What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-02-06 compared with 2023-02-07 · 156 added, 162 removed, 540 unchanged (37% of the section changed)

3 unchanged sentences

We have described below the material risks facing us and our subsidiaries.

additional risks that we do not yet know of or that we do not currently perceive to be material that may also materially adversely impact our business or the businesses of one or more of our subsidiaries.

There may be additional risks that we do not yet know of or that we do not currently perceive to be material that may also materially adversely impact our business or the businesses of one or more of our subsidiaries.

You should carefully consider and evaluate all of the information included in this Report and any subsequent reports we may file with the SEC and the information we make available to the public before investing in any securities issued by us.

13 unchanged sentences

Certain risks and uncertainties associated with CNA’s insurance reserves are outlined in the Insurance Reserves and Critical Accounting Estimates sections of MD&A in Item 7.

CNA is subject to the uncertain effects of emerging or potential claims and coverage issues that arise as industry practices and legal, judicial, social, economic and other environmental conditions change.

CNA is subject to the uncertain effects of emerging and potential claims and coverage issues that arise as industry practices and legal, judicial, social, economic and other environmental conditions change.

Further, the impact of social inflation continues to be significant, and the trajectory of its future impact remains uncertain.

In addition, passage of reviver statutes that extend, or eliminate, the statute of limitations for the reporting of claims, including statutes passed in certain states with respect to sexual molestation and sexual abuse, increase the uncertainty of the frequency of claims.

These issues have had, and may continue to have, a negative effect on CNA’s business, results of operations and financial condition by either extending coverage beyond the original underwriting intent or by increasing the number or size of claims, resulting in further increases in CNA’s reserves.

The effects of unforeseen emerging claim and coverage issues are extremely difficult to predict and may be material.

The effects of unforeseen emerging or potential claim and coverage issues are extremely difficult to predict and may be material.

In light of the many uncertainties associated with establishing the estimates and making the judgments necessary to establish reserve levels, CNA continually reviews and changes its reserve estimates in a regular and ongoing process as experience develops from the actual reporting and settlement of claims and as the legal, regulatory and economic environment evolves.

If CNA’s recorded reserves are insufficient for any reason, the required increase in reserves would be recorded as a charge against its earnings in the period in which reserves are determined to be insufficient.

These charges could be substantial.

When CNA’s recorded reserves are insufficient for any reason, the required increase in reserves is recorded as a charge against its earnings in the period in which reserves are determined to be insufficient.

These charges have been and in the future could be substantial.

CNA’s actual experience could vary from the key assumptions used to determine future policy benefit reserves for long-term care policies.

CNA’s future policy benefit reserves for long term care policies are based on CNA’s best estimate assumptions as of September 30, 2020, due to a reserve unlocking at that date.

Key assumptions include morbidity, persistency (the percentage of policies remaining in force), discount rate and future premium rate increases.

Estimating future experience for long term care policies is highly uncertain, because the adequacy of the reserves is contingent upon actual experience and CNA’s future expectations related to these key assumptions.

If actual or expected future experience differs from these assumptions, the reserves may not be adequate, requiring CNA to add reserves.

The required increase in reserves would be recorded as a charge against its earnings in the period in which reserves are determined to be insufficient.

These charges could be substantial.

CNA’s future policy benefit reserves for long-term care policies are based on CNA’s best estimate actuarial assumptions, which are assessed quarterly and updated at least annually.

Key actuarial assumptions include morbidity, persistency (inclusive of mortality), anticipated future premium rate increases and expenses.

The adequacy of the reserves is contingent upon actual experience and CNA’s future expectations related to these key assumptions.

If actual or expected future experience differs from these assumptions, the reserves may not be adequate, requiring CNA to increase reserves.

The required increase in reserves is recorded as a charge against its earnings in the period in which reserves are determined to be insufficient.

These charges have been and in the future could be substantial.

The reserves are discounted using upper-medium grade fixed income instrument yields as of each reporting date.

Discount rates are subject to interest rate and market volatility.

See the Life & Group Policyholder Reserves portion of the Insurance Reserves section of MD&A in Item 7 for more information.

Morbidity and persistency experience, inclusive of mortality, can be volatile and may be negatively affected by many factors including, but not limited to, policyholder behavior, judicial decisions regarding policy terms, socioeconomic factors, cost of care inflation, changes in health trends and advances in medical care.

A prolonged period during which investment returns remain at levels lower than those anticipated in CNA’s reserving discount rate assumptions could result in shortfalls in investment income on assets supporting CNA’s obligations under long term care policies, which may require increases to its reserves.

A prolonged period during which investment returns remain at low levels could result in shortfalls in investment income on assets supporting CNA’s obligations under long-term care policies.

This risk is more significant for CNA’s long-term care products because the long potential duration of the policy obligations exceeds the duration of the supporting investment assets.

Further, changes to the Internal Revenue Code may also affect the rate at which CNA discounts its reserves.

In addition, CNA may not receive regulatory approval for the level of premium rate increases it requests.

9 unchanged sentences

Climate studies by government agencies, academic institutions, catastrophe modeling organizations and other groups indicate that climate change may be altering the frequency and/or severity of catastrophic weather events, such as hurricanes, tornadoes, windstorms, floods and other natural disasters.

The extent of CNA’s losses from catastrophes is a function of the total amount of its insured exposures in the affected areas, the frequency and severity of the events themselves, the level of reinsurance coverage, reinsurance reinstatement premiums and state residual market assessments, if any.

The extent of CNA’s losses from catastrophes is a function of the total amount of its insured exposures in the affected areas, the frequency and severity of the events themselves, the level of CNA’s reinsurance coverage, reinsurance reinstatement premiums and state residual market assessments, if any.

It can take a long time for the ultimate cost of any catastrophe losses to CNA to be finally determined, as a multitude of factors contribute to such costs, including evaluation of general liability and pollution exposures, infrastructure disruption, business interruption and reinsurance collectibility.

5 unchanged sentences

For a further discussion of TRIPRA, see Part II, Item 7, MD&A - Catastrophes and Related Reinsurance.

As a result of the items discussed above, catastrophe losses are particularly difficult to estimate, could cause CNA to exhaust its available reinsurance limits and could adversely affect the cost and availability of reinsurance.

As a result of the items discussed above, catastrophe losses are particularly difficult to estimate, could cause CNA to exhaust its available reinsurance limits, could lead to large losses and could adversely affect the cost and availability of reinsurance.

Accordingly, catastrophic events could have a material adverse effect on CNA’s business, results of operations, financial condition and liquidity.

The COVID-19 pandemic and measures to mitigate the spread of the virus have resulted in increased claims and related litigation risk across CNA’s enterprise, which may continue to have adverse impacts on its business, results of operations and financial condition and could be material.

CNA has experienced, and may continue to experience, increased claim submissions and litigation related to denial of claims based on policy coverage, or the facts of the claim, in certain lines of business that are implicated by the pandemic and mitigating actions taken by its customers and governmental authorities in response to its spread.

These lines include primarily healthcare professional liability, workers’ compensation, commercial property-related business interruption coverage, management liability (directors and officers, employment practices and professional liability lines) and trade

CNA recorded significant losses during 2020, the majority of which are classified as incurred but not reported (“IBNR”) reserves, in these areas and may experience continued losses, which could be material.

Increased frequency or severity in any or all of the foregoing lines, or others where the exposure has yet to emerge, may have a material impact on CNA’s business, results of operations and financial condition.

The COVID-19 pandemic, including new or emerging variants, other potential pandemics and related measures to mitigate the spread of the foregoing may continue to have adverse impacts on its business, results of operations and financial condition and could be material.

CNA has experienced, and may continue to experience, increased claim submissions and litigation related to denial of claims based on policy coverage, or the facts of the claim, in certain lines of business that are implicated by the COVID-19 pandemic and mitigating actions taken by its customers and governmental authorities in response to its spread.

CNA recorded significant losses during 2020, a significant portion of which remain classified as incurred but not reported (“IBNR”) reserves, in these areas and may experience continued losses, which could be material.

Increased frequency or severity in any or all of the foregoing lines, or others where the exposure has yet to emerge, relating to long-term effects of COVID-19, new or emerging variants, or other potential pandemics, and related measures to mitigate the spread of the foregoing may have a material impact on CNA’s business, results of operations and financial condition.

CNA has incurred and may continue to incur substantial expenses related to litigation activity in connection with COVID-related legal claims.

These actions primarily relate to denial of claims submitted as a result of the pandemic and the mitigating actions under commercial property policies for business interruption coverage, including lockdowns and closing of certain businesses.

The significance of such litigation, both in substance and volume, and the resultant activities CNA has initiated, including external counsel engagement, and the costs related thereto, may have a material impact on CNA’s business, results of operations and financial condition.

These actions primarily relate to denial of claims submitted as a result of the pandemic and the mitigating actions taken, including lockdowns and closing of certain businesses.

The significance of such litigation or any other litigation relating to new or emerging variants of COVID-19 or other potential pandemics and related measures to mitigate the spread of the foregoing, both in substance and volume, and the resultant CNA-initiated activities, including external counsel engagement, and the costs related thereto, may have a material impact on CNA’s business, results of operations and financial condition.

CNA has exposure related to A&EP claims, which could result in material losses.

CNA’s property and casualty insurance subsidiaries have exposures related to A&EP claims.

CNA’s experience has been that establishing claim and claim adjustment expense reserves for casualty coverages relating to A&EP claims is subject to uncertainties that are greater than those presented by other claims.

Additionally, traditional actuarial methods and techniques employed to estimate the ultimate cost of claims for more traditional property and casualty exposures are less precise in estimating claim and claim adjustment expense reserves for A&EP.

6 unchanged sentences

Any additional reinsurance premium or future claim handling costs would also reduce CNA’s earnings.

CNA is exposed to, and may face adverse developments related to, mass tort claims that could arise from, among other things, its insureds’ sale or use of potentially harmful products or substances, changes to the social and legal environment, issues related to altered interpretation of coverage and other new and emerging claim theories.

CNA is exposed to, and may face adverse developments related to, mass tort claims that could arise from, among other things, its insureds’ sale or use of potentially harmful products or substances, changes to the social and legal environment, such as those related to abuse reviver statutes, issues related to altered interpretation of coverage and other new and emerging claim theories.

CNA faces potential exposure to various types of existing, new and emerging mass tort claims including, those related to exposure to potentially harmful products or substances, such as glyphosate, lead paint, per- and polyfluoroalkyl substances (“PFAS”) and opioids;

2 unchanged sentences

Evolving judicial interpretations and new legislation regarding the application of various tort theories and defenses, including application of various theories of joint and several liability, as well as the application of insurance coverage to these claims, give rise to new and potentially more severe claim activity.

Mass tort claim activity, including activity based on such changing judicial interpretations and recent and proposed legislation could have a material adverse effect on CNA’s business, results of operations and financial condition.

For example, CNA has recorded, and may continue to record, increases in its mass tort reserves, driven substantially by abuse reviver statutes that have resulted in increased claims.

Similar and continuing mass tort claim activity, including activity based on changing judicial interpretations and recent and proposed legislation could have a material adverse effect on CNA’s business, results of operations and financial condition.

CNA faces intense competition in its industry;

2 unchanged sentences

CNA competes with a large number of stock and mutual insurance companies and other entities, some of which may be larger or have greater financial or other resources than CNA does, for both distributors and customers.

This includes agents, brokers and managing general underwriters who may increasingly compete with CNA to the extent that they continue to have direct access to providers of capital seeking exposure to insurance risk.

This includes agents, brokers and managing general underwriters who may increasingly compete with CNA to the extent that markets continue to provide them with direct access to providers of capital seeking exposure to insurance risk.

Insurers compete on the basis of many factors, including products, price, services, ratings and financial strength.

The competitor landscape has evolved substantially in recent years, with significant consolidation and new market entrants, such as insuretech firms, resulting in increased pressures on CNA’s ability to remain competitive, particularly in obtaining pricing that is both attractive to CNA’s customer base and risk appropriate to CNA.

remain competitive, particularly in obtaining pricing that is both attractive to CNA’s customer base and risk appropriate to CNA.

In addition, the property and casualty market is cyclical and has experienced periods characterized by relatively high levels of price competition, resulting in less restrictive underwriting standards and relatively low premium rates, followed by periods of relatively lower levels of competition, more selective underwriting standards and relatively high premium rates.

During periods in which price competition is high, CNA may lose business to competitors offering competitive insurance products at lower prices.

CNA may lose business to competitors offering competitive insurance products at lower prices.

As a result, CNA’s premium levels and expense ratio could be materially adversely impacted.

5 unchanged sentences

Under CNA’s ceded reinsurance arrangements, a reinsurer assumes a specified portion of its exposure in exchange for a specified portion of policy premiums.

The availability and cost of the reinsurance protection CNA purchases, which affects the volatility and profitability of its business, as well as the level and types of risk CNA retains, is determined by general economic conditions and conditions in the reinsurance market, such as the occurrence of significant reinsured events or unexpected adverse trends, including those associated with climate change.

If CNA is unable to obtain sufficient reinsurance at a cost or on terms and conditions it deems acceptable, CNA’s risk exposure will not be mitigated or it may forego such increased risk, thereby adversely impacting its underwriting strategies.

The availability and cost of the reinsurance protection CNA purchases, which affects the volatility and profitability of its business, as well as the level and types of risk CNA retains, is determined by many factors, including general economic conditions and conditions in the reinsurance market, such as the occurrence of significant reinsured events or unexpected adverse trends, including those associated with climate change.

If CNA is unable to obtain sufficient reinsurance at a cost or on terms and conditions it deems acceptable, CNA’s risk exposure will not be mitigated to the degree desired or it may forego such increased risk, thereby adversely impacting its underwriting strategies.

In addition, use of reinsurance exposes CNA to credit risk of the reinsurers, as the reinsurance arrangements do not relieve it of the liability to the customer.

5 unchanged sentences

For example, more insurers are utilizing “big data” analytics to make underwriting and other decisions that impact product design and pricing.

If such utilization is more effective than how CNA uses similar data and information, CNA will be at a competitive disadvantage.

If such utilization is more effective than how CNA uses its data and information, CNA will be at a competitive disadvantage.

There can be no assurance that CNA will continue to compete effectively with its industry peers due to technological changes;

5 unchanged sentences

CNA’s investment portfolio is exposed to various risks, such as interest rate, credit spread, issuer default, equity prices and foreign currency, which are unpredictable.

Financial markets are highly sensitive to changes in economic conditions, monetary policies, tax policies, domestic and international geopolitical issues and many other factors.

Financial markets are highly sensitive to changes in economic conditions, monetary policies, tax policies, interest rates, domestic and international geopolitical issues and many other factors.

Changes in financial markets, including fluctuations in interest rates, credit, equity prices and foreign currency prices, and many other factors beyond CNA’s control can adversely affect the value of its investments, the realization of investment income and the rate at which it discounts certain liabilities.

2 unchanged sentences

CNA has significant holdings in fixed maturity investments that are sensitive to changes in interest rates.

A decline in interest rates may reduce the returns earned on new fixed maturity investments, thereby reducing CNA’s net investment income, while an increase in interest rates may reduce the value of its existing fixed maturity investments, which could reduce CNA’s net unrealized gains included in Accumulated Other Comprehensive Income (“AOCI”).

A decline in interest rates may reduce the returns earned on new fixed maturity investments, thereby reducing CNA’s net investment income, while an increase in interest rates may reduce the value of its existing fixed maturity investments, which could increase CNA’s net unrealized losses or reduce its net unrealized gains included in Accumulated Other Comprehensive Income (“AOCI”).

The value of CNA’s fixed maturity investments is also subject to risk that certain investments may default or become impaired due to deterioration in the financial condition of issuers of the investments CNA holds or in the underlying collateral of the security.

23 unchanged sentences

The shut-down or unavailability of one or more of CNA’s or its vendors’ systems or facilities for these or any other reasons could significantly impair CNA’s ability to perform critical business functions in a timely basis.

In addition, because CNA’s information technology and telecommunications systems interface with and depend on third-party systems, CNA could experience service denials if demand for such service exceeds capacity or a third-party system fails or experiences an interruption.

In addition, because CNA and its vendors’ information technology and telecommunications systems interface with and depend on third-party systems, CNA could experience service denials if demand for such service exceeds capacity or a third-party system fails or experiences an interruption.

If sustained or repeated, such events could result in a deterioration of CNA’s ability to perform necessary business functions.

10 unchanged sentences

The breach of confidential information also could give rise to legal liability and regulatory action under data protection and privacy laws, as well as evolving regulation in this regard.

During the third quarter of 2021, CNA was notified of a breach of certain systems of a third party administrator, which resulted in breach notifications sent by such administrator to potentially impacted persons, including a limited number of CNA’s claimants.

During the second quarter of 2023, CNA was notified of a breach in the file transfer software, MOVEit Transfer, used by a vendor of one of its third party administrators.

This incident resulted in required breach notifications to CNA’s long-term care policyholders, with such notifications made by the subject vendor.

While CNA does not believe such notifications and resultant actions will have a material adverse effect on its business, this or similar incidents, or any other such breach of CNA’s or its vendors’ data security infrastructure could have a material adverse effect on its business, results of operations and financial condition.

6 unchanged sentences

In addition, potential disputes with its insurers about the availability of insurance coverage could occur.

Further, as a result of the March 2021 attack, CNA incurred higher costs for the replenishment of its current policy through the end of the term, and CNA believes it will incur higher costs for future cybersecurity insurance coverage beyond the current term.

CNA may also be subject to future cyber incidents that could have a material adverse effect on its business, results of operations or financial condition or may result in operational impairments and financial losses, as well as significant harm to CNA’s reputation.

Further, should CNA experience future cyber incidents, or should industry trends drive rate increases resulting from growth in volume and significance of cyber incidents broadly, it may incur higher costs for cybersecurity insurance coverage.

The risks relating to future breaches in CNA’s, or its vendors’ data security infrastructure, including in connection with cyber incidents, could have a material adverse effect on its business, results of operations or financial condition or may result in operational impairments and financial losses, as well as significant harm to CNA’s reputation.

Inability to detect and prevent significant employee or third party service provider misconduct, inadvertent errors and omissions, or exposure relating to functions performed on CNA’s behalf could result in a material adverse effect on CNA’s business, results of operations and financial condition.

49 unchanged sentences

CNA also is subject to numerous regulations governing the protection of personal and confidential information of its clients and employees, including medical records, credit card data and financial information.

These laws and regulations are increasing in complexity and number, change frequently, sometimes conflict, and could expose CNA to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more

jurisdictions, including regulations related to cyber security protocols (which continue to evolve in breadth, sophistication and maturity in response to an ever-evolving threat landscape).

and regulations, including regulations related to cybersecurity protocols (which continue to evolve in breadth, sophistication and maturity in response to an ever-evolving threat landscape), are increasing in complexity and number, change frequently, sometimes conflict, and could expose CNA to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions.

In response to climate change, regulators at the federal, state and international level also could impose new regulations requiring disclosure of underwriting or investment in certain industry sectors.

5 unchanged sentences

Risks Related to Us and Our Subsidiary, Boardwalk Pipelines

Boardwalk Pipelines’ natural gas transportation and storage operations are subject to extensive regulation by the FERC, including rules and regulations related to the rates it can charge for its services and its ability to construct or abandon facilities.

Boardwalk Pipelines’ natural gas transportation and storage operations and ethane transportation services are subject to extensive regulation by the FERC, including rules and regulations related to the rates it can charge for its services and its ability to construct or abandon facilities.

Boardwalk Pipelines may not be able to recover the full cost of operating its pipelines, including earning a reasonable return.

Boardwalk Pipelines’ natural gas transportation and storage operations are subject to extensive regulation by the FERC, including the types, rates and terms of services Boardwalk Pipelines may offer to its customers, construction of new facilities, creation, modification or abandonment of services or facilities and recordkeeping and relationships with affiliated companies.

An adverse FERC action in any of these areas could affect Boardwalk Pipelines’ ability to compete for business, construct new facilities, offer new services or recover the full cost of operating its pipelines.

This regulatory oversight can result in longer lead times to develop and complete any future project than competitors that are not subject to the FERC’s regulations.

The FERC can also deny Boardwalk Pipelines the right to abandon certain facilities from service.

The FERC regulates the rates Boardwalk Pipelines can charge for its natural gas transportation and storage operations.

The FERC regulates the rates Boardwalk Pipelines can charge for its natural gas transportation and storage and interstate ethane transportation operations.

For cost-based services, the FERC establishes both the maximum and minimum rates Boardwalk Pipelines can charge.

3 unchanged sentences

Adoption of potential legislation that would amend Section 5 of the NGA to add refund provisions could increase the likelihood of such a challenge.

If such a challenge is successful for any of Boardwalk Pipelines’ pipelines, the revenues associated with transportation and storage services the pipeline provides pursuant to cost-of-service rates could materially decrease in the future, which would adversely affect, perhaps substantially, the revenues on that pipeline going forward.

The FERC issued a NOI on April 19, 2018, initiating a review of its policies on certification of natural gas pipelines, including an examination of the 1999 Policy Statement that is used to determine whether to grant certificates for new pipeline projects.

On February 18, 2021, the FERC issued the 2021 NOI, reopening its review of the 1999 Policy Statement.

On February 18, 2022, the FERC issued the 2022 Policy Statements, to be effective that same day.

On March 24, 2022, the FERC issued an order converting the 2022 Policy Statements into draft policy statements and requested further comments.

The FERC will not apply the draft 2022 Policy Statements until it issues final guidance on these topics.

Boardwalk Pipelines is unable to predict what, if any, changes may result upon finalization of the draft 2022 Policy Statements that will affect its natural gas pipeline operations or when such new policies, if any, might become effective.

Boardwalk Pipelines does not expect that any change in these policy statements would affect it in a materially different manner than any other natural gas pipeline company operating in the U.S.

If such a challenge is successful for any of Boardwalk Pipelines’ pipelines or if its rates are found not to be just and reasonable, then the revenues associated with transportation and storage services the pipeline provides pursuant to cost-of-service rates could materially decrease in the future, which would adversely affect, perhaps substantially, the revenues on that pipeline going forward.

Over time, the FERC may change, amend or announce that it will undertake a review of its existing policies.

There were no major policy changes announced by the FERC during 2023.

The FERC has authority to impose civil penalties for violations of the NGA and NGPA, and the implementing regulations thereunder, up to a maximum amount that is adjusted annually for inflation, which for 2024 is approximately $1.5 million per day per violation.

Should Boardwalk Pipelines fail to comply with applicable statutes, rules, regulations and orders administered by the FERC, it could be subject to substantial penalties and fines.

Should Boardwalk Pipelines fail to comply with applicable statutes, rules, regulations and orders administered by the FERC, it could be subject to substantial penalties and fines, in addition to reputational damage.

The rates and terms of service on Boardwalk Pipelines’ interstate ethane transportation pipeline are also subject to regulation by the FERC under, among other statutes, the ICA and the Energy Policy Act of 1992.

Boardwalk Pipelines’ operations, and those of Boardwalk Pipelines’ customers, are subject to a series of risks regarding climate change.

7 unchanged sentences

Supreme Court finding that GHGs are air pollutants under the CAA and the EPA’s own endangerment finding for certain GHGs, including carbon dioxide and methane.

The EPA regulates GHGs through various requirements, including permitting for GHG emissions from large stationary sources, annual reporting on GHG emissions from oil and gas facilities, New Source Performance Standards (“NSPS”) restricting methane emissions from new facilities in the natural gas sector, and GHG emissions limits on vehicles (together with the DOT).

The EPA’s regulation of methane emissions continues to undergo significant changes.

In June 2021, President Biden signed into law a joint resolution of Congress under the Congressional Review Act that rescinded the EPA’s 2020 Policy Rule, effectively reinstating the 2012 and 2016 NSPS for the transmission and storage sector.

In November 2021, the EPA proposed a rule to establish standards of performance for methane and volatile organic compound emissions from new sources and, for the first time, existing sources (those that commenced construction or reconstruction after November 15, 2021), within the crude oil and natural gas source category, including the transmission and storage sector.

On November 11, 2022, the EPA released a supplemental methane proposal that modified the original proposal and provided additional detail.

The proposed rule includes several requirements relevant to Boardwalk Pipelines’ operations, including stricter emissions limits for various facilities and equipment (including pneumatic devices, storage tanks, reciprocating compressors and wet seal and dry seal centrifugal compressors), more frequent leak detection and monitoring of fugitive emissions from compressor stations, and deadlines for repairing fugitive emissions.

The proposal also establishes a program for third-party notification of “super-emitter” events.

The final rule will likely work alongside the IRA, which appropriates significant federal funding for renewable energy initiatives as well as amends the CAA to impose a first-time fee on the emission of methane from sources required to report their GHG emissions to the EPA.

The EPA regulates GHGs through various requirements, including permitting for GHG emissions from large stationary sources, annual reporting on GHG emissions from oil and gas facilities, New Source Performance Standards restricting methane emissions from new facilities in the natural gas sector, and GHG emissions limits on vehicles (together with the DOT).

The EPA’s regulation of methane emissions has undergone significant changes.

In December 2023, the EPA finalized its methane rules for new, modified, and reconstructed facilities, known as OOOOb, as well as standards for existing sources for the first time ever, known as OOOOc.

Under the final rules, states have two years to prepare and submit their plans to impose methane emission controls on existing sources.

The presumptive standards established under the final rules are generally the same for both new and existing sources and include enhanced leak detection survey requirements using optical gas imaging and other advanced monitoring to encourage the deployment of innovative technologies to detect and reduce methane emissions, reduction of emissions by 95% through capture and control systems, zero-emission requirements for certain devices, and the establishment of the "super emitter" response program that would allow third parties to make reports to the EPA of large methane emission events, triggering certain investigation and repair requirements.

Fines and penalties for violations of these rules can be substantial.

It is likely that the final rules and its requirements will be subject to legal challenges.

Compliance with the new rules may affect the amount Boardwalk Pipelines owes under the IRA, which amended the CAA to impose a first-time fee on the emission of methane from sources required to report their GHG emissions to the EPA.

The methane emissions fee applies to excess methane emissions from certain facilities and starts at $900 per metric ton of leaked methane in 2024 and increases to $1,200 in 2025 and $1,500 in 2026 and thereafter.

Compliance with the EPA’s proposed new rule and the IRA’s methane emissions fee could increase Boardwalk Pipelines’ operating costs and the costs of Boardwalk Pipelines’ customers and accelerate the transition away from fossil fuels which could, in turn, reduce the demand for its services, thereby adversely affecting its operations.

Compliance with the EPA’s new final rules and standards would exempt an otherwise covered facility from the requirement to pay the methane fee.

The requirements of the EPA’s final methane rules could increase Boardwalk Pipelines’ operating costs and the costs of Boardwalk Pipelines’ customers, thereby adversely affecting its operations.

Governmental entities, including certain states and groups of states, have adopted or are considering legislation, regulations or other initiatives such as GHG cap-and-trade programs, carbon taxes, GHG reporting and tracking programs, and emissions limits.

6 unchanged sentences

made various commitments, including the Global Methane Pledge to reduce methane emissions 30% from 2020 levels by 2030.

Additionally, at the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27) in November 2022, countries, including the U.S., reiterated the agreements from COP26 and were called upon to accelerate efforts toward the phase out of inefficient fossil fuel subsidies.

also announced, in conjunction with the European Union and other partner countries, that it would develop standards for monitoring and reporting methane emissions to help create a market for low methane-intensity gas.

Although no firm commitment or timeline to phase out or phase down fossil fuels were made at COP27, there can be no guarantees that countries will not seek to implement such a phase out or phase down in the future.

Additionally, Boardwalk Pipelines cannot predict whether similar efforts at future climate conferences will be successful and the potential resultant impact this may have upon its business or financial condition.

In December 2023, at the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (“COP28”), certain parties signed onto an agreement to transition "away from fossil fuels in energy systems in a just, orderly, and equitable manner" and increase renewable energy capacity so as to achieve net zero by 2050, although no timeline for doing so was set.

The impact of the Paris Agreement, COP26, COP28 or other international conventions cannot be predicted at this time, and it is unclear what additional initiatives may be adopted or implemented, or whether similar efforts at future climate conferences will be successful and the potential resultant impact this may have upon Boardwalk Pipelines’ business or financial condition.

Governmental, scientific and public concern over the threat of climate change arising from GHG emissions has resulted in increasing political risks in the U.S.

federal lands and offshore waters, increasing requirements for construction and permitting of pipeline infrastructure and LNG export facilities, and further restricting GHG emissions from oil and gas facilities.

Litigation risks are also increasing, as a number of cities and other governmental entities have brought suit alleging that fossil fuel producers created public nuisances by producing fuels that contributed to global warming effects such as rising sea levels, are responsible for associated roadway and infrastructure damage, or defrauded investors or customers by failing to timely and adequately disclose adverse effects of climate change.

The Biden Administration and future administrations could take various actions to curtail oil and natural gas production and transportation, including limiting fracturing of oil and natural gas wells, restricting flaring and venting during natural gas production on federal properties, limiting or banning oil and gas leases on federal lands and offshore waters, increasing requirements for construction and permitting of pipeline infrastructure and LNG export facilities, and further restricting GHG emissions from oil and gas facilities.

For example, on January 26, 2024, President Biden announced a temporary pause on pending decisions on new exports of LNG to countries that the U.S.

does not have free trade agreements with, pending Department of Energy review of the underlying analyses for authorization.

sea levels, are responsible for associated roadway and infrastructure damage, or defrauded investors or customers by failing to timely and adequately disclose adverse effects of climate change.

There are also increasing financial risks for fossil fuel energy companies as investors become increasingly concerned about the potential effects of climate change and may elect in the future to shift some or all of their investments into non-fossil fuel energy related sectors.

4 unchanged sentences

Financial institutions could be required to adopt policies that limit funding for fossil fuel energy companies.

In late 2020 the Federal Reserve joined the Network for Greening the Financial System (“NGFS”), a consortium of financial regulators focused on addressing climate-related risks in the financial sector, and in September 2022, announced that six of the U.S.’ largest banks will participate in a pilot climate scenario analysis to enhance the ability of firms and supervisors to measure and manage climate-related financial risk.

The Federal Reserve released its pilot exercise in January 2023, which is designed to analyze the impact of both physical and transition risks related to climate change on specific assets of the banks’ portfolios.

While Boardwalk Pipelines cannot predict what policies may result from these announcements and activities, a material reduction in the capital available to the fossil fuel industry could make it more difficult to secure funding for exploration and production or midstream energy business activities, which could adversely impact its business and operations.

In October 2023 the Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp.

released a finalized set of principles guiding financial institutions with $100 billion or more in assets on the management of physical and transition risks associated with climate change.

While Boardwalk Pipelines cannot predict what additional developments may arise from these various actions, a material reduction in the capital available to the fossil fuel industry could make it more difficult to secure funding for exploration and production or midstream energy business activities, which could adversely impact its business and operations.

Additionally, in March 2022, the SEC released a proposed rule that would establish a framework for the reporting of climate risks, targets and metrics.

9 unchanged sentences

Climatic conditions and events could adversely impact Boardwalk Pipelines’ operations, pipelines and facilities, or those of its customers or suppliers.

Climatic events can cause disruptions to, delays in or suspension of Boardwalk Pipelines’ services, by interrupting its operations, causing loss of or damage to equipment, or having similar impacts on its customers or third party suppliers.

Climatic events can cause disruptions to, delays in or suspension of Boardwalk Pipelines’ services, by interrupting its operations, causing loss of or damage to its facilities or equipment, or having similar impacts on its customers or third-party suppliers.

In general, Boardwalk Pipelines’ operations could be significantly impacted by climatic conditions such as increased frequency and severity of storms, floods and wintry conditions.

2 unchanged sentences

Such climactic conditions could also impact Boardwalk Pipelines’ customers’ ability to utilize Boardwalk Pipelines’ services and third-party suppliers’ ability to provide Boardwalk Pipelines with the products and services necessary to maintain operation of its facilities.

Boardwalk Pipelines may incur significant damages as well as costs to repair or

maintain its facilities, which could adversely affect its operations and the financial health of its business.

Boardwalk Pipelines may incur significant damages as well as costs to repair or maintain its facilities, which could adversely affect its operations and the financial health of its business.

In recent years, local governments and landowners in Louisiana have filed lawsuits against energy companies, alleging that their operations contributed to increased coastal rising seas and erosion and seeking substantial damages.

13 unchanged sentences

PHMSA published a second final rule in October 2019 for hazardous liquid transmission and gathering pipelines that significantly extends and expands the reach of certain of its integrity management requirements, and that requires the accommodation of in-line inspection tools by 2039 unless the pipeline cannot be modified to permit such accommodation, increased annual, accident and safety-related conditional reporting requirements, and expanded use of leak detection systems beyond HCAs.

Certain aspects of that rule are currently in court review.

PHMSA also published final rules during February and July 2020 that amended the minimum safety requirements related to natural gas storage facilities, including wells, wellbore tubing and casing, and added applicable reporting requirements.

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.

PHMSA and state regulators reportedly began their review of these plans in 2022, and in May 2023, PHMSA published a proposed rule that would enhance requirements for detecting and repairing leaks on new and existing natural gas distribution, gas transmission, and gas gathering 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.

These new and any future regulations adopted by PHMSA have imposed and may impose more stringent requirements applicable to integrity management programs and other pipeline safety aspects of Boardwalk Pipelines’ operations, which is expected to cause it to incur increased capital and operating costs, may cause it to experience operational delays and may result in potential adverse impacts to its ability to reliably serve its customers.

In September 2023, PHMSA published a proposed rule that would enhance the safety requirements for gas distribution pipelines and require updates to distribution integrity management programs, emergency response plans, operations and maintenance manuals, and other safety practices.

These new and any future regulations adopted by PHMSA have imposed and may impose more stringent requirements applicable to integrity management programs and other pipeline safety aspects of Boardwalk Pipelines’ operations, which is expected to cause Boardwalk Pipelines to incur increased capital and operating costs, may cause it to experience operational delays and may result in potential adverse impacts to its ability to reliably serve its customers.

States have jurisdiction over certain of Boardwalk Pipelines’ intrastate pipelines and have adopted regulations similar to existing PHMSA regulations.

2 unchanged sentences

The imposition of new or more stringent pipeline safety rules applicable to natural gas or NGL pipelines, or any issuance or reinterpretation of guidance from PHMSA or any state agencies, could cause Boardwalk Pipelines to install new or modified safety controls, pursue additional capital projects or conduct maintenance programs on an accelerated basis, any or all of which could result in Boardwalk Pipelines incurring increased capital and operating costs, experiencing operational delays and suffering potential adverse impacts to its operations or ability to reliably serve its customers.

Requirements that are imposed under the 2011 Act, the 2016 Act, the 2020 Act or other

pipeline safety legislation or implementing regulations, may also increase Boardwalk Pipelines’ capital and operating costs or impact the operation of its pipelines.

Requirements that are imposed under the 2011 Act, the 2016 Act, the 2020 Act or other pipeline safety legislation or implementing regulations, may also increase Boardwalk Pipelines’ capital and operating costs or impact the operation of its pipelines.

Boardwalk Pipelines has entered into certain firm transportation contracts with shippers that utilize the design capacity of certain of its pipeline assets, based upon the authority Boardwalk Pipelines received from PHMSA to operate those pipelines at higher than normal operating pressures of up to 0.80 of the pipeline’s SMYS under issued permits with specific conditions.

17 unchanged sentences

one or more landowners may resist Boardwalk Pipelines’ efforts to make needed repairs, which could lead to an interruption in the operation of the affected pipeline or facility for a period of time that is significantly longer than would have otherwise been the case.

Acts of sabotage or eco-terrorism could cause significant damage or injury to people, property or the environment and lead to extended interruptions of Boardwalk Pipelines’ operations and material damages and costs.

Acts of sabotage or eco-terrorism could cause significant damage or injury or death to people, property or the environment and lead to extended interruptions of Boardwalk Pipelines’ operations and material damages and costs.

Market conditions, including the price differentials between natural gas supplies and market demand for natural gas, may reduce the transportation rates that Boardwalk Pipelines can charge on certain portions of its pipeline systems.

4 unchanged sentences

Boardwalk Pipelines’ customers, especially producers and certain plant operators, are directly impacted by changes in commodity prices.

The prices of natural gas, oil and NGLs fluctuate in response to changes in both domestic and worldwide supply and demand, market uncertainty and a variety of additional factors, including for natural gas, the realization of potential LNG exports and demand growth within the power generation market.

realization of potential LNG exports and demand growth within the power generation market.

Volatility in the pricing levels of natural gas, oil and NGLs could adversely affect the businesses of certain of Boardwalk Pipelines’ producer customers and could result in defaults or the non-renewal of Boardwalk Pipelines’ contracted capacity when existing contracts expire.

7 unchanged sentences

If a customer fails to post the required credit support or defaults during the growth project process, overall returns on the project may be reduced to the extent an adjustment to the scope of the project occurs or Boardwalk Pipelines is unable to replace the defaulting customer with a customer willing to pay similar rates.

In 2020, an expansion customer declared bankruptcy for which Boardwalk Pipelines was able to use the credit support obtained during the growth project process to cover a portion of the customer’s remaining long term commitment.

Boardwalk Pipelines’ credit exposure also includes receivables for services provided, future performance under firm agreements and volumes of gas owed by customers for imbalances or gas loaned by Boardwalk Pipelines to them under certain NNS and parking and lending (“PAL”) services.

2 unchanged sentences

Its credit agreement limits its ability to make loans or investments, make material changes to the nature of its business, merge, consolidate or engage in asset sales, or grant liens or make negative pledges.

This agreement also requires it to maintain a ratio of total consolidated debt to consolidated EBITDA (as defined in the agreement) of not more than 5.0 to 1.0, or up to 5.5 to 1.0 for the three quarters following a qualified acquisition or series of acquisitions, where the purchase price exceeds $100.0 million over a rolling 12-month period, which limits the amount of additional indebtedness Boardwalk Pipelines can incur to grow its business, and could require it to reduce indebtedness if its earnings before interest, income taxes, depreciation and amortization (“EBITDA”) decreases to a level that would cause it to breach this covenant.

This agreement also requires it to maintain a ratio of total consolidated debt to consolidated EBITDA (as defined in the credit agreement) of not more than 5.0 to 1.0, or up to 5.5 to 1.0 for the three quarters following a qualified acquisition or series of acquisitions, where the purchase price exceeds $100.0 million over a rolling 12-month period, which limits the amount of additional indebtedness Boardwalk Pipelines can incur to grow its business, and could require it to reduce indebtedness if its earnings before interest, income taxes, depreciation and amortization (“EBITDA”) decreases to a level that would cause it to breach this covenant.

Future financing agreements Boardwalk Pipelines may enter into could contain similar or more restrictive covenants or may not be as favorable as those under its existing indebtedness.

8 unchanged sentences

This level of debt requires significant interest payments.

Boardwalk Pipelines’ inability to generate sufficient cash flow to

satisfy its debt obligations, or to refinance its obligations on commercially reasonable terms, would have a material adverse effect on its business.

Boardwalk Pipelines’ inability to generate sufficient cash flow to satisfy its debt obligations, or to refinance its obligations on commercially reasonable terms, would have a material adverse effect on its business.

Boardwalk Pipelines’ indebtedness could have important consequences.

1 unchanged sentence

• limit Boardwalk Pipelines’ ability to borrow money for its working capital, capital expenditures, debt service requirements or other general business activities;

• impact the ratings received from credit rating agencies;

• impact Boardwalk Pipelines’ ratings received from credit rating agencies;

• increase Boardwalk Pipelines’ vulnerability to general adverse economic and industry conditions;

1 unchanged sentence

Boardwalk Pipelines is permitted, under its revolving credit facility and the indentures governing its notes, to incur additional debt, subject to certain limitations under its revolving credit facility and the indentures governing the notes.

If Boardwalk Pipelines incurs additional debt, its increased leverage could also result in the consequences described above.

If Boardwalk Pipelines incurs additional debt, its increased leverage could also result in or exacerbate the consequences described above.

Limited access to the debt markets and increases in interest rates could adversely affect Boardwalk Pipelines’ business.

10 unchanged sentences

Future pandemics and other outbreaks of contagious diseases could result in similar or worse impacts and significant business and operational disruptions, including business closures, supply chain disruptions, travel restrictions, stay-at-home orders and limitations on the availability of workforces.

Boardwalk Pipelines’ operations are considered essential critical infrastructure under current Cybersecurity and Infrastructure Security Agency guidelines;

however, if significant portions of Boardwalk Pipelines’ workforce are unable to work effectively, including because of illness or quarantines or from the impacts of any potential future pandemics and other outbreaks of contagious diseases, its business could be materially adversely affected.

Although Boardwalk Pipelines’ operations are considered essential critical infrastructure under current Cybersecurity and Infrastructure Security Agency guidelines, if significant portions of Boardwalk Pipelines’ workforce are unable to work effectively, including because of illness or quarantines or from the impacts of any potential future pandemics and other outbreaks of contagious diseases, its business could be materially adversely affected.

Boardwalk Pipelines may also be unable to perform fully on its contracts, and its costs may increase as a result of any potential future pandemics and other outbreaks of contagious diseases.

6 unchanged sentences

Substantial portions of Boardwalk Pipelines’ pipelines, storage and other facilities are constructed and maintained on property owned by others pursuant to rights-of-way, easements, permits, licenses or consents, and Boardwalk Pipelines is subject to the possibility of more onerous terms and/or increased costs to retain necessary land use rights if it does not have valid land use rights or if such land use rights lapse or terminate.

Some of the rights to construct and operate Boardwalk Pipelines’ pipelines storage or other facilities on land owned by third parties and governmental agencies that it obtains are

for specific periods of time.

Some of the rights to construct and operate Boardwalk Pipelines’ pipelines storage or other facilities on land owned by third parties and governmental agencies that it obtains are for specific periods of time.

Boardwalk Pipelines cannot guarantee that it will always be able to renew, when necessary, existing land use rights or obtain new land use rights without experiencing significant costs or experiencing landowner opposition.

10 unchanged sentences

Boardwalk Pipelines’ operations are subject to catastrophic losses, operational hazards and unforeseen interruptions for which it may not be adequately insured.

There are a variety of operating risks inherent in transporting and storing natural gas, ethylene and NGLs, such as leaks and other forms of releases, explosions, fires, cyber-attacks and mechanical problems, which could have catastrophic consequences.

Additionally, the nature and location of Boardwalk Pipelines’ business may make it susceptible to catastrophic losses from hurricanes or other named storms, particularly with regard to its assets in the Gulf Coast region, windstorms, earthquakes, hail, and other severe weather.

There are a variety of operating risks inherent in transporting and storing natural gas, ethylene and NGLs, such as leaks and other forms of releases, explosions, fires, cybersecurity attacks and mechanical problems, which could have catastrophic consequences.

Additionally, the nature and location of Boardwalk Pipelines’ business may make it susceptible to catastrophic losses from hurricanes or other named storms, particularly with regard to its assets in the Gulf Coast region, cold freezes, snow storms, windstorms, earthquakes, hail and other severe weather.

Any of these or other similar occurrences could result in the disruption of Boardwalk Pipelines’ operations, substantial repair costs, personal injury or loss of life, significant damage to property, environmental pollution, impairment of its operations and substantial financial losses.

The location of pipelines in HCAs, which includes populated areas, residential areas, commercial business centers and industrial sites, could significantly increase the level of damages resulting from some of these risks.

Boardwalk Pipelines currently possesses property, business interruption, cyber threat and general liability insurance, but proceeds from such insurance coverage may not be adequate for all liabilities or expenses incurred or revenues lost.

Boardwalk Pipelines currently possesses property, business interruption, cybersecurity threat and general liability insurance, but proceeds from such insurance coverage may not be adequate for all liabilities or expenses incurred or revenues lost.

Moreover, such insurance may not be available in the future at commercially reasonable costs and terms.

8 unchanged sentences

or global economy and financial markets, as well as more localized changes in the economy of each hotel’s geographic location;

• increases in the costs of supplies, furniture, fixtures, equipment, labor (such as, directly or indirectly, from minimum wage increases, labor shortages or protocols intended to mitigate the spread of COVID-19, future pandemics or outbreaks of other contagious diseases), workers’ compensation, benefits, insurance, food and beverage, commodities, energy and unanticipated costs or cost increases due to inflation or resulting from force majeure events, new or different federal, state or local governmental regulations, including tariffs, constrained supply, and other factors that may not be offset by increased revenues;

• disruptions or delays in our supply chain for goods and materials, including those used for hotel development, renovations and operations;

• increases in the costs of supplies, furniture, fixtures, equipment, labor, workers’ compensation, benefits, insurance, food and beverage, commodities, energy and unanticipated costs or cost increases due to inflation or resulting from force majeure events, new or different federal, state or local governmental regulations, including tariffs, constrained supply, and other factors that may not be offset by increased revenues;

• disruptions or delays in Loews Hotels & Co’s supply chain for goods and materials, including those used for hotel development, renovations and operations;

• labor supply disruptions or shortages;

7 unchanged sentences

• the financial condition and general operational condition of the airline, automotive and other transportation-related industries and its impact on travel;

• decreased airline capacities and routes and disruption in airline operations, whether arising from the spread of COVID-19, future pandemics or outbreaks of other contagious diseases and associated mitigation efforts, or otherwise;

• competition from other hotels and alternative accommodations, such as Airbnb, in the markets in which Loews Hotels & Co operates;

• decreased airline capacities and routes and disruption in airline operations;

• competition from other hotels, cruise lines and alternative accommodations, such as Airbnb, in the markets in which Loews Hotels & Co operates;

• requirements for periodic capital reinvestment to maintain and upgrade hotels;

• the costs and administrative burdens associated with compliance with applicable laws and regulations, including, among others, those arising out of mitigation efforts associated with COVID-19, future pandemics or outbreaks of other contagious diseases;

• the costs and administrative burdens associated with compliance with applicable laws and regulations, including those associated with responding to requests or demands of regulators or other governmental authorities, whether currently existing or implemented in the future, including, those pertaining to the environmental impact of Loews Hotels & Co’s operations, and those arising out of mitigation efforts associated with pandemics or outbreaks of contagious diseases;

• organized labor activities, which could cause a diversion of business from hotels involved in labor negotiations and loss of business for Loews Hotels & Co’s properties generally as a result of certain labor tactics;

• changes in the desirability of particular locations or travel patterns of customers, including the possibility that travelers may be inclined to seek alternatives to large public gatherings, such as conferences and conventions, out of safety concerns associated with COVID-19, future pandemics or outbreaks of other contagious diseases and associated mitigation efforts, or with respect to the underlying attractions supporting the desirability of a particular location, such as, in the case of Loews Hotels & Co’s immersive destination properties, the Universal theme parks for its Orlando, Florida properties, and stadiums, arenas and convention centers for properties in other markets;

• changes in the desirability of particular locations or travel patterns of customers, including the possibility that travelers may be inclined to seek alternatives to large public gatherings, such as conferences and conventions, out of safety concerns associated with pandemics or outbreaks of contagious diseases and associated mitigation efforts, or with respect to the underlying attractions supporting the desirability of a particular location, such as, in the case of Loews Hotels & Co’s immersive destination properties, the Universal theme parks for its Orlando, Florida properties, and stadiums, arenas and convention centers for properties in other markets;

• geographic concentration of operations and customers;

• shortages of desirable locations for development;

• relationships with third-party property owners, developers, landlords, tenants, suppliers and joint venture partners, including the risk that such third-parties may encounter financial difficulties, may not fulfill material obligations , may terminate management, lease, supply, joint venture or other agreements with Loews Hotels & Co, may, in the case of landlords, seek material increases or improvements from Loews Hotels & Co in order to renew leases to Loews Hotels & Co, and/or may, in the case of tenants, seek material discounts or concessions from Loews Hotels & Co in order to renew leases from Loews Hotels & Co, and/or may, in the case of joint venture partners, prevent Loews Hotels & Co from making unilateral decisions with respect to material matters relating to specific properties .

In addition to materially affecting the business of Loews Hotels & Co generally, these factors, and the reputational repercussions of these factors, could materially adversely affect, and from time to time have materially adversely affected, individual hotels and hotels in particular regions.

Loews Hotels & Co is exposed to the risks resulting from significant investments in owned and leased real estate, including through ownership interests in partnerships and joint ventures, which could increase its costs, reduce its profits, limit its ability to respond to market conditions or restrict its growth strategy.

Loews Hotels & Co’s proportion of owned and leased properties, compared to the number of properties that it manages for third-party owners, is larger than that of some of its competitors.

Loews Hotels & Co’s proportion of owned and leased properties, compared to the number of properties that it manages for third-party owners, may differ from that of some of its competitors.

Real estate ownership and leasing is subject to risks not applicable to managed or franchised properties, including:

1 unchanged sentence

• the ongoing need for owner-funded capital improvements and expenditures to maintain or upgrade properties;

• risks associated with mortgage debt, including the possibility of default, fluctuating interest rate levels, compliance with covenants that may include or result in principal amortization or the acceleration of repayment and the availability of financing, including the possibility of lenders electing to freeze or restrict loans secured by hospitality related assets or to not fund loans as anticipated or previously committed, which may arise as a result of pandemics or outbreaks of contagious diseases and associated mitigation efforts or otherwise;

• risks associated with the possibility that cost increases will outpace revenue increases and that, in the event of an economic slowdown or other circumstances negatively affecting revenues, a high proportion of fixed costs will make it difficult to reduce costs to the extent required to offset declining revenues;

• risks associated with real estate and property leases, including the possibility of rent increases and the inability to renew or extend upon favorable terms;

• the potential impact of changes in general economic and market conditions, including the severity and duration of any downturn in the U.S.

or global economy and financial markets and the impact of COVID-19, future pandemics and outbreaks of other contagious diseases and associated mitigation efforts, on tenants of space leases within properties in which Loews Hotels & Co invests;

• risks associated with real estate condominiums, including the possibility of special assessments by condominiums that Loews Hotels & Co does not control;

• the potential impact of changes in general or local economic and market conditions, including the severity and duration of any downturn in the U.S., global or local economies and financial markets, on tenants of space leases within properties in which Loews Hotels & Co invests;

• the ability to exit or enter markets may not be able to be implemented in a time frame favorable to Loews Hotels & Co or be solely within Loews Hotels & Co’s control;

• risks associated with real estate condominiums and similar structures, including the possibility of special assessments by condominiums that Loews Hotels & Co does not control;

• fluctuations in real estate values and potential impairments in the value of Loews Hotels & Co’s assets;

5 unchanged sentences

In addition, the hospitality industry is cyclical and demand generally follows the general economy on a lagged basis.

The seasonality and cyclicality of its industry may contribute to fluctuations in Loews Hotels & Co’s results of operations, financial condition and cash flows.

The seasonality and cyclicality of its industry may contribute to fluctuations in Loews Hotels & Co’s results of operations, financial condition, investment activity and cash flows.

Loews Hotels & Co operates in a highly competitive industry, both for customers and for the acquisition and/or development of new properties.

The hospitality industry is highly competitive.

Loews Hotels & Co’s properties compete with other hotels and alternative accommodations based on a number of factors, including room rates, quality of accommodations, service levels and

amenities, location, brand affiliation, reputation and reservation systems.

Loews Hotels & Co’s properties compete with other hotels, cruises and alternative accommodations based on a number of factors, including room rates, quality of accommodations, service levels and amenities, location, brand affiliation, reputation and reservation systems.

New hotels may be constructed and these additions to supply create new competitors, in some cases without corresponding increases in demand for hotel rooms.

Some of its competitors also have greater financial and marketing resources than Loews Hotels & Co.

In addition, travelers can book stays on websites that facilitate the short-term rental of homes and apartments from owners, thereby providing an alternative to hotel rooms.

In addition, travelers can book stays on websites and through applications that facilitate the short-term rental of homes and apartments from owners, thereby providing an alternative to hotel rooms.

Loews Hotels & Co also competes for hotel acquisitions and development projects with entities that have similar investment objectives as it does.

1 unchanged sentence

It may also increase the bargaining power of Loews Hotels & Co’s counterparties, making it more difficult for Loews Hotels & Co to acquire or develop new properties on attractive terms or on the terms contemplated in its business plans.

Any deterioration in the quality or reputation of Loews Hotels & Co’s brands could have a material adverse effect on its reputation and business.

Loews Hotels & Co’s brands and reputation are among its most important assets.

Any deterioration in the quality or reputation of Loews Hotels & Co’s brands, including brands used in its joint ventures and those it licenses, could have a material adverse effect on its reputation and business.

Loews Hotels & Co’s brands, including those associated with its joint ventures (e.g., at its properties at Universal Orlando) and those it licenses (e.g., at its Live!

by Loews – St.

Louis and Live!

by Loews – Arlington hotels), are among its most important assets.

Its ability to attract and retain guests depends, in part, on the public recognition of its brands and their associated reputation.

3 unchanged sentences

Loews Hotels & Co’s efforts to develop new properties and renovate existing properties could be delayed or become more expensive.

Loews Hotels & Co from time to time renovates its properties and is currently expanding its portfolio through the ground-up construction of new properties in Orlando, Florida, and Arlington, Texas, along with a support facility in Apopka, Florida, and in the future may similarly develop additional new properties.

Often these projects are undertaken with joint venture partners who may also serve as developer.

Loews Hotels & Co from time to time renovates its properties and, together with joint venture partners, is currently expanding its portfolio through the ground-up construction of new properties in Orlando, Florida and Arlington, Texas and in the future may similarly, alone or with joint venture partners, develop additional new properties.

Often joint venture partners may also serve as developer.

These renovation and construction efforts are subject to a number of risks, including:

• construction delays, changes to plans and specifications and cost overruns (including for labor and materials, unforeseeable site conditions or design defects) that may increase project costs, cause new development projects to not be completed by lender or municipal imposed required completion dates or subject Loews Hotels & Co to cancellation penalties for reservations accepted;

• obtaining zoning, occupancy and other required permits or authorizations;

• construction delays, changes to plans and specifications and cost overruns (including for labor and materials, unforeseeable site conditions, construction errors or design defects) that may increase project costs, cause new development projects to not be completed by lender or municipal imposed required completion dates or subject Loews Hotels & Co to cancellation penalties for reservations accepted;

• obtaining zoning, occupancy and other required licenses, permits or authorizations;

• changes in economic or other market conditions that may result in weakened or lack of demand or negative project returns;

• governmental restrictions on the size or kind of development;

• projects financed with construction debt are subject to interest rate risk as uncertain timing and amount of draws may make effective hedging difficult or expensive to obtain, as well as the other risks associated with mortgage debt described above;

• delays resulting from COVID-19, future pandemics or the outbreaks of other contagious diseases and related containment efforts, including as they pertain to contractors, suppliers and inspectors required to review projects;

• weather delays and force majeure events, including earthquakes, tornados, hurricanes, floods and other natural or man-made catastrophes;

• projects with adjacent demand generators under construction that become delayed causing opening delays of hotels under development.

• projects financed with construction debt are subject to risk that participating lenders may not fulfill their commitments when called upon as well as interest rate risk as uncertain timing and amount of draws may make effective hedging difficult or expensive to obtain, as well as the other risks associated with mortgage debt described above;

• delays resulting from pandemics or the outbreaks of contagious diseases and related containment efforts, including as they pertain to contractors, suppliers and inspectors required to review projects;

• weather delays and force majeure events, including earthquakes, tornados, hurricanes, floods, winter weather conditions and other natural or man-made catastrophes;

• projects with adjacent demand generators under construction that become delayed causing opening delays of, or less revenue than anticipated from, hotels under development.

Additionally, renovating existing properties and developing new properties typically involve lengthy development periods during which significant amounts of capital must be funded before the properties begin to operate and generate revenue.

If the cost of renovations or new development exceeds budgeted amounts, and/or the time period for development is longer than initially anticipated, Loews Hotels & Co’s operating results could be reduced.

Loews Hotels & Co has seen

construction timelines lengthen due to various factors, including competition for skilled construction labor, challenges related to financing, disruption in the supply chain for materials, and the impact of COVID-19 generally, and these or similar circumstances could continue or worsen in the future.

Accordingly, there can be no assurance that all development pipeline projects will result in new hotels entering Loews Hotel & Co’s system, or that those hotels will open when anticipated.

Further, due to the lengthy development cycle, intervening adverse economic or other market conditions in general and as they apply to Loews Hotels & Co and its development partners may alter or impede the development plans, thereby resulting in incremental costs or potential impairment charges.

Loews Hotels & Co has seen construction timelines lengthen due to various factors, including competition for skilled construction labor, challenges related to financing, disruption in the supply chain for materials, and the impact of pandemics or other outbreaks of contagious diseases and related mitigation efforts, and these or similar circumstances could continue or worsen in the future.

Accordingly, there can be no assurance that all development pipeline projects will result in new hotels entering Loews Hotel & Co’s system, or that those hotels will open when or perform as anticipated.

Further, due to the lengthy

development cycle, intervening adverse economic or other market conditions in general and as they apply to Loews Hotels & Co and its development partners may alter or impede the development plans, thereby resulting in incremental costs or potential impairment charges.

In addition, using multiple sources of capital to develop new properties reduces or eliminates the ability of Loews Hotels & Co to cease commenced projects if the overall economic environment or other market conditions change.

Moreover, during the early stages of operations, charges related to interest expense and depreciation may substantially detract from, or even outweigh, the profitability of certain new property investments.

Investing in hotel properties through ownership interests in partnerships and joint ventures decreases Loews Hotels & Co’s ability to manage risk .

Investing in hotel properties through ownership interests in partnerships and joint ventures is subject to inherent risks, including due to Loews Hotels & Co’s lack of unilateral control over the investment .

Loews Hotels & Co has invested, and expects to continue to invest, in hotel properties or businesses through ownership interests in partnerships and joint ventures.

Partners and joint venturers often have shared control over the operation of the property or business.

Therefore, the operation of such properties or businesses is subject to inherent risk due to the shared nature of the enterprise and the need to reach agreements on material matters.

Therefore, the operation of such properties or businesses is subject to inherent risk due to the shared nature of the enterprise and the need to reach agreements on material matters, including matters that may impact taxes or have other significant financial consequences.

In addition, investments with other investors may involve risks such as the possibility that the partner or joint venturer might become bankrupt or not have the financial resources to meet its obligations, or have economic or business interests or goals that are inconsistent with Loews Hotels & Co’s business interests or goals.

Further, Loews Hotels & Co may be unable to take action without the approval of its partners or joint venturers, or its partners or joint venturers could take actions binding on the property without the consent of Loews Hotels & Co.

Additionally, should a partner or joint venturer become bankrupt, Loews Hotels & Co could become liable for its share of liabilities.

Additionally, should a partner or joint venturer become bankrupt or otherwise fail to honor its financial obligations, Loews Hotels & Co could become liable for its share of liabilities.

Loews Hotels & Co’s properties are geographically concentrated, which exposes its business to the effects of regional events and occurrences.

1 unchanged sentence

Specifically, as of December 31, 2023, eight hotels, representing 56% of rooms in its system, were located at Universal Orlando in Orlando, Florida and ten hotels, representing approximately 62% of rooms in its system, were located in Florida.

Furthermore, there are three additional hotels under development in Orlando, Florida that would increase these numbers to 11 hotels in Orlando, Florida and 13 hotels in in Florida.

Furthermore, there are three additional hotels under development in Orlando, Florida that would increase these numbers to 11 hotels in Orlando, Florida and 13 hotels in Florida.

In the future, other existing or new geographies may present opportunities for new or additional investment that may create new or increased concentration risk.

The concentration of hotels in one region or a limited number of markets may expose Loews Hotels & Co to risks of adverse economic and other developments that are greater than if its portfolio were more geographically diverse.

These developments include regional economic downturns, a decline in the popularity of or access to area tourist attractions, such as theme parks, the failure of new tourist attractions to be developed or be successful in markets where new hotels are under development, significant increases in the number of Loews Hotels & Co’s competitors’ hotels in these markets and potentially higher local property, sales and income taxes, property insurance costs or other expenses in the geographic markets in which it is concentrated.

The concentration of hotels in one region, jurisdiction or a limited number of markets may expose Loews Hotels & Co to risks of adverse economic and other developments that are greater than if its portfolio were more geographically diverse.

These developments could include, among others, regional economic downturns, an increase in burdensome governmental regulation, changes in the local political climate, a decline in the popularity of or access to area tourist attractions, such as theme parks, the failure of new tourist attractions to be developed or be successful in markets where new hotels are under development, significant increases in the number of Loews Hotels & Co’s competitors’ hotels in these markets and potentially higher local property, sales and income taxes, property insurance costs or other expenses in the geographic markets in which it is concentrated.

In addition, Loews Hotels & Co’s properties in Florida are subject to the effects of adverse acts of nature, such as hurricanes, strong winds and flooding, which have in the past caused damage to its hotels in Florida, and which may in the future be intensified as a result of climate change.

5 unchanged sentences

The spread of the coronavirus and related containment efforts caused unprecedented disruptions to the global economy, including supply chains, air travel and normal business operations across sectors, including the hospitality industry that depends on active levels of business and leisure travel.

Future pandemics or other outbreaks of contagious diseases may result in similar mitigation measures, perceptions of health risks and economic disruptions.

In response to COVID-19, Loews Hotels & Co temporarily suspended operations at the majority of its properties and, for a period after general operations resumed, occupancy rates were considerably lower for certain of its hotels compared to

occupancy rates prior to the pandemic.

Future pandemics or other outbreaks of contagious diseases may result in similar or more severe mitigation measures, perceptions of health risks and economic disruptions.

As a result of the suspended operations and lower occupancy levels, revenues were lower, while operating costs were not reduced to the same extent.

In addition, Loews Hotels & Co had to implement a number of new measures for the health and safety of its guests and employees, which increased its costs.

Loews Hotels & Co may have to implement similar responses to future pandemics or other outbreaks of contagious diseases, which may lead to similar effects.

Loews Hotels &

Co may have to implement similar responses to future pandemics or other outbreaks of contagious diseases, which may lead to similar or more severe effects.

As part of cost containment efforts at the outset of the COVID-19 pandemic, Loews Hotels & Co and many of its service providers and suppliers severed or put employees on unpaid leaves of absence.

When conditions improved such that increased staffing levels were required, finding and attracting talent to fill certain roles that were furloughed or eliminated was challenging for Loews Hotels & Co and certain of its service providers and suppliers, which affected Loews Hotels & Co’s ability to return to normal operations at certain of its hotels.

Loews Hotels & Co and its service providers and suppliers may have to take similar actions in response to future pandemics or other outbreaks of contagious diseases, which may lead to similar effects.

The negative impacts of a pandemic or other outbreak of contagious disease on Loews Hotels & Co’s business may substantially exacerbate the other risks facing Loews Hotels & Co, including those described in this section, and such impacts may linger beyond the containment and mitigation of any such pandemic or outbreak, including the COVID-19 pandemic.

The growth and use of alternative reservation channels adversely affects Loews Hotels & Co’s business.

A significant percentage of hotel rooms for guests at Loews Hotels & Co’s properties is booked through internet travel and other intermediaries.

The negative impacts of a pandemic or other outbreak of contagious disease, including the COVID-19 pandemic, on Loews Hotels & Co’s business may substantially exacerbate the other risks facing Loews Hotels & Co, including those described in this section, and such impacts may linger beyond the containment and mitigation of any such pandemic or outbreak.

The growth and use of third-party reservation channels adversely affects Loews Hotels & Co’s business.

A significant percentage of hotel rooms for guests at Loews Hotels & Co’s properties is booked through internet-based travel agencies and other intermediaries.

In most cases, Loews Hotels & Co has agreements with such intermediaries and pays them commissions and/or fees for sales of its rooms through their systems.

13 unchanged sentences

A portion of Loews Hotels & Co’s labor force is covered by collective bargaining agreements.

Work stoppages and other labor problems could negatively affect Loews Hotels & Co’s business and results of operations.

A portion of Loews Hotels & Co’s labor force is covered by collective bargaining agreements.

Work slowdowns and stoppages and other labor problems could negatively affect Loews Hotels & Co’s business and results of operations.

A prolonged dispute with covered employees or any labor unrest, strikes or other business interruptions in connection with labor negotiations or otherwise could have an adverse impact on Loews Hotels & Co’s operations.

Adverse publicity in the marketplace related to union messaging could further harm its reputation and reduce customer demand for its services.

Also, wage and/or benefit increases resulting from new labor agreements may be significant and could have an adverse impact on its results of operations.

Furthermore, Loews Hotels & Co could experience demands from labor unions that represent its employees for additional compensation, healthcare benefits, operational protocols or other terms in response to COVID-19, future pandemics or the outbreak of other contagious diseases that could increase costs.

To the extent that Loews Hotels & Co’s non-union employees join unions, Loews Hotels & Co would have greater

exposure to risks associated with such labor problems.

Furthermore, Loews Hotels & Co may have, or acquire in the future, multi-employer plans that are classified as “endangered,” “seriously endangered,” or “critical” status and a withdrawal in the future could result in the incurrence of a contingent liability that would be payable in an amount and at such time (or over a period of time) that would vary based on a number of factors at the time of (and after) withdrawal.

Also, wage and/or benefit increases and/or changes to operational protocols resulting from new labor agreements may be significant and could have an adverse impact on its results of operations.

Furthermore, Loews Hotels & Co could experience demands from labor unions that represent its employees for additional compensation, healthcare benefits, operational protocols or other terms in response to pandemics or the outbreak of contagious diseases that could increase costs.

To the extent that Loews Hotels & Co’s non-union employees join unions, Loews Hotels & Co would have greater exposure to risks associated with such labor problems.

the future could result in the incurrence of a contingent liability that would be payable in an amount and at such time (or over a period of time) that would vary based on a number of factors at the time of (and after) withdrawal.

Any such events or additional costs may have materially adverse effects.

3 unchanged sentences

Its inability to generate sufficient cash flow to satisfy its debt obligations, or to refinance its obligations on commercially reasonable terms, would have a material adverse effect on its business.

Altium Packaging’s substantial indebtedness could have important consequences.

Altium Packaging’s substantial indebtedness could have other important consequences.

For example, it could:

7 unchanged sentences

Sales of Altium Packaging’s plastic containers depend heavily on the volume of sales made by its customers to consumers.

Consequently, changes in consumer preferences for products in the industries that it serves or the packaging formats in which such products are delivered, whether as a result of changes in cost, convenience or health, environmental and social concerns or perceptions regarding plastics, may result in a decline in the demand for Altium Packaging’s plastic container products.

Consequently, changes in consumer preferences for products in the industries that Altium Packaging serves or the packaging formats in which such products are delivered, whether as a result of changes in cost, convenience or health, environmental and social concerns or perceptions regarding plastics, may result in a decline in the demand for Altium Packaging’s plastic container products.

Fluctuations in raw material prices and raw material availability may materially affect Altium Packaging’s results of operations.

5 unchanged sentences

In addition, a sustained increase in resin and recycled plastic prices, relative to alternative packaging materials, would make plastic containers less economical for its customers and could result in reductions in the use of plastic containers.

Any limitation on its ability to procure its primary raw materials or to pass through price increases in such materials on a timely basis could materially negatively affect Altium Packaging.

Any limitation on its ability to procure its primary raw materials or to pass through price increases in such materials in a timely manner could materially negatively affect Altium Packaging.

Altium Packaging’s customers may increase their self-manufacturing.

Increased self-manufacturing by Altium Packaging’s customers may have a material adverse impact on its sales volume and financial results.

Altium Packaging believes that certain customers may engage in self-manufacturing over time at locations where transportation costs are high, and where low complexity and available space to install blow molding equipment exist.

Altium Packaging believes that certain customers may engage in self-manufacturing over time at certain locations, particularly those where transportation costs are high, for products that have low complexity, and where customers have available space to install blow molding equipment.

Risks Related to Us and Our Subsidiaries Generally

8 unchanged sentences

Cyber attacks and cyber incidents take many forms, including cyber extortion, denial of service, social engineering, introduction of viruses or malware, exploiting vulnerabilities in hardware, software or other infrastructure, hacking, website defacement, theft of passwords and other credentials, unauthorized use of computing resources for digital currency mining and business email compromise.

CNA was subjected to a sophisticated cybersecurity incident involving ransomware in March 2021.

In addition, one of CNA’s vendors also experienced a cybersecurity incident during the third quarter of 2021.

For additional information about these incidents see “ Risks Related to Us and Our Subsidiary, CNA Financial Corporation ” above under this Part II, Item 1A.

As with other large companies, we and our subsidiaries and our and their third party vendors have experienced cyber attacks and other cyber incidents and expect this to continue.

If we and our subsidiaries and our and their third party vendors do not allocate and effectively manage the resources necessary to continue to build and maintain our and their information technology security infrastructure, or if we or our subsidiaries or our or our subsidiaries’ vendors fail to timely identify or appropriately respond to cyber attacks or other cyber incidents, then this may disrupt our and our subsidiaries’ operations, cause significant damage to our or their assets and surrounding areas, cause loss of life or serious bodily injury, impact our or their data framework or cause a failure to protect personal information of customers, employees or others.

For example, CNA was subjected to a sophisticated cybersecurity incident involving ransomware in March 2021.

In addition, one of CNA’s vendors also experienced a cybersecurity incident during the second quarter of 2023.

For additional information about these incidents, see “ Risks Related to Us and Our Subsidiary, CNA Financial Corporation ” above under this Part I, Item 1A, and for a discussion of certain aspects of our approach to cybersecurity risk management and strategy, see Item 1C.

Cybersecurity.

If we and our subsidiaries and our and their third party vendors do not allocate and effectively manage the resources necessary to continue to build and maintain our and their information technology security infrastructure, or if we or our subsidiaries or our or our subsidiaries’ vendors fail to timely identify or appropriately respond to cyber attacks or other cyber incidents, then this may, in addition to other consequences, disrupt our and our subsidiaries’ operations, cause significant damage to our or their assets and surrounding areas, cause loss of life or serious bodily injury, impact our or their data framework or cause a failure to protect personal information of customers, employees or others.

The foregoing risks relating to disruption of service, interruption of operations and data loss could impact our and our subsidiaries’ ability to timely perform critical business functions, resulting in disruption or deterioration in our and our subsidiaries’ operations and business and expose us and our subsidiaries to significant financial losses and monetary and reputational damages.

4 unchanged sentences

We and our subsidiaries are or may become parties to legal proceedings and disputes.

These matters may include, among others, contract disputes, claims disputes, reinsurance disputes, personal injury claims, environmental claims or proceedings, asbestos and other toxic tort claims, intellectual property disputes, disputes related to employment and tax matters and other litigation incidental to our or their businesses.

These matters may include, among others, contract disputes, claims and coverage disputes, reinsurance disputes, personal injury and wrongful death claims, environmental claims or proceedings, asbestos and other toxic tort claims, intellectual property disputes, disputes related to employment and tax matters and other litigation incidental to our or their businesses.

For instance, we and certain of our Boardwalk Pipelines-related subsidiaries are defendants in a class action litigation in the State of Delaware related to our 2018 acquisition of the Boardwalk Pipelines limited partnership units not already owned by our affiliates.

1 unchanged sentence

Litigation is inherently subject to great uncertainty and it is difficult to predict the outcome or effect of any litigation matters.

The outcome of any

pending or future litigation could have a significant adverse impact on our or our subsidiaries’ financial condition or results of operations.

The outcome of any pending or future litigation could have a significant adverse impact on our or our subsidiaries’ financial condition or results of operations.

Acts of terrorism could harm us and our subsidiaries.

5 unchanged sentences

Our subsidiaries face significant risks related to compliance with environmental laws.

Our subsidiaries have extensive obligations and financial exposure related to compliance with federal, state, local, foreign and international environmental laws, including those relating to the discharge of substances into the environment, the disposal, removal or clean up of hazardous wastes and other activities relating to the protection of the environment.

Our subsidiaries have extensive obligations and financial exposure related to compliance with federal, state, local, foreign and international environmental laws, including those relating to the discharge of substances into the environment, the disposal, removal or cleanup of hazardous wastes and other activities relating to the protection of the environment.

Many of such laws have become increasingly stringent in recent years and may in some cases impose strict liability, which could be substantial, rendering a person liable for environmental damage without regard to negligence or fault on the part of that person.

43 unchanged sentences

Additionally, to the extent ESG matters negatively impact our reputation, we may not be able to compete as effectively to recruit or retain employees, which may adversely affect our operations.

Unresolved Staff Comments.

Our corporate headquarters is located in leased office space in two buildings in New York City.

Information relating to our subsidiaries’ properties is contained under Item 1.

Legal Proceedings.

Information on our legal proceedings is included in Note 17 of the Notes to Consolidated Financial Statements, included under Item 8.

Mine Safety Disclosures.

Not applicable.

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 1A. Risk Factors