Item 1. Financial Statements.

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Item 1. Financial Statements.

Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)


	June 30,		December 31,
	2022		2021
(Dollar amounts in millions, except per share data)

Assets:

Investments:
Fixed maturities, amortized cost of $41,261 and $39,952, less allowance for credit loss of $5 and $18	$	39,431	$	44,380
Equity securities, cost of $1,545 and $1,546	1,364		1,674
Limited partnership investments	1,941		1,933
Other invested assets, primarily mortgage loans, less allowance for credit loss of $16 and $16	1,048		1,091
Short term investments	4,291		4,860
Total investments	48,075		53,938
Cash	951		621
Receivables	9,701		9,273
Property, plant and equipment	9,962		9,888
Goodwill	346		349
Deferred non-insurance warranty acquisition expenses	3,593		3,476
Deferred acquisition costs of insurance subsidiaries	792		737
Other assets	3,651		3,344
Total assets	$	77,071	$	81,626

Liabilities and Equity:

Insurance reserves:
Claim and claim adjustment expense	$	24,559	$	24,174
Future policy benefits	10,926		13,236
Unearned premiums	6,289		5,761
Total insurance reserves	41,774		43,171
Payable to brokers	320		90
Short term debt	839		93
Long term debt	8,443		8,986
Deferred income taxes	350		1,079
Deferred non-insurance warranty revenue	4,638		4,503
Other liabilities	4,486		4,529
Total liabilities	60,850		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 – 248,622,439 and 248,467,051 shares	2		2
Additional paid-in capital	2,869		2,885
Retained earnings	15,261		14,776
Accumulated other comprehensive income (loss)	(2,510)		186
	15,622		17,849
Less treasury stock, at cost (6,398,767 and 50,000 shares)	(386)		(3)
Total shareholders’ equity	15,236		17,846
Noncontrolling interests	985		1,329
Total equity	16,221		19,175
Total liabilities and equity	$	77,071	$	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				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions, except per share data)

Revenues:
Insurance premiums	$	2,155	$	2,035	$	4,214	$	3,997
Net investment income	366		616		798		1,166
Investment gains (losses)	(59)		578		(70)		635
Non-insurance warranty revenue	392		359		774		697
Operating revenues and other	534		415		1,074		1,130
Total	3,388		4,003		6,790		7,625

Expenses:
Insurance claims and policyholders’ benefits	1,583		1,546		3,038		3,052
Amortization of deferred acquisition costs	374		357		718		716
Non-insurance warranty expense	367		332		721		643
Operating expenses and other	715		656		1,406		1,570
Interest	96		100		192		225
Total	3,135		2,991		6,075		6,206
Income before income tax	253		1,012		715		1,419
Income tax expense	(51)		(219)		(143)		(333)
Net income	202		793		572		1,086
Amounts attributable to noncontrolling interests	(22)		(39)		(54)		(71)
Net income attributable to Loews Corporation	$	180	$	754	$	518	$	1,015

Basic net income per share	$	0.73	$	2.87	$	2.10	$	3.83
Diluted net income per share	$	0.73	$	2.86	$	2.09	$	3.82

Weighted average shares outstanding:
Shares of common stock	245.45		262.76		246.70		265.06
Dilutive potential shares of common stock	0.49		0.58		0.50		0.49
Total weighted average shares outstanding assuming dilution	245.94		263.34		247.20		265.55

See accompanying Notes to Consolidated Condensed Financial Statements.


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Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Net income	$	202	$	793	$	572	$	1,086

Other comprehensive income (loss), after tax
Changes in:
Net unrealized losses on investments with an allowance for credit losses	(2)				(6)
Net unrealized gains (losses) on other investments	(1,346)		300		(2,957)		(327)
Total unrealized gains (losses) on investments	(1,348)		300		(2,963)		(327)
Unrealized gains on cash flow hedges	6		8		24		12
Pension and postretirement benefits	5		7		12		16
Foreign currency translation	(68)		11		(83)		14

Other comprehensive income (loss)	(1,405)		326		(3,010)		(285)

Comprehensive income (loss)	(1,203)		1,119		(2,438)		801

Amounts attributable to noncontrolling interests	124		(72)		260		(40)

Total comprehensive income (loss) attributable to Loews Corporation	$	(1,079)	$	1,047	$	(2,178)	$	761

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 Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Common Stock Held in Treasury		Noncontrolling Interests
(In millions)

Balance, April 1, 2021	$	18,537	$	3	$	3,119	$	14,394	$	34	$	(280)	$	1,267
Net income	793						754						39
Other comprehensive income	326								293				33
Dividends paid ($0.0625 per share)	(27)						(16)						(11)
Purchase of subsidiary stock from noncontrolling interests	(15)												(15)
Purchases of Loews Corporation treasury stock	(219)										(219)

Stock-based compensation	3				2								1
Other	—										(1)		1
Balance, June 30, 2021	$	19,398	$	3	$	3,121	$	15,132	$	327	$	(500)	$	1,315

Balance, April 1, 2022	$	17,695	$	2	$	2,859	$	15,097	$	(1,251)	$	(132)	$	1,120
Net income	202						180						22
Other comprehensive loss	(1,405)								(1,259)				(146)
Dividends paid ($0.0625 per share)	(26)						(15)						(11)


Purchases of Loews Corporation treasury stock	(255)										(255)
Stock-based compensation	12				11								1
Other	(2)				(1)		(1)				1		(1)
Balance, June 30, 2022	$	16,221	$	2	$	2,869	$	15,261	$	(2,510)	$	(386)	$	985

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 Stock		Additional 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 income	1,086						1,015						71
Other comprehensive loss	(285)								(254)				(31)
Dividends paid ($0.125 per share)	(76)						(33)						(43)
Purchase of subsidiary stock from noncontrolling interests	(18)												(18)
Purchases of Loews Corporation treasury stock	(493)										(493)

Stock-based compensation	7				(9)								16
Other	(4)				(3)								(1)
Balance, June 30, 2021	$	19,398	$	3	$	3,121	$	15,132	$	327	$	(500)	$	1,315

Balance, January 1, 2022	$	19,175	$	2	$	2,885	$	14,776	$	186	$	(3)	$	1,329
Net income	572						518						54
Other comprehensive loss	(3,010)								(2,696)				(314)
Dividends paid ($0.125 per share)	(110)						(31)						(79)

Purchase of subsidiary stock from noncontrolling interests	(21)				(1)								(20)
Purchases of Loews Corporation treasury stock	(384)										(384)
Stock-based compensation	2				(14)								16
Other	(3)				(1)		(2)				1		(1)
Balance, June 30, 2022	$	16,221	$	2	$	2,869	$	15,261	$	(2,510)	$	(386)	$	985

See accompanying Notes to Consolidated Condensed Financial Statements.


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Loews Corporation and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


Six Months Ended June 30	2022		2021
(In millions)

Operating Activities:

Net income	$	572	$	1,086
Adjustments to reconcile net income to net cash provided by operating activities, net	505		(187)







Changes in operating assets and liabilities, net:
Receivables	(634)		(1,087)
Deferred acquisition costs	(63)		(12)
Insurance reserves	1,376		1,373
Other assets	(360)		(720)
Other liabilities	87		598
Trading securities	(37)		(508)
Net cash flow provided by operating activities	1,446		543

Investing Activities:

Purchases of fixed maturities	(6,251)		(4,615)
Proceeds from sales of fixed maturities	3,293		1,846
Proceeds from maturities of fixed maturities	1,715		2,104
Purchases of equity securities	(195)		(181)
Proceeds from sales of equity securities	193		193
Purchases of limited partnership investments	(168)		(169)
Proceeds from sales of limited partnership investments	134		185
Purchases of property, plant and equipment	(312)		(183)

Dispositions			52
Sale of interest in Altium Packaging			417
Change in short term investments	739		405
Other, net	66		39
Net cash flow (used) provided by investing activities	(786)		93

Financing Activities:

Dividends paid	(31)		(33)
Dividends paid to noncontrolling interests	(79)		(43)
Purchases of Loews Corporation treasury stock	(380)		(484)
Purchases of subsidiary stock from noncontrolling interests	(21)		(18)
Principal payments on debt	(301)		(1,146)
Issuance of debt	498		1,199
Other, net	(4)		(12)
Net cash flow used by financing activities	(318)		(537)

Effect of foreign exchange rate on cash	(12)		1

Net change in cash	330		100
Cash, beginning of period	621		478
Cash, end of period	$	951	$	578

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” means Loews Corporation including its consolidated subsidiaries, the term “Parent Company” means Loews Corporation excluding its subsidiaries, the term “Net income (loss) attributable to Loews Corporation” means Net income (loss) attributable to Loews Corporation shareholders and the term “subsidiaries” means Loews Corporation’s consolidated subsidiaries.

On April 1, 2021, Loews Corporation sold 47% of Altium Packaging LLC (“Altium Packaging”), previously a 99% owned subsidiary, for $420 million in cash consideration, and following the transaction Loews Corporation deconsolidated Altium Packaging. Effective April 1, 2021, Loews Corporation’s investment in Altium Packaging is accounted for under the equity method of accounting, with the investment reported in Other assets on the Consolidated Condensed Balance Sheets and equity income (loss) reported in Operating expenses and other on the Consolidated Condensed Statements of Operations. The transaction resulted in a gain of $555 million ($438 million after tax) for the six months ended June 30, 2021, which was recorded in Investment gains (losses) on the Consolidated Condensed Statement of Operations. 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 June 30, 2022 and December 31, 2021 and results of operations, comprehensive income (loss) and changes in shareholders’ equity for the three and six months ended June 30, 2022 and 2021 and cash flows for the six months ended June 30, 2022 and 2021. Net income for the second quarter and first half 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 and six months ended June 30, 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.


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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 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				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Fixed maturity securities	$	441	$	425	$	870	$	853
Limited partnership investments	7		149		27		196

Equity securities	(11)		20		(9)		49
Income (loss) from trading portfolio (a)	(62)		26		(77)		76
Other	13		14		28		30
Total investment income	388		634		839		1,204
Investment expenses	(22)		(18)		(41)		(38)
Net investment income	$	366	$	616	$	798	$	1,166


(a)			During the three and six months ended June 30, 2022, $95 and $120 of net investment losses were recognized due to the change in fair value of securities still held as of June 30, 2022. During the three and six months ended June 30, 2021, $28 and $58 of net investment income was recognized due to the change in fair value of securities still held as of June 30, 2021.


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Investment gains (losses) are as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Fixed maturity securities:
Gross gains	$	45	$	51	$	71	$	109
Gross losses	(60)		(20)		(88)		(40)
Investment gains (losses) on fixed maturity securities	(15)		31		(17)		69
Equity securities	(71)		17		(109)		19
Derivative instruments	26		(12)		55		5
Short term investments and other	1		(13)		1		(13)
Altium Packaging (see Note 1)			555				555
Investment gains (losses) (a)	$	(59)	$	578	$	(70)	$	635


(a)			During the three and six months ended June 30, 2022, $70 and $108 of investment losses were recognized due to the change in fair value of non-redeemable preferred stock still held as of June 30, 2022. During the three and six months ended June 30, 2021, $15 of investment gains were recognized due to the change in fair value of non-redeemable preferred stock still held as of June 30, 2021.

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 $374 million, $369 million and $374 million as of June 30, 2022, December 31, 2021 and June 30, 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 June 30, 2022	Corporate and Other Bonds		Asset-backed		Total
(In millions)

Allowance for credit losses:
Balance as of April 1, 2022	$	12	$	5	$	17
Additions to the allowance for credit losses:

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

Reductions to the allowance for credit losses:


Write-offs charged against the allowance	12				12

Additional decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period			(3)		(3)
Total allowance for credit losses	$	—	$	5	$	5


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Three months ended June 30, 2021	Corporate and Other Bonds		Asset-backed		Total

Allowance for credit losses:
Balance as of April 1, 2021	$	27	$	16	$	43
Additions to the allowance for credit losses:


Available-for-sale securities accounted for as PCD assets			4		4





Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	(3)		1		(2)
Total allowance for credit losses	$	24	$	21	$	45


Six months ended June 30, 2022

Allowance for credit losses:
Balance as of January 1, 2022	$	11	$	7	$	18
Additions to the allowance for credit losses:

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

Reductions to the allowance for credit losses:


Write-offs charged against the allowance	12				12

Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	1		(5)		(4)
Total allowance for credit losses	$	—	$	5	$	5


Six months ended June 30, 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 recorded	14				14
Available-for-sale securities accounted for as PCD assets	2		4		6

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	(9)				(9)
Total allowance for credit losses	$	24	$	21	$	45


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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Fixed maturity securities available-for-sale:
Corporate and other bonds	$	21	$	(2)	$	29	$	5
Asset-backed	(1)		1		1
Impairment losses (gains) recognized in earnings	$	20	$	(1)	$	30	$	5

There were no losses recognized on mortgage loans during the three and six months ended June 30, 2022 or 2021.

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


June 30, 2022	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
(In millions)

Fixed maturity securities:
Corporate and other bonds	$	22,606	$	499	$	1,440			$	21,665
States, municipalities and political subdivisions	9,822		492		676				9,638
Asset-backed:
Residential mortgage-backed	3,034		14		305				2,743
Commercial mortgage-backed	1,995		6		164				1,837
Other asset-backed	3,063		4		220		$	5	2,842
Total asset-backed	8,092		24		689		5		7,422
U.S. Treasury and obligations of government sponsored enterprises	115		1		7				109
Foreign government	577		1		30				548
Redeemable preferred stock	3								3
Fixed maturities available-for-sale	41,215		1,017		2,842		5		39,385
Fixed maturities trading	46								46
Total fixed maturity securities	$	41,261	$	1,017	$	2,842	$	5	$	39,431


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December 31, 2021	Cost or Amortized Cost		Gross 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-backed	2,893		71		8				2,956
Commercial mortgage-backed	1,987		63		19				2,031
Other asset-backed	2,561		54		10		7		2,598
Total asset-backed	7,441		188		37		7		7,585
U.S. Treasury and obligations of government sponsored enterprises	132		1		3				130
Foreign government	570		15		2				583

Fixed maturities available-for-sale	39,945		4,558		112		18		44,373
Fixed maturities trading	7								7
Total fixed maturity securities	$	39,952	$	4,558	$	112	$	18	$	44,380

The net unrealized gains and losses 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 there are unrealized gains on fixed income securities supporting the reserves of certain products within the Life & Group business that 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 (losses) through Other comprehensive income (loss) (“Shadow Adjustments”). As of June 30, 2022 and December 31, 2021, the net unrealized gains and losses on investments included in AOCI were correspondingly reduced by Shadow Adjustments of $432 million 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 Months				12 Months or Longer				Total
June 30, 2022	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)

Fixed maturity securities:
Corporate and other bonds	$	14,827	$	1,366	$	322	$	74	$	15,149	$	1,440
States, municipalities and political subdivisions	4,121		666		32		10		4,153		676
Asset-backed:
Residential mortgage-backed	2,374		305		3				2,377		305
Commercial mortgage-backed	1,552		143		149		21		1,701		164
Other asset-backed	2,354		214		85		6		2,439		220
Total asset-backed	6,280		662		237		27		6,517		689
U.S. Treasury and obligations of government-sponsored enterprises	82		6		3		1		85		7
Foreign government	436		28		23		2		459		30
Total fixed maturity securities	$	25,746	$	2,728	$	617	$	114	$	26,363	$	2,842

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-backed	1,043		8						1,043		8
Commercial mortgage-backed	527		7		167		12		694		19
Other asset-backed	840		10		62				902		10
Total asset-backed	2,410		25		229		12		2,639		37
U.S. Treasury and obligations of government-sponsored enterprises	69		3		5				74		3
Foreign government	97		2						97		2
Total fixed maturity securities	$	5,695	$	92	$	370	$	20	$	6,065	$	112


			15

Table of c o ntents

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.


	June 30, 2022				December 31, 2021
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)

U.S. Government, Government agencies and Government-sponsored enterprises	$	2,150	$	223	$	898	$	8
AAA	1,232		205		368		6
AA	4,078		581		875		17
A	5,454		493		1,516		23
BBB	11,806		1,111		1,812		42
Non-investment grade	1,643		229		596		16
Total	$	26,363	$	2,842	$	6,065	$	112

Based on current facts and circumstances, the unrealized losses presented in the June 30, 2022 securities in the gross unrealized loss position table above are not believed to be indicative of the ultimate collectibility of the current amortized cost of the securities, but rather are primarily attributable to changes in risk-free interest rates and a general market widening of credit spreads. In reaching this determination, the recent volatility in risk-free rates and credit spreads, as well as the fact that the unrealized losses are concentrated in investment grade issuers, were considered. Additionally, there is no current intent to sell securities with unrealized losses, nor is it more likely than not that sale will be required prior to recovery of amortized cost; accordingly, it was determined that there are no additional impairment losses to be recorded at June 30, 2022.

Contractual Maturity

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


	June 30, 2022				December 31, 2021
	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
(In millions)

Due in one year or less	$	1,150	$	1,153	$	1,603	$	1,624
Due after one year through five years	9,330		9,154		10,637		11,229
Due after five years through ten years	14,434		13,549		13,294		14,338
Due after ten years	16,301		15,529		14,411		17,182
Total	$	41,215	$	39,385	$	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.


			16

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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 June 30, 2022	2022		2021		2020		2019		2018		Prior		Total
(In millions)

DSCR ≥1.6x
LTV less than 55%	$	9	$	14	$	112	$	21	$	54	$	280	$	490
LTV 55% to 65%							8						8
LTV greater than 65%	18		11										29
DSCR 1.2x - 1.6x
LTV less than 55%			49		14		78		10		44		195
LTV 55% to 65%	28				24						8		60
LTV greater than 65%	15												15
DSCR ≤1.2x
LTV less than 55%							52				17		69
LTV 55% to 65%							55						55
LTV greater than 65%	10		21				6				7		44
Total	$	80	$	95	$	150	$	220	$	64	$	356	$	965


(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.


	June 30, 2022						December 31, 2021
	Contractual/Notional Amount			Estimated Fair Value			Contractual/Notional Amount		Estimated Fair Value
			Asset			(Liability)	Asset		(Liability)
(In millions)

Without hedge designation:





Interest rate swaps	$	240		$	12		$	100


Embedded derivative on funds withheld liability	285			41			270			$	(12)
Other	178			10


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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 June 30, 2022, commitments to purchase or fund were approximately $1.5 billion and to sell were approximately $25 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.


June 30, 2022	Level 1		Level 2		Level 3		Total
(In millions)

Fixed maturity securities:
Corporate bonds and other	$	118	$	21,361	$	846	$	22,325
States, municipalities and political subdivisions			9,592		46		9,638
Asset-backed			6,781		641		7,422
Fixed maturities available-for-sale	118		37,734		1,533		39,385
Fixed maturities trading			46				46
Total fixed maturities	$	118	$	37,780	$	1,533	$	39,431

Equity securities	$	713	$	604	$	47	$	1,364
Short term and other	3,987		188				4,175
Receivables			12				12
Payable to brokers	(75)						(75)

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 subdivisions			11,887		56		11,943
Asset-backed			7,029		556		7,585
Fixed maturities available-for-sale	140		42,684		1,549		44,373
Fixed maturities trading			7				7
Total fixed maturities	$	140	$	42,691	$	1,549	$	44,380

Equity securities	$	924	$	721	$	29	$	1,674
Short term and other	4,696		74				4,770

Payable to brokers	(70)						(70)


			18

Table of c o ntents

The following tables present reconciliations for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 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 June 30		Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30
2022	Balance, April 1		Included in Net Income		Included in OCI		Purchases		Sales		Settlements		Transfers into Level 3		Transfers out of Level 3		Balance, June 30
(In millions)

Fixed maturity securities:
Corporate bonds and other	$	915	$	(1)	$	(82)	$	51			$	(37)					$	846			$	(81)
States, municipalities and political
subdivisions	51				(5)												46				(5)
Asset-backed	604		8		(52)		92		$	(2)	(23)		$	14			641				(52)
Fixed maturities available-for-sale	1,570		7		(139)		143		(2)		(60)		14		—		1,533		—		(138)
Fixed maturities trading	—																—
Total fixed maturities	$	1,570	$	7	$	(139)	$	143	$	(2)	$	(60)	$	14	$	—	$	1,533	$	—	$	(138)

Equity securities	$	44	$	(3)					$	(3)	$	9					$	47	$	(3)


			19

Table of c o ntents


			Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses)																Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities Held at June 30		Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30
2021	Balance, April 1		Included in Net Income		Included in OCI		Purchases		Sales		Settlements		Transfers into Level 3		Transfers out of Level 3		Balance, June 30
(In millions)

Fixed maturity securities:
Corporate bonds and other	$	767	$	3	$	16	$	122	$	(3)	$	(22)					$	883			$	16
States, municipalities and political
subdivisions	44				2		12				(1)						57				2
Asset-backed	315		1		4		84				(10)		$	21	$	(5)	410				4
Fixed maturities available-for-sale	1,126		4		22		218		(3)		(33)		21		(5)		1,350		—		22
Fixed maturities trading	5		(3)								(2)						—
Total fixed maturities	$	1,131	$	1	$	22	$	218	$	(3)	$	(35)	$	21	$	(5)	$	1,350	$	—	$	22

Equity securities	$	45	$	(15)			$	10	$	(4)							$	36


			20

Table of c o ntents


			Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses)																Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities Held at June 30		Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30
2022	Balance, January 1		Included in Net Income		Included in OCI		Purchases		Sales		Settlements		Transfers into Level 3		Transfers out of Level 3		Balance, June 30
(In millions)

Fixed maturity securities:
Corporate bonds and other	$	937	$	(2)	$	(153)	$	118	$	(5)	$	(59)	$	10			$	846			$	(153)
States, municipalities and political
subdivisions	56				(10)												46				(10)
Asset-backed	556		11		(84)		232		(2)		(40)		19		$	(51)	641				(83)
Fixed maturities available-for-sale	1,549		9		(247)		350		(7)		(99)		29		(51)		1,533		—		(246)
Fixed maturities trading	—																—
Total fixed maturities	$	1,549	$	9	$	(247)	$	350	$	(7)	$	(99)	$	29	$	(51)	$	1,533	$	—	$	(246)

Equity securities	$	29					$	12	$	(3)	$	9					$	47	$	(1)


			21

Table of c o ntents


			Net Realized Investment Gains (Losses) and Net Change in Unrealized Investment Gains (Losses)																Unrealized Gains (Losses) Recognized in Net Income (Loss) on Level 3 Assets and Liabilities Held at June 30		Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Level 3 Assets and Liabilities Held at June 30
2021	Balance, January 1		Included in Net Income		Included in OCI		Purchases		Sales		Settlements		Transfers into Level 3		Transfers out of Level 3		Balance, June 30
(In millions)

Fixed maturity securities:
Corporate bonds and other	$	770	$	(10)	$	(24)	$	164	$	(3)	$	(24)	$	10			$	883			$	(24)
States, municipalities and political subdivisions	46						12				(1)						57
Asset-backed	308		3		(5)		114				(27)		30		$	(13)	410				(5)
Fixed maturities available-for-sale	1,124		(7)		(29)		290		(3)		(52)		40		(13)		1,350		—		(29)
Fixed maturities trading	8		(6)								(2)						—
Total fixed maturities	$	1,132	$	(13)	$	(29)	$	290	$	(3)	$	(54)	$	40	$	(13)	$	1,350	$	—	$	(29)

Equity securities	$	43	$	(13)			$	10	$	(4)							$	36	$	2

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


Major Category of Assets and Liabilities			Consolidated Condensed Statements of Operations Line Items

Fixed maturity securities available-for-sale			Investment gains (losses)
Fixed maturity securities trading			Net investment income
Equity securities			Investment gains (losses) and Net investment income
Other invested assets			Investment gains (losses) and Net investment income
Derivative financial instruments held in a trading portfolio			Net investment income
Derivative financial instruments, other			Investment gains (losses) and Operating revenues and other


			22

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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.


June 30, 2022	Estimated Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)
	(In millions)

Fixed maturity securities	$	1,117	Discounted cash flow	Credit spread	1%	—	9%	(3%)

December 31, 2021

Fixed maturity securities	$	1,225	Discounted cash flow	Credit 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 Amount			Estimated Fair Value
June 30, 2022			Level 1		Level 2			Level 3			Total
(In millions)

Assets:
Other invested assets, primarily mortgage loans	$	949							$	915		$	915

Liabilities:
Short term debt	838					$	797		39			836
Long term debt	8,438					7,472			645			8,117

December 31, 2021

Assets:
Other invested assets, primarily mortgage loans	$	973							$	1,018		$	1,018

Liabilities:
Short term debt	93								93			93
Long term debt	8,981					$	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 $37 million and $54 million for the three months ended June 30, 2022 and 2021 and of $57 million and $179 million for the six months ended June 30, 2022 and 2021, in each case primarily related to severe weather related events.


			24

Table of c o ntents

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 operations outside CNA’s commercial property and casualty operations.


Six Months Ended June 30	2022		2021
(In millions)

Reserves, beginning of year:
Gross	$	24,174	$	22,706
Ceded	4,969		4,005
Net reserves, beginning of year	19,205		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 year	2,974		2,930
Decrease in provision for insured events of prior years	(69)		(78)
Amortization of discount	90		95
Total net incurred (a)	2,995		2,947

Net payments attributable to:
Current year events	(245)		(317)
Prior year events	(2,330)		(1,949)
Total net payments	(2,575)		(2,266)

Foreign currency translation adjustment and other	(222)		(5)

Net reserves, end of period	19,403		18,745
Ceded reserves, end of period	5,156		4,735
Gross reserves, end of period	$	24,559	$	23,480


(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 $37 million and $11 million was recorded for commercial property and casualty operations (“Property & Casualty Operations”) for the three months ended June 30, 2022 and 2021 and favorable net prior year development of $49 million and $26 million was recorded for the six months ended June 30, 2022 and 2021. Unfavorable net prior year loss reserve development of $64 million and $40 million was recorded for CNA’s operations outside of Property & Casualty Operations (“Other Insurance Operations”) for the three and six months ended June 30, 2022 and 2021.


			25

Table of c o ntents

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Medical professional liability	$	1			$	9	$	8
Other professional liability and management liability	13		$	10	13		10
Surety	(19)		(23)		(28)		(38)
Commercial auto	21		30		21		30
General liability	41				41
Workers’ compensation	(82)		(42)		(84)		(42)
Property and other	(12)		14		(21)		6
Other insurance operations	64		40		64		40
Total pretax (favorable) unfavorable development	$	27	$	29	$	15	$	14

Three Months

2022

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

Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s construction business in multiple accident years.

Unfavorable development in general liability was due to higher than expected claim severity in construction, middle market and small business across multiple accident years.

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

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

2021

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

Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s construction and middle market businesses in recent accident years.

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

Unfavorable development in other insurance operations was due to legacy mass tort exposures, primarily related to abuse.


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Table of c o ntents

Six Months

2022

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

Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s construction business in multiple accident years.

Unfavorable development in general liability was due to higher than expected claim severity in construction, middle market and small business across multiple accident years.

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

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

2021

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

Unfavorable development in commercial auto was due to higher than expected claim severity in CNA’s construction and middle market businesses in recent accident years.

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

Unfavorable development in other insurance operations was due to legacy mass tort exposures, primarily related to abuse.

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 $11 million and $12 million for the three months ended June 30, 2022 and 2021 and $23 million and $22 million for the six months ended June 30, 2022 and 2021. As of June 30, 2022 and December 31, 2021, the cumulative amounts ceded under the LPT were $3.4 billion. The unrecognized deferred retroactive reinsurance benefit was


			27

Table of c o ntents

$406 million and $429 million as of June 30, 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 $2.4 billion as of June 30, 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.


			28

Table of c o ntents

5. Shareholders’ Equity

Accumulated other comprehensive income (loss)

The tables below present the changes in AOCI by component for the three and six months ended June 30, 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, April 1, 2021	$	—	$	1,002	$	(19)	$	(869)	$	(80)	$	34
Other comprehensive income (loss) before reclassifications, after tax of $0, $(82), $(1), $0 and $0	1		323		8		(2)		11		341
Reclassification of (gains) losses from accumulated other comprehensive income, after tax of $0, $7, $(1), $(3) and $0	(1)		(23)				9				(15)
Other comprehensive income	—		300		8		7		11		326
Amounts attributable to noncontrolling interests			(31)				(1)		(1)		(33)

Balance, June 30, 2021	$	—	$	1,271	$	(11)	$	(863)	$	(70)	$	327

Balance, April 1, 2022	$	(6)	$	(513)	$	12	$	(630)	$	(114)	$	(1,251)
Other comprehensive income (loss) before reclassifications, after tax of $(1), $359, $5, $2 and $0	(1)		(1,360)		6		(2)		(68)		(1,425)
Reclassification of (gains) losses from accumulated other comprehensive loss, after tax of $1, $(3), $2, $(1) and $0	(1)		14				7				20
Other comprehensive income (loss)	(2)		(1,346)		6		5		(68)		(1,405)
Amounts attributable to noncontrolling interests	1		138						7		146
Balance, June 30, 2022	$	(7)	$	(1,721)	$	18	$	(625)	$	(175)	$	(2,510)


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	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, $72, $(3), $0 and $0	(2)		(270)		11		(2)		14		(249)
Reclassification of (gains) losses from accumulated other comprehensive income, after tax of $(1), $15, $(2), $(5) and $0	2		(57)		1		18				(36)
Other comprehensive income (loss)	—		(327)		12		16		14		(285)
Amounts attributable to noncontrolling interests			35				(2)		(2)		31

Balance, June 30, 2021	$	—	$	1,271	$	(11)	$	(863)	$	(70)	$	327

Balance, January 1, 2022	$	(2)	$	930	$	(6)	$	(636)	$	(100)	$	186
Other comprehensive income (loss) before reclassifications, after tax of $0, $784, $3, $0 and $0	(5)		(2,972)		21				(83)		(3,039)
Reclassification of (gains) losses from accumulated other comprehensive loss, after tax of $1, $(4), $1, $(3) and $0	(1)		15		3		12				29
Other comprehensive income (loss)	(6)		(2,957)		24		12		(83)		(3,010)
Amounts attributable to noncontrolling interests	1		306				(1)		8		314
Balance, June 30, 2022	$	(7)	$	(1,721)	$	18	$	(625)	$	(175)	$	(2,510)

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


Major Category of AOCI			Affected Line Item

Net unrealized gains (losses) on investments with an allowance for credit losses and Net unrealized gains (losses) on other investments			Investment gains (losses)
Unrealized gains (losses) on cash flow hedges			Operating revenues and other, Interest expense and Operating expenses and other
Pension and postretirement benefits			Operating expenses and other


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Treasury Stock

Loews Corporation repurchased 6.3 million and 9.5 million shares of its common stock at aggregate costs of $384 million and $493 million during the six months ended June 30, 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				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Non-insurance warranty – CNA Financial	$	392	$	359	$	774	$	697

Transportation and storage of natural gas and NGLs and other services – Boardwalk Pipelines	$	315	$	302	$	684	$	663
Lodging and related services – Loews Hotels & Co	190		94		336		150
Rigid plastic packaging and recycled resin – Corporate (a)							280

Total revenues from contracts with customers	505		396		1,020		1,093
Other revenues	29		19		54		37
Operating revenues and other	$	534	$	415	$	1,074	$	1,130

(a)Revenues presented reflect the consolidated results of Altium Packaging through March 31, 2021.

Receivables from contracts with customers – As of June 30, 2022 and December 31, 2021, receivables from contracts with customers were approximately $141 million and $145 million and are included within Receivables on the Consolidated Condensed Balance Sheets.

Deferred revenue – As of June 30, 2022 and December 31, 2021, deferred revenue resulting from contracts with customers was approximately $4.7 billion and $4.6 billion and is reported as Deferred non-insurance warranty revenue and within Other liabilities on the Consolidated Condensed Balance Sheets. Approximately $723 million and $624 million of revenues recognized during the six months ended June 30, 2022 and 2021 were included in deferred revenue as of December 31, 2021 and 2020.

Performance obligations – As of June 30, 2022, approximately $13.4 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 $1.4 billion will be recognized during the remaining six months of 2022, $2.4 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 tables present the components of net periodic (benefit) cost for the defined benefit plans:


	Pension Benefits
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)

Service cost					$	1	$	1
Interest cost	$	18	$	18	37		36
Expected return on plan assets	(40)		(43)		(83)		(86)
Amortization of unrecognized net loss	8		13		16		25

Settlements	1		2		2		2
Regulatory asset decrease	1				2
Net periodic benefit	$	(12)	$	(10)	$	(25)	$	(22)


	Other Postretirement Benefits
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
(In millions)


Interest cost	$	1	$	1	$	1	$	1
Expected return on plan assets	(1)				(1)		(1)




Net periodic benefit	$	—	$	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.


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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. Oral arguments have been set for this case on September 14, 2022.

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 June 30, 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 through March 31, 2021 and the equity method of accounting for Altium Packaging subsequent to its deconsolidation on April 1, 2021. 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 June 30, 2022	CNA Financial		Boardwalk Pipelines		Loews Hotels & Co		Corporate		Total
(In millions)

Revenues:

Insurance premiums	$	2,155							$	2,155
Net investment income (loss)	432				$	(1)	$	(65)	366
Investment losses	(59)								(59)
Non-insurance warranty revenue	392								392
Operating revenues and other	6		$	325	201		2		534
Total	2,926		325		200		(63)		3,388

Expenses:

Insurance claims and policyholders’ benefits	1,583								1,583
Amortization of deferred acquisition costs	374								374
Non-insurance warranty expense	367								367
Operating expenses and other	329		231		132		23		715
Interest	28		42		4		22		96
Total	2,681		273		136		45		3,135
Income (loss) before income tax	245		52		64		(108)		253
Income tax (expense) benefit	(40)		(13)		(20)		22		(51)
Net income (loss)	205		39		44		(86)		202
Amounts attributable to noncontrolling interests	(22)								(22)
Net income (loss) attributable to Loews Corporation	$	183	$	39	$	44	$	(86)	$	180


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Three Months Ended June 30, 2021	CNA Financial		Boardwalk Pipelines		Loews Hotels & Co		Corporate		Total
(In millions)

Revenues:

Insurance premiums	$	2,035							$	2,035
Net investment income	591				$	1	$	24	616
Investment gains	38						540		578
Non-insurance warranty revenue	359								359
Operating revenues and other	6		$	312	97				415
Total	3,029		312		98		564		4,003

Expenses:

Insurance claims and policyholders’ benefits	1,546								1,546
Amortization of deferred acquisition costs	357								357
Non-insurance warranty expense	332								332
Operating expenses and other	302		209		115		30		656
Interest	29		40		9		22		100
Total	2,566		249		124		52		2,991
Income (loss) before income tax	463		63		(26)		512		1,012
Income tax (expense) benefit	(94)		(16)		5		(114)		(219)
Net income (loss)	369		47		(21)		398		793
Amounts attributable to noncontrolling interests	(39)								(39)
Net income (loss) attributable to Loews Corporation	$	330	$	47	$	(21)	$	398	$	754


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Six Months Ended June 30, 2022	CNA Financial		Boardwalk Pipelines		Loews Hotels & Co		Corporate		Total
(In millions)

Revenues:

Insurance premiums	$	4,214							$	4,214
Net investment income (loss)	880				$	(1)	$	(81)	798
Investment losses	(70)								(70)
Non-insurance warranty revenue	774								774
Operating revenues and other	13		$	706	353		2		1,074
Total	5,811		706		352		(79)		6,790

Expenses:

Insurance claims and policyholders’ benefits	3,038								3,038
Amortization of deferred acquisition costs	718								718
Non-insurance warranty expense	721								721
Operating expenses and other	655		448		258		45		1,406
Interest	56		84		8		44		192
Total	5,188		532		266		89		6,075
Income (loss) before income tax	623		174		86		(168)		715
Income tax (expense) benefit	(105)		(44)		(27)		33		(143)
Net income (loss)	518		130		59		(135)		572
Amounts attributable to noncontrolling interests	(54)								(54)
Net income (loss) attributable to Loews Corporation	$	464	$	130	$	59	$	(135)	$	518


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Six Months Ended June 30, 2021	CNA Financial		Boardwalk Pipelines		Loews Hotels & Co		Corporate (a)		Total
(In millions)

Revenues:

Insurance premiums	$	3,997							$	3,997
Net investment income	1,095				$	1	$	70	1,166
Investment gains	95						540		635
Non-insurance warranty revenue	697								697
Operating revenues and other	11		$	684	154		281		1,130
Total	5,895		684		155		891		7,625

Expenses:

Insurance claims and policyholders’ benefits	3,052								3,052
Amortization of deferred acquisition costs	716								716
Non-insurance warranty expense	643								643
Operating expenses and other	587		426		219		338		1,570
Interest	57		81		17		70		225
Total	5,055		507		236		408		6,206
Income (loss) before income tax	840		177		(81)		483		1,419
Income tax (expense) benefit	(160)		(45)		17		(145)		(333)
Net income (loss)	680		132		(64)		338		1,086
Amounts attributable to noncontrolling interests	(71)								(71)
Net income (loss) attributable to Loews Corporation	$	609	$	132	$	(64)	$	338	$	1,015


(a)			Amounts include the consolidated results of Altium Packaging through March 31, 2021. Beginning April 1, 2021, Altium Packaging is recorded as an equity method investment.


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