LOEWS CORP 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read in conjunction with our Consolidated Condensed Financial Statements included under Item 1 of this Report and the Consolidated Financial Statements, Risk Factors, and MD&A included in our Annual Report on Form 10-K for the year ended December 31, 2023. This MD&A is comprised of the following sections: Page No. Overview 39 Results of Operations 40 Consolidated Financial Results 40 CNA Financial 41 Boardwalk Pipelines 49 Loews Hotels & Co 50 Corporate 52 Liquidity and Capital Resources 52 Parent Company 52 Subsidiaries 53 Investments 54 Catastrophes and Related Reinsurance 57 Critical Accounting Estimates 58 Accounting Standards Update 58 Forward-Looking Statements 58 OVERVIEW Loews Corporation is a holding company and has four reportable segments comprised of three individual consolidated operating subsidiaries, CNA Financial Corporation (“CNA”), Boardwalk Pipeline Partners, LP (“Boardwalk Pipelines”) and Loews Hotels Holding Corporation (“Loews Hotels & Co”); and the Corporate segment. The Corporate segment is primarily comprised of Loews Corporation, excluding its operating subsidiaries, and the equity method of accounting for Altium Packaging LLC (“Altium Packaging”). Unless the context otherwise requires, as used herein, the term “Company” means Loews Corporation including its consolidated subsidiaries, the terms “Parent Company,” “we,” “our,” “us” or like terms mean Loews Corporation excluding its subsidiaries, the term “Net income (loss) attributable to Loews Corporation” means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means Loews Corporation’s consolidated subsidiaries. We rely upon our invested cash balances and distributions from our subsidiaries to generate the funds necessary to meet our obligations and to declare and pay any dividends to our shareholders. The ability of our subsidiaries to pay dividends is subject to, among other things, the availability of sufficient earnings and funds in such subsidiaries, applicable state laws, including in the case of the insurance subsidiaries of CNA, laws and rules governing the payment of dividends by regulated insurance companies (see Note 15 of th e Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023) and compliance with covenants in their respective loan agreements. Claims of creditors of our subsidiaries will generally have priority as to the assets of such subsidiaries over our claims and those of our creditors and shareholders. We are not responsible for the liabilities and obligations of our subsidiaries and there are no Parent Company guarantees. 39 Table of contents RESULTS OF OPERATIONS Consolidated Financial Results The following table summarizes net income (loss) attributable to Loews Corporation by segment and the basic and diluted net income per share attributable to Loews Corporation for the three and six months ended June 30, 2024 and 2023: Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions, except per share data) CNA Financial $ 291 $ 255 $ 601 $ 523 Boardwalk Pipelines 70 57 191 143 Loews Hotels & Co 35 74 51 98 Corporate (27) (26) (17) (29) Net income attributable to Loews Corporation $ 369 $ 360 $ 826 $ 735 Basic and diluted net income per share $ 1.67 $ 1.58 $ 3.72 $ 3.19 Net income attributable to Loews Corporation for the three months ended June 30, 2024 was $369 million, or $1.67 per share, compared to net income of $360 million, or $1.58 per share in the comparable 2023 period. Net income attributable to Loews Corporation for the six months ended June 30, 2024 was $826 million, or $3.72 per share, compared to net income of $735 million, or $3.19 per share in the comparable 2023 period. The increase in net income attributable to Loews Corporation for the three months ended June 30, 2024 as compared to the comparable 2023 period was primarily driven by higher net income at CNA and Boardwalk Pipelines. The increase at CNA is primarily due to higher net investment income, partially offset by higher catastrophe losses, and the increase at Boardwalk Pipelines is primarily due to increased revenues from re-contracting at higher rates and recently completed growth projects. Loews Hotels & Co’s net income for the three months ended June 30, 2023 includes a $36 million gain related to the acquisition of an additional equity interest in, and the consolidation of, a previously unconsolidated joint venture property. The increase in net income attributable to Loews Corporation for the six months ended June 30, 2024 as compared to the comparable 2023 period was primarily driven by higher net income at CNA and Boardwalk Pipelines. The increase at CNA is primarily due to higher net investment income and favorable net prior year loss reserve development, partially offset by higher catastrophe losses. Excluding CNA, t he drivers of the increase in net income for the six months ended June 30, 2024 as compared to the comparable 2023 period are consistent with the three-month discussion above. 40 Table of contents CNA Financial The following table summarizes the results of operations for CNA for the three and six months ended June 30, 2024 and 2023 as presented in Note 12 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report. For further discussion of Net investment income and Investment gains (losses), see the Investments section of this MD&A. Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Revenues: Insurance premiums $ 2,498 $ 2,347 $ 4,939 $ 4,595 Net investment income 618 575 1,227 1,100 Investment losses (10) (32) (32) (67) Non-insurance warranty revenue 404 407 811 814 Other revenues 9 7 18 14 Total 3,519 3,304 6,963 6,456 Expenses: Insurance claims and policyholders’ benefits 1,882 1,779 3,689 3,432 Amortization of deferred acquisition costs 435 403 879 782 Non-insurance warranty expense 388 384 782 768 Other operating expenses 378 346 715 683 Interest 34 31 69 59 Total 3,117 2,943 6,134 5,724 Income before income tax 402 361 829 732 Income tax expense (85) (78) (174) (152) Net income 317 283 655 580 Amounts attributable to noncontrolling interests (26) (28) (54) (57) Net income attributable to Loews Corporation $ 291 $ 255 $ 601 $ 523 Three Months Ended June 30, 2024 Compared to the Comparable 2023 Period Net income attributable to Loews Corporation increased $36 million for the three months ended June 30, 2024 as compared with the comparable 2023 period due to higher net investment income, par tially offset by higher catastrophe losses. Six Months Ended June 30, 2024 Compared to the Comparable 2023 Period Net income attributable to Loews Corporation increased $78 million for the six months ended June 30, 2024 as compared with the comparable 2023 period due to higher net investment income and favorable net prior year loss reserve development, par tially offset by higher catastrophe losses. CNA’s Property & Casualty and Other Insurance Operations CNA’s commercial property and casualty insurance operations (“Property & Casualty Operations”) include its Specialty, Commercial and International lines of business. CNA’s Other Insurance Operations outside of Property & Casualty Operations include its long-term care business that is in run-off, certain corporate expenses, including interest on CNA’s corporate debt, and the results of certain property and casualty businesses in run-off, including CNA Re, asbestos and environmental pollution (“A&EP”), a legacy portfolio of excess workers’ compensation (“EWC”) policies and certain legacy mass tort reserves. We believe the presentation of CNA as one reportable segment is appropriate in accordance with applicable accounting standards on segment reporting. However, for purposes of this discussion and analysis of the results 41 Table of contents of operations, we provide greater detail with respect to CNA’s Property & Casualty Operations and Other Insurance Operations to enhance the reader’s understanding and to provide further transparency into key drivers of CNA’s financial results. In assessing its insurance operations, CNA utilizes the core income (loss) financial measure. Core income (loss) is calculated by excluding investment gains or losses from net income (loss). In addition, core income (loss) excludes the effects of noncontrolling interests. The calculation of core income (loss) excludes investment gains or losses because investment gains or losses are generally driven by economic factors that are not necessarily reflective of CNA’s primary insurance operations. Core income (loss) is deemed to be a non-GAAP financial measure and management believes some investors may find this measure useful to evaluate CNA’s insurance operations. Please see the non-GAAP reconciliation of net income (loss) to core income (loss) that follows in this MD&A. Property & Casualty Operations In evaluating the results of Property & Casualty Operations, CNA utilizes the loss ratio, the underlying loss ratio, the expense ratio, the dividend ratio, the combined ratio and the underlying combined ratio. These ratios are calculated using GAAP financial results. The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The underlying loss ratio excludes the impact of catastrophe losses and development-related items from the loss ratio. Development-related items represent net prior year loss reserve and premium development, and includes the effects of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts. The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums. The dividend ratio is the ratio of policyholders’ dividends incurred to net earned premiums. The combined ratio is the sum of the loss, expense and dividend ratios. The underlying combined ratio is the sum of the underlying loss ratio, the expense ratio and the dividend ratio. In addition, renewal premium change, rate, retention and new business are also utilized in evaluating operating trends. Renewal premium change represents the estimated change in average premium on policies that renew, including rate and exposure changes. Rate represents the average change in price on policies that renew excluding exposure change. Exposure represents the measure of risk used in the pricing of the insurance product. The change in exposure represents the change in premium dollars on policies that renew as a result of the change in risk of the policy. Retention represents the percentage of premium dollars renewed, excluding rate and exposure changes, in comparison to the expiring premium dollars from policies available to renew. New business represents premiums from policies written with new customers and additional policies written with existing customers. Gross written premiums, excluding third-party captives, excludes business which is ceded to third-party captives, including business related to large warranty programs. CNA uses underwriting gain (loss), calculated using GAAP financial results, to monitor insurance operations. Underwriting gain (loss) is pretax and is calculated as net earned premiums less total insurance expenses, which includes insurance claims and policyholders’ benefits, amortization of deferred acquisition costs and other insurance related expenses. Underlying underwriting gain (loss) represents underwriting results excluding catastrophe losses and development-related items. The following tables summarize the results of CNA’s Property & Casualty Operations for the three and six months e nded June 30, 2024 and 2023. 42 Table of contents Three Months Ended June 30, 2024 Specialty Commercial International Total (In millions, except %) Gross written premiums $ 1,728 $ 1,927 $ 417 $ 4,072 Gross written premiums excluding third-party captives 984 1,802 417 3,203 Net written premiums 857 1,458 359 2,674 Net earned premiums 831 1,247 311 2,389 Underwriting gain 60 39 25 124 Net investment income 154 175 32 361 Core income 169 167 44 380 Other performance metrics: Loss ratio excluding catastrophes and development 59.6 % 62.0 % 58.1 % 60.6 % Effect of catastrophe impacts 6.1 2.0 3.5 Effect of development-related items (0.4) (0.1) (1.0) (0.3) Loss ratio 59.2 % 68.0 % 59.1 % 63.8 % Expense ratio 33.2 28.5 32.8 30.7 Dividend ratio 0.3 0.5 0.3 Combined ratio 92.7 % 97.0 % 91.9 % 94.8 % Combined ratio excluding catastrophes and development 93.1 % 91.0 % 90.9 % 91.6 % Rate 7 % 4 % Renewal premium change 1 % 7 2 % 5 Retention 90 84 80 85 New business $ 118 $ 405 $ 72 $ 595 Three Months Ended June 30, 2023 Gross written premiums $ 1,769 $ 1,719 $ 421 $ 3,909 Gross written premiums excluding third-party captives 961 1,604 421 2,986 Net written premiums 825 1,329 359 2,513 Net earned premiums 812 1,120 302 2,234 Underwriting gain 74 42 22 138 Net investment income 142 165 25 332 Core income 177 159 38 374 Other performance metrics: Loss ratio excluding catastrophes and development 58.6 % 61.5 % 57.9 % 59.9 % Effect of catastrophe impacts 5.2 3.1 3.1 Effect of development-related items (0.3) (0.5) (0.4) Loss ratio 58.3 % 66.2 % 61.0 % 62.6 % Expense ratio 32.4 29.6 31.2 30.9 Dividend ratio 0.2 0.5 0.3 Combined ratio 90.9 % 96.3 % 92.2 % 93.8 % Combined ratio excluding catastrophes and development 91.2 % 91.6 % 89.1 % 91.1 % Rate (1)% 8 % 4 % 5 % Renewal premium change 11 7 7 Retention 89 85 83 86 New business $ 120 $ 343 $ 92 $ 555 43 Table of contents Six Months Ended June 30, 2024 Specialty Commercial International Total (In millions, except %) Gross written premiums $ 3,410 $ 3,613 $ 791 $ 7,814 Gross written premiums excluding third-party captives 1,864 3,484 791 6,139 Net written premiums 1,649 2,796 619 5,064 Net earned premiums 1,645 2,449 626 4,720 Underwriting gain 136 68 46 250 Net investment income 304 351 63 718 Core income 346 325 81 752 Other performance metrics: Underlying loss ratio 59.4 % 62.0 % 58.1 % 60.6 % Effect of catastrophe impacts 6.4 2.0 3.6 Effect of development-related items (0.5) (0.5) (0.3) Loss ratio 58.9 % 68.4 % 59.6 % 63.9 % Expense ratio 32.5 28.4 33.0 30.4 Dividend ratio 0.3 0.5 0.4 Combined ratio 91.7 % 97.3 % 92.6 % 94.7 % Underlying combined ratio 92.2 % 90.9 % 91.1 % 91.4 % Rate 1 % 7 % 4 % Renewal premium change 2 8 3 % 5 Retention 89 84 81 85 New business $ 212 $ 772 $ 140 $ 1,124 Six Months Ended June 30, 2023 Gross written premiums $ 3,549 $ 3,161 $ 819 $ 7,529 Gross written premiums excluding third-party captives 1,847 3,044 819 5,710 Net written premiums 1,613 2,517 630 4,760 Net earned premiums 1,609 2,166 592 4,367 Underwriting gain 154 83 31 268 Net investment income 271 314 48 633 Core income 348 310 62 720 Other performance metrics: Underlying loss ratio 58.5 % 61.5 % 57.7 % 59.9 % Effect of catastrophe impacts 4.7 2.9 2.7 Effect of development-related items (0.2) (0.3) 2.5 0.2 Loss ratio 58.3 % 65.9 % 63.1 % 62.8 % Expense ratio 31.9 29.8 31.5 30.8 Dividend ratio 0.2 0.5 0.3 Combined ratio 90.4 % 96.2 % 94.6 % 93.9 % Underlying combined ratio 90.6 % 91.8 % 89.2 % 91.0 % Rate 8 % 4 % 5 % Renewal premium change 2 % 10 7 7 Retention 89 85 83 86 New business $ 228 $ 653 $ 177 $ 1,058 44 Table of contents Three Months Ended June 30, 2024 Compared to the Comparable 2023 Period Gross written premiums, excluding third-party captives, for Specialty increased $23 million for the three months ended June 30, 2024 as compared with the comparable 2023 period driven by favorable renewal premium change and retention. Net written premiums for Specialty increased $32 million for the three months ended June 30, 2024 as compared with the comparable 2023 period. The increase in net earned premiums for the three months ended June 30, 2024 was consistent with the trend in net written premiums for Specialty. Gross written premiums for Commercial increased $208 million for the three months ended June 30, 2024 as compared with the comparable 2023 period driven by rate and higher new business. Net written premiums for Commercial increased $129 million for the three months ended June 30, 2024 as compared with the comparable 2023 period. The increase in net earned premiums for the three months ended June 30, 2024 was consistent with the trend in net written premiums for Commercial. Gross written premiums for International decreased $4 million for the three months ended June 30, 2024 as compared with the comparable 2023 period. Excluding the effect of foreign currency exchange rates, gross written premiums decreased $4 million driven by lower new business. Net written premiums for International were consistent with the comparable 2023 period. Excluding the effect of foreign currency exchange rates, net written premiums increased $1 million for the three months ended June 30, 2024 as compared with the comparable 2023 period. The increase in net earned premiums for the three months ended June 30, 2024 was consistent with the trend in net written premiums in recent quarters for International. Core income for Property & Casualty Operations increased $6 million for the three months ended June 30, 2024 as compared with the comparable 2023 period driven by higher net investment income partially offset by higher catastrophe losses. Catastrophe losses for Property & Casualty Operations were $82 million for the three months ended June 30, 2024 as compared with $68 million for the comparable 2023 period. For the three months ended June 30, 2024 and 2023, Specialty had no catastrophe losses, Commercial had catastrophe losses of $76 million and $59 million and International had catastrophe losses of $6 million and $9 million. Favorable net prior year loss reserve development for Property & Casualty Operations of $12 million and $17 million was recorded for the three months ended June 30, 2024 and 2023. For the three months ended June 30, 2024 and 2023, Specialty recorded favorable net prior year loss reserve development of $3 million and $4 million, Commercial recorded favorable net prior year loss reserve development of $6 million and $13 million and International recorded favorable net prior year loss reserve development of $3 million and no net prior year loss reserve development. Further information on net prior year loss reserve development is included in Note 4 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report. Specialty’s combined ratio increased 1.8 points for the three months ended June 30, 2024 as compared with the comparable 2023 period primarily due to a 0.9 point increase in the loss ratio and a 0.8 point increase in the expense ratio. The increase in the loss ratio was due to an increase in the underlying loss ratio primarily driven by continued rate pressure over the last several quarters. The increase in the expense ratio was driven by higher acquisition costs. Commercial’s combined ratio increased 0.7 points for the three months ended June 30, 2024 as compared with the comparable 2023 period due to a 1.8 point increase in the loss ratio, partially offset by a 1.1 point improvement in the expense ratio. The increase in the loss ratio was primarily driven by higher catastrophe losses, which were 6.1 points of the loss ratio for the three months ended June 30, 2024 as compared with 5.2 points of the loss ratio in the comparable 2023 period, an increase in the underlying loss ratio and lower favorable net prior year loss reserve development. The improvement in the expense ratio was primarily driven by higher net earned premiums, partially offset by higher acquisition costs. International’s combined ratio improved 0.3 points for the three months ended June 30, 2024 as compared with the comparable 2023 period due to a 1.9 point improvement in the loss ratio, partially offset by a 1.6 point increase in the expense ratio. The improvement in the loss ratio was driven by lower catastrophe losses, which were 2.0 points of the loss ratio for the three months ended June 30, 2024 as compared with 3.1 points of the loss ratio in the comparable 2023 period and favorable net prior year loss reserve development. The increase in the expense ratio was driven by higher employee related and acquisition costs. 45 Table of contents Six Months Ended June 30, 2024 Compared to the Comparable 2023 Period Gross written premiums, excluding third-party captives, for Specialty increased $17 million for the six months ended June 30, 2024 as compared with the comparable 2023 period driven by favorable renewal premium change and retention. Net written premiums for Specialty increased $36 million for the six months ended June 30, 2024 as compared with the comparable 2023 period. The increase in net earned premiums for the six months ended June 30, 2024 was consistent with the trend in net written premiums for Specialty. Gross written premiums for Commercial increased $452 million for the six months ended June 30, 2024 as compared with the comparable 2023 period driven by rate and higher new business. Net written premiums for Commercial increased $279 million for the six months ended June 30, 2024 as compared with the comparable 2023 period. The increase in net earned premiums for the six months ended June 30, 2024 was consistent with the trend in net written premiums for Commercial. Gross written premiums for International decreased $28 million for the six months ended June 30, 2024 as compared with the comparable 2023 period. Excluding the effect of foreign currency exchange rates, gross written premiums decreased $35 million driven by lower new business. Net written premiums for International decreased $11 million for the six months ended June 30, 2024 as compared with the comparable 2023 period. Excluding the effect of foreign currency exchange rates, net written premiums decreased $15 million for the six months ended June 30, 2024 as compared with the comparable 2023 period. The increase in net earned premiums for the six months ended June 30, 2024 was consistent with the trend in net written premiums in recent quarters for International. Core income for Property & Casualty Operations increased $32 million for the six months ended June 30, 2024 as compared with the comparable 2023 period driven by higher net investment income and favorable net prior year loss reserve development partially offset by higher catastrophe losses. Catastrophe losses for Property & Casualty Operations were $170 million for the six months ended June 30, 2024 as compared with $120 million for the comparable 2023 period. For the six months ended June 30, 2024 and 2023, Specialty had no catastrophe losses, Commercial had catastrophe losses of $158 million and $103 million and International had catastrophe losses of $12 million and $17 million. Favorable net prior year loss reserve development for Property & Casualty Operations of $19 million and $4 million was recorded for the six months ended June 30, 2024 and 2023. For the six months ended June 30, 2024 and 2023, Specialty recorded favorable net prior year loss reserve development of $8 million and $4 million, Commercial recorded favorable net prior year loss reserve development of $8 million and $15 million and International recorded favorable net year loss reserve development of $3 million and unfavorable net prior year loss reserve development of $15 million. Further information on net prior year loss reserve development is included in Note 4 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report. Specialty’s combined ratio increased 1.3 points for the six months ended June 30, 2024 as compared with the comparable 2023 period primarily due to a 0.6 point increase in the expense ratio and a 0.6 point increase in the loss ratio. The increase in the expense ratio was driven by higher acquisition costs. The increase in the loss ratio was due to an increase in the underlying loss ratio primarily driven by continued rate pressure over the last several quarters partially offset by favorable net prior year loss reserve development. Commercial’s combined ratio increased 1.1 points for the six months ended June 30, 2024 as compared with the comparable 2023 period due to a 2.5 point increase in the loss ratio, partially offset by a 1.4 point improvement in the expense ratio. The increase in the loss ratio was primarily driven by higher catastrophe losses, which were 6.4 points of the loss ratio for the six months ended June 30, 2024 as compared with 4.7 points of the loss ratio in the comparable 2023 period. The improvement in the expense ratio was primarily driven by higher net earned premiums partially offset by higher employee related costs. International’s combined ratio improved 2.0 points for the six months ended June 30, 2024 as compared with the comparable 2023 period due to a 3.5 point improvement in the loss ratio, partially offset by a 1.5 point increase in the expense ratio. The improvement in the loss ratio was driven by favorable net prior year loss reserve development and lower catastrophe losses, which were 2.0 points of the loss ratio for the six months ended June 30, 2024, as compared with 2.9 points of the loss ratio in the comparable 2023 period. The increase in the expense ratio was driven by higher employee related costs partially offset by higher net earned premiums. 46 Table of contents Other Insurance Operations The following table summarizes the results of CNA’s Other Insurance Operations for the three and six months ended June 30, 2024 and 2023. Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Net earned premiums $ 109 $ 113 $ 219 $ 228 Net investment income 257 243 509 467 Core loss (54) (66) (71) (87) Three Months Ended June 30, 2024 Compared to the Comparable 2023 Period Core results for Other Insurance Operations improved $12 million for the three months ended June 30, 2024 as compared with the comparable 2023 period, primarily due to a reduced impact from long-term care policy buyouts and higher net investment income, partially offset by a $5 million after tax charge related to an office consolidation in the 2024 period. The current and prior year quarters each include a $28 million after tax charge related to unfavorable net prior year loss reserve development largely associated with legacy mass tort abuse claims. Further information on net prior year loss reserve development is included in Note 4 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report. Six Months Ended June 30, 2024 Compared to the Comparable 2023 Period Core results for Other Insurance Operations improved $16 million for the six months ended June 30, 2024 as compared with the comparable 2023 period, primarily due to a reduced impact from long-term care policy buyouts and higher net investment income, partially offset by a $10 million after tax charge related to an office consolidation in the 2024 period. 47 Table of contents Non-GAAP Reconciliation of Net Income Attributable to Loews Corporation to Core Income The following table reconciles net income attributable to Loews Corporation to core income for t he three and six months ended June 30, 2024 and 2023: Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Net income attributable to Loews Corporation $ 291 $ 255 $ 601 $ 523 Investment losses 9 25 26 53 Noncontrolling interests 26 28 54 57 Total core income $ 326 $ 308 $ 681 $ 633 Core income (loss): Property & Casualty Operations $ 380 $ 374 $ 752 $ 720 Other Insurance Operations (54) (66) (71) (87) Total core income $ 326 $ 308 $ 681 $ 633 48 Table of contents Boardwalk Pipelines A significant portion of Boardwalk Pipelines’ revenues is fee-based, being derived from capacity reservation charges under firm agreements with customers, which do not vary significantly period to period, but are impacted by longer term trends in its business such as changes in pricing on contract renewals and other factors. Boardwalk Pipelines has little to no direct commodity price exposure. For further information on Boardwalk Pipelines’ revenue recognition policies see Note 1 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023. Boardwalk Pipelines’ operations and maintenance expenses are impacted by its compliance with the requirements of, among other regulations, the Pipeline and Hazardous Materials Safety Administration Mega Rule and Boardwalk Pipelines’ efforts to monitor, control and reduce emissions, as further discussed in Results of Operations of our MD&A included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. On September 29, 2023, Boardwalk Pipelines acquired Williams Olefins Pipeline Holdco LLC, renamed Boardwalk Ethane Pipeline Holdco, LLC (“Bayou Ethane”) after the acquisition, from Williams Field Services Group, LLC. Bayou Ethane provides ethane supply and transportation services for industrial customers in Louisiana and Texas. The following table summarizes the results of operations for Boardwalk Pipelines for the three and six months ended June 30, 2024 and 2023, as presented in Note 12 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report. Boardwalk Pipelines also utilizes a non-GAAP measure, earnings before interest, income tax expense, depreciation and amortization (“EBITDA”) as a financial measure to assess its operating and financial performance and return on invested capital. Management believes some investors may find this measure useful in evaluating Boardwalk Pipelines’ performance. Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Revenues: Operating revenues and other $ 479 $ 361 $ 992 $ 756 Interest income 9 4 13 6 Total 488 365 1,005 762 Expenses: Operating and other: Operating costs and expenses 239 148 445 289 Depreciation and amortization 108 102 214 203 Interest 47 39 90 78 Total 394 289 749 570 Income before income tax 94 76 256 192 Income tax expense (24) (19) (65) (49) Net income attributable to Loews Corporation $ 70 $ 57 $ 191 $ 143 EBITDA $ 240 $ 213 $ 547 $ 467 Three Months Ended June 30, 2024 Compared to the Comparable 2023 Period EBITDA and net income attributable to Loews Corporation increased $27 million and $13 million for the three months ended June 30, 2024 as compared with the comparable 2023 period, primarily due to the reasons discussed below. Total revenues increased $123 million for the three months ended June 30, 2024 as compared with the comparable 2023 period. Boardwalk Pipelines’ transportation revenues increased $15 million, primarily due to re-contracting at higher rates and recently completed growth projects; storage, parking and lending revenues increased $8 million due to favorable market conditions; product sale revenues increased by $3 million from the sale of ethylene; and the Bayou Ethane acquisition contributed $93 million of operating revenues, primarily resulting from ethane product sales. 49 Table of contents Operating costs and expenses increased $91 million for the three months ended June 30, 2024 as compared with the comparable 2023 period, primarily reflecting operations of the Bayou Ethane acquisition. Depreciation and amortization expenses increased $6 million for the three months ended June 30, 2024 as compared with the comparable 2023 period due to an increased asset base from recently completed growth projects and the Bayou Ethane acquisition. Interest expenses increased $8 million for the three months ended June 30, 2024 as compared with the comparable 2023 period, primarily due to pre-financing Boardwalk Pipeline’s $600 million of debt maturing in December 2024. Six Months Ended June 30, 2024 Compared to the Comparable 2023 Period EBITDA and net income attributable to Loews Corporation increased $80 million and $48 million for the six months ended June 30, 2024 as compared with the comparable 2023 period, primarily due to the reasons discussed below. Total revenues increased $243 million for the six months ended June 30, 2024 as compared with the comparable 2023 period. Boardwalk Pipelines’ transportation revenues increased $40 million, primarily due to re-contracting at higher rates and recently completed growth projects; storage, parking and lending revenues increased $15 million due to favorable market conditions; product sale revenues from the sale of natural gas, ethylene and propane increased $13 million; and the Bayou Ethane acquisition contributed $169 million of operating revenues, primarily resulting from ethane product sales. Operating costs and expenses increased $156 million for the six months ended June 30, 2024 as compared with the comparable 2023 period primarily reflecting operations of the Bayou Ethane acquisition. Depreciation and amortization expenses increased $11 million for the six months ended June 30, 2024 as compared with the comparable 2023 period due to an increased asset base from recently completed growth projects and the Bayou Ethane acquisition. Interest expenses increased $12 million for the six months ended June 30, 2024 as compared with the comparable 2023 period, primarily due to pre-financing Boardwalk Pipeline’s $600 million of debt maturing in December 2024. Non-GAAP Reconciliation of Net Income Attributable to Loews Corporation to EBITDA The following table reconciles net income attributable to Loews Corporation to EBITDA for the three and six months ended June 30, 2024 and 2023: Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Net income attributable to Loews Corporation $ 70 $ 57 $ 191 $ 143 Interest, net 38 35 77 72 Income tax expense 24 19 65 49 Depreciation and amortization 108 102 214 203 EBITDA $ 240 $ 213 $ 547 $ 467 Loews Hotels & Co The following table summarizes the results of operations for Loews Hotels & Co for the three and six months ended June 30, 2024 and 2023, as presented in Note 12 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report. 50 Table of contents Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Revenues: Operating revenue $ 219 $ 182 $ 402 $ 337 Gain on acquisition of a joint venture 46 46 Revenues related to reimbursable expenses 32 26 65 63 Total 251 254 467 446 Expenses: Operating and other: Operating 169 142 324 272 Asset impairments 9 9 Reimbursable expenses 32 26 65 63 Depreciation and amortization 24 17 45 33 Equity income from joint ventures (32) (41) (59) (72) Interest 14 20 6 Total 207 153 395 311 Income before income tax 44 101 72 135 Income tax expense (9) (27) (21) (37) Net income attributable to Loews Corporation $ 35 $ 74 $ 51 $ 98 Net income attributable to Loews Corporation decreased $39 million and $47 million for the three and six months ended June 30, 2024 as compared with the comparable 2023 periods primarily due to the reasons discussed below. Operating revenues improved by $37 million and $65 million and operating expenses increased by $27 million and $52 million for the three and six months ended June 30, 2024 as compared with the comparable 2023 periods. The increas e in operating revenues and operating expenses was primarily driven by the opening of the Loews Arlington Hotel and Convention Center, including pre-opening expenses, in the first quarter of 2024. Operating revenues also improved due to consolidating the results of a property previously accounted for under the equity method, higher occupancy levels at many city center hot els as a result of the continued recovery in group travel in 2024 as compared with the comparable 2023 periods and an increase in food and beverage revenues. Operating expenses also increased due to consolidating the results of a property previously accounted for under the equity method and increased staffing costs, as well as higher insurance expenses and property taxes. During the second quarter of 2023, Loews Hotels & Co recorded a gain of $46 million ($36 million after tax) related to the acquisition of an additional equity interest in, and the consolidation of, a previously unconsolidated joint venture property. Equity income from joint ventures decreased $9 million and $13 million for the three and six months ended June 30, 2024 as compared with the comparable 2023 periods. The decrease was driven by a reduction in overall occupancy levels at many joint venture hotels, particularly at the Universal Orlando Resort, in 2024 compared to 2023 and higher expenses at joint venture properties, largely due to increased staffing costs, as well as higher insurance expenses and property taxes. Equity income from joint ventures also decreased for the three months ended June 30, 2024 compared to the comparable 2023 period due to lower average daily rates for many joint venture hotels, particularly at the Universal Orlando Resort. The three and six months ended June 30, 2023 include impairment charges of $9 million to reduce the carrying value of certain assets to their estimated fair value. Depreciation and amortization expense increased $7 million and $12 million for the three and six months ended June 30, 2024 as compared with the comparable 2023 periods mainly due to the opening of the Loews Arlington Hotel and Convention Center in the first quarter of 2024 and consolidating the results of a property previously accounted for under the equity method. 51 Table of contents Interest expense increased $14 million and $14 million for the three and six months ended June 30, 2024 as compared with the comparable 2023 perio ds primarily due to placing the Loews Arlington Hotel and Convention Center into service during the first quarter of 2024, after which Loews Hotels & Co no longer capitalized interest on that development project . Corporate Corporate operations consist primarily of investment income, interest expense and administrative costs at the Parent Company. Investment income includes earnings on cash and short-term investments held at the Parent Company to meet current and future liquidity needs, as well as results of the trading portfolio held at the Parent Company. Corporate also includes the equity method of accounting for Altium Packaging. The following table summarizes the results of operations for Corporate for the three and six months ended June 30, 2024 and 2023 as presented in Note 12 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report: Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Revenues: Net investment income $ 9 $ 11 $ 63 $ 53 Total 9 11 63 53 Expenses: Operating and other 18 18 40 37 Equity method loss 5 2 6 5 Interest 19 21 38 43 Total 42 41 84 85 Loss before income tax (33) (30) (21) (32) Income tax benefit 6 4 4 3 Net loss attributable to Loews Corporation $ (27) $ (26) $ (17) $ (29) Net loss attributable to Loews Corporation increased $1 million and decreased $12 million for the three and six months ended June 30, 2024 as compared with the comparable 2023 periods primarily due to the reasons discussed below. Net investment income for the Parent Company decreased $2 million for the three m onths ended June 30, 2024 as compared with the comparable 2023 period primarily due to the unfavorable change in the fair value of equity based investments, partially offset by higher income from short-term investments and fixed maturity securities in the trading portfolio. Net investment income for the Parent Company increased $10 million for the six months ended June 30, 2024 as compared with the comparable 2023 period, primarily due to higher returns on equity based investments and higher income from short term investments in the trading portfolio. Interest expenses decreased by $2 million and $5 million for the three and six months ended June 30, 2024 as compared with the comparable 2023 periods due to the retirement of the Parent Company’s $500 million aggregate principal amount of its 2.6% senior notes in May of 2023. LIQUIDITY AND CAPITAL RESOURCES Parent Company Parent Company cash and investments, net of receivables and payables, totaled $3.1 billion at June 30, 2024 as compared to $2.6 billion at December 31, 2023. During the six months ended June 30, 2024 , we received $815 million in cash dividends from our subsidiaries, including a special cash dividend of $497 million from CNA and distributions of $100 million from Boardwalk Pipelines. Cash outflows during the six months ended June 30, 2024 included the payment of $203 million to fund treasury stock purchases and $28 million of cash dividends to our shareholders . As a holding company we 52 Table of contents depend on dividends from our subsidiaries and returns on our investment portfolio to fund our obligations. We also have an effective shelf registration statement on file with the Securities and Exchange Commission (“SEC”) under which we may publicly issue an unspecified amount of our debt, equity or hybrid securities from time to time. We are not responsible for the liabilities and obligations of our subsidiaries and there are no Parent Company guarantees. Depending on market and other conditions, we may purchase shares of our and our subsidiaries outstanding common stock in the open market, in privately negotiated transactions or otherwise. As of July 26, 2024, we repurchased 2.8 million shares of Loews Corporation common stock in 2024 for a total cost of $212 million. As of July 26, 2024, there were 219,516,512 shares of Loews Corporation common stock outstanding. Future uses of our cash may include investing in our subsidiaries, new acquisitions, dividends and/or purchases of our and our subsidiaries’ outstanding common stock. The declaration and payment of future dividends to holders of our common stock will be at the discretion of our Board of Directors and will depend on many factors, including our earnings, financial condition and business needs. Subsidiaries CNA’s cash provided by operating activities was $1.1 billion for the six months ended June 30, 2024 as compared with $937 million for the comparable 2023 period. The increase in cash provided by operating activities was driven by an increase in premiums collected and higher earnings from fixed income securities, partially offset by an increase in net claim payments and higher operating expenses. CNA paid cash dividends of $2.88 per share on its common stock, including a special cash dividend of $2.00 per share, during the six months ended June 30, 2024. On July 26, 2024 , CNA’s Board of Directors declared a quarterly cash dividend of $0.44 per share payable August 29, 2024 to shareholders of record on August 12, 2024 . CNA’s declaration and payment of future dividends is at the discretion of its Board of Directors and will depend on many factors, including CNA’s earnings, financial condition, business needs and regulatory constraints. CNA believes that its present cash flows from operating, investing and financing activities are sufficient to fund its current and expected working capital and debt obligation needs and does not expect this to change in the near term. Dividends to CNA from Continental Casualty Company (“CCC”), a subsidiary of CNA, are subject to the insurance holding company laws of the State of Illinois, the domiciliary state of CCC. Under these laws, ordinary dividends, or dividends that do not require prior approval by the Illinois Department of Insurance, are determined based on the greater of the prior year’s statutory net income or 10% of statutory surplus as of the end of the prior year, as well as the timing and amount of dividends paid in the preceding 12 months. Additionally, ordinary dividends may only be paid from earned surplus, which is calculated by removing unrealized gains from unassigned surplus. As of June 30, 2024, CCC was in a positive earned surplus position. CCC paid dividends of $490 million and $660 million during the six months ended June 30, 2024 and 2023. The actual level of dividends paid in any year is determined after an assessment of available dividend capacity, holding company liquidity and cash needs as well as the impact the dividends will have on the statutory surplus of the applicable insurance company. In February of 2024 , CNA completed a public offering of $500 million aggregate principal amount of its 5.1% senior notes due February 15, 2034 and in May of 2024, CNA repaid at maturity the outstanding $550 million aggregate principal amount of its 4.0% senior notes. CNA has an effective shelf registration statement on file with the SEC under which it may publicly issue an unspecified amount of debt, equity or hybrid securities from time to time. Boardwalk Pipelines’ cash provided by operating activities increased $48 million for the six months ended June 30, 2024 as compared with the comparable 2023 period, primarily due to changes in net income adjusted for depreciation and amortization. For the six months ended June 30, 2024 and 2023, Boardwalk Pipelines’ capital expenditures were $196 million and $151 million, consisting of growth capital expenditures of $124 million and $95 million and maintenance capital expenditures of $72 million and $56 million. In February of 2024 , Boardwalk Pipelines completed a public offering of $600 million aggregate principal amount of its 5.6% senior notes due August 1, 2034 . As of June 30, 2024, Boardwalk Pipelines had the full borrowing capacity of $1.0 billion available under its revolving credit facility. The revolving credit facility has a borrowing capacity of $1.0 billion through May 27, 2027, and a borrowing capacity of $912 million from May 28, 2027 to May 26, 2028. Boardwalk Pipelines anticipates that its existing capital resources, including its cash and cash equivalents, short-term investments, revolving credit facility and cash flows from operating activities, will be adequate to fund its operations and capital 53 Table of contents expenditures for 2024 and to retire its $600 million of debt that is maturing in December 2024. As of June 30, 2024, Boardwalk Pipelines also has an effective shelf registration statement on file with the SEC under which it may publicly issue up to $900 million of debt securities, warrants or rights from time to time. In the first half of 2024, Boardwalk Pipelines paid distributions of $100 million to the Company. As of June 30, 2024, Loews Hotels & Co, through its subsidiaries, had $409 million in mortgage loans that mature within twelve months. Loews Hotels & Co currently intends to refinance these loans prior to maturity. Refinancing any indebtedness, including loans of unconsolidated joint venture partnerships, may require Loews Hotels & Co to make principal pay downs, establish restricted cash reserves or provide guaranties of the subsidiary’s debt. Through the date of this Report, all Loews Hotels & Co’s subsidiaries are in compliance with their debt covenants. Loews Hotels & Co refinanced $118 million in mortgage loans in the second quarter of 2024 that were due to mature within twelve months. Loews Hotels & Co acquired all of the remaining outstanding noncontrolling equity interest of an owned and consolidated hotel for $30 million in the second quarter of 2024. In addition, Loews Hotels & Co received aggregate proceeds of $23 million for the sale of an owned hotel in the first quarter of 2024. INVESTMENTS Investment activities of our non-insurance subsidiaries primarily consist of investments in fixed income securities, including short-term investments. The Parent Company portfolio also includes equity securities, including short sales and derivative instruments. Certain of these types of Parent Company investments generally have greater volatility, less liquidity and greater risk than fixed income investments and are included within Results of Operations – Corporate. The Parent Company enters into short sales and invests in certain derivative instruments that are used for asset and liability management activities, income enhancements to its portfolio management strategy and to benefit from anticipated future movements in the underlying markets. If such movements do not occur as anticipated, significant losses may occur. Monitoring procedures include senior management review of daily reports of existing positions and valuation fluctuations to seek to ensure that open positions are consistent with the portfolio strategy. Credit exposure associated with non-performance by counterparties to derivative instruments is generally limited to the uncollateralized change in fair value of the derivative instruments recognized in the Consolidated Condensed Balance Sheets. The risk of non-performance is mitigated by monitoring the creditworthiness of counterparties and diversifying derivatives by using multiple counterparties. Collateral is occasionally required from derivative investment counterparties depending on the amount of the exposure and the credit rating of the counterparty. Insurance CNA maintains a large portfolio of fixed maturity and equity securities, including large amounts of corporate and government issued debt securities, residential and commercial mortgage-backed securities, other asset-backed securities and investments in limited partnerships which pursue a variety of long and short investment strategies across a broad array of asset classes. CNA’s investment portfolio supports its obligation to pay future insurance claims and provides investment returns which are an important part of CNA’s overall profitability. 54 Table of contents Net Investment Income The significant components of CNA’s net investment income are presented in the following table. Fixed income securities, as presented, include both fixed maturity securities and non-redeemable preferred stock. Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Fixed income securities: Taxable fixed income securities $ 484 $ 444 $ 956 $ 874 Tax-exempt fixed income securities 36 46 74 95 Total fixed income securities 520 490 1,030 969 Limited partnership and common stock investments 78 68 146 96 Other, net of investment expense 20 17 51 35 Net investment income $ 618 $ 575 $ 1,227 $ 1,100 Effective income yield for the fixed income securities portfolio 4.8 % 4.6 % 4.8 % 4.6 % Limited partnership and common stock return 3.1 % 3.1 % 6.1 % 4.5 % CNA’s net investment income increased $43 million and $127 million for the three and six months ended June 30, 2024 as compared with the comparable 2023 periods, driven by higher income from fixed income securities as a result of favorable reinvestment rates and a larger invested asset base, as well as favorable limited partnership and common stock returns. Investment Gains (Losses) The components of CNA’s investment gains (losses) are presented in the following table: Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Investment gains (losses): Fixed maturity securities: Corporate and other bonds $ (4) $ (12) $ (21) $ (35) States, municipalities and political subdivisions (2) (3) (2) 7 Asset-backed (6) (12) (21) (21) Total fixed maturity securities (12) (27) (44) (49) Non-redeemable preferred stock 1 3 12 (11) Derivatives, short-term and other 1 (8) (7) Total investment losses (10) (32) (32) (67) Income tax benefit 1 7 6 14 Amounts attributable to noncontrolling interests 2 2 3 5 Investment losses attributable to Loews Corporation $ (7) $ (23) $ (23) $ (48) 55 Table of contents CNA’s pretax investment losses decreased $22 million for the three months ended June 30, 2024 as compared with the comparable 2023 period driven by lower impairment losses. CNA’s pretax investment losses decreased $35 million for the six months ended June 30, 2024 as compared with the comparable 2023 period, driven by the favorable change in fair value of non-redeemable preferred stock and lower impairment losses. Further information on CNA’s investment gains and losses is set forth in Note 2 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report. Portfolio Quality The following table presents the estimated fair value and net unrealized gains (losses) of CNA’s fixed maturity securities by rating distribution: June 30, 2024 December 31, 2023 Estimated Fair Value Net Unrealized Gains (Losses) Estimated Fair Value Net Unrealized Gains (Losses) (In millions) U.S. Government, Government agencies and Government-sponsored enterprises $ 2,841 $ (374) $ 2,795 $ (298) AAA 2,886 (225) 2,727 (169) AA 6,323 (559) 6,444 (420) A 10,126 (426) 9,910 (223) BBB 16,314 (884) 16,670 (744) Non-investment grade 1,913 (105) 1,879 (119) Total $ 40,403 $ (2,573) $ 40,425 $ (1,973) As of June 30, 2024 and December 31, 2023, 1% of CNA’s fixed maturity portfolio was rated internally. AAA rated securities included $0.2 billion of pre-funded municipal bonds as of June 30, 2024 and December 31, 2023. The following table presents CNA’s available-for-sale fixed maturity securities in a gross unrealized loss position by ratings distribution: June 30, 2024 Estimated Fair Value Gross Unrealized Losses (In millions) U.S. Government, Government agencies and Government-sponsored enterprises $ 2,599 $ 378 AAA 1,841 288 AA 4,371 730 A 6,587 629 BBB 11,813 1,119 Non-investment grade 880 134 Total $ 28,091 $ 3,278 56 Table of contents The following table presents the maturity profile for these available-for-sale fixed maturity securities. Securities not due to mature on a single date are allocated based on weighted average life: June 30, 2024 Estimated Fair Value Gross Unrealized Losses (In millions) Due in one year or less $ 1,308 $ 38 Due after one year through five years 8,384 458 Due after five years through ten years 8,280 1,084 Due after ten years 10,119 1,698 Total $ 28,091 $ 3,278 Duration A primary objective in the management of CNA’s investment portfolio is to optimize return relative to the corresponding liabilities and respective liquidity needs. CNA’s views on the current interest rate environment, tax regulations, asset class valuations, specific security issuer and broader industry segment conditions as well as domestic and global economic conditions, are some of the factors that enter into an investment decision. CNA also continually monitors exposure to issuers of securities held and broader industry sector exposures and may from time to time adjust such exposures based on its views of a specific issuer or industry sector. A further consideration in the management of CNA’s investment portfolio is the characteristics of the corresponding liabilities and the ability to align the duration of the portfolio to those liabilities and to meet future liquidity needs, minimize interest rate risk and maintain a level of income sufficient to support the underlying insurance liabilities. For portfolios where future liability cash flows are determinable and typically long-term in nature, CNA segregates investments for asset/liability management purposes. The segregated investments support the long-term care and structured settlement liabilities in Other Insurance Operations. The effective durations of CNA’s fixed income securities and short-term investments are presented in the following table. Amounts presented are net of payable and receivable amounts for securities purchased and sold, but not yet settled. June 30, 2024 December 31, 2023 Estimated Fair Value Effective Duration (Years) Estimated Fair Value Effective Duration (Years) (In millions of dollars) Life & Group $ 15,055 9.9 $ 15,137 10.2 Property & Casualty and other 27,578 4.4 27,981 4.5 Total $ 42,633 6.4 $ 43,118 6.5 CNA’s investment portfolio is periodically analyzed for changes in duration and related price risk. Certain securities have duration characteristics that are variable based on market interest rates, credit spreads and other factors that may drive variability in the amount and timing of cash flows. Additionally, CNA periodically reviews the sensitivity of the portfolio to the level of foreign exchange rates and other factors that contribute to market price changes. A summary of these risks and specific analysis on changes is included in the Quantitative and Qualitative Disclosures about Market Risk included under Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2023. CATASTROPHES AND RELATED REINSURANCE Various events can cause catastrophe losses. These events can be natural or man-made, including hurricanes, tornadoes, windstorms, earthquakes, hail, severe winter weather, fires, floods, riots, strikes, civil unrest, cyber attacks, pandemics and acts of terrorism that produce unusually large aggregate losses. 57 Table of contents Catastrophes are an inherent risk of the property and casualty insurance business and have contributed to material period-to-period fluctuations in CNA’s results of operations and/or equity. CNA uses various analyses and methods, including using one of the industry standard natural catastrophe models, to estimate hurricane and earthquake losses at various return periods and to inform underwriting and reinsurance decisions designed to manage its exposure to catastrophic events. CNA generally seeks to manage its exposure through the purchase of catastrophe reinsurance and utilizes various reinsurance programs to mitigate catastrophe losses, including excess-of-loss occurrence and aggregate treaties covering property and workers’ compensation, a property quota share treaty and the Terrorism Risk Insurance Program Reauthorization Act of 2019 (“TRIPRA”), as well as individual risk agreements that reinsure losses from specific classes or lines of business. CNA conducts an ongoing review of its risk and catastrophe reinsurance coverages and from time to time makes changes as it deems appropriate. In the second quarter of 2024, CNA renewed its excess-of-loss property catastrophe reinsurance as described below: Group North American Property Treaty CNA purchased corporate catastrophe excess-of-loss treaty reinsurance covering its U.S. states and territories and Canadian property exposures underwritten in its North American and European companies. The treaty has a term of June 1, 2024 to June 1, 2025 and provides coverage for the accumulation of covered losses from catastrophe occurrences above CNA’s per occurrence retention of $250 million up to $1.4 billion for all losses. Losses stemming from terrorism events are covered unless they are due to a nuclear, biological or chemical attack. All layers of the treaty provide for one full reinstatement. Group Workers’ Compensation Treaty CNA also purchased corporate Workers’ Compensation catastrophe excess-of-loss treaty reinsurance for the period January 1, 2024 to January 1, 2025 providing $275 million of coverage for the accumulation of covered losses related to natural catastrophes above CNA’s per occurrence retention of $25 million. The treaty also provides $775 million of coverage for the accumulation of covered losses related to terrorism events above CNA’s per occurrence retention of $25 million. Of the $775 million in terrorism coverage, $200 million is provided for nuclear, biological, chemical and radiation events. One full reinstatement is available for the first $275 million above the retention, regardless of the covered peril. CRITICAL ACCOUNTING ESTIMATES Certain accounting policies require us to make estimates and judgments that affect the amounts reflected in the Consolidated Condensed Financial Statements. Such estimates and judgments necessarily involve varying, and possibly significant, degrees of uncertainty. Accordingly, certain amounts currently recorded or disclosed in the financial statements will likely be adjusted in the future based on new available information and changes in other facts and circumstances. See the Critical Accounting Estimates and the Insurance Reserves sections of our MD&A included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 for further information. ACCOUNTING STANDARDS UPDATE For a discussion of accounting standards updates that have been adopted, please read Note 1 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report. FORWARD-LOOKING STATEMENTS Investors are cautioned that certain statements contained in this Report as well as in other of our and our subsidiaries’ SEC filings and periodic press releases and certain statements made by us and our subsidiaries and our and their officials in presentations or remarks may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements include, without limitation, any statement that does not directly relate to any historical or current fact and may project, indicate or imply future results, events, performance or achievements. Such statements may contain the words “expect,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “will be,” “will continue,” “will likely result,” and similar expressions. In addition, any statement concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible actions taken by us or our subsidiaries are also forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to a variety of risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those anticipated or projected. 58 Table of contents Developments in any of the risks or uncertainties facing us or our subsidiaries, including those described under Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023 and in our and our subsidiaries’ other filings with the SEC, could cause our and our subsidiaries’ results to differ materially from results that have been or may be anticipated or projected. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made and we and our subsidiaries expressly disclaim any obligation or undertaking to update these statements to reflect any change in expectations or beliefs or any change in events, conditions or circumstances on which any forward-looking statement is based.