal pay downs, establish restricted cash reserves or provide guaranties of the subsidiary’s debt.

Through the date of this Report, none of Loews Hotels & Co’s subsidiaries are in default on any of their loans.

Loews Hotels & Co contributed $41 million to two joint venture development projects expected to open in 2025.

These projects are currently estimated to require an aggregate additional investment of approximately $160 million in capital contributions from Loews Hotels & Co.

Based on the timing of capital calls relative to the seasonality of Loews Hotels & Co’s business, capital contributions from Loews Corporation to Loews Hotels & Co may be required.

In 2022, Loews Hotels & Co received capital contributions of $33 million from Loews Corporation.

In August of 2022, we made a cash contribution of $79 million to our equity method investee, Altium Packaging.

These funds and a pro rata contribution from our joint venture partner were used by Altium Packaging for an acquisition which expanded its offerings and increased its bottle manufacturing capabilities throughout key industries and geographies.

Contractual Obligations

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The Parent Company portfolio also includes equity securities, including short sales and derivative instruments, and investments in limited partnerships.

Certain of these types of investments generally have greater volatility, less liquidity and greater risk than fixed income investments and are included within Results of Operations – Corporate.

Certain of these types of Parent Company investments generally have greater volatility, less liquidity and greater risk than fixed income investments and are included within Results of Operations – Corporate.

The Parent Company enters into short sales and invests in certain derivative instruments that are used for asset and liability management activities, income enhancements to its portfolio management strategy and to benefit from anticipated future movements in the underlying markets.

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Collateral is occasionally required from derivative investment counterparties depending on the amount of the exposure and the credit rating of the counterparty.

CNA maintains a large portfolio of fixed maturity and equity securities, including large amounts of corporate and government issued debt securities, residential and commercial mortgage-backed securities, other asset-backed securities and investments in limited partnerships which pursue a variety of long and short investment strategies across a broad array

of asset classes.

CNA’s investment portfolio supports its obligation to pay future insurance claims and provides investment returns which are an important part of CNA’s overall profitability.

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Limited partnership and common stock return (1.4) % 22.3 %

CNA’s net investment income increased $224 million in 2021 as compared with 2020 driven by higher limited partnership and common stock returns partially offset by lower yields in the fixed income portfolio.

CNA’s net investment income decreased $354 million in 2022 as compared with 2021 driven by unfavorable limited partnership and common stock results, partially offset by higher income from fixed income securities.

Investment Gains (Losses)

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Non-redeemable preferred stock (116) 4

Short term and other 20 (32)

Derivatives, short term and other 14 20

Total investment gains (losses) (199) 120

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Investment gains (losses) attributable to Loews Corporation $ (138) $ 86

CNA’s investment gains (losses) improved $155 million in 2021 as compared with 2020, driven by lower impairment losses.

(a) Excludes the loss in 2022 on the assets supporting the funds withheld liability, which is reflected in the Derivatives, short term and other line.

CNA’s investment gains (losses) decreased $319 million in 2022 as compared with 2021, driven by net losses on fixed maturity securities and the unfavorable change in fair value of non-redeemable preferred stock.

Additionally, Derivatives, short term and other for 2022 includes an $18 million non-economic net gain related to the coinsurance agreement on CNA’s legacy annuity business in its Other Insurance Operations and the associated funds withheld embedded derivative, which was novated in 2022.

Further information on CNA’s investment gains and losses is set forth in Note 3 of the Notes to Consolidated Financial Statements included under Item 8.

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(In millions)

Government, Government agencies and

Government-sponsored enterprises $ 2,600 $ 42 $ 3,672 $ 117

Government, Government agencies and Government-sponsored enterprises $ 2,419 $ (336) $ 2,600 $ 42

AAA 2,398 (208) 3,784 360

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As of December 31, 2022 and 2021, 1% of CNA’s fixed maturity portfolio was rated internally.

AAA rated securities included $1.7 billion and $1.8 billion of pre-refunded municipal bonds as of December 31, 2021 and 2020.

AAA rated securities included $0.3 billion and $1.7 billion of pre-funded municipal bonds as of December 31, 2022 and 2021.

The following table presents CNA’s available-for-sale fixed maturity securities in a gross unrealized loss position by ratings distribution:

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(In millions)

Government, Government agencies and

Government-sponsored enterprises $ 898 $ 8

Government, Government agencies and Government-sponsored enterprises $ 2,355 $ 337

AAA 1,559 298

BBB 13,226 1,621

Non-investment grade 1,429 234

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(In millions of dollars)

Investments supporting Other Insurance

Operations $ 18,458 9.2 $ 18,518 9.2

Investments supporting Other Insurance Operations $ 14,511 9.9 $ 18,458 9.2

Other investments 25,445 4.7 28,915 4.9

Total $ 39,956 6.6 $ 47,373 6.6

The effective duration of investments supporting Other Insurance Operations liabilities at December 31, 2022 lengthened as compared with December 31, 2021, reflecting strategic repositioning to capitalize on higher rates and reduce reinvestment risk.

CNA’s investment portfolio is periodically analyzed for changes in duration and related price risk.

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Selection of the paid loss pattern may require consideration of several factors including the impact of economic, social and medical inflation on claim costs, the rate at which claims professionals make claim payments and close claims, the impact of judicial decisions, the impact of underwriting changes, the impact of large claim payments and other factors.

Claim cost inflation itself may require evaluation of changes in the cost of repairing or replacing property, changes in the cost of medical care, changes in the cost of wage replacement, judicial decisions, legislative changes and other factors.

Claim cost inflation itself may require evaluation of changes in the cost of repairing or replacing property, changes in the cost of medical care, changes in the cost of wage replacement,

judicial decisions, legislative changes and other factors.

Because this method assumes that losses are paid at a consistent rate, changes in any of these factors can affect the results.

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In such a case, CNA’s actuaries typically assign more weight to the incurred development method than to the paid development method.

As claims continue to settle and the volume of paid loss increases, the actuaries may assign additional weight to the paid development method.

claims continue to settle and the volume of paid loss increases, the actuaries may assign additional weight to the paid development method.

For most of CNA’s products, even the incurred losses for accident or policy years that are early in the claim settlement process will not be of sufficient volume to produce a reliable estimate of ultimate losses.

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However, the assumed pattern is itself based on several implicit assumptions such as the impact of inflation on medical costs and the rate at which claim professionals close claims.

As a result, the effect on reserve

estimates of a particular change in assumptions typically cannot be specifically quantified, and changes in these assumptions cannot be tracked over time.

As a result, the effect on reserve estimates of a particular change in assumptions typically cannot be specifically quantified, and changes in these assumptions cannot be tracked over time.

CNA’s recorded reserves are management’s best estimate.

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professional liability coverages provided to various professional firms, including architects, real estate agents, small and mid-sized accounting firms, law firms and other professional firms.

They also include D&O, employment practices, fiduciary, fidelity and surety coverages and medical liability.

They also include D&O, E&O, employment practices, fiduciary, fidelity, cyber and surety coverages and medical liability.

The most significant factor affecting reserve estimates for these liability coverages is claim severity.

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For workers’ compensation, since many years will pass from the time the business is written until all claim payments have been made, the most significant factor affecting workers’ compensation reserve estimates is claim cost inflation on claim payments.

Workers’ compensation claim cost inflation is driven by the cost of medical care, the cost of wage replacement, expected claimant lifetimes, judicial decisions, legislative changes and other factors.

Workers’ compensation claim cost inflation is driven by the cost of medical care, the cost of wage

replacement, expected claimant lifetimes, judicial decisions, legislative changes and other factors.

If estimated workers’ compensation claim cost inflation increases by 100 basis points for the entire period over which claim payments will be made, CNA estimates that its net reserves would increase by approximately $350 million.

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If the GPV required reserves are less than the existing recorded reserves, the assumptions remain locked in and no adjustment is required.

Information regarding Accounting Standards Update (“ASU”) 2018-12, which, beginning in 2023, will require changes in the measurement and disclosure of long-duration contracts, including CNA’s long term care business, is provided in the Accounting Standards Update section of this MD&A and in Note 1 of the Notes to Consolidated Financial Statements included under Item 8.

The September 30, 2022 GPV indicated that the recorded reserves included a margin of approximately $125 million.

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September 30, 2021 estimated margin

Changes in underlying discount rate assumptions (a)

Changes in underlying economic assumptions (a)

Changes in underlying morbidity assumptions (30)

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September 30, 2022 Estimated Margin

(a) Including cost of care inflation assumption.

The increase in the margin in 2021 was primarily driven by changes in discount rate assumptions due to higher near term expected reinvestment rates and favorable changes to underlying morbidity assumptions.

These favorable drivers were partially offset by unfavorable changes to underlying persistency assumptions.

(a) Economic assumptions include the impact of interest rates and cost of care inflation.

The increase in the margin in 2022 was primarily driven by changes in discount rate assumptions due to higher near term expected reinvestment rates and higher than previously estimated rate increases on active rate increase programs.

These favorable drivers were partially offset by changes in cost of care inflation assumptions.

CNA has determined that additional future policy benefit reserves for profits followed by losses are not currently required based on the most recent projection.

The table below summarizes the estimated pretax impact on CNA’s results of operations from various hypothetical revisions to its active life reserve assumptions.

The table below summarizes the estimated pretax impact on CNA’s results of operations from various hypothetical revisions to its future policy benefit reserve assumptions.

The annual GPV process involves updating all assumptions to management’s then current best estimate, and historically all significant assumptions have been revised each year.

In the table below, CNA has assumed that revisions to such assumptions would occur in each policy type, age and duration within each policy group and would occur absent any changes, mitigating or otherwise, in the other assumptions.

In the table below, CNA has assumed that revisions to such assumptions would occur in each policy type, age and duration within each policy group.

The impact of each sensitivity is discrete and does not reflect the impact one factor may have on another or the mitigating impact from management actions, which may include additional future premium rate increases.

Although such hypothetical revisions are not currently required or anticipated, CNA believes they could occur based on past variances in experience and its expectations of the ranges of future experience that could reasonably occur.

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Hypothetical revisions

Morbidity (a):

2.5% increase in morbidity $ 200

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50 basis point decline in new money interest rates 100

Premium rate actions:

50% decrease in anticipated future premium rate increases $ —

(a) Represents a sensitivity in future paid claims.

The following tables summarize policyholder reserves for CNA’s long term care operations:

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Shadow adjustments (a)

200 2,936 3,136

Ceded reserves (b)

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Total gross reserves $ 3,754 $ 13,236 $ 16,990

(a) To the extent that unrealized gains on fixed maturity securities supporting structured settlements not funded by annuities were realized, or that unrealized gains on fixed maturity securities supporting long term care products would result in a premium deficiency if realized, a related increase in Insurance reserves is recorded, after tax and noncontrolling interests, as a reduction of net unrealized gains through Other comprehensive income (“Shadow Adjustments”).

(a) To the extent that unrealized gains on fixed maturity securities supporting long term care reserves would result in a premium deficiency if realized, a related increase in Insurance reserves is recorded, after tax and noncontrolling interests, as a reduction of net unrealized gains (losses), through Other comprehensive income (loss).

To the extent that unrealized gains or losses on fixed maturity securities supporting structured settlements not funded by annuities would impact the reserve balance if realized, a related increase or decrease in Insurance reserves is recorded, after tax and noncontrolling interests, as a reduction or increase of net unrealized gains (losses) through Other comprehensive income (“Shadow Adjustments”).

(b) Ceded reserves relate to claim or policy reserves fully reinsured in connection with a sale or exit from the underlying business.

In the fourth quarter of 2022, CNA novated its block of legacy annuity business resulting in the reduction of all associated gross and ceded future policy benefit reserves.

CATASTROPHES AND RELATED REINSURANCE

Various events can cause catastrophe losses.

These events can be natural or man-made, including hurricanes, windstorms, earthquakes, hail, severe winter weather, fires, floods, riots, strikes, civil unrest, cyber attacks, pandemics and acts of terrorism that produce unusually large aggregate losses.

These events can be natural or man-made, including hurricanes, tornadoes, windstorms, earthquakes, hail, severe winter weather, fires, floods, riots, strikes, civil unrest, cyber attacks, pandemics and acts of terrorism that produce unusually large aggregate losses.

In most, but not all cases, CNA’s catastrophe losses from these events in the U.S.

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Catastrophes are an inherent risk of the property and casualty insurance business and have contributed to material period-to-period fluctuations in CNA’s results of operations and/or equity.

CNA reported catastrophe losses, net of reinsurance, of $397 million and $550 million for the years ended December 31, 2021 and 2020.

Net catastrophe losses for the year ended December 31, 2021 were driven by severe weather related events, primarily Hurricane Ida and Winter Storms Uri and Viola.

Net catastrophe losses for the year ended December 31, 2020 included $294 million related primarily to severe weather related events, $195 million related to the COVID-19 pandemic and $61 million related to civil unrest.

Catastrophe losses, net of reinsurance, of $247 million and $397 million were recorded for the years ended December 31, 2022 and 2021.

Catastrophe losses for the years ended December 31, 2022 and 2021 were driven by severe weather related events, primarily Winter Storm Elliott and Hurricane Ian for 2022 and Hurricane Ida and Winter Storms Uri and Viola for 2021.

CNA uses various analyses and methods, including using one of the industry standard natural catastrophe models to estimate hurricane and earthquake losses at various return periods, to inform underwriting and reinsurance decisions designed to manage its exposure to catastrophic events.

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CNA conducts an ongoing review of its risk and catastrophe reinsurance coverages and from time to time makes changes as it deems appropriate.

During the second quarter of 2021, CNA added a quota share treaty to its property reinsurance program, which covers policies written during the treaty term and in-force as of June 1, 2021.

As a result of the coverage of in-force policies, net written premiums were reduced by $122 million during the second quarter for the one-time catch-up under the treaty of unearned premium on policies previously written as of the June 1, 2021 treaty inception.

This ceded premium will earn in future quarters consistent with the underlying gross policies.

In 2021, CNA added a quota share treaty to its property reinsurance program, which covers policies written during the treaty term and in-force as of June 1, 2021.

As a result of the coverage of in-force policies, net written premiums were reduced by $122 million during the second quarter of 2021 for the one-time catch-up under the treaty of unearned premium on policies previously written as of the treaty inception.

The treaty was renewed for a term of June 1, 2022 to June 1, 2023.

The following discussion summarizes CNA’s most significant catastrophe reinsurance coverage at January 1, 2023.

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CNA’s deductible is based on eligible commercial property and casualty earned premiums for the preceding calendar year.

Based on 2021 earned premiums, CNA’s estimated deductible under the program is $915 million for 2022.

Based on 2022 earned premiums, CNA’s estimated deductible under the program is $1.0 billion for 2023.

If an act of terrorism or acts of terrorism result in covered losses exceeding the $100 billion annual industry aggregate limit, Congress would be responsible for determining how additional losses in excess of $100 billion will be paid.

CRITICAL ACCOUNTING ESTIMATES

The preparation of the Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the related notes.

The preparation of the Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported on the Consolidated Financial Statements and the related notes.

Actual results could differ from those estimates.

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Significant judgment is required in the determination of whether a credit loss has occurred for a security.

CNA considers all available evidence when determining whether a security requires a credit allowance to be recorded, including the financial condition

and expected near-term and long term prospects of the issuer, whether the issuer is current with interest and principal payments, credit ratings on the security or changes in ratings over time, general market conditions, industry, sector or other specific factors and whether CNA expects to receive cash flows sufficient to recover the entire amortized cost basis of the security.

CNA considers all available evidence when determining whether a security requires a credit allowance to be recorded, including the financial condition and expected near-term and long term prospects of the issuer, whether the issuer is current with interest and principal payments, credit ratings on the security or changes in ratings over time, general market conditions, industry, sector or other specific factors and whether CNA expects to receive cash flows sufficient to recover the entire amortized cost basis of the security.

CNA’s mortgage loan portfolio is subject to the expected credit loss model, which requires immediate recognition of estimated credit losses over the life of the asset and the presentation of the asset at the net amount expected to be collected.

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ACCOUNTING STANDARDS UPDATE

In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-12, “Financial Services-Insurance (Topic 944):

Targeted Improvements to the Accounting for Long-Duration Contracts.” The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts.

For the Company, this includes CNA’s long term care business.

The Company will adopt the new guidance effective January 1, 2023, using the modified retrospective method applied as of the transition date of January 1, 2021.

The most significant impact will be the effect of updating the discount rate assumption quarterly to reflect an upper-medium grade fixed-income instrument yield, rather than the expected investment portfolio yield.

This will be partially offset by the de-recognition of Shadow Adjustments associated with long-duration contracts.

The net impact of these changes is expected to be a decrease of approximately $2.1 billion (after tax and noncontrolling interests) in AOCI as of the transition date of January 1, 2021.

To illustrate the sensitivity of this adjustment, had the interest rates in effect as of December 31, 2022 been used in the calculation, the transition impact to AOCI would have been a decrease of approximately $225 million (after tax and noncontrolling interests).

The requirement to review, and update if there is a change, cash flow assumptions at least annually is expected to change the pattern of earnings being recognized.

Under current accounting guidance, the third quarter 2022 gross premium valuation assessment indicated a pretax reserve margin of $125 million, with no unlocking event.

However under the new guidance, the effect of changes in cash flow assumptions from the assessment would be recorded in results of operations (except for discount rate changes which would be recorded quarterly through AOCI).

For a discussion of accounting standards updates that have been adopted or will be adopted in the future, please read Note 1 of the Notes to Consolidated Financial Statements included under Item 8.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis