What changed in this filing

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Item 1. Financial Statements

2023-10-30 compared with 2023-07-31 · 204 added, 165 removed, 980 unchanged (27% of the section changed)

2 unchanged sentences

CONSOLIDATED CONDENSED BALANCE SHEETS

June 30, December 31,

September 30, December 31,

(Dollar amounts in millions, except per share data)

45 unchanged sentences

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

2 unchanged sentences

Net investment income 592 404 1,752 1,202

Investment gains (losses) 14 ( 59 ) ( 21 ) ( 70 )

Investment losses ( 38 ) ( 96 ) ( 59 ) ( 166 )

Non-insurance warranty revenue 407 399 1,221 1,173

2 unchanged sentences

Insurance claims and policyholders’ benefits

(re-measurement gain (loss) of $( 33 ), $ 1 , $( 34 ),

(re-measurement loss of $( 41 ), $( 211 ), $( 75 ), and $( 205 ))

1,826 1,880 5,258 4,959

5 unchanged sentences

Total 3,570 3,486 10,260 9,602

Income before income tax 508 235 1,027 674

Income (loss) before income tax 356 ( 25 ) 1,383 649

Income tax expense ( 80 ) ( 2 ) ( 315 ) ( 137 )

Net income 388 187 792 539

Net income (loss) 276 ( 27 ) 1,068 512

Amounts attributable to noncontrolling interests ( 23 ) 5 ( 80 ) ( 45 )

Net income attributable to Loews Corporation $ 360 $ 167 $ 735 $ 489

Basic and diluted net income per share $ 1.58 $ 0.68 $ 3.19 $ 1.98

Net income (loss) attributable to Loews Corporation $ 253 $ ( 22 ) $ 988 $ 467

Basic net income (loss) per share $ 1.12 $ ( 0.09 ) $ 4.32 $ 1.91

Diluted net income (loss) per share $ 1.12 $ ( 0.09 ) $ 4.31 $ 1.90

Weighted average shares outstanding:

5 unchanged sentences

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

(In millions)

Net income $ 388 $ 187 $ 792 $ 539

Net income (loss) $ 276 $ ( 27 ) $ 1,068 $ 512

Other comprehensive income (loss), after tax

Net unrealized losses on investments with an allowance for credit losses ( 1 ) ( 2 ) ( 10 ) ( 8 )

Net unrealized gains (losses) on other investments ( 413 ) ( 2,226 ) 257 ( 4,869 )

Total unrealized gains (losses) on investments ( 414 ) ( 2,228 ) 248 ( 4,875 )

Net unrealized losses on other investments ( 1,084 ) ( 1,735 ) ( 827 ) ( 6,604 )

Total unrealized losses on investments ( 1,085 ) ( 1,737 ) ( 837 ) ( 6,612 )

Impact of changes in discount rates used to measure long-duration contract liabilities 818 994 678 4,136

Unrealized gains on cash flow hedges 8 6 6 24

Unrealized gains (losses) on cash flow hedges ( 1 ) 4 5 28

Pension and postretirement benefits 40 6 55 18

Foreign currency translation ( 55 ) ( 106 ) ( 4 ) ( 189 )

Other comprehensive income (loss) ( 109 ) ( 778 ) 180 ( 1,780 )

Other comprehensive loss ( 283 ) ( 839 ) ( 103 ) ( 2,619 )

Comprehensive income (loss) ( 7 ) ( 866 ) 965 ( 2,107 )

8 unchanged sentences

(In millions)

Balance, April 1, 2022, as reported

Balance, July 1, 2022, as reported

$ 16,221 $ 2 $ 2,869 $ 15,261 $ ( 2,510 ) $ ( 386 ) $ 985

1 unchanged sentence

accounting standards (Note 1) ( 507 ) ( 51 ) ( 403 ) ( 53 )

Balance, April 1, 2022, as adjusted

Balance, July 1, 2022, as adjusted

15,714 2 2,869 15,210 ( 2,913 ) ( 386 ) 932

Net income 187 167 20

Net loss ( 27 ) ( 22 ) ( 5 )

Other comprehensive loss ( 839 ) ( 766 ) ( 73 )

1 unchanged sentence

( 23 ) ( 15 ) ( 8 )

Purchase of subsidiary stock from noncontrolling interests ( 45 ) 5 ( 50 )

Purchases of Loews Corporation treasury stock ( 230 ) ( 230 )

1 unchanged sentence

Other 4 4 ( 1 ) 1

Balance, June 30, 2022

Balance, September 30, 2022

$ 14,563 $ 2 $ 2,886 $ 15,172 $ ( 3,679 ) $ ( 616 ) $ 798

Balance, April 1, 2023

Balance, July 1, 2023

$ 15,470 $ 2 $ 2,728 $ 15,637 $ ( 3,160 ) $ ( 604 ) $ 867

Net income 276 253 23

Other comprehensive loss ( 109 ) ( 98 ) ( 11 )

Other comprehensive income (loss) ( 283 ) ( 252 ) ( 31 )

Dividends paid ($ 0.0625 per share)

4 unchanged sentences

Other 3 ( 1 ) 1 3

Balance, June 30, 2023

Balance, September 30, 2023

$ 15,158 $ 2 $ 2,764 $ 15,877 $ ( 3,473 ) $ ( 722 ) $ 710

20 unchanged sentences

Other 1 3 ( 3 ) 1

Balance, June 30, 2022

Balance, September 30, 2022

$ 14,563 $ 2 $ 2,886 $ 15,172 $ ( 3,679 ) $ ( 616 ) $ 798

6 unchanged sentences

Net income 1,068 988 80

Other comprehensive income 180 160 20

Other comprehensive income (loss) ( 103 ) ( 92 ) ( 11 )

Dividends paid ($ 0.1875 per share)

4 unchanged sentences

Other ( 2 ) ( 4 ) 1 1

Balance, June 30, 2023

Balance, September 30, 2023

$ 15,158 $ 2 $ 2,764 $ 15,877 $ ( 3,473 ) $ ( 722 ) $ 710

2 unchanged sentences

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

Six Months Ended June 30

Nine Months Ended September 30

(In millions)

19 unchanged sentences

Purchases of property, plant and equipment ( 463 ) ( 437 )

Acquisitions ( 348 )

Dispositions 16

Investment in Altium Packaging ( 79 )

Change in short term investments 60 568

22 unchanged sentences

transportation and storage of natural gas and natural gas liquids (Boardwalk Pipeline Partners, LP (“Boardwalk Pipelines”), a wholly owned subsidiary) and the operation of a chain of hotels (Loews Hotels Holding Corporation (“Loews Hotels & Co”), a wholly owned subsidiary).

Unless the context otherwise requires, as used herein, the term “Company” means Loews Corporation including its consolidated subsidiaries, the term “Parent Company” means 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.

In the opinion of management, the accompanying unaudited Consolidated Condensed Financial Statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company’s financial position as of June 30, 2023 and December 31, 2022 and results of operations, comprehensive income (loss) and changes in shareholders’ equity for the three and six months ended June 30, 2023 and 2022 and cash flows for the six months ended June 30, 2023 and 2022, in each case in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Net income for the interim periods is not necessarily indicative of net income for the entire year.

Unless the context otherwise requires, as used herein, the term “Company” means Loews Corporation including its subsidiaries, the term “Parent Company” means Loews Corporation excluding its subsidiaries and the term “Net income (loss) attributable to Loews Corporation” means Net income (loss) attributable to Loews Corporation shareholders.

In the opinion of management, the accompanying unaudited Consolidated Condensed Financial Statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company’s financial position as of September 30, 2023 and December 31, 2022, results of operations, comprehensive income (loss) and changes in shareholders’ equity for the three and nine months ended September 30, 2023 and 2022 and cash flows for the nine months ended September 30, 2023 and 2022, in each case in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Results for the interim periods are not necessarily indicative of results for the entire year.

These Consolidated Condensed Financial Statements should be read in conjunction with the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

2 unchanged sentences

Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

For the three and six months ended June 30, 2023 and 2022 there were no shares attributable to employee stock-based compensation awards excluded from the diluted weighted average shares outstanding amounts because the effect would have been antidilutive.

For the three and nine months ended September 30, 2023 and 2022 there were no shares attributable to employee stock-based compensation awards excluded from the diluted weighted average shares outstanding amounts because the effect would have been antidilutive.

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

56 unchanged sentences

The effects of adoption of ASU 2018-12 on the Consolidated Condensed Statement of Operations were as follows:

Three Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

Three Months Ended September 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

Insurance claims and policyholders’ benefits (a) $ 1,665 $ 215 $ 1,880

Income before income tax 253 ( 18 ) 235

Income (loss) before income tax 190 ( 215 ) ( 25 )

Income tax expense ( 47 ) 45 ( 2 )

Net income 202 ( 15 ) 187

Net income (loss) 143 ( 170 ) ( 27 )

Amounts attributable to noncontrolling interests ( 13 ) 18 5

Net income attributable to Loews Corporation 180 ( 13 ) 167

Basic net income per share 0.73 ( 0.05 ) 0.68

Diluted net income per share 0.73 ( 0.05 ) 0.68

(a) The effect of adopting ASU 2018-12 on Insurance claims and policyholders’ benefits is inclusive of the re-measurement gain of $ 1 million, which is presented parenthetically on the Consolidated Condensed Statement of Operations.

Six Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

Net income (loss) attributable to Loews Corporation 130 ( 152 ) ( 22 )

Basic net income (loss) per share 0.54 ( 0.63 ) ( 0.09 )

Diluted net income (loss) per share 0.54 ( 0.63 ) ( 0.09 )

(a) The effect of adopting ASU 2018-12 on Insurance claims and policyholders’ benefits is inclusive of the re-measurement loss of $ 211 million, which is presented parenthetically on the Consolidated Condensed Statement of Operations.

Nine Months Ended September 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

7 unchanged sentences

Diluted net income per share 2.64 ( 0.74 ) 1.90

(a) The effect of adopting ASU 2018-12 on Insurance claims and policyholders’ benefits is inclusive of the re-measurement gain of $ 6 million, which is presented parenthetically on the Consolidated Condensed Statement of Operations.

(a) The effect of adopting ASU 2018-12 on Insurance claims and policyholders’ benefits is inclusive of the re-measurement loss of $ 205 million, which is presented parenthetically on the Consolidated Condensed Statement of Operations.

The effects of adoption of ASU 2018-12 on the Consolidated Condensed Balance Sheet were as follows:

13 unchanged sentences

The effects of adoption of ASU 2018-12 on the Consolidated Condensed Statement of Comprehensive Income (Loss) were as follows:

Three Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

Three Months Ended September 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

7 unchanged sentences

Total comprehensive (loss) attributable to Loews Corporation ( 1,163 ) 375 ( 788 )

Six Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

Nine Months Ended September 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

8 unchanged sentences

The effects of adoption of ASU 2018-12 on the Consolidated Condensed Statements of Cash Flows were as follows:

Six Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

Nine Months Ended September 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

4 unchanged sentences

The effects of adoption of ASU 2018-12 on segment results of operations of CNA were as follows:

Three Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

Three Months Ended September 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

Insurance claims and policyholders’ benefits (a) $ 1,665 $ 215 $ 1,880

Income before income tax 245 ( 18 ) 227

Income tax expense ( 40 ) 3 ( 37 )

Net income 205 ( 15 ) 190

Income (loss) before income tax 164 ( 215 ) ( 51 )

Income tax (expense) benefit ( 36 ) 45 9

Net income (loss) 128 ( 170 ) ( 42 )

Amounts attributable to noncontrolling interests ( 13 ) 18 5

Net income attributable to Loews Corporation 183 ( 13 ) 170

Six Months Ended June 30, 2022 As Reported Effect of Adoption As Adjusted

Net income (loss) attributable to Loews Corporation 115 ( 152 ) ( 37 )

Nine Months Ended September 30, 2022 As Reported Effect of Adoption As Adjusted

(In millions)

5 unchanged sentences

Net income attributable to Loews Corporation 579 ( 181 ) 398

Boardwalk Pipelines

On September 29, 2023, Boardwalk Pipelines acquired 100 % of the equity interests of Williams Olefins Pipeline Holdco LLC (“Bayou Ethane”) from Williams Field Services Group, LLC for $ 348 million in cash, including working capital.

Bayou Ethane owns an approximately 380-mile ethane pipeline system from Mont Belvieu, Texas, to the Mississippi River corridor in Louisiana and two 15-mile pipelines in the Houston Ship Channel area that carry ammonia and hydrogen chloride.

Bayou Ethane provides ethane supply and transportation services for industrial customers in Louisiana and Texas.

The purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition.

As of September 29, 2023, Boardwalk Pipelines recorded $ 369 million of assets and $ 21 million of

liabilities, which include $ 296 million of property, plant and equipment and $ 34 million of finite lived intangible assets.

The purchase price allocation is preliminary and is expected to be finalized by the first quarter of 2024.

Loews Hotels & Co

During the second quarter of 2023, Loews Hotels & Co paid $ 46 million to acquire an additional equity interest in a previously unconsolidated joint venture property.

2 unchanged sentences

Net investment income is as follows:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

9 unchanged sentences

Net investment income $ 592 $ 404 $ 1,752 $ 1,202

(a) Net investment income (loss) recognized due to the change in fair value of equity and trading portfolio securities held as of June 30, 2023 and 2022

(a) Net investment income (loss) recognized due to the change in fair value of equity and trading portfolio securities held as of September 30, 2023 and 2022

$ ( 14 ) $ ( 68 ) $ 3 $ ( 179 )

Investment gains (losses) are as follows:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

8 unchanged sentences

Gain on acquisition of a joint venture (see Note 2) 46

Investment gains (losses) $ 14 $ ( 59 ) $ ( 21 ) $ ( 70 )

(a) Investment gains (losses) recognized due to the change in fair value of non-redeemable preferred stock included within equity securities held as of June 30, 2023 and 2022

Investment losses $ ( 38 ) $ ( 96 ) $ ( 59 ) $ ( 166 )

(a) Investment gains (losses) recognized due to the change in fair value of non-redeemable preferred stock included within equity securities held as of September 30, 2023 and 2022

$ 2 $ ( 2 ) $ 2 $ ( 109 )

Net investment losses for the three months ended September 30, 2022 in the table above included a $ 35 million net loss related to the novation of a coinsurance agreement on CNA’s legacy annuity business, which was transacted on a funds withheld basis and gave rise to an embedded derivative.

The net loss of $ 35 million was comprised of a $ 59 million loss on the fixed maturity securities supporting the funds withheld liability to recognize unrealized losses which had been included in AOCI since the inception of the coinsurance agreement, partially offset by a $ 24 million gain on the associated embedded derivative.

Taken together, this net loss was the final recognition of changes in the valuation of the funds held assets and offsets previously recognized net investment gains on the associated embedded derivative.

The coinsurance agreement was novated in the fourth quarter of 2022.

The components of available-for-sale impairment losses (gains) recognized in earnings by asset type are presented in the following table.

The table includes losses (gains) on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

4 unchanged sentences

Impairment losses recognized in earnings $ 12 $ 25 $ 37 $ 55

T here were $ 6 million of losses recognized on mortgage loans during the three and six months ended June 30, 2023 due to changes in expected credit losses.

There were no losses recognized on mortgage loans during the three and six months ended June 30, 2022.

T here were $ 5 million and $ 11 million of losses recognized on mortgage loans during the three and nine months ended September 30, 2023 due to changes in expected credit losses.

There were $ 8 million of losses recognized on mortgage loans during the three and nine months ended September 30, 2022.

The following tables present a summary of fixed maturity securities:

June 30, 2023 Cost or Amortized Cost Gross Unrealized

September 30, 2023 Cost or Amortized Cost Gross Unrealized

Gains Gross Unrealized

14 unchanged sentences

Foreign government 713 1 56 658

Redeemable preferred stock 5 5

Fixed maturities available-for-sale $ 42,364 $ 396 $ 4,888 $ 18 $ 37,854

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Less than 12 Months 12 Months or Longer Total

June 30, 2023 Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses

September 30, 2023 Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses

(In millions)

27 unchanged sentences

The following table presents the estimated fair value and gross unrealized losses of available-for-sale fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by ratings distribution.

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses

7 unchanged sentences

Total $ 31,117 $ 4,888 $ 29,511 $ 4,056

Based on current facts and circumstances, the unrealized losses presented in the June 30, 2023 securities in the gross unrealized loss position table above are not believed to be indicative of the ultimate collectibility of the current amortized cost of the securities, but rather are primarily attributable to changes in risk-free interest rates and a general market widening of credit spreads.

Based on current facts and circumstances, the unrealized losses presented in the September 30, 2023 securities in the gross unrealized loss position table above are not believed to be indicative of the ultimate collectibility of the current amortized cost of the securities, but rather are primarily attributable to changes in risk-free interest rates.

In reaching this determination, the continued volatility in risk-free rates and credit spreads, as well as the fact that the unrealized losses are concentrated in investment grade issuers, were considered.

Additionally, there is no current intent to sell securities with unrealized losses, nor is it more likely than not that sale will be required prior to recovery of amortized cost;

accordingly, it was determined that there are no additional impairment losses to be recorded as of June 30, 2023.

accordingly, it was determined that there are no additional impairment losses to be recorded as of September 30, 2023.

The following tables present the activity related to the allowance on available-for-sale securities with credit impairments and purchased credit-deteriorated (“PCD”) assets.

Accrued interest receivables on available-for-sale fixed maturity securities totaled $ 413 million, $ 394 million and $ 374 million as of June 30, 2023, December 31, 2022 and June 30, 2022 and are excluded from the estimate of expected credit losses and the amortized cost basis in the tables within this Note.

Three months ended June 30, 2023 Corporate and Other Bonds

Accrued interest receivables on available-for-sale fixed maturity securities totaled $ 430 million, $ 394 million and $ 401 million as of September 30, 2023, December 31, 2022 and September 30, 2022 and are excluded from the estimate of expected credit losses and the amortized cost basis in the tables within this Note.

Three months ended September 30, 2023 Corporate and Other Bonds

Asset-backed Total

1 unchanged sentence

Allowance for credit losses:

Balance as of April 1, 2023

Balance as of July 1, 2023

$ 13 $ 9 $ 22

Additions to the allowance for credit losses:

1 unchanged sentence

Available-for-sale securities accounted for as PCD assets 2 2

Reductions to the allowance for credit losses:

Write-offs charged against the allowance 15 15

Additional increases to the allowance for credit losses

1 unchanged sentence

Total allowance for credit losses $ 5 $ 13 $ 18

Three months ended June 30, 2022 Corporate and Other Bonds Asset-backed Total

Three months ended September 30, 2022 Corporate and Other Bonds Asset-backed Total

(In millions)

Allowance for credit losses:

Balance as of April 1, 2022

$ 12 $ 5 $ 17

Additions to the allowance for credit losses:

Available-for-sale securities accounted for as PCD assets 3 3

Reductions to the allowance for credit losses:

Write-offs charged against the allowance 12 12

Balance as of July 1, 2022

Additional decreases to the allowance for credit losses

1 unchanged sentence

Total allowance for credit losses $ — $ 3 $ 3

Six months ended June 30, 2023

Nine months ended September 30, 2023

Allowance for credit losses:

6 unchanged sentences

Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis 3 3

Write-offs charged against the allowance 15 15

Additional increases to the allowance for credit

1 unchanged sentence

Total allowance for credit losses $ 5 $ 13 $ 18

Six months ended June 30, 2022

Nine months ended September 30, 2022

Allowance for credit losses:

11 unchanged sentences

The following table presents available-for-sale fixed maturity securities by contractual maturity.

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Cost or Amortized Cost Estimated Fair

12 unchanged sentences

Mortgage Loans Amortized Cost Basis by Origination Year (a)

As of June 30, 2023

As of September 30, 2023

(In millions)

13 unchanged sentences

A summary of the aggregate contractual or notional amounts and gross estimated fair values related to derivative financial instruments follows.

The contractual or notional amounts for derivatives are used to calculate the exchange of contractual payments under related agreements and may not be representative of the potential for gain or loss on these

Gross estimated fair values of derivative positions are currently presented in Equity securities, Receivables and Payable to brokers on the Consolidated Condensed Balance Sheets.

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Contractual/Notional Amount Estimated Fair Value Contractual/Notional Amount Estimated Fair Value

12 unchanged sentences

These investments are recorded once funded, and the related commitments may include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications and obligations related to private placement securities.

As of June 30, 2023, commitments to purchase or fund were approximately $ 1.5 billion and to sell were approximately $ 60 million under the terms of these investments.

As of September 30, 2023, commitments to purchase or fund were approximately $ 1.6 billion and to sell were approximately $ 65 million under the terms of these investments.

Assets and liabilities measured at fair value on a recurring basis are summarized in the following tables.

Corporate bonds and other includes obligations of the United States of America (“U.S.”) Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock.

June 30, 2023 Level 1

September 30, 2023 Level 1

Level 3 Total

23 unchanged sentences

Payable to brokers ( 82 ) ( 82 )

The following tables present reconciliations for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2023 and 2022:

Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses) Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities Held at June 30

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30

2023 Balance, April 1 Included in Net Income

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at September 30

2023 Balance, July 1 Included in Net Income

Included in OCI Purchases Sales

1 unchanged sentence

Level 3 Transfers out of Level 3

Balance, June 30

Balance, September 30

(In millions)

6 unchanged sentences

Equity securities $ 26 $ ( 1 ) $ ( 2 ) $ 23 $ ( 1 )

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30

2022 Balance, April 1 Included in Net Income Included in OCI Purchases Sales Settlements Transfers into

Level 3 Transfers out of Level 3 Balance, June 30

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at September 30

2022 Balance, July 1 Included in Net Income Included in OCI Purchases Sales Settlements Transfers into

Level 3 Transfers out of Level 3 Balance, September 30

(In millions)

6 unchanged sentences

Equity securities $ 47 $ ( 7 ) $ ( 10 ) $ 30 $ ( 7 )

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at September 30

2023 Balance, January 1 Included in Net Income

2 unchanged sentences

Level 3 Transfers out of Level 3

Balance, June 30

Balance, September 30

(In millions)

6 unchanged sentences

Equity securities $ 35 $ ( 8 ) $ ( 4 ) $ 23 $ ( 8 )

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at September 30

2022 Balance, January 1 Included in Net Income Included in OCI Purchases Sales Settlements Transfers into

Level 3 Transfers out of Level 3 Balance, June 30

Level 3 Transfers out of Level 3 Balance, September 30

(In millions)

19 unchanged sentences

The weighted average rate is calculated based on fair value.

June 30, 2023 Estimated

September 30, 2023 Estimated

Fair Value Valuation Techniques Unobservable Inputs Range (Weighted Average)

9 unchanged sentences

Carrying Amount Estimated Fair Value

June 30, 2023 Level 1 Level 2 Level 3 Total

September 30, 2023 Level 1 Level 2 Level 3 Total

(In millions)

21 unchanged sentences

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

The Company reported catastrophe losses, net of reinsurance, of $ 68 million and $ 37 million for the three months ended June 30, 2023 and 2022 and $ 120 million and $ 57 million for the six months ended June 30, 2023 and 2022 primarily due to severe weather related events.

The Company reported catastrophe losses, net of reinsurance, of $ 94 million and $ 114 million for the three months ended September 30, 2023 and 2022 and $ 214 million and $ 171 million for the nine months ended September 30, 2023 and 2022.

Catastrophe losses for the three and nine months ended September 30, 2023 were driven primarily by severe weather related events.

Catastrophe losses for the three and nine months ended September 30, 2022 were driven primarily by severe weather related events, including $ 87 million for Hurricane Ian.

Liability for Unpaid Claim and Claim Adjustment Expenses

The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves.

Six Months Ended June 30

Nine Months Ended September 30

2023 2022 (a)

23 unchanged sentences

These changes can be favorable or unfavorable.

Favorable net prior year loss reserve development of $ 17 million and $ 37 million was recorded for CNA’s commercial property and casualty operations (“Property & Casualty Operations”) for the three months ended June 30, 2023 and 2022 and favorable net prior year loss reserve development of $ 4 million and $ 49 million was recorded for the six months ended June 30, 2023 and 2022.

Unfavorable net prior year loss reserve development of $ 35 million and $ 64 million was recorded for CNA’s operations outside of Property & Casualty Operations (“Other Insurance Operations”) for the three and six months ended June 30, 2023 and 2022.

Favorable net prior year loss reserve development of $ 7 million and $ 17 million was recorded for CNA’s commercial property and casualty operations (“Property & Casualty Operations”) for the three months ended September 30, 2023 and 2022 and favorable net prior year loss reserve development of $ 11 million and $ 66 million was recorded for the nine months ended September 30, 2023 and 2022.

Unfavorable net prior year loss reserve development of $ 20 million was recorded for CNA’s operations outside of Property & Casualty Operations (“Other Insurance Operations”) for the three months ended September 30, 2023 and unfavorable net prior year loss reserve development of $ 55 million and $ 64 million was recorded for the nine months ended September 30, 2023 and 2022.

The following table and discussion present details of the net prior year loss reserve development in Property & Casualty Operations and Other Insurance Operations:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

6 unchanged sentences

Workers’ compensation ( 2 ) ( 2 ) ( 100 ) ( 86 )

Warranty ( 2 ) ( 13 ) ( 11 ) ( 22 )

Property and other 1 1 22 ( 11 )

1 unchanged sentence

Total pretax (favorable) unfavorable development $ 13 $ ( 17 ) $ 44 $ ( 2 )

Three and Six Months

Unfavorable development in other professional liability and management liability was primarily due to higher than expected claim severity and frequency in CNA’s cyber and professional errors and omissions (“E&O”) businesses in multiple accident years.

Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in multiple accident years.

Unfavorable development in other insurance operations was primarily driven by higher than expected frequency and severity in legacy mass tort abuse claims in older accident years.

Favorable development in surety was primarily due to lower than expected loss emergence in multiple accident years and lack of systemic activity in recent accident years.

Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in multiple accident years.

Unfavorable development in general liability was due to higher than expected claim severity in CNA’s construction and middle market businesses across multiple accident years.

Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years.

Following the second quarter annual review of legacy mass tort exposures, unfavorable development in other insurance operations was primarily driven by higher than expected frequency and severity in abuse claims in older accident years.

Unfavorable development in property and other was due to higher than expected large loss emergence in CNA’s professional liability business in accident year 2017.

Unfavorable development in other insurance operations was primarily driven by higher than expected frequency and severity in legacy mass tort abuse claims in older accident years.

Unfavorable development in medical professional liability was due to higher than expected large loss activity in recent accident years.

Unfavorable development in other professional liability and management liability was due to higher than expected claim severity and frequency in CNA’s cyber and professional E&O businesses in multiple accident years.

Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in recent accident years.

2 unchanged sentences

Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years.

Favorable development in warranty was due to lower than expected loss emergence in a recent accident year.

Unfavorable development in other insurance operations was largely associated with legacy mass tort abuse claims, including the Diocese of Rochester proposed settlement.

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At the effective date of the transaction, approximately $ 1.6 billion of net A&EP claim and allocated claim adjustment expense reserves were ceded to NICO under a retroactive reinsurance agreement with an aggregate limit of $ 4.0 billion.

The $ 1.6 billion of claim and allocated claim adjustment expense reserves ceded to NICO was net of $ 1.2 billion of ceded claim and allocated claim

adjustment expense reserves under existing third party reinsurance contracts.

The $ 1.6 billion of claim and allocated claim adjustment expense reserves ceded to NICO was net of $ 1.2 billion of ceded claim and allocated claim adjustment expense reserves under existing third party reinsurance contracts.

The NICO LPT aggregate reinsurance limit also covers credit risk on the existing third party reinsurance related to these liabilities.

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The effect of the deferred retroactive reinsurance benefit is recorded in Insurance claims and policyholders’ benefits on the Consolidated Condensed Statements of Operations.

The impact of the LPT on the Consolidated Condensed Statements of Operations was the recognition of a retroactive reinsurance benefit of $ 15 million and $ 11 million for the three months ended June 30, 2023 and 2022 and $ 23 million for each of the six months ended June 30, 2023 and 2022 .

As of June 30, 2023 and December 31, 2022, the cumulative amounts ceded under the LPT were $ 3.5 billion.

The unrecognized deferred retroactive reinsurance benefit was $ 402 million and $ 425 million as of June 30, 2023 and December 31, 2022 and is included within Other liabilities on the Consolidated Condensed Balance Sheets.

The impact of the LPT on the Consolidated Condensed Statements of Operations was the recognition of a retroactive reinsurance benefit of $ 15 million and $ 17 million for the three months ended September 30, 2023 and 2022 and $ 38 million and $ 40 million for the nine months ended September 30, 2023 and 2022 .

As of September 30, 2023 and December 31, 2022, the cumulative amounts ceded under the LPT were $ 3.5 billion.

The unrecognized deferred retroactive reinsurance benefit was $ 388 million and $ 425 million as of September 30, 2023 and December 31, 2022 and is included within Other liabilities on the Consolidated Condensed Balance Sheets.

NICO established a collateral trust account as security for its obligations under the LPT.

The fair value of the collateral trust account was $ 2.4 billion as of June 30, 2023.

The fair value of the collateral trust account was $ 2.3 billion as of September 30, 2023.

In addition, Berkshire Hathaway Inc.

guaranteed the payment obligations of NICO up to the aggregate reinsurance limit as well as certain of NICO’s performance obligations under the trust agreement.

guaranteed the payment

obligations of NICO up to the aggregate reinsurance limit as well as certain of NICO’s performance obligations under the trust agreement.

NICO is responsible for claims handling and billing and collection from third-party reinsurers related to A&EP claims.

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Applicable industry research is also considered.

The cash flow assumption updates for the third quarter of 2023 resulted in an $ 8 million pretax increase in the LFPB.

Persistency updates were unfavorable due to revisions to lapse rates.

Morbidity updates were favorable, driven by claim severity assumption updates, and there was a favorable impact from outperformance on premium rate assumptions.

Adjusted to reflect the application of ASU 2018-12, the cash flow assumption updates for the third quarter of 2022 resulted in a $ 186 million pretax increase to the LFPB, primarily driven by the unfavorable impact of increased cost of care inflation offset by favorable premium rate assumptions.

Quarterly, to derive the upper-medium grade fixed income instrument yield discount rate assumption, a published spot rate curve constructed from single-A rated U.S.

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Quarterly, the updated NPR is used to derive an updated LFPB as of the beginning of the current quarter measured at the original locked in discount rate.

The updated LFPB is then compared to the existing carrying amount of the liability as of the same date (measured at the original locked in discount rate) to determine the re-measurement gain (loss), which is presented parenthetically within the Insurance claims and policyholders’ benefits line on the Consolidated Condensed Statements of Operations.

presented parenthetically within the Insurance claims and policyholders’ benefits line on the Consolidated Condensed Statements of Operations.

Insurance contracts are grouped into cohorts according to issue year.

19 unchanged sentences

Effect of changes in discount rate ( 67 ) 40

Balance, June 30

Balance, September 30

$ 3,589 $ 4,027

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Effect of changes in discount rate ( 873 ) ( 134 )

Balance, June 30

Balance, September 30

$ 16,243 $ 17,208

Net LFPB $ 13,666 $ 14,157

(a) As of June 30, 2023 and 2022 , the re-measurement gain (loss) of $( 34 ) million and $ 6 million presented parenthetically on the Consolidated Condensed Statement of Operations is comprised of the effect of changes in cash flow assumptions and the effect of actual variances from expected experience.

Net LFPB, September 30 $ 12,654 $ 13,181

(a) As of September 30, 2023 and 2022 , the re-measurement loss of $( 75 ) million and $( 205 ) million presented parenthetically on the Consolidated Condensed Statement of Operations is comprised of the effect of changes in cash flow assumptions and the effect of actual variances from expected experience.

The following table presents earned premiums and interest expense associated with the long term care business recognized on the Condensed Consolidated Statement of Operations.

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

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The following table presents undiscounted expected future benefit and expense payments and undiscounted expected future gross premiums.

September 30,

(In millions)

1 unchanged sentence

Expected future gross premiums 5,557 6,034

Discounted expected future gross premiums at the upper-medium grade fixed income instrument yield discount rate were $ 3.9 billion and $ 4.2 billion as of June 30, 2023 and 2022.

The weighted average effective duration of the LFPB calculated using the original locked in discount rate was 12 years as of June 30, 2023 and 2022.

Discounted expected future gross premiums at the upper-medium grade fixed income instrument yield discount rate were $ 3.7 billion and $ 4.1 billion as of September 30, 2023 and 2022.

The weighted average effective duration of the LFPB calculated using the original locked in discount rate was 12 years as of September 30, 2023 and 2022.

The weighted average interest rates in the table below are calculated based on the rate used to discount all future cash flows.

June 30, December 31,

September 30, December 31,

2023 2022 2022

1 unchanged sentence

Upper-medium grade fixed income instrument discount rate 5.78 5.39 5.23

For the three and six months ended June 30, 2023, immediate charges to net income resulting from adverse development that caused the NPR to exceed 100% were $ 29 million and $ 42 million.

For the three and six months ended June 30, 2022, immediate charges to net income resulting from adverse development that caused the NPR to exceed 100% were less than $ 1 million.

For the three and six months ended June 30, 2023, the portion of losses recognized in a prior period due to NPR exceeding 100% which, due to favorable development, was reversed through net income were less than $ 1 million and $ 11 million.

For the six months ended June 30, 2022, the portion of losses recognized in a prior period due to NPR exceeding 100% which, due to favorable development, was reversed through net income was $ 1 million.

There were no such reversals for the three months ended June 30, 2022.

For the three and nine months ended September 30, 2023, immediate charges to net income resulting from adverse development that caused the NPR to exceed 100% for certain cohorts were $ 109 million and $ 152 million.

For each of the three and nine months ended September 30, 2022, immediate charges to net income resulting from adverse development that caused the NPR to exceed 100% for certain cohorts were $ 154 million.

For the three and nine months ended September 30, 2023, the portion of losses recognized in a prior period due to NPR exceeding 100% for certain cohorts which, due to favorable development, was reversed through net income were $ 26 million and $ 37 million.

For the three and nine months ended September 30, 2022, the portion of losses recognized in a prior period due to NPR exceeding 100% for certain cohorts which, due to favorable development, was reversed through net income was less than $ 1 million and $ 1 million.

Shareholders’ Equity

Accumulated other comprehensive income (loss)

The tables below present the changes in AOCI by component for the three and six months ended June 30, 2022 and 2023 :

The tables below present the changes in AOCI by component for the three and nine months ended September 30, 2022 and 2023 :

Net Unrealized Gains (Losses) on Investments with an Allowance for Credit Losses Net Unrealized Gains (Losses) on Other Investments Cumulative

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(In millions)

Balance, April 1, 2022, as reported

Balance, July 1, 2022, as reported

$ ( 7 ) $ ( 1,721 ) $ — $ 18 $ ( 625 ) $ ( 175 ) $ ( 2,510 )

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365 ( 768 ) ( 403 )

Balance, April 1, 2022, as adjusted

Balance, July 1, 2022, as adjusted

( 7 ) ( 1,356 ) ( 768 ) 18 ( 625 ) ( 175 ) ( 2,913 )

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Amounts attributable to noncontrolling interests ( 1 ) 169 ( 104 ) ( 1 ) 10 73

Balance, June 30, 2022

Balance, September 30, 2022

$ ( 10 ) $ ( 2,922 ) $ 122 $ 22 $ ( 620 ) $ ( 271 ) $ ( 3,679 )

Balance, April 1, 2023

Balance, July 1, 2023

$ ( 16 ) $ ( 2,238 ) $ ( 163 ) $ 20 $ ( 609 ) $ ( 154 ) $ ( 3,160 )

1 unchanged sentence

( 9 ) ( 1,105 ) 818 ( 1 ) ( 55 ) ( 352 )

Reclassification of (gains) losses from accumulated other comprehensive loss, after tax of $( 2 ), $( 4 ), $ 0 , $ 0 , $( 2 ) and $ 0

Reclassification of losses from accumulated other comprehensive loss, after tax of $( 2 ), $( 6 ), $ 0 , $ 0 , $( 11 ) and $ 0

Other comprehensive income (loss) ( 1 ) ( 1,084 ) 818 ( 1 ) 40 ( 55 ) ( 283 )

Amounts attributable to noncontrolling interests 1 95 ( 69 ) ( 1 ) 5 31

Balance, June 30, 2023

Purchase of CNA shares ( 46 ) ( 1 ) ( 10 ) ( 4 ) ( 61 )

Balance, September 30, 2023

$ ( 16 ) $ ( 3,273 ) $ 585 $ 19 $ ( 580 ) $ ( 208 ) $ ( 3,473 )

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Amounts attributable to noncontrolling interests 673 ( 429 ) ( 2 ) 18 260

Balance, June 30, 2022

Balance, September 30, 2022

$ ( 10 ) $ ( 2,922 ) $ 122 $ 22 $ ( 620 ) $ ( 271 ) $ ( 3,679 )

10 unchanged sentences

Amounts attributable to noncontrolling interests 1 69 ( 56 ) ( 3 ) 11

Balance, June 30, 2023

Purchase of CNA shares ( 46 ) ( 1 ) ( 10 ) ( 4 ) ( 61 )

Balance, September 30, 2023

$ ( 16 ) $ ( 3,273 ) $ 585 $ 19 $ ( 580 ) $ ( 208 ) $ ( 3,473 )

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Pension and postretirement benefits Operating expenses and other

Treasury Stock

Loews Corporation repurchased 10.0 million and 6.3 million shares of its common stock at aggregate costs of $ 593 million and $ 384 million during the six months ended June 30, 2023 and 2022.

Loews Corporation purchased 0.1 million shares of CNA’s common stock at an aggregate cost of $ 3 million during the six months ended June 30, 2023.

Stock Purchases

Loews Corporation repurchased 11.9 million and 10.5 million shares of its common stock at aggregate costs of $ 711 million and $ 614 million during the nine months ended September 30, 2023 and 2022.

Loews Corporation purchased 4.5 million shares of CNA’s common stock at an aggregate cost of $ 178 million during the nine months ended September 30, 2023.

In June of 2023, Boardwalk Pipelines entered into an amendment to its revolving credit agreement, which extended the maturity date of its revolving credit facility from May 27, 2027 to May 26, 2028, while preserving the two one-year extensions that can be exercised at Boardwalk Pipelines’ election.

The available borrowing capacity under the credit agreement will decrease from $ 1 billion to $ 912 million after May 27, 2027.

In May of 2023 , CNA completed a public offering of $ 400 million aggregate principal amount of its 5.5 % senior notes due June 15, 2033.

In May of 2023 , CNA completed a public offering of $ 400 million aggregate principal amount of its 5.5 % senior notes due June 15, 2033 and in August of 2023, CNA completed a public offering of an additional $ 100 million aggregate principal amount of its 5.5 % senior notes due June 15, 2033.

In May of 2023, Loews Corporation retired at maturity with available cash the outstanding $ 500 million aggregate principal amount of its 2.6 % senior notes.

2 unchanged sentences

The following table presents revenues from contracts with customers disaggregated by revenue type along with the reportable segment and a reconciliation to Operating revenues and other as reported in Note 13 :

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

6 unchanged sentences

Operating revenues and other $ 559 $ 533 $ 1,728 $ 1,607

Receivables from contracts with customers – As of June 30, 2023 and December 31, 2022, receivables from contracts with customers were approximately $ 145 million and $ 168 million and are included within Receivables on the Consolidated Condensed Balance Sheets.

Deferred revenue – As of June 30, 2023 and December 31, 2022, deferred revenue resulting from contracts with customers was approximately $ 4.8 billion and is reported as Deferred non-insurance warranty revenue and within Other liabilities on the Consolidated Condensed Balance Sheets.

Approximately $ 660 million and $ 723 million of revenues recognized during the six months ended June 30, 2023 and 2022 were included in deferred revenue as of December 31, 2022 and 2021.

Performance obligations – As of June 30, 2023, approximately $ 13.7 billion of estimated operating revenues is expected to be recognized in the future related to outstanding performance obligations.

The balance relates primarily to revenues for transportation and storage services for natural gas and natural gas liquids and hydrocarbons (“NGLs”) at Boardwalk Pipelines and non-insurance warranty revenue at CNA.

Approximately $ 1.6 billion will be recognized during the remaining six months of 2023 , $ 2.4 billion in 2024 and the remainder in following years.

Receivables from contracts with customers – As of September 30, 2023 and December 31, 2022, receivables from contracts with customers were approximately $ 194 million and $ 168 million and are included within Receivables on the Consolidated Condensed Balance Sheets.

Deferred revenue – As of September 30, 2023 and December 31, 2022, deferred revenue resulting from contracts with customers was approximately $ 4.8 billion and is reported as Deferred non-insurance warranty revenue and within Other liabilities on the Consolidated Condensed Balance Sheets.

Approximately $ 905 million and $ 1.0 billion of revenues recognized during the nine months ended September 30, 2023 and 2022 were included in deferred revenue as of December 31, 2022 and 2021.

Performance obligations – As of September 30, 2023, approximately $ 14.0 billion of estimated operating revenues is expected to be recognized in the future related to outstanding performance obligations.

The balance relates primarily to revenues for transportation and storage services for natural gas and natural gas liquids and other hydrocarbons (“NGLs”) at Boardwalk Pipelines and non-insurance warranty revenue at CNA.

Approximately $ 0.8 billion will be recognized during

the remaining three months of 2023 , $ 2.6 billion in 2024 and the remainder in following years.

The actual timing of recognition may vary due to factors outside of the Company’s control.

3 unchanged sentences

Pension Benefits

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

7 unchanged sentences

Net periodic (benefit) cost $ 53 $ ( 13 ) $ 65 $ ( 38 )

During the third quarter of 2023 , the Company terminated a non-contributory defined benefit plan through lump sum settlement payments to certain participants and the transfer of the remaining liability to a third party insurance company through the purchase of group annuity contracts.

The Company recorded a settlement expense of $ 47 million ($ 37 million after-tax) to recognize unrealized losses which were previously included in AOCI.

What changed 10-Q

Item 1. Financial Statements