Loews : 2021 Letter to Shareholders

LETTER to SHAREHOLDERS

www.loews.com

Financial Highlights

Year Ended December 31 ($ in millions, except per share data)

Results of Operations

2021

2020

2019

2018 2017(a)

Revenues

Income (loss) before income tax Net income (loss)

Amounts attributable to noncontrolling interests

$ $ $ $

14,657 2,182 1,703

(125)

• $ 12,583

  $ $ $ $

  14,931 1,119 871 61

  $ $ $ $

  14,066 834 706 (70)

  • $ 13,735

• $ (1,464)

  • $ 1,582

• $ (1,291)

  • $ 1,412

• $ 360

• $ (248)

  Net income (loss) attributable to Loews Corporation

  $

  1,578

  $

  (931)

  $

  932

  $

  636

• $ 1,164

  Diluted net income (loss) per share

  $

  6.07

  $

  (3.32)

  $

  3.07

  $

  1.99

• $ 3.45

Financial Position

2021

2020

2019

2018

2017(a)

Investments

Total assets

Debt: Parent Company Debt: Subsidiaries Shareholders' equity Cash dividends per share Book value per share

Shares outstanding

Results of Operations

$

Consolidated net income attributable to Loews Corporation for 2021 was $1.6 billion, or $6.07 per share compared to a net loss of $931 million, or $3.32 per share, in 2020.

Net income for 2021 includes an investment gain of $555 million ($438 million after tax) related to the sale of 47% of Altium Packaging and its deconsolidation. The net loss for 2020 includes an investment loss of $1.2 billion ($957 million after tax) as a result of Diamond Offshore's bankruptcy filing and deconsolidation and an operating loss of $934 million ($476 million after tax and noncontrolling interests) for Diamond Offshore. Excluding these, net income was $1.1 billion and $502 million in 2021 and 2020.

All consolidated subsidiaries contributed to the year-over-year increase in net income. CNA's core Property & Casualty business experienced record high results as their underlying combined ratio, which excludes catastrophes and prior year development, was a record low of 91.4% in 2021, improving 1.7 points year-over-year due to increased premiums. Loews Hotels results have been adversely impacted by the COVID-19 pandemic. In 2021 leisure travel rebounded, especially at resort destinations, and Loews Hotels posted significantly improved results. Boardwalk Pipelines' net operating revenues increased 3% due to growth projects recently placed into service.

In addition, 2021 benefited from higher net investment income at the parent company and net investment gains at CNA in 2021 as compared to net investment losses in 2020.

CNA's earnings increased in 2021 primarily due to higher Property & Casualty underlying underwriting income, lower net catastrophe losses, higher net investment income and net investment gains as compared to losses in 2020. Life & Group business results benefited from the reduction in long term care claims reserves resulting from the 2021 annual claim reserves review and the absence of the long term care active life premium

53,938

81,626

2,278

6,801

17,846

0.25

71.84

248.42

$

53,844

80,236

2,276

7,833

17,860

0.25

66.34

269.21

$

51,250

82,243

1,779

9,754

19,119

0.25

65.71

290.97

$

48,186

$ 52,226

78,316 79,586

1,778 1,776

9,598 9,757

18,518 19,204

0.25 0.25

59.34 57.83

312.07 332.09

deficiency charge recorded in 2020. The improvement in net investment income in 2021 was driven by higher returns on limited partnership and common stock investments. Net investment gains in 2021 were driven by lower impairment losses on fixed income securities.

Boardwalk Pipelines' earnings improved as net operating revenues increased due to growth projects recently placed into service. Operating expenses, including depreciation and amortization, rose primarily due to an increase in maintenance project costs and an increased asset base from recently completed growth projects, partially offset by a reduction in interest expense due to lower interest rates and lower average outstanding debt balances.

Loews Hotels had temporarily suspended operations at most hotel properties by April 2020. These hotel properties gradually resumed operations at various times, culminating with all hotels having resumed operations by June 30, 2021. Through 2021, occupancy levels have gradually increased, leading to improved revenues at all hotel properties, particularly those in resort areas. Although results were significantly better in 2021 compared to 2020, occupancy levels have not reached pre-pandemic levels at many Loews Hotels properties.

Income from the parent company investment portfolio increased in 2021 as limited partnership and equity investments generated higher returns as compared to 2020.

At December 31, 2021, excluding accumulated other comprehensive income, the book value per share of Loews common stock was $71.09 as compared to $64.18 at December 31, 2020.

At December 31, 2021, there were 248.4 million shares of Loews common stock outstanding. In 2021, the Company purchased 21.1 million shares of its common stock at an aggregate cost of $1.1 billion.

a) On January 1, 2018, the Company adopted Accounting Standard Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)" and ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10); Recognition and Measurement of Financial Assets and Financial Liabilities." Prior period revenues were not adjusted for the adoption of either of these standards.

Our Portfolio of

Businesses

1

Letter to Our Shareholders

Loews delivered a strong performance in 2021, as each of our consolidated subsidiaries contributed meaningfully to our growing profitability and fundamental value. The company's net income reached $1.6 billion or $6.07 per share, reversing a prior year net loss of $931 million or ($3.32) per share. In 2021, we bought back 21.1 million shares of Loews common stock for a total of $1.1 billion, which was equivalent to almost 8% of the shares outstanding at the start of the year.

James S. Tisch	Andrew H. Tisch	Jonathan M. Tisch
Office of the President, President and	Co-Chairman and Chairman of the	Office of the President and Co-Chairman of the
Chief Executive Officer	Executive Committee of the Board	Board; Chairman and CEO, Loews Hotels & Co
2

During the four-year period from January 2018 through December 2021, Loews has spent $4.1 billion on repurchases, retiring about 26% of our common shares outstanding at the beginning of 2018. We ended 2021 with cash and investments totaling $3.4 billion.

to $0.40 - further evidence of CNA's confidence in its financial position. The increase in the dividends is reflective of CNA's strong 2021 earnings performance, as well as its financial strength and fortress balance sheet.

The fact that these positive results were achieved in a year marked by the persistence of the COVID-19 pandemic, global supply chain disruptions and the return of inflation, is a reflection of Loews's well-established approach to creating value, over the long term, for all shareholders. We have built a company composed of diverse businesses under the leadership of highly capable management teams. And we have strategically allocated our capital - whether to fund share repurchases, invest in the growth of our subsidiaries or (albeit rarely) acquire a promising new business.

Our Subsidiaries: Performance and Perspective

Each of our consolidated subsidiaries made solid progress in 2021, leading to higher year-over-year net income contributions. While Loews's subsidiaries operate in vastly different industries and markets, there are a number of common factors that we believe justify our investment in these businesses, including their attractive growth prospects, increasing operational efficiency and strong management teams.

Below, we review the performance of our subsidiaries during the past year and discuss how we view each one from an investment perspective.

CNA Financial

CNA earned net income of $1.1 billion in 2021, up from $618 million in 2020. These results benefited from an improvement in the underlying combined ratio, which decreased by 1.7 points to 91.4%, driven by reductions in the expense ratio. The company delivered gross written premium growth, produced favorable life and group results, and enjoyed excellent new business growth. Furthermore, CNA achieved rate increases amounting to 9% for the year. Net catastrophe losses declined to $397 million in 2021 from $550 million in 2020, due in part to a strategy of purchasing additional reinsurance to protect the insurance portfolio from large loss events. Loews received regular and special dividends from CNA totaling $552 million in 2021. On February 7, 2022, CNA announced a special dividend of $2.00 per share, up from $0.75 per share in 2021, and raised its quarterly dividend by about 5%

Our positive view of CNA reflects our belief in the strong prospects for the P&C insurance industry generally, characterized by more disciplined underwriting and a favorable rate environment. More importantly, we have high confidence in the company's management team, which has worked diligently and successfully to ramp up growth and profitability, while pursuing the goal of becoming a top quartile underwriter. These efforts have led to a substantial improvement in the underlying combined ratio and growth in gross written premium across all of the company's P&C business lines. CNA also has made excellent progress in decreasing its long term care exposure.

Boardwalk Pipelines

Boardwalk's EBITDA rose to $843 million in 2021, compared to $819 million for the prior year. The company's performance continues to benefit from its investment in growth projects. At the end of 2021, Boardwalk had a revenue backlog of approximately $9 billion, 96% of which is backed by firm agreements with a weighted average transportation contract life of about 7 years.

While governments and private organizations around the world have made commitments to a lower carbon future, the transition from fossil fuels to renewable sources cannot be accomplished overnight. As a cleaner-burning, cost-effective fuel for power generation, natural gas has a vital role to play as a substitute for coal and a backup for renewable energy. Boardwalk's pipeline assets, with a significant footprint in the Gulf Coast, are well positioned to take advantage of the continued global demand for natural gas. A significant portion of the globe relies on Liquified Natural Gas (LNG) for its natural gas supply, and the United States has become a major exporter of LNG. The Gulf Coast is the hub for LNG export terminals, and Boardwalk's pipelines are either already interconnected with, or in close proximity to, many existing and planned LNG export facilities.

Natural gas is an important energy resource that has meaningfully reduced greenhouse gas emissions. In the U.S., CO2 emissions from power generation are down 40% over the last 20 years, as power plants switched from coal to natural gas. Energy production needs to be low cost, reliable and green. We need to approach the energy transition in a rational and balanced way - and natural gas is playing an important role as the clean, low-cost and reliable option.

3