LOEWS CORPORATION ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION

Overview of Loews Corporation’s Financial Performance

Loews Corporation, a diversified holding company, reported a strong financial performance in 2024 despite facing some challenges. The company’s net income attributable to Loews Corporation decreased by $215 million compared to 2023, primarily due to a $265 million pension settlement charge at its subsidiary CNA Financial. However, excluding this one-time charge, Loews’ net income increased by 17% in 2024.

The increase in net income was driven by higher earnings at CNA Financial and Boardwalk Pipelines, as well as increased net investment income at the parent company. CNA Financial benefited from favorable investment returns and improved underwriting results, partially offset by higher catastrophe losses. Boardwalk Pipelines saw increased transportation revenues, storage and parking revenues, and contributions from an acquisition. The parent company’s higher net investment income was due to strong returns on its equity securities portfolio.

These positive factors were partially offset by lower net income at Loews Hotels & Co, primarily due to higher depreciation and interest expenses related to the opening of a new hotel, as well as lower equity income from joint ventures.

CNA Financial

CNA Financial, Loews’ largest subsidiary, is a leading insurance provider offering property and casualty, as well as life and group insurance products. In 2024, CNA’s net income attributable to Loews Corporation decreased by $215 million, or 19.6%, compared to 2023.

The decrease was primarily due to a $265 million after-tax and noncontrolling interests pension settlement charge. Excluding this one-time charge, CNA’s net income increased by $50 million, or 4.6%, driven by higher net investment income and improved underwriting results, partially offset by higher catastrophe losses.

CNA’s net investment income increased by $233 million, or 10.3%, in 2024 compared to 2023, due to favorable returns from limited partnership and common stock investments, as well as higher income from fixed income securities. CNA’s underwriting results improved, with the combined ratio (a measure of underwriting profitability) decreasing from 93.5% in 2023 to 94.9% in 2024.

However, CNA’s results were negatively impacted by higher catastrophe losses, which increased from $236 million in 2023 to $358 million in 2024, primarily due to severe weather events.

Boardwalk Pipelines

Boardwalk Pipelines, which operates in the midstream natural gas and natural gas liquids industry, saw a significant increase in its financial performance in 2024. Net income attributable to Loews Corporation increased by $130 million, or 45.9%, compared to 2023.

The improvement was driven by a $429 million, or 26.2%, increase in total revenues. Boardwalk Pipelines’ transportation revenues increased by $93 million due to higher re-contracting rates and recently completed growth projects. Storage, parking, and lending revenues also increased by $31 million due to favorable market conditions. Additionally, the acquisition of Bayou Ethane in 2023 contributed $262 million in incremental operating revenues.

Operating costs and expenses increased by $252 million, primarily due to the Bayou Ethane acquisition and higher maintenance and administrative costs. Depreciation and amortization expenses also increased by $17 million due to the expanded asset base.

Loews Hotels & Co

Loews Hotels & Co, the company’s hotel and resort subsidiary, experienced a decrease in net income attributable to Loews Corporation of $77 million, or 52.4%, in 2024 compared to 2023. This was primarily due to a $46 million gain recorded in 2023 related to the acquisition of an additional equity interest in a previously unconsolidated joint venture property.

Operating revenues improved by $128 million, or 18.9%, in 2024, driven by the opening of the Loews Arlington Hotel and Convention Center and higher occupancy levels at many city center hotels as group travel continued to recover. However, operating expenses also increased by $95 million, or 17.0%, due to higher staffing costs, insurance expenses, and property taxes.

Equity income from joint ventures decreased by $43 million, or 33.3%, due to reduced occupancy levels, particularly at the Universal Orlando Resort, as well as an impairment charge recorded at a joint venture property.

Corporate

Loews Corporation’s corporate operations, which include investment income, interest expense, and administrative costs, saw a significant improvement in net income attributable to Loews Corporation, increasing by $142 million in 2024 compared to 2023.

This was primarily driven by a $128 million, or 112.3%, increase in net investment income, due to higher returns on the parent company’s equity-based investments. Operating and other expenses also decreased by $43 million, or 35.8%, mainly due to a $47 million settlement expense recorded in 2023 to recognize unrealized losses related to the termination of a defined benefit pension plan.

Liquidity and Capital Resources

Loews Corporation and its subsidiaries maintain strong liquidity and capital positions. At the parent company level, cash and investments, net of receivables and payables, totaled $3.3 billion at the end of 2024, up from $2.6 billion in 2023. This was primarily due to $1.3 billion in cash dividends received from subsidiaries, including a $497 million special dividend from CNA.

CNA’s cash provided by operating activities increased to $2.6 billion in 2024, up from $2.3 billion in 2023, driven by higher premiums collected and earnings from fixed income securities. CNA paid $3.76 per share in dividends, including a $2.00 per share special dividend, in 2024.

Boardwalk Pipelines’ cash provided by operating activities increased by $83 million in 2024 compared to 2023, primarily due to changes in net income adjusted for depreciation and amortization. Boardwalk Pipelines expects to spend approximately $269 million on capital expenditures in 2025, including $203 million for maintenance and $66 million for growth projects.

Loews Hotels & Co refinanced $532 million in mortgage loans in 2024, all of which mature beyond twelve months. The company also acquired the remaining noncontrolling interests in two owned hotels for $44 million and received $23 million from the sale of an owned hotel.

Outlook and Risks

Loews Corporation and its subsidiaries face a variety of risks and uncertainties that could impact their future performance. These include:

• Potential volatility in CNA’s reserves due to factors such as claim severity, workers’ compensation claim cost inflation, and commercial auto liability trends.
• Increased capital and operating costs at Boardwalk Pipelines due to new regulations and efforts to reduce greenhouse gas emissions.
• Continued recovery in the hotel industry and the ability of Loews Hotels & Co to manage rising costs and maintain profitability at its joint venture properties.

Overall, Loews Corporation’s diversified business model and strong financial position provide a solid foundation for navigating these challenges. The company’s management team remains focused on prudent capital allocation, operational excellence, and positioning the business for long-term success.