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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2022

OR

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

For the Transition Period From ____________ to _____________

Commission File Number 1-06541

LOEWS CORPORATION
(Exact name of registrant as specified in its charter)

Delaware13-2646102
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

667 Madison Avenue, New York, NY 10065-8087
(Address of principal executive offices) (Zip Code)

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

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 per shareLNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes☒No ☐  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒No ☐  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐Non-accelerated filer ☐Smaller reporting company ☐
 Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes☐No ☒  
As of April 29, 2022, there were 246,108,045 shares of the registrant’s common stock outstanding.

1
Table of Contents
INDEX

 Page
No.
  
 
  
 
  
March 31, 2022 and December 31, 2021
 
 
Three months ended March 31, 2022 and 2021
 
 
Three months ended March 31, 2022 and 2021
 
 
Three months ended March 31, 2022 and 2021
 
 
Three months ended March 31, 2022 and 2021
 
 
  
  
  
  
  
  
  
  
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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
March 31,December 31,
 20222021
(Dollar amounts in millions, except per share data)
Assets:
Investments:
Fixed maturities, amortized cost of $40,928 and $39,952, less allowance for credit loss of $17 and $18
$41,945 $44,380 
Equity securities, cost of $1,496 and $1,546
1,515 1,674 
Limited partnership investments1,917 1,933 
Other invested assets, primarily mortgage loans, less allowance for credit loss of $16 and $16
1,070 1,091 
Short term investments4,655 4,860 
Total investments51,102 53,938 
Cash798 621 
Receivables9,259 9,273 
Property, plant and equipment9,896 9,888 
Goodwill348 349 
Deferred non-insurance warranty acquisition expenses3,504 3,476 
Deferred acquisition costs of insurance subsidiaries766 737 
Other assets3,471 3,344 
Total assets$79,144 $81,626 
 
Liabilities and Equity:
 
Insurance reserves:
Claim and claim adjustment expense$24,348 $24,174 
Future policy benefits11,938 13,236 
Unearned premiums5,942 5,761 
Total insurance reserves42,228 43,171 
Payable to brokers396 90 
Short term debt393 93 
Long term debt8,883 8,986 
Deferred income taxes715 1,079 
Deferred non-insurance warranty revenue4,528 4,503 
Other liabilities4,306 4,529 
Total liabilities61,449 62,451 
 
Commitments and contingent liabilities
 
Preferred stock, $0.10 par value:
Authorized – 100,000,000 shares
Common stock, $0.01 par value:
Authorized – 1,800,000,000 shares
Issued – 248,596,343 and 248,467,051 shares
2 2 
Additional paid-in capital2,859 2,885 
Retained earnings15,097 14,776 
Accumulated other comprehensive income (loss)(1,251)186 
 16,707 17,849 
Less treasury stock, at cost (2,195,656 and 50,000 shares)
(132)(3)
Total shareholders’ equity16,575 17,846 
Noncontrolling interests1,120 1,329 
Total equity17,695 19,175 
Total liabilities and equity$79,144 $81,626 
See accompanying Notes to Consolidated Condensed Financial Statements.
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Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended March 31
20222021
(In millions, except per share data)  
   
Revenues:  
Insurance premiums$2,059 $1,962 
Net investment income432 550 
Investment gains (losses)(11)57 
Non-insurance warranty revenue382 338 
Operating revenues and other540 715 
Total3,402 3,622 
 
Expenses:
Insurance claims and policyholders’ benefits1,455 1,506 
Amortization of deferred acquisition costs344 359 
Non-insurance warranty expense354 311 
Operating expenses and other691 914 
Interest96 125 
Total2,940 3,215 
Income before income tax462 407 
Income tax expense(92)(114)
Net income370 293 
Amounts attributable to noncontrolling interests(32)(32)
Net income attributable to Loews Corporation$338 $261 
Basic net income per share$1.36 $0.98 
Diluted net income per share$1.36 $0.97 
Weighted average shares outstanding:
Shares of common stock247.97267.39
Dilutive potential shares of common stock0.510.37
Total weighted average shares outstanding assuming dilution248.48267.76

See accompanying Notes to Consolidated Condensed Financial Statements.
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Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)

Three Months Ended March 31
20222021
(In millions)  
   
Net income$370 $293 
 
Other comprehensive loss, after tax
Changes in:
Net unrealized losses on investments with an allowance for credit losses(4)
Net unrealized losses on other investments(1,611)(627)
Total unrealized losses on investments(1,615)(627)
Unrealized gains on cash flow hedges18 4 
Pension and postretirement benefits7 9 
Foreign currency translation(15)3 
 
Other comprehensive loss(1,605)(611)
 
Comprehensive loss(1,235)(318)
 
Amounts attributable to noncontrolling interests136 32 
 
Total comprehensive loss attributable to Loews Corporation$(1,099)$(286)

See accompanying Notes to Consolidated Condensed Financial Statements.
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Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF EQUITY
(Unaudited)

 Loews Corporation Shareholders  
 Total Common StockAdditional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Common Stock
Held in Treasury 		Noncontrolling Interests
(In millions)       
        
Balance, January 1, 2021
$19,181 $3 $3,133 $14,150 $581 $(7)$1,321 
Net income293 261 32 
Other comprehensive loss(611)(547)(64)
Dividends paid ($0.0625 per share)
(49)(17)(32)
Purchase of subsidiary stock from noncontrolling interests(3)(3)
Purchases of Loews Corporation treasury stock(274)(274)
Stock-based compensation4 (11)15 
Other(4)(3)1 (2)
Balance, March 31, 2021
$18,537 $3 $3,119 $14,394 $34 $(280)$1,267 
Balance, January 1, 2022
$19,175 $2 $2,885 $14,776 $186 $(3)$1,329 
Net income370 338 32 
Other comprehensive loss(1,605)(1,437)(168)
Dividends paid ($0.0625 per share)
(84)(16)(68)
Purchase of subsidiary stock from noncontrolling interests(21)(1)(20)
Purchases of Loews Corporation treasury stock(129)(129)
Stock-based compensation(10)(25)15 
Other(1)(1)
Balance, March 31, 2022
$17,695 $2 $2,859 $15,097 $(1,251)$(132)$1,120 

See accompanying Notes to Consolidated Condensed Financial Statements.
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Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

Three Months Ended March 31
20222021
(In millions)
Operating Activities:
Net income$370 $293 
Adjustments to reconcile net income to net cash provided by operating activities, net333 257 
Changes in operating assets and liabilities, net:
Receivables(28)(736)
Deferred acquisition costs(31)(32)
Insurance reserves489 605 
Other assets(134)(250)
Other liabilities(202)126 
Trading securities(374)(129)
Net cash flow provided by operating activities423 134 
 
Investing Activities:
 
Purchases of fixed maturities(2,547)(2,203)
Proceeds from sales of fixed maturities803 907 
Proceeds from maturities of fixed maturities916 1,084 
Purchases of equity securities(75)(81)
Proceeds from sales of equity securities77 119 
Purchases of limited partnership investments(85)(61)
Proceeds from sales of limited partnership investments113 49 
Purchases of property, plant and equipment(121)(87)
Change in short term investments696 569 
Other, net36 10 
Net cash flow (used) provided by investing activities(187)306 
 
Financing Activities:
 
Dividends paid(16)(17)
Dividends paid to noncontrolling interests(68)(32)
Purchases of Loews Corporation treasury stock(132)(280)
Purchases of subsidiary stock from noncontrolling interests(21)(3)
Principal payments on debt(300)(1,073)
Issuance of debt495 1,159 
Other, net(14)(12)
Net cash flow used by financing activities(56)(258)
 
Effect of foreign exchange rate on cash(3)
 
Net change in cash177 182 
Cash, beginning of period621 478 
Cash, end of period$798 $660 

See accompanying Notes to Consolidated Condensed Financial Statements.
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Loews Corporation and Subsidiaries
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

1. Basis of Presentation

Loews Corporation is a holding company. Its consolidated operating subsidiaries are engaged in the following lines of business: commercial property and casualty insurance (CNA Financial Corporation (“CNA”), an 89.6% owned subsidiary); transportation and storage of natural gas and natural gas liquids (Boardwalk Pipeline Partners, LP (“Boardwalk Pipelines”), a wholly owned subsidiary) and the operation of a chain of hotels (Loews Hotels Holding Corporation (“Loews Hotels & Co”), a wholly owned subsidiary). Unless the context otherwise requires, the term “Company” as used herein means Loews Corporation including its consolidated subsidiaries, the term “Parent Company” means Loews Corporation excluding its subsidiaries, the term “Net income (loss) attributable to Loews Corporation” as used herein means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means Loews Corporation’s consolidated subsidiaries.

On April 1, 2021, Loews Corporation sold 47% of Altium Packaging LLC (“Altium Packaging”), previously a 99% owned subsidiary, and following the transaction Loews Corporation deconsolidated Altium Packaging. For additional information regarding the deconsolidation of Altium Packaging, see Note 2 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

In the opinion of management, the accompanying unaudited Consolidated Condensed Financial Statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company’s financial position as of March 31, 2022 and December 31, 2021 and results of operations, comprehensive loss and changes in shareholders’ equity and cash flows for the three months ended March 31, 2022 and 2021. Net income for the first quarter of each of the years is not necessarily indicative of net income for that entire year. These Consolidated Condensed Financial Statements should be read in conjunction with the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The Company presents basic and diluted net income (loss) per share on the Consolidated Condensed Statements of Operations. Basic net income (loss) per share excludes dilution and is computed by dividing net income (loss) attributable to common stock by the weighted average number of common shares outstanding for the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the three months ended March 31, 2022 and 2021 there were no shares attributable to employee stock-based compensation awards excluded from the diluted weighted average shares outstanding amounts because the effect would have been antidilutive.

Recently issued Accounting Standards Updates (“ASUs”) – In August of 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-12, “Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts.” The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. For the Company, this includes CNA’s Long term care and fully-ceded single premium immediate annuity business. Entities will be required to review, and update if there is a change, cash flow assumptions (including morbidity and persistency) at least annually and to update quarterly discount rate assumptions using an upper-medium grade fixed-income instrument yield. The effect of changes in cash flow assumptions will be recorded in Net income and the effect of changes in discount rate assumptions will be recorded in Other comprehensive income (“OCI”). The guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted, and may be applied using either a modified retrospective transition method or a full retrospective transition method. Financial statements for prior periods presented will be adjusted to reflect the effects of applying the new accounting guidance.

The Company will adopt the new guidance effective January 1, 2023, using the modified retrospective method applied as of the transition date of January 1, 2021. A published spot rate curve constructed from A+, A and A- rated U.S. dollar denominated corporate bonds matched to the duration of the corresponding insurance liabilities will be used to calculate discount rates. Long-duration contracts will be grouped into calendar year cohorts based on the contract issue date and product line. Long term care contracts will be grouped separately from the fully-ceded single premium immediate annuity contracts.

The most significant impact at the transition date will be the effect of updating the discount rate assumption to reflect an upper-medium grade fixed-income instrument yield, which will be partially offset by the de-recognition of Shadow Adjustments associated with long-duration contracts. The Company expects the net impact of these changes will be a $2.0
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billion - $2.3 billion (after tax and noncontrolling interests) decrease in Accumulated other comprehensive income (“AOCI”) as of the transition date of January 1, 2021. There is a minimal transition impact expected to retained earnings.

The requirement to review, and update if there is a change, cash flow assumptions at least annually is expected to change the pattern of earnings being recognized. Adoption will also significantly expand the Company’s disclosures, and will impact systems, processes and controls. While the requirements of the new guidance represent a material change from existing accounting guidance, the new guidance will not impact capital and surplus under statutory accounting practices, cash flows, or the underlying economics of the business.

The Company continues to make progress in connection with these matters and is in the process of refining key accounting policy decisions, technology solutions and updates to internal controls associated with adoption of the new guidance. These in-progress activities include modifications of actuarial valuation systems, data sourcing, analytical procedures and reporting processes.

2. Investments

Net investment income is as follows:

Three Months Ended March 31
20222021
(In millions)  
   
Fixed maturity securities$429 $428 
Limited partnership investments20 47 
Equity securities2 29 
Income (loss) from trading portfolio (a)
(15)50 
Other15 16 
Total investment income451 570 
Investment expenses(19)(20)
Net investment income$432 $550 

(a)
During the three months ended March 31, 2022 and 2021, $(31) and $32 of net investment income (loss) was recognized due to the change in fair value of securities still held as of March 31, 2022 and 2021.

Investment gains (losses) are as follows:

Three Months Ended March 31
20222021
(In millions)  
   
Fixed maturity securities:
Gross gains$26 $58 
Gross losses(28)(20)
Investment gains (losses) on fixed maturity securities(2)38 
Equity securities(38)2 
Derivative instruments29 17 
Investment gains (losses) (a)$(11)$57 

(a)
During the three months ended March 31, 2022 and 2021, $38 of investment losses and $2 of investment gains were recognized due to the change in fair value of non-redeemable preferred stock still held as of March 31, 2022 and 2021.
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The following tables present the activity related to the allowance on available-for-sale securities with credit impairments and purchased credit-deteriorated (“PCD”) assets. Accrued interest receivables on available-for-sale fixed maturity securities totaled $389 million, $369 million and $389 million as of March 31, 2022, December 31, 2021 and March 31, 2021 and are excluded from the estimate of expected credit losses and the amortized cost basis in the tables within this Note.

Three months ended March 31, 2022
Corporate and Other Bonds
Asset-backed
Total
 (In millions)   
Allowance for credit losses:   
Balance as of January 1, 2022
$11 $7 $18 
Additional increases or (decreases) to the allowance for credit
losses on securities that had an allowance recorded in a previous period
1 (2)(1)
Total allowance for credit losses$12 $5 $17 

Three months ended March 31, 2021 
    
Allowance for credit losses:   
Balance as of January 1, 2021
$23 $17 $40 
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded14 14 
Available-for-sale securities accounted for as PCD assets2 2 
 
Reductions to the allowance for credit losses:
Securities sold during the period (realized)6 6 
Additional decreases to the allowance for credit losses
on securities that had an allowance recorded in a previous period
(6)(1)(7)
Total allowance for credit losses$27 $16 $43 

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The components of available-for-sale impairment losses recognized in earnings by asset type are presented in the following table. The table includes losses on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date:

Three Months Ended March 31
20222021
(In millions)  
   
Fixed maturity securities available-for-sale:  
Corporate and other bonds$8 $7 
Asset-backed2 (1)
Impairment losses recognized in earnings$10 $6 

There were no losses recognized on mortgage loans during the three months ended March 31, 2022 or 2021.

The amortized cost and fair values of fixed maturity securities are as follows:

March 31, 2022Cost or Amortized CostGross Unrealized
Gains		Gross Unrealized
Losses		Allowance
for Credit Losses 		Estimated
Fair Value
(In millions)     
      
Fixed maturity securities:     
Corporate and other bonds$22,001 $1,277 $486 $12 $22,780 
States, municipalities and political
 subdivisions		10,516 862 319 11,059 
Asset-backed:
Residential mortgage-backed2,983 25 160 2,848 
Commercial mortgage-backed2,008 13 81 1,940 
Other asset-backed2,710 11 93 5 2,623 
Total asset-backed7,701 49 334 5 7,411 
U.S. Treasury and obligations of
 government sponsored enterprises		125 5 120 
Foreign government559 3 13 549 
Redeemable preferred stock20 20 
Fixed maturities available-for-sale40,922 2,191 1,157 17 41,939 
Fixed maturities trading6 6 
Total fixed maturity securities$40,928 $2,191 $1,157 $17 $41,945 

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December 31, 2021Cost or Amortized CostGross Unrealized
Gains		Gross Unrealized
Losses		Allowance
for Credit Losses 		Estimated
Fair Value
(In millions)    
Fixed maturity securities:    
Corporate and other bonds$21,444 $2,755 $56 $11 $24,132 
States, municipalities and political
 subdivisions		10,358 1,599 14 11,943 
Asset-backed:
Residential mortgage-backed2,893 71 8 2,956 
Commercial mortgage-backed1,987 63 19 2,031 
Other asset-backed2,561 54 10 7 2,598 
Total asset-backed7,441 188 37 7 7,585 
U.S. Treasury and obligations of
 government sponsored enterprises		132 1 3 130 
Foreign government570 15 2 583 
Fixed maturities available-for-sale39,945 4,558 112 18 44,373 
Fixed maturities trading7 7 
Total fixed maturity securities$39,952 $4,558 $112 $18 $44,380 

The net unrealized gains on available-for-sale investments included in the tables above are recorded as a component of AOCI. When presented in AOCI, these amounts are net of tax and noncontrolling interests and any required Shadow Adjustments. To the extent that unrealized gains on fixed maturity securities supporting structured settlements not funded by annuities were realized, or that unrealized gains on fixed maturity securities supporting long term care products would result in a premium deficiency, or would impact the reserve balance, if realized, a related increase in Insurance reserves is recorded, net of tax and noncontrolling interests, as a reduction of net unrealized gains through Other comprehensive income (loss) (“Shadow Adjustments”). As of March 31, 2022 and December 31, 2021, the net unrealized gains on investments included in AOCI were correspondingly reduced by Shadow Adjustments of $1.3 billion and $2.2 billion (after tax and noncontrolling interests).

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The available-for-sale securities in a gross unrealized loss position for which an allowance for credit losses has not been recorded are as follows:

 Less than 12 Months12 Months or LongerTotal
March 31, 2022Estimated Fair ValueGross Unrealized LossesEstimated Fair ValueGross Unrealized LossesEstimated Fair ValueGross Unrealized Losses
(In millions)
 
Fixed maturity securities:
Corporate and other bonds$7,390 $441 $327 $45 $7,717 $486 
States, municipalities and political
 subdivisions		2,796 314 35 5 2,831 319 
Asset-backed:
Residential mortgage-backed2,315 160 2,315 160 
Commercial mortgage-backed1,274 65 151 16 1,425 81 
Other asset-backed1,717 90 67 3 1,784 93 
Total asset-backed5,306 315 218 19 5,524 334 
U.S. Treasury and obligations of
 government-sponsored enterprises		94 5 5 99 5 
Foreign government327 11 26 2 353 13 
Total fixed maturity securities$15,913 $1,086 $611 $71 $16,524 $1,157 
December 31, 2021
Fixed maturity securities:
Corporate and other bonds$2,389 $48 $136 $8 $2,525 $56 
States, municipalities and political
 subdivisions		730 14 730 14 
Asset-backed:
Residential mortgage-backed1,043 8 1,043 8 
Commercial mortgage-backed527 7 167 12 694 19 
Other asset-backed840 10 62 902 10 
Total asset-backed2,410 25 229 12 2,639 37 
U.S. Treasury and obligations of
 government-sponsored enterprises		69 3 5 74 3 
Foreign government97 2 97 2 
Total fixed maturity securities$5,695 $92 $370 $20 $6,065 $112 


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

March 31, 2022December 31, 2021
Estimated Fair ValueGross Unrealized LossesEstimated Fair ValueGross Unrealized Losses
(In millions)
U.S. Government, Government agencies and Government-sponsored enterprises$2,095 $116 $898 $8 
AAA993 105 368 6 
AA2,809 269 875 17 
A3,300 205 1,516 23 
BBB6,073 392 1,812 42 
Non-investment grade1,254 70 596 16 
Total$16,524 $1,157 $6,065 $112 

Based on current facts and circumstances, the unrealized losses presented in the March 31, 2022 securities in a gross unrealized loss position table above are not believed to be indicative of the ultimate collectibility of the current amortized cost of the securities, but rather are primarily attributable to changes in risk-free interest rates, and to a lesser extent credit spreads. In reaching this determination, the recent volatility in risk-free rates and spreads, as well as the fact that the unrealized losses are concentrated in investment grade issuers, were considered. Additionally, there is no current intent to sell securities with unrealized losses, nor is it more likely than not that sale will be required prior to recovery of amortized cost; accordingly, it was determined that there are no additional impairment losses to be recorded at March 31, 2022.

Contractual Maturity

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

March 31, 2022December 31, 2021
Cost or Amortized CostEstimated Fair
Value		Cost or Amortized CostEstimated
Fair
Value
(In millions)
Due in one year or less$1,533 $1,546 $1,603 $1,624 
Due after one year through five years10,206 10,337 10,637 11,229 
Due after five years through ten years14,040 14,032 13,294 14,338 
Due after ten years15,143 16,024 14,411 17,182 
Total$40,922 $41,939 $39,945 $44,373 

Actual maturities may differ from contractual maturities because certain securities may be called or prepaid. Securities not due at a single date are allocated based on weighted average life.

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Mortgage Loans

The following table presents the amortized cost basis of mortgage loans for each credit quality indicator by year of origination. The primary credit quality indicators utilized are debt service coverage ratios (“DSCR”) and loan-to-value (“LTV”) ratios.

Mortgage Loans Amortized Cost Basis by Origination Year (a)
As of March 31, 2022
2022
2021
2020
2019
2018
PriorTotal
(In millions)       
        
DSCR ≥1.6x       
LTV less than 55%$9 $94 $21 $54 $247 $425 
LTV 55% to 65%5 19 8 24 56 
LTV greater than 65%$18 11 29 
DSCR 1.2x - 1.6x
LTV less than 55%13 14 95 10 56 188 
LTV 55% to 65%21 36 24 8 89 
LTV greater than 65%— 
DSCR ≤1.2x
LTV less than 55%52 30 82 
LTV 55% to 65%55 55 
LTV greater than 65%21 6 7 34 
Total$39 $95 $151 $237 $64 $372 $958 

(a)The values in the table above reflect DSCR on a standardized amortization period and LTV ratios based on the most recent appraised values trended forward using changes in a commercial real estate price index.

Derivative Financial Instruments

A summary of the aggregate contractual or notional amounts and gross estimated fair values related to derivative financial instruments follows. The contractual or notional amounts for derivatives are used to calculate the exchange of contractual payments under related agreements and may not be representative of the potential for gain or loss on these instruments. Gross estimated fair values of derivative positions are currently presented in Equity securities, Receivables and Payable to brokers on the Consolidated Condensed Balance Sheets.

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March 31, 2022December 31, 2021
Contractual/Notional AmountEstimated Fair Value Contractual/Notional AmountEstimated Fair Value
Asset
(Liability)
Asset(Liability)
(In millions)
Without hedge designation:
Equity markets:
Options – purchased$76 $1 
Futures – short103 1 
Interest rate swaps240 10 $100 
Forward commitments for mortgage-backed securities45 
Currency forwards13 
Embedded derivative on funds withheld liability268 16 270 $(12)

Investment Commitments

As part of the overall investment strategy, investments are made in various assets which require future purchase, sale or funding commitments. These investments are recorded once funded, and the related commitments may include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications and obligations related to private placement securities. As of March 31, 2022, commitments to purchase or fund were approximately $1.3 billion and to sell were approximately $65 million under the terms of these investments.

3. Fair Value

Assets and liabilities measured at fair value on a recurring basis are summarized in the following tables. Corporate bonds and other includes obligations of the U.S. Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock.

March 31, 2022
Level 1
Level 2
Level 3
Total
(In millions)    
     
Fixed maturity securities:    
Corporate bonds and other$129 $22,425 $915 $23,469 
States, municipalities and political subdivisions11,008 51 11,059 
Asset-backed6,807 604 7,411 
Fixed maturities available-for-sale129 40,240 1,570 41,939 
Fixed maturities trading6 6 
Total fixed maturities$129 $40,246 $1,570 $41,945 
 
Equity securities$788 $683 $44 $1,515 
Short term and other4,530 30 4,560 
Receivables12 12 
Payable to brokers(96)(96)
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December 31, 2021
Level 1
Level 2
Level 3
Total
(In millions)
Fixed maturity securities:
Corporate bonds and other$140 $23,768 $937 $24,845 
States, municipalities and political subdivisions11,887 56 11,943 
Asset-backed7,029 556 7,585 
Fixed maturities available-for-sale140 42,684 1,549 44,373 
Fixed maturities trading7 7 
Total fixed maturities$140 $42,691 $1,549 $44,380 
Equity securities$924 $721 $29 $1,674 
Short term and other4,696 74 4,770 
Payable to brokers(70)(70)


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The following tables present reconciliations for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2022 and 2021:

Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses)
Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities Held at March 31
Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at March 31
2022Balance, January 1
Included in Net Income
Included in OCIPurchases
Sales
Settlements
Transfers into
Level 3
Transfers out of Level 3
Balance, March 31
(In millions)           
            
Fixed maturity securities:           
Corporate bonds and other$937 $(1)$(71)$67 $(5)$(22)$10 $915 $(72)
States, municipalities and political
 subdivisions56 (5)51 (5)
Asset-backed556 3 (32)140 (17)5 $(51)604 (31)
Fixed maturities available-for-sale1,549 2 (108)207 (5)(39)15 (51)1,570 $— (108)
Fixed maturities trading— — 
Total fixed maturities$1,549 $2 $(108)$207 $(5)$(39)$15 $(51)$1,570 $— $(108)
 
Equity securities$29 $3 $12 $44 $3 

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Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses)
Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities Held at March 31
Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at March 31
2021Balance, January 1Included in Net Income Included in OCIPurchasesSales Settlements Transfers into
 Level 3		Transfers out of Level 3
Balance, March 31
(In millions)          
          
Fixed maturity securities:          
Corporate bonds and other$770 $(13)$(40)$42 $(2)$10 $767 $(40)
States, municipalities and political subdivisions46(2)44 (2)
Asset-backed3082(9)30 (17)9 $(8)315(9)
Fixed maturities available-for-sale1,124 (11)(51)72 $— (19)19 (8)1,126 $— (51)
Fixed maturities trading8 (3)5 (3)
Total fixed maturities$1,132 $(14)$(51)$72 $— $(19)$19 $(8)$1,131 $(3)$(51)
 
Equity securities$43 $2 $45 $2 

Net investment gains and losses are reported in Net income as follows:

Major Category of Assets and LiabilitiesConsolidated Condensed Statements of Operations Line Items
  
Fixed maturity securities available-for-saleInvestment gains (losses)
Fixed maturity securities tradingNet investment income
Equity securitiesInvestment gains (losses) and Net investment income
Other invested assetsInvestment gains (losses) and Net investment income
Derivative financial instruments held in a trading portfolioNet investment income
Derivative financial instruments, otherInvestment gains (losses) and Operating revenues and other

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Significant Unobservable Inputs

The following tables present quantitative information about the significant unobservable inputs utilized in the fair value measurement of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of unobservable inputs from these broker quotes is neither provided nor reasonably available. The weighted average rate is calculated based on fair value.

March 31, 2022Estimated
Fair Value		Valuation TechniquesUnobservable InputsRange (Weighted Average)
 (In millions)  
    
Fixed maturity securities$1,198 Discounted cash flowCredit spread
1%
—
7%
(3%)
   
December 31, 2021  
   
Fixed maturity securities$1,225 Discounted cash flowCredit spread
1%
—
7%
(2%)

For fixed maturity securities, an increase to the credit spread assumptions would result in a lower fair value measurement.

Financial Assets and Liabilities Not Measured at Fair Value

The carrying amount, estimated fair value and the level of the fair value hierarchy of the financial assets and liabilities which are not measured at fair value on the Consolidated Condensed Balance Sheets are presented in the following tables. The carrying amounts and estimated fair values of short term debt and long term debt exclude finance lease obligations. The carrying amounts reported on the Consolidated Condensed Balance Sheets for cash and short term investments not carried at fair value and certain other assets and liabilities approximate fair value due to the short term nature of these items.

Carrying AmountEstimated Fair Value
March 31, 2022Level 1Level 2Level 3Total
(In millions)     
      
Assets:     
Other invested assets, primarily mortgage loans$942 $940 $940 
 
Liabilities:
Short term debt392 $302 93 395 
Long term debt8,878 8,469 606 9,075 
 
December 31, 2021
 
Assets:
Other invested assets, primarily mortgage loans$973 $1,018 $1,018 
 
Liabilities:
Short term debt93 93 93 
Long term debt8,981 $9,170 611 9,781 

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4. Claim and Claim Adjustment Expense Reserves

Property and casualty insurance claim and claim adjustment expense reserves represent the estimated amounts necessary to resolve all outstanding claims, including incurred but not reported (“IBNR”) claims as of the reporting date. Reserve projections are based primarily on detailed analysis of the facts in each case, experience with similar cases and various historical development patterns. Consideration is given to historical patterns such as claim reserving trends and settlement practices, loss payments, pending levels of unpaid claims and product mix, as well as court decisions and economic conditions including inflation and public attitudes. All of these factors can affect the estimation of claim and claim adjustment expense reserves.

Establishing claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves for catastrophic events that have occurred, is an estimation process. Many factors can ultimately affect the final settlement of a claim and, therefore, the necessary reserve. Changes in the law, results of litigation, medical costs, the cost of repair materials and labor rates can affect ultimate claim costs. In addition, time can be a critical part of reserving determinations since the longer the span between the incidence of a loss and the payment or settlement of the claim, the more variable the ultimate settlement amount can be. Accordingly, short-tail claims, such as property damage claims, tend to be more reasonably estimable than long-tail claims, such as workers’ compensation, general liability and professional liability claims. Adjustments to prior year reserve estimates, if necessary, are reflected in the results of operations in the period that the need for such adjustments is determined. There can be no assurance that the ultimate cost for insurance losses will not exceed current estimates.

Catastrophes are an inherent risk of the property and casualty insurance business and have contributed to material period-to-period fluctuations in the Company’s results of operations and/or equity. The Company reported catastrophe losses, net of reinsurance, of $19 million and $125 million for the three months ended March 31, 2022 and 2021. Catastrophe losses for the three months ended March 31, 2022 were primarily related to severe weather related events. Catastrophe losses for the three months ended March 31, 2021 were primarily driven by Winter Storms Uri and Viola.

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Liability for Unpaid Claim and Claim Adjustment Expenses

The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves of Other Insurance Operations.

Three Months Ended March 31
20222021
(In millions)  
   
Reserves, beginning of year:  
Gross$24,174 $22,706 
Ceded4,969 4,005 
Net reserves, beginning of year19,205 18,701 
 
Reduction of net reserves due to the excess workers’ compensation loss portfolio transfer (632)
Net incurred claim and claim adjustment expenses:
Provision for insured events of current year1,448 1,474 
Increase (decrease) in provision for insured events of prior years(45)(54)
Amortization of discount47 50 
Total net incurred (a)
1,450 1,470 
 
Net payments attributable to:
Current year events(70)(85)
Prior year events(1,147)(1,067)
Total net payments(1,217)(1,152)
 
Foreign currency translation adjustment and other(92)(32)
 
Net reserves, end of period19,346 18,355 
Ceded reserves, end of period5,002 4,701 
Gross reserves, end of period$24,348 $23,056 

(a)Total net incurred above does not agree to Insurance claims and policyholders’ benefits as reflected on the Consolidated Condensed Statements of Operations due to amounts related to retroactive reinsurance deferred gain accounting, the loss on the excess workers’ compensation loss portfolio transfer, uncollectible reinsurance and benefit expenses related to future policy benefits, which are not reflected in the table above.

Net Prior Year Development

Changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years are defined as net prior year loss reserve development. These changes can be favorable or unfavorable.

Favorable net prior year development of $12 million and $15 million were recorded for commercial property and casualty operations (“Property & Casualty Operations”) for the three months ended March 31, 2022 and 2021.

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

Three Months Ended March 31
20222021
(In millions)  
   
Medical professional liability$8 $8 
Surety(9)(15)
Workers’ compensation(2)
Property and other(9)(8)
Total pretax (favorable) unfavorable development$(12)$(15)

2021

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

Asbestos & Environmental Pollution (“A&EP”) Reserves

In 2010, Continental Casualty Company (“CCC”) together with several insurance subsidiaries completed a transaction with National Indemnity Company (“NICO”), a subsidiary of Berkshire Hathaway Inc., under which substantially all of their legacy A&EP liabilities were ceded to NICO through a loss portfolio transfer (“LPT”). At the effective date of the transaction, approximately $1.6 billion of net A&EP claim and allocated claim adjustment expense reserves were ceded to NICO under a retroactive reinsurance agreement with an aggregate limit of $4.0 billion. The $1.6 billion of claim and allocated claim adjustment expense reserves ceded to NICO was net of $1.2 billion of ceded claim and allocated claim adjustment expense reserves under existing third party reinsurance contracts. The NICO LPT aggregate reinsurance limit also covers credit risk on the existing third party reinsurance related to these liabilities. NICO was paid a reinsurance premium of $2.0 billion and billed third party reinsurance receivables related to A&EP claims with a net book value of $215 million were transferred to NICO, resulting in total consideration of $2.2 billion.

In years subsequent to the effective date of the LPT, adverse prior year development on A&EP reserves was recognized resulting in additional amounts ceded under the LPT. As a result, the cumulative amounts ceded under the LPT have exceeded the $2.2 billion consideration paid, resulting in the NICO LPT moving into a gain position, requiring retroactive reinsurance accounting. Under retroactive reinsurance accounting, this gain is deferred and only recognized in earnings in proportion to actual paid recoveries under the LPT. Over the life of the contract, there is no economic impact as long as any additional losses incurred are within the limit of the LPT. In a period in which a change in the estimate of A&EP reserves is recognized that increases or decreases the amounts ceded under the LPT, the proportion of actual paid recoveries to total ceded losses is affected and the change in the deferred gain is recognized in earnings as if the revised estimate of ceded losses was available at the effective date of the LPT. The effect of the deferred retroactive reinsurance benefit is recorded in Insurance claims and policyholders’ benefits on the Consolidated Condensed Statements of Operations.

The impact of the LPT on the Consolidated Condensed Statements of Operations was the recognition of a retroactive reinsurance benefit of $12 million and $10 million for the three months ended March 31, 2022 and 2021. As of March 31, 2022 and December 31, 2021, the cumulative amounts ceded under the LPT were $3.4 billion. The unrecognized deferred retroactive reinsurance benefit was $417 million and $429 million as of March 31, 2022 and December 31, 2021 and is included within Other liabilities on the Consolidated Condensed Balance Sheets.

NICO established a collateral trust account as security for its obligations under the LPT. The fair value of the collateral trust account was $3.1 billion as of March 31, 2022. In addition, Berkshire Hathaway Inc. guaranteed the payment obligations of NICO up to the aggregate reinsurance limit as well as certain of NICO’s performance obligations under the trust agreement. NICO is responsible for claims handling and billing and collection from third-party reinsurers related to the majority of the A&EP claims.

Credit Risk for Ceded Reserves

The majority of CNA’s outstanding voluntary reinsurance receivables are due from reinsurers with financial strength ratings of A- or higher. Receivables due from reinsurers with lower financial strength ratings are primarily due from captive reinsurers and are backed by collateral arrangements.
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5. Shareholders’ Equity

Accumulated other comprehensive income (loss)

The tables below present the changes in AOCI by component for the three months ended March 31, 2021 and 2022:

 Net Unrealized Gains (Losses) on Investments with an Allowance for Credit Losses Net Unrealized Gains (Losses) on Other Investments Unrealized Gains (Losses) on Cash Flow Hedges Pension and Postretirement Benefits Foreign Currency Translation Total Accumulated Other Comprehensive Income (Loss)
(In millions)      
       
Balance, January 1, 2021
$— $1,563 $(23)$(877)$(82)$581 
Other comprehensive income (loss) before reclassifications, after tax of $1, $154, $(2), $0 and $0
(3)(593)3 3 (590)
Reclassification of (gains) losses from accumulated other comprehensive income, after tax of $(1), $8, $(1), $(2) and $0
3 (34)1 9 (21)
Other comprehensive income (loss)— (627)4 9 3 (611)
Amounts attributable to noncontrolling interests66 (1)(1)64 
Balance, March 31, 2021
$— $1,002 $(19)$(869)$(80)$34 
Balance, January 1, 2022
$(2)$930 $(6)$(636)$(100)$186 
Other comprehensive income (loss) before reclassifications, after tax of $1, $425, $(2), $(2) and $0
(4)(1,612)15 2 (15)(1,614)
Reclassification of losses from accumulated other comprehensive loss, after tax of $0, $(1), $(1), $(2) and $0
1 3 5 9 
Other comprehensive income (loss)(4)(1,611)18 7 (15)(1,605)
Amounts attributable to noncontrolling interests168 (1)1 168 
Balance, March 31, 2022
$(6)$(513)$12 $(630)$(114)$(1,251)

Amounts reclassified from AOCI shown above are reported in Net income (loss) as follows:

Major Category of AOCIAffected Line Item
  
Net unrealized gains (losses) on investments with an allowance for credit losses and Net unrealized gains (losses) on other investmentsInvestment gains (losses)
Unrealized gains (losses) on cash flow hedgesOperating revenues and other, Interest expense and Operating expenses and other
Pension and postretirement benefitsOperating expenses and other

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Treasury Stock

Loews Corporation repurchased 2.1 million and 5.6 million shares of its common stock at aggregate costs of $129 million and $274 million during the three months ended March 31, 2022 and 2021.

6. Debt

In February of 2022, Boardwalk Pipelines completed a public offering of $500 million aggregate principal amount of its 3.6% senior notes due September 1, 2032. Boardwalk Pipelines used the proceeds to retire the outstanding $300 million aggregate principal amount of its 4.0% senior notes due June 2022 in March of 2022, to fund growth capital expenditures and for general corporate purposes.

7. Revenue from Contracts with Customers

Disaggregation of revenues – Revenue from contracts with customers, other than insurance premiums, is reported as Non-insurance warranty revenue and within Operating revenues and other on the Consolidated Condensed Statements of Operations. The following table presents revenues from contracts with customers disaggregated by revenue type along with the reportable segment and a reconciliation to Operating revenues and other as reported in Note 11:

Three Months Ended March 31
20222021
(In millions)  
   
Non-insurance warranty – CNA Financial$382 $338 
 
Transportation and storage of natural gas and NGLs and other services – Boardwalk Pipelines$370 $361 
Lodging and related services – Loews Hotels & Co146 56 
Rigid plastic packaging and recycled resin – Corporate (a)280 
Total revenues from contracts with customers516 697 
Other revenues24 18 
Operating revenues and other$540 $715 

(a)Revenues reflect the consolidated results of Altium Packaging for the three months ended March 31, 2021.

Receivables from contracts with customers – As of March 31, 2022 and December 31, 2021, receivables from contracts with customers were approximately $149 million and $145 million and are included within Receivables on the Consolidated Condensed Balance Sheets.

Deferred revenue – As of March 31, 2022 and December 31, 2021, deferred revenue resulting from contracts with customers was approximately $4.6 billion and is reported as Deferred non-insurance warranty revenue and within Other liabilities on the Consolidated Condensed Balance Sheets. Approximately $374 million and $316 million of revenues recognized during the three months ended March 31, 2022 and 2021 were included in deferred revenue as of December 31, 2021 and 2020.

Performance obligations – As of March 31, 2022, approximately $13.2 billion of estimated operating revenues is expected to be recognized in the future related to outstanding performance obligations. The balance relates primarily to revenues for transportation and storage services for natural gas and natural gas liquids and hydrocarbons (“NGLs”) at Boardwalk Pipelines and non-insurance warranty revenue at CNA. Approximately $1.9 billion will be recognized during the remaining nine months of 2022, $2.2 billion in 2023 and the remainder in following years. The actual timing of recognition may vary due to factors outside of the Company’s control.

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8. Benefit Plans

The Company has several non-contributory defined benefit plans and postretirement benefit plans covering eligible employees and retirees.

The following table presents the components of net periodic (benefit) cost for the defined benefit plans:

Pension Benefits
Other Postretirement Benefits
Three Months Ended March 31
2022202120222021
(In millions)    
     
Service cost$1 $1 
Interest cost19 18 
Expected return on plan assets(43)(43)$(1)
Amortization of unrecognized net loss8 12 
Settlements1 
Regulatory asset decrease1 
Net periodic benefit$(13)$(12)$— $(1)

9. Legal Proceedings

Boardwalk Pipelines Litigation

On May 25, 2018, plaintiffs Tsemach Mishal and Paul Berger (on behalf of themselves and the purported class, “Plaintiffs”) initiated a purported class action in the Court of Chancery of the State of Delaware (the “Trial Court”) against the following defendants: Boardwalk Pipelines, Boardwalk GP, LP (“General Partner”), Boardwalk GP, LLC and Boardwalk Pipelines Holding Corp. (“BPHC”) (together, “Defendants”), regarding the potential exercise by the General Partner of its right to purchase all of the issued and outstanding common units representing limited partnership interests in Boardwalk Pipelines not already owned by the General Partner or its affiliates.

On June 25, 2018, Plaintiffs and Defendants entered into a Stipulation and Agreement of Compromise and Settlement, subject to the approval of the Trial Court (the “Proposed Settlement”). Under the terms of the Proposed Settlement, the lawsuit would be dismissed, and related claims against the Defendants would be released by the Plaintiffs, if BPHC, the sole member of the General Partner, elected to cause the General Partner to exercise its right to purchase the issued and outstanding common units of Boardwalk Pipelines pursuant to Boardwalk Pipelines’ Third Amended and Restated Agreement of Limited Partnership, as amended (“Limited Partnership Agreement”), within a period specified by the Proposed Settlement. On June 29, 2018, the General Partner elected to exercise its right to purchase all of the issued and outstanding common units representing limited partnership interests in Boardwalk Pipelines not already owned by the General Partner or its affiliates pursuant to the Limited Partnership Agreement within the period specified by the Proposed Settlement. The transaction was completed on July 18, 2018.

On September 28, 2018, the Trial Court denied approval of the Proposed Settlement. On February 11, 2019, a substitute verified class action complaint was filed in this proceeding, which among other things, added the Parent Company as a Defendant. The Defendants filed a motion to dismiss, which was heard by the Trial Court in July of 2019. In October of 2019, the Trial Court ruled on the motion and granted a partial dismissal, with certain aspects of the case proceeding to trial. A trial was held the week of February 22, 2021 and post-trial oral arguments were held on July 14, 2021.

On November 12, 2021, the Trial Court issued a ruling in the case. The Trial Court held that the General Partner breached the Limited Partnership Agreement and awarded Plaintiffs approximately $690 million, plus pre-judgment interest (approximately $166 million), post-judgment interest and attorneys’ fees.

The Company believes that the Trial Court ruling includes factual and legal errors. Therefore on January 3, 2022, the Defendants appealed the Trial Court’s ruling to the Supreme Court of the State of Delaware (the “Supreme Court”). On January 17, 2022, the Plaintiffs filed a cross-appeal to the Supreme Court contesting the calculation of damages by the Trial Court.

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At this time, given the Trial Court’s ruling and the pending appeals, the Company believes that it is reasonably possible that a loss has occurred, although the Company is unable to estimate any potential loss as it may range from zero up to the full amount of the Trial Court’s award of $690 million, plus pre- and post-judgment interest and attorneys’ fees, or more, depending on the extent of the Defendants’ and Plaintiffs’ success on appeal. The Company has not recorded a liability related to this matter.

As litigation is inherently unpredictable, if an unfavorable final outcome occurs, there is a possibility of a material adverse impact to the Company’s consolidated financial statements in the period in which the effects become known.

Other Litigation

The Company is from time to time party to other litigation arising in the ordinary course of business. While it is difficult to predict the outcome or effect of any litigation, management does not believe that the outcome of any such pending litigation will materially affect the Company’s results of operations or equity.

10. Commitments and Contingencies

CNA Guarantees

CNA has provided guarantees, if the primary obligor fails to perform, to holders of structured settlement annuities issued by a previously owned subsidiary. As of March 31, 2022, the potential amount of future payments CNA could be required to pay under these guarantees was approximately $1.6 billion, which will be paid over the lifetime of the annuitants. CNA does not believe any payment is likely under these guarantees, as CNA is the beneficiary of a trust that must be maintained at a level that approximates the discounted reserves for these annuities.

11. Segments

Loews Corporation has four reportable segments comprised of three individual consolidated operating subsidiaries, CNA, Boardwalk Pipelines and Loews Hotels & Co; and the Corporate segment. The Corporate segment is primarily comprised of Loews Corporation, excluding its subsidiaries, the consolidated operations of Altium Packaging for the three months ended March 31, 2021 and the equity method of accounting for Altium Packaging for the three months ended March 31, 2022. Each of the operating subsidiaries is headed by a chief executive officer who is responsible for the operation of its business and has the duties and authority commensurate with that position. For additional disclosures regarding the composition of Loews Corporation’s segments, see Note 19 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The following tables present the reportable segments and their contribution to the Consolidated Condensed Statements of Operations. Amounts presented will not necessarily be the same as those in the individual financial statements of the subsidiaries due to adjustments for purchase accounting, income taxes and noncontrolling interests.

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Statements of Operations by segment are presented in the following tables.

Three Months Ended March 31, 2022
CNA Financial
Boardwalk Pipelines
Loews
Hotels & Co
Corporate
Total
(In millions)     
      
Revenues:     
      
Insurance premiums$2,059 $2,059 
Net investment income (loss)448 $(16)432 
Investment losses(11)(11)
Non-insurance warranty revenue382 382 
Operating revenues and other7 $381 $152 540 
Total2,885 381 152 (16)3,402 
 
Expenses:
 
Insurance claims and policyholders’ benefits1,455 1,455 
Amortization of deferred acquisition costs344 344 
Non-insurance warranty expense354 354 
Operating expenses and other326 217 126 22 691 
Interest28 42 4 22 96 
Total2,507 259 130 44 2,940 
Income (loss) before income tax378 122 22 (60)462 
Income tax (expense) benefit(65)(31)(7)11 (92)
Net income (loss)313 91 15 (49)370 
Amounts attributable to noncontrolling interests(32)(32)
Net income (loss) attributable to Loews Corporation$281 $91 $15 $(49)$338 

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Three Months Ended March 31, 2021CNA Financial Boardwalk Pipelines Loews Hotels & Co Corporate (a) Total
(In millions)     
      
Revenues:     
      
Insurance premiums$1,962 $1,962 
Net investment income504 $46 550 
Investment losses57 57 
Non-insurance warranty revenue338 338 
Operating revenues and other5 $372 $57 281 715 
Total2,866 372 57 327 3,622 
 
Expenses:
 
Insurance claims and policyholders’ benefits1,506 1,506 
Amortization of deferred acquisition costs359 359 
Non-insurance warranty expense311 311 
Operating expenses and other285 217 104 308 914 
Interest28 41 8 48 125 
Total2,489 258 112 356 3,215 
Income (loss) before income tax377 114 (55)(29)407 
Income tax (expense) benefit(66)(29)12 (31)(114)
Net income (loss)311 85 (43)(60)293 
Amounts attributable to noncontrolling interests(32)(32)
Net income (loss) attributable to Loews Corporation$279 $85 $(43)$(60)$261 

(a)Amounts include the consolidated results of Altium Packaging for the three months ended March 31, 2021.
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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, 2021. This MD&A is comprised of the following sections:
Page
No.
  

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, the consolidated operations of Altium Packaging LLC (“Altium Packaging”) for the three months ended March 31, 2021 and the equity method of accounting for Altium Packaging for the three months ended March 31, 2022. For information regarding the deconsolidation of Altium Packaging, see Note 2 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021.

Unless the context otherwise requires, the term “Company” as used herein means Loews Corporation including its consolidated subsidiaries, the terms “Parent Company,” “we,” “our,” “us” or like terms as used herein mean Loews Corporation excluding its subsidiaries, the term “Net income (loss) attributable to Loews Corporation” as used herein means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means 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 14 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021) 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.

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RESULTS OF OPERATIONS

Consolidated Financial Results

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

Three Months Ended March 31
2022
2021
(In millions, except per share data)  
   
CNA Financial$281 $279 
Boardwalk Pipelines91 85 
Loews Hotels & Co15 (43)
Corporate(49)(60)
Net income attributable to Loews Corporation$338 $261 
   
Basic net income per share$1.36 $0.98 
   
Diluted net income per share$1.36 $0.97 

Net income attributable to Loews Corporation for the three months ended March 31, 2022 was $338 million, or $1.36 per share, compared to net income attributable to Loews Corporation of $261 million, or $0.97 per share in the comparable 2021 period.

Net income attributable to Loews Corporation increased for the three months ended March 31, 2022 compared to the comparable prior year period as CNA, Boardwalk Pipelines, and Loews Hotels & Co all generated strong operating results. CNA experienced higher property & casualty non-catastrophe underwriting results and lower catastrophe losses, offset by lower net investment income and investment losses compared to investment gains in the comparable prior year period. Loews Hotels & Co’s results improved significantly as the company continues its recovery from reduced travel during the COVID-19 pandemic, and Boardwalk Pipelines’ earnings increased due to higher revenues from growth projects recently placed into service. The parent company generated lower net investment income than in the comparable prior year period.

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CNA Financial

The following table summarizes the results of operations for CNA for the three months ended March 31, 2022 and 2021 as presented in Note 11 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 March 31
2022
2021
(In millions)  
   
Revenues:  
Insurance premiums$2,059 $1,962 
Net investment income448 504 
Investment gains (losses)(11)57 
Non-insurance warranty revenue382 338 
Other revenues7 5 
Total2,885 2,866 
Expenses:  
Insurance claims and policyholders’ benefits1,455 1,506 
Amortization of deferred acquisition costs344 359 
Non-insurance warranty expense354 311 
Other operating expenses326 285 
Interest28 28 
Total2,507 2,489 
Income before income tax378 377 
Income tax expense(65)(66)
Net income313 311 
Amounts attributable to noncontrolling interests(32)(32)
Net income attributable to Loews Corporation$281 $279 

Net income attributable to Loews Corporation increased $2 million for the three months ended March 31, 2022 as compared with the comparable 2021 period. Net income increased due to lower catastrophe losses and improved non-catastrophe underwriting results for the three months ended March 31, 2022 as compared with the comparable 2021 period. Catastrophe losses were $19 million ($13 million after tax and noncontrolling interests) for the three months ended March 31, 2022 as compared with $125 million ($88 million after tax and noncontrolling interests) in the comparable 2021 period. Catastrophe losses for the three months ended March 31, 2022 were primarily related to severe weather related events. Catastrophe losses for the three months ended March 31, 2021 were primarily driven by Winter Storms Uri and Viola. These increases to net income were offset by lower net investment income and investment losses for the three months ended March 31, 2022 as compared with investment gains in the comparable 2021 period. Lower net investment income was driven by lower limited partnership and common stock returns and investment losses were driven by the unfavorable change in the fair value of non-redeemable preferred stock and lower investment gains on disposals of fixed maturity securities.

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 of operations, we provide greater detail with respect to CNA’s Property & Casualty Operations and Other Insurance
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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 from net income (loss), investment gains or losses and any cumulative effects of changes in accounting guidance. 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 this measure is useful for investors to evaluate its insurance operations. Please see the non-GAAP reconciliation of core income (loss) to net income (loss) that follows in this MD&A.

Property & Casualty Operations

In evaluating the results of Property & Casualty Operations, CNA utilizes the loss ratio, the loss ratio excluding catastrophes and development, the expense ratio, the dividend ratio, the combined ratio and the combined ratio excluding catastrophes and development. These ratios are calculated using GAAP financial results. The loss ratio is the percentage of net incurred claim and claim adjustment expenses to net earned premiums. The loss ratio excluding catastrophes and development excludes catastrophes losses and changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years from the loss ratio. The expense ratio is the percentage of insurance underwriting and acquisition expenses, including the amortization of deferred acquisition costs, to net earned premiums. 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 combined ratio excluding catastrophes and development is the sum of the loss ratio excluding catastrophes and development, 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. For certain products within Small Business, where quantifiable, rate includes the influence of new business as well. Exposure represents the measure of risk used in the pricing of the insurance product. Retention represents the percentage of premium dollars renewed in comparison to the expiring premium dollars from policies available to renew. Renewal premium change, rate and retention presented for the prior period are updated to reflect subsequent activity on policies written in the period. 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.

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

Three Months Ended March 31, 2022
Specialty
Commercial
International
Total
(In millions, except %)    
     
Gross written premiums$1,846 $1,208 $363 $3,417 
Gross written premiums excluding third-party captives885 1,206 363 2,454 
Net written premiums771 1,001 251 2,023 
Net earned premiums772 904 264 1,940 
Net investment income103 118 14 235 
Core income163 132 26 321 
 
Other performance metrics:
Loss ratio excluding catastrophes and development58.9 %61.5 %58.6 %60.1 %
Effect of catastrophe impacts1.8 1.2 1.0 
Effect of development-related items(1.3)(0.5)
Loss ratio57.6 %63.3 %59.8 %60.6 %
Expense ratio30.9 30.7 32.6 31.0 
Dividend ratio0.2 0.5 0.3 
Combined ratio88.7 %94.5 %92.4 %91.9 %
Combined ratio excluding catastrophes and development90.0 %92.7 %91.2 %91.4 %
Rate9 %5 %9 %7 %
Renewal premium change10 8 10 9 
Retention85 85 73 83 
New business$145 $228 $78 $451 

Three Months Ended March 31, 2021
    
Gross written premiums$1,794 $1,113 $343 $3,250 
Gross written premiums excluding third-party captives816 1,111 343 2,270 
Net written premiums742 960 235 1,937 
Net earned premiums735 855 252 1,842 
Net investment income117 148 14 279 
Core income170 69 24 263 
 
Other performance metrics:
Loss ratio excluding catastrophes and development59.4 %60.8 %59.6 %60.1 %
Effect of catastrophe impacts0.7 13.4 2.0 6.8 
Effect of development-related items(2.1)0.5 (0.1)(0.6)
Loss ratio58.0 %74.7 %61.5 %66.3 %
Expense ratio30.6 31.4 34.4 31.5 
Dividend ratio0.2 0.6 0.3 
Combined ratio88.8 %106.7 %95.9 %98.1 %
Combined ratio excluding catastrophes and development90.2 %92.8 %94.0 %91.9 %
 
Rate11 %10 %14 %11 %
Renewal premium change12 11 12 11 
Retention86 83 75 83 
New business$103 $211 $80 $394 

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Gross written premiums, excluding third-party captives, for Specialty increased $69 million for the three months ended March 31, 2022 as compared with the comparable 2021 period driven by higher new business and rate. Net written premiums for Specialty increased $29 million for the three months ended March 31, 2022 as compared with the comparable 2021 period. The increase in net earned premiums for the three months ended March 31, 2022 was consistent with the trend in net written premiums for Specialty.

Gross written premiums for Commercial increased $95 million for the three months ended March 31, 2022 as compared with the comparable 2021 period driven by rate and retention. Net written premiums for Commercial increased $41 million for the three months ended March 31, 2022 as compared with the comparable 2021 period. The increase in net earned premiums for the three months ended March 31, 2022 was consistent with the trend in net written premiums for Commercial.

Gross written premiums for International increased $20 million for the three months ended March 31, 2022 as compared with the comparable 2021 period. Excluding the effect of foreign currency exchange rates, gross written premiums increased $30 million driven by rate. Net written premiums for International increased $16 million for the three months ended March 31, 2022 as compared with the comparable 2021 period. Excluding the effect of foreign currency exchange rates, net written premiums increased $26 million for the three months ended March 31, 2022 as compared with the comparable 2021 period. The increase in net earned premiums for the three months ended March 31, 2022 was consistent with the trend in net written premiums for International.

Core income increased $58 million for the three months ended March 31, 2022 as compared with the comparable 2021 period due to lower catastrophe losses and improved non-catastrophe current accident year underwriting results, partially offset by lower net investment income driven by limited partnership and common stock returns.

Total catastrophe losses were $19 million for the three months ended March 31, 2022 as compared with $125 million for the comparable 2021 period. For the three months ended March 31, 2022 and 2021, Specialty had no catastrophe losses and $5 million of catastrophe losses, Commercial had catastrophe losses of $16 million and $115 million and International had catastrophe losses of $3 million and $5 million.

Favorable net prior year loss reserve development of $12 million and $15 million was recorded for the three months ended March 31, 2022 and 2021. For the three months ended March 31, 2022 and 2021, Specialty recorded favorable net prior year loss reserve development of $10 million and $15 million. For the three months ended March 31, 2022, Commercial recorded favorable net prior year loss reserve development of $2 million as compared with no net prior year loss reserve development in the comparable 2021 period. 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 improved 0.1 point for the three months ended March 31, 2022 as compared with the comparable 2021 period due to a 0.4 point improvement in the loss ratio largely offset by a 0.3 point increase in the expense ratio. The improvement in the loss ratio was primarily driven by improved current accident year underwriting results partially offset by lower favorable net prior year loss reserve development. There were no catastrophe losses for the three months ended March 31, 2022, as compared with catastrophe losses comprising 0.7 points of the loss ratio in the comparable 2021 period. The increase in the expense ratio was driven by higher underwriting expenses partially offset by higher net earned premiums.

Commercial’s combined ratio improved 12.2 points for the three months ended March 31, 2022 as compared with the comparable 2021 period primarily due to a 11.4 point improvement in the loss ratio and a 0.7 point improvement in the expense ratio. The improvement in the loss ratio was primarily due to lower catastrophe losses which were 1.8 points of the loss ratio for the three months ended March 31, 2022, as compared with 13.4 points of the loss ratio in the comparable 2021 period. The combined ratio excluding catastrophes and development improved 0.1 point for the three months ended March 31, 2022 as compared with the comparable 2021 period. The improvement in the expense ratio of 0.7 points was driven by higher net earned premiums and lower acquisition costs partially offset by an increase in underwriting expenses. The loss ratio excluding catastrophes and development increased 0.7 points due to a shift in mix of business associated with the property quota share treaty purchased during the second quarter of 2021. CNA’s property coverages, which have a lower underlying loss ratio than most other commercial coverages, now represent a smaller proportion of net earned premiums. On a mix adjusted basis, there was no change in the underlying loss ratio.

International’s combined ratio improved 3.5 points for the three months ended March 31, 2022 as compared with the comparable 2021 period due to a 1.8 point improvement in the expense ratio and a 1.7 point improvement in the loss ratio. The improvement in the expense ratio was driven by lower acquisition costs and higher net earned premiums. The improvement in the loss ratio was driven by improved current accident year underwriting results. Catastrophe losses were
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1.2 points of the loss ratio for the three months ended March 31, 2022, as compared with 2.0 points of the loss ratio in the comparable 2021 period.

Other Insurance Operations

The following table summarizes the results of CNA’s Other Insurance Operations for the three months ended March 31, 2022 and 2021.

Three Months Ended March 31
2022
2021
(In millions)  
   
Net earned premiums$120 $120 
Net investment income213 225 
Core income (loss)(5)— 

Core results decreased $5 million for the three months ended March 31, 2022 as compared with the comparable 2021 period primarily due to lower net investment income and higher expenses, partially offset by the recognition of a $12 million loss resulting from the legacy excess workers’ compensation loss portfolio transfer (“EWC LPT”) in the three months ended March 31, 2021. For further information on the EWC LPT see Note 8 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021.

Non-GAAP Reconciliation of Core Income to Net Income

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

Three Months Ended March 31
2022
2021
(In millions)  
   
Core income (loss):  
Property & Casualty Operations$321 $263 
Other Insurance Operations(5)
Total core income316 263 
Investment gains (losses)(3)49 
Consolidating adjustments including noncontrolling interests(32)(33)
Net income attributable to Loews Corporation$281 $279 

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Boardwalk Pipelines

A significant portion of Boardwalk Pipelines’ revenues are 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 lower pricing on contract renewals and other factors. Boardwalk Pipelines’ operating costs and expenses do not vary significantly based upon the amount of products transported, with the exception of costs recorded in fuel and transportation expense, which are netted with fuel retained on our Consolidated Condensed Statements of Operations. 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, 2021.

The following table summarizes the results of operations for Boardwalk Pipelines for the three months ended March 31, 2022 and 2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:

Three Months Ended March 31
2022
2021
(In millions)  
   
Revenues:  
Operating revenues and other$381 $372 
Total381 372 
Expenses:  
Operating and other217 217 
Interest42 41 
Total259 258 
Income before income tax122 114 
Income tax expense(31)(29)
Net income attributable to Loews Corporation$91 $85 

Total revenues increased $9 million for the three months ended March 31, 2022 as compared with the comparable 2021 period. Including the items in fuel and transportation expense, operating revenues increased $13 million, primarily driven by an increase in natural gas transportation revenues from recently completed growth projects.

Operating expenses were flat for the three months ended March 31, 2022 as compared with the comparable 2021 period. Excluding items offset with operating revenues, operating expenses increased $4 million, primarily due to higher employee-related costs and an increased asset base from recently completed growth projects.

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Loews Hotels & Co

The following table summarizes the results of operations for Loews Hotels & Co for the three months ended March 31, 2022 and 2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:

Three Months Ended March 31
2022
2021
(In millions)  
   
Revenues:  
Operating revenue$123 $39 
Revenues related to reimbursable expenses29 18 
Total152 57 
Expenses:
Operating and other:
Operating108 58 
Reimbursable expenses29 18 
Depreciation15 16 
Equity (income) loss from joint ventures(26)12 
Interest4 8 
Total130 112 
Income (loss) before income tax22 (55)
Income tax (expense) benefit(7)12 
Net income (loss) attributable to Loews Corporation$15 $(43)

Loews Hotels & Co’s results have significantly improved for the three months ended March 31, 2022 as compared with the comparable 2021 period as overall travel demand and resulting business levels were considerably higher in 2022. Travel, particularly to resort destinations, has significantly rebounded from the impacts of the COVID-19 pandemic causing overall occupancy rates to improve. However, occupancy rates have not reached pre-pandemic levels at some hotels owned and/or operated by Loews Hotels & Co, notably those located in city centers.

Operating revenues improved by $84 million and operating expenses increased by $50 million for the three months ended March 31, 2022 as compared with the comparable 2021 period. The increase in operating revenues was driven by stronger occupancy levels and higher average daily rates at many hotels in 2022 as compared to 2021. Operating expenses have likewise increased to support the higher demand levels and resumption of additional pre-pandemic services. As additional hotels continue to achieve greater occupancy levels, operating expenses may continue to increase.

Equity (income) loss from joint ventures improved $38 million for the three months ended March 31, 2022 as compared with the comparable 2021 period. This improvement was the result of having all 9,000 rooms available at the Universal Orlando Resort along with greater occupancy levels and higher average daily rates, particularly at the Universal Orlando Resort.

Interest expense for the three months ended March 31, 2022 decreased $4 million as compared with the comparable 2021 period due primarily to the increase in fair value of an interest rate cap that was executed in the first quarter of 2022, capitalized interest on a project under development, and lower average debt balances.

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 Altium Packaging recorded under the equity method of accounting for the three months ended March 31, 2022 and includes the consolidated operating results of Altium Packaging for the three months ended March 31, 2021.

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The following table summarizes the results of operations for Corporate for the three months ended March 31, 2022 and 2021 as presented in Note 11 of the Notes to Consolidated Condensed Financial Statements included under Item 1 of this Report:

Three Months Ended March 31
2022
2021
(In millions)  
   
Revenues:  
Net investment income (loss)$(16)$46 
Operating revenues and other281 
Total(16)327 
Expenses:  
Operating and other22 308 
Interest22 48 
Total44 356 
Loss before income tax(60)(29)
Income tax (expense) benefit11 (31)
Net loss attributable to Loews Corporation$(49)$(60)

Net investment loss for the Parent Company was $16 million for the three months ended March 31, 2022 as compared with income of $46 million for the comparable 2021 period, primarily due to a decline in the fair value of equity based investments.

Operating revenues and other for the three months ended March 31, 2021 include $280 million of consolidated operating revenues for Altium Packaging.

Operating and other expenses decreased for the three months ended March 31, 2022 as compared with the comparable 2021 period, primarily due to $279 million of consolidated operating expenses for Altium Packaging during the three months ended March 31, 2021 as compared with the equity method of accounting for Altium Packaging during the three months ended March 31, 2022. Operating and other expenses also include lower legal and other corporate overhead expenses at the Parent Company for the three months ended March 31, 2022 as compared with the comparable 2021 period.

Interest expenses decreased $26 million for the three months ended March 31, 2022 as compared with the comparable 2021 period, primarily due to $26 million of consolidated interest expenses for Altium Packaging for the three months ended March 31, 2021, which included a charge of approximately $14 million to write off debt issuance costs for the early retirement of debt.

Income tax expense for the three months ended March 31, 2021 included the recognition of a $35 million deferred tax liability resulting from the asset held for sale designation of Altium Packaging.

LIQUIDITY AND CAPITAL RESOURCES

Parent Company

Parent Company cash and investments, net of receivables and payables, totaled $3.8 billion at March 31, 2022 as compared to $3.4 billion at December 31, 2021. During the three months ended March 31, 2022, we received $584 million in cash dividends from CNA, including a special cash dividend of $486 million. Cash outflows during the three months ended March 31, 2022 included the payment of $132 million to fund treasury stock purchases and $15 million of cash dividends to our shareholders. As a holding company we depend on dividends from our subsidiaries and returns on our investment portfolio to fund our obligations. We also have an effective shelf registration statement on file with the Securities and Exchange Commission (“SEC”) registering the future sale of an unlimited amount of our debt and equity securities from time to time. We are not responsible for the liabilities and obligations of our subsidiaries and there are no Parent Company guarantees.


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Depending on market and other conditions, we may purchase our shares and shares of our subsidiaries outstanding common stock in the open market, in privately negotiated transactions or otherwise. During the three months ended March 31, 2022, we purchased 2.1 million shares of Loews Corporation common stock. As of April 29, 2022, we had purchased an additional 0.3 million shares of Loews Corporation common stock in 2022 at an aggregate cost of $19 million. As of April 29, 2022, there were 246,108,045 shares of Loews Corporation common stock outstanding.

Future uses of our cash may include investing in our subsidiaries, new acquisitions, dividends and/or repurchases 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 $645 million for the three months ended March 31, 2022 and $82 million for the comparable 2021 period. The increase in cash provided by operating activities was driven by the prior year payment of the EWC LPT premium.

CNA paid a cash dividend of $2.40 per share on its common stock, including a special cash dividend of $2.00 per share, during the three months ended March 31, 2022. On April 29, 2022, CNA’s Board of Directors declared a quarterly cash dividend of $0.40 per share payable June 2, 2022 to shareholders of record on May 16, 2022. 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 from Continental Casualty Company (“CCC”), a subsidiary of CNA, are subject to the insurance holding company laws of the State of Illinois, the domiciliary state of CCC. Under these laws, ordinary dividends, or dividends that do not require prior approval by the Illinois Department of Insurance (the “Department”), are determined based on the greater of the prior year’s statutory net income or 10% of statutory surplus as of the end of the prior year, as well as the timing and amount of dividends paid in the preceding 12 months. Additionally, ordinary dividends may only be paid from earned surplus, which is calculated by removing unrealized gains from unassigned surplus. As of March 31, 2022, CCC was in a positive earned surplus position. CCC paid dividends of $535 million and $330 million during the three months ended March 31, 2022 and 2021. 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.

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

Boardwalk Pipelines’ cash provided by operating activities increased $13 million for the three months ended March 31, 2022 compared to the comparable 2021 period, primarily due to the change in net income.

For the three months ended March 31, 2022 and 2021, Boardwalk Pipelines’ capital expenditures were $60 million and $53 million, consisting of growth capital expenditures of $35 million and $34 million and maintenance capital expenditures of $18 million and $19 million. Boardwalk Pipelines also paid $7 million for natural gas to be used in its integrated natural gas pipeline system in the 2022 period.

Boardwalk Pipelines anticipates that its existing capital resources, including its cash on hand, revolving credit facility and cash flows from operating activities, will be adequate to fund its operations and capital expenditures for 2022 and to retire the outstanding $300 million aggregate principal amount of its 3.4% senior notes due in February of 2023. Boardwalk Pipelines also has an effective shelf registration statement on file with the SEC under which it may publicly issue $1.0 billion of debt securities, warrants or rights from time to time. In February of 2022, Boardwalk Pipelines completed a public offering of $500 million aggregate principal amount of its 3.6% senior notes due September 1, 2032, which utilized $500 million of capacity under its shelf registration statement. Boardwalk Pipelines used the proceeds to retire the outstanding $300 million aggregate principal amount of its 4.0% senior notes due June 2022 in March of 2022, to fund growth capital expenditures and for general corporate purposes. As of March 31, 2022, Boardwalk Pipelines had no outstanding borrowings and all of the $1.0 billion available borrowing capacity under its revolving credit facility.

During 2022, Loews Hotels & Co anticipates funding its development projects in progress with cash on hand, cash generated from operations, and, if necessary, cash contributions from Loews Corporation.

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As of March 31, 2022, Loews Hotels & Co, through its subsidiaries, has loans that mature within twelve months and is actively working with lenders to refinance $93 million in current maturities of long term debt. Extending these loans, along with certain loans of unconsolidated joint venture partnerships, may require Loews Hotels & Co to make principal pay downs, establish restricted cash reserves or provide guaranties of a subsidiary’s debt. Through the date of this Report, none of Loews Hotels & Co’s subsidiaries are in default on any of their loans.

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

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, then 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.

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 March 31
2022
2021
(In millions)  
   
Fixed income securities:  
Taxable fixed income securities$368 $359 
Tax-exempt fixed income securities73 80 
Total fixed income securities441 439 
Limited partnership and common stock investments8 61 
Other, net of investment expense(1)4 
Net investment income$448 $504 

Effective income yield for the fixed income securities
portfolio4.3 %4.4 %
Limited partnership and common stock return0.4 %3.4 %

CNA’s net investment income decreased $56 million for the three months ended March 31, 2022 as compared with the comparable 2021 period driven by lower limited partnership and common stock returns.
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Investment Gains (Losses)

The components of CNA’s investment gains (losses) are presented in the following table:

Three Months Ended March 31
2022
2021
(In millions)  
   
Investment gains (losses):  
Fixed maturity securities:  
Corporate and other bonds$3 $36 
States, municipalities and political subdivisions3 (1)
Asset-backed(8)3 
Total fixed maturity securities(2)38 
Non-redeemable preferred stock(38)2 
Short term and other29 17 
Total investment gains (losses)(11)57 
Income tax (expense) benefit8 (8)
Amounts attributable to noncontrolling interests(5)
Investment gains (losses) attributable to Loews Corporation$(3)$44 

CNA’s investment results decreased $68 million for the three months ended March 31, 2022 as compared with the comparable 2021 period, driven by the unfavorable change in fair value of non-redeemable preferred stock and lower net investment gains on disposals of fixed maturity securities.

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:

March 31, 2022
December 31, 2021
 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$2,497 $(107)$2,600 $42 
AAA3,513 97 3,784 360 
AA7,243 160 7,665 823 
A9,062 366 9,511 1,087 
BBB17,497 552 18,458 2,043 
Non-investment grade2,133 (34)2,362 91 
Total$41,945 $1,034 $44,380 $4,446 

As of March 31, 2022 and December 31, 2021, 1% of CNA’s fixed maturity portfolio was rated internally. AAA rated securities included $1.5 billion and $1.7 billion of pre-refunded municipal bonds as of March 31, 2022 and December 31, 2021.
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The following table presents CNA’s available-for-sale fixed maturity securities in a gross unrealized loss position by ratings distribution:

March 31, 2022
Estimated
Fair Value
Gross Unrealized Losses
(In millions)  
   
U.S. Government, Government agencies and
 Government-sponsored enterprises		$2,095 $116 
AAA993 105 
AA2,809 269 
A3,300 205 
BBB6,073 392 
Non-investment grade1,254 70 
Total$16,524 $1,157 

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:

March 31, 2022
Estimated
Fair Value
Gross Unrealized Losses
(In millions)  
   
Due in one year or less$238 $4 
Due after one year through five years3,081 97 
Due after five years through ten years7,754 465 
Due after ten years5,451 591 
Total$16,524 $1,157 

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.

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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.

March 31, 2022
December 31, 2021
 Estimated
Fair Value		Effective Duration (Years)Estimated
Fair Value		Effective Duration (Years)
(In millions of dollars)    
    
Investments supporting Other Insurance Operations$16,868 8.9$18,458 9.2
Other investments27,045 5.028,915 4.9
Total$43,913 6.5$47,373 6.6

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, 2021.

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 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, 2021 for further information.

ACCOUNTING STANDARDS UPDATE

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-12, “Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts.” The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. For the Company, this includes CNA’s Long term care and fully-ceded single premium immediate annuity business.

The most significant impact will be the effect of updating the discount rate assumption quarterly to reflect an upper-medium grade fixed-income instrument yield, rather than the expected investment portfolio yield. This will be partially offset by the de-recognition of Shadow Adjustments associated with long-duration contracts. The net impact of these changes is expected to be a $2.0 billion - $2.3 billion (after tax and noncontrolling interests) decrease in Accumulated other comprehensive income as of the transition date of January 1, 2021. To illustrate the sensitivity of this adjustment, had the interest rates in effect as of March 31, 2022 been used in the calculation, the transition impact would have been a $0.9 billion - $1.2 billion (after tax and noncontrolling interests) decrease in Accumulated other comprehensive income.

For a discussion of accounting standards updates that have been adopted or will be adopted in the future, please read Note 1 of the Notes to Consolidated 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 oral statements made by us and our subsidiaries and our and their officials during presentations 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
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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.

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, 2021 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.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

There were no material changes in our market risk components as of March 31, 2022. See 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, 2021 for further information. Additional information related to portfolio duration and market conditions is discussed in the Investments section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included under Part I, Item 2.

Item 4. Controls and Procedures.

The Company maintains a system of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which is designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, including this Report, is recorded, processed, summarized and reported on a timely basis. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Company under the Exchange Act is accumulated and communicated to the Company’s management on a timely basis to allow decisions regarding required disclosure.

The Company’s management, including the Company’s principal executive officer (“CEO”) and principal financial officer (“CFO”) conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Report and, based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2022.

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2022 that have materially affected or that are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Information on our legal proceedings is set forth in Note 9 to the Consolidated Condensed Financial Statements included under Part I, Item 1.

Item 1A. Risk Factors.

Our Annual Report on Form 10-K for the year ended December 31, 2021 includes a discussion of material risk factors facing the Company. There have been no material changes to such risk factors as of the date of this Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Items 2 (a) and (b) are inapplicable.

(c) STOCK REPURCHASES

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Period
(a) Total number
of shares
purchased
(b) Average
price paid per
share
(c) Total number of shares purchased as
part of publicly announced plans or programs
(d) Maximum number of shares (or approximate dollar value)
of shares that may yet be purchased under the plans or programs (in millions)
     
January 1, 2022 - January 31, 2022
242,440$57.82 N/AN/A
     
February 1, 2022 - February 28, 2022
878,70060.71N/AN/A
     
March 1, 2022 - March 31, 2022
1,024,51660.58N/AN/A

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Item 6. Exhibits.

Description of ExhibitExhibit
Number
  
  
  
  
  
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document101.INS *
  
Inline XBRL Taxonomy Extension Schema101.SCH *
  
Inline XBRL Taxonomy Extension Calculation Linkbase101.CAL *
  
Inline XBRL Taxonomy Extension Definition Linkbase101.DEF *
  
Inline XBRL Taxonomy Label Linkbase101.LAB *
  
Inline XBRL Taxonomy Extension Presentation Linkbase101.PRE *
  
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)104*

*Filed herewith.

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SIGNATURES

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

 LOEWS CORPORATION
 (Registrant)
   
Dated: May 2, 2022
By:/s/ David B. Edelson
  DAVID B. EDELSON
  Senior Vice President and
Chief Financial Officer
(Duly authorized officer
and principal financial
officer)

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