Business Overview: A Century-Spanning Legacy

Loews Corporation's origins can be traced back to the 1940s, when the Tisch family founded the company as a small hotel operator. Over the decades, the company has undergone a remarkable transformation, strategically expanding its reach across various industries while maintaining a steadfast commitment to prudent financial management and value creation.

The cornerstone of Loews' business is its insurance subsidiary, CNA Financial Corporation (CNA), which accounts for the lion's share of the company's revenue and earnings. CNA has been a core part of Loews since the 1970s and has established itself as a leading provider of commercial property and casualty insurance, serving a diverse client base that includes small and medium-sized businesses, as well as larger corporate entities. However, CNA has faced significant challenges over the years, including exposure to asbestos and environmental pollution claims. To address these legacy liabilities, Loews completed a loss portfolio transfer transaction with National Indemnity Company in 2010, demonstrating its proactive approach to risk management.

Complementing its insurance operations, Loews' energy infrastructure segment is represented by Boardwalk Pipeline Partners, LP, a natural gas and natural gas liquids transportation and storage provider with a vast network of pipelines and storage facilities across the United States. This segment has consistently delivered solid results, benefiting from long-term customer contracts and strategic expansions. Loews expanded into this midstream energy business in the 2000s through the acquisition of Boardwalk Pipeline Partners, showcasing its ability to identify and capitalize on new growth opportunities.

The company's hospitality division, Loews Hotels Holding Corporation, operates a portfolio of 25 hotels across North America, including iconic properties in key markets such as New York, Chicago, and Miami. Despite the inherent volatility of the hospitality industry, Loews Hotels has demonstrated its ability to adapt to changing market conditions and capitalize on evolving consumer preferences. The hotel division has grown its portfolio of owned, joint venture, and managed hotels over several decades, navigating through industry downturns and competitive pressures.

Rounding out Loews' diversified business mix is its investment in Altium Packaging LLC, a leading manufacturer of rigid plastic packaging solutions. This strategic investment provides the company with exposure to the growing consumer and industrial packaging market, further diversifying its revenue streams.

Throughout its history, Loews has demonstrated a willingness to make strategic acquisitions to expand its business reach, while also divesting non-core assets. This approach has allowed the company to maintain a strong balance sheet and weather challenges in its operating subsidiaries. Additionally, Loews has consistently returned capital to shareholders through regular dividend payments and share repurchases over the years, underscoring its commitment to creating long-term value for its investors.

Financial Performance: Weathering Storms, Delivering Resilience

Loews Corporation's financial performance has been marked by a consistent focus on prudent capital allocation and risk management. Over the past three years, the company has reported the following key financial metrics:

• Net Income: $1.41 billion (2024), $1.43 billion (2023), $822 million (2022)

• Revenue: $17.51 billion (2024), $15.68 billion (2023), $14.05 billion (2022)
• Operating Cash Flow: $3.02 billion (2024), $3.91 billion (2023), $3.31 billion (2022)
• Free Cash Flow: $2.39 billion (2024), $3.22 billion (2023), $2.65 billion (2022)

The company's diversified business model has been a key asset in navigating industry-specific challenges. For instance, the insurance segment has faced increased catastrophe losses in recent years, while the hospitality division has grappled with the impact of the COVID-19 pandemic. However, Loews' agile approach and disciplined capital management have enabled the company to maintain its financial resilience and deliver consistent shareholder returns.

One notable development was a $265 million pension settlement charge incurred by CNA Financial in 2024, which temporarily weighed on the parent company's net income. Despite this one-time event, Loews' underlying performance remained strong, with the insurance unit delivering improved underwriting results and the energy infrastructure segment benefiting from strategic growth initiatives.

In the most recent quarter (Q4 2024), Loews reported revenue of $4.55 billion, representing a year-over-year growth of 6.8%. However, net income for the quarter decreased to $187 million, primarily due to the aforementioned $265 million (after-tax and noncontrolling interests) pension settlement charge at CNA Financial.

Governance and Strategic Priorities: Leveraging Experience and Adaptability

Loews Corporation's leadership team is anchored by the Tisch family, whose multi-generational involvement has instilled a strong culture of long-term value creation. Benjamin Tisch, the current President and CEO, represents the third generation of Tisch leadership, bringing a fresh perspective while preserving the company's core principles.

Under the Tisch family's stewardship, Loews has demonstrated a steadfast commitment to prudent capital allocation, with a track record of strategic investments, disciplined acquisitions, and shareholder-friendly initiatives. The company's robust share repurchase program, which saw the retirement of 7.7 million shares in 2024 for $611 million, underscores its confidence in its long-term prospects and its dedication to enhancing shareholder value.

Looking ahead, Loews' strategic priorities center around leveraging its diversified business model to navigate evolving industry dynamics and capitalize on emerging opportunities. The company remains focused on driving organic growth within its core segments, while selectively pursuing accretive acquisitions that align with its long-term vision. Additionally, Loews is committed to strengthening its sustainability and environmental, social, and governance (ESG) initiatives, recognizing the increasing importance of these factors in the eyes of its stakeholders.

Risks and Challenges: Navigating Industry-Specific Headwinds

As a diversified conglomerate, Loews Corporation faces a range of industry-specific risks and challenges that require careful monitoring and strategic response. Some of the key risks include:

1. Insurance Segment Volatility: The property and casualty insurance industry is inherently susceptible to fluctuations in catastrophe losses, which can significantly impact CNA Financial's underwriting results and profitability. Effective risk management and reinsurance strategies are crucial to mitigating the impact of these events.

2. Energy Infrastructure Regulatory Environment: Boardwalk Pipeline Partners operates in a highly regulated industry, with its natural gas and natural gas liquids transportation and storage activities subject to oversight by various governmental authorities. Changes in regulations or policies could affect the segment's operations and financial performance.

3. Hospitality Industry Cyclicality: The hospitality industry is known for its cyclical nature, with demand for Loews Hotels' services influenced by macroeconomic factors, consumer preferences, and industry competition. Navigating these cycles and adapting the company's offerings accordingly is essential for maintaining profitability.

4. Packaging Market Dynamics: Altium Packaging's success is tied to the broader packaging industry, which is influenced by evolving consumer preferences, raw material costs, and competitive pressures. Effectively managing these dynamics is crucial for the segment's continued growth and profitability.

To mitigate these risks, Loews employs a multi-faceted risk management approach, leveraging its diversified business model, robust financial position, and experienced management team to navigate industry-specific challenges and capitalize on emerging opportunities.

Financials

Loews Corporation's financial performance has remained strong over the years, with consistent revenue growth and solid profitability. The company's diversified business model has helped it maintain financial stability even in the face of industry-specific challenges. Key financial metrics for the past three years include:

• Net Income: $1.41 billion (2024), $1.43 billion (2023), $822 million (2022)

• Revenue: $17.51 billion (2024), $15.68 billion (2023), $14.05 billion (2022)
• Operating Cash Flow: $3.02 billion (2024), $3.91 billion (2023), $3.31 billion (2022)
• Free Cash Flow: $2.39 billion (2024), $3.22 billion (2023), $2.65 billion (2022)

Liquidity

Loews Corporation maintains a strong liquidity position, which provides the company with financial flexibility to pursue strategic opportunities and weather potential economic downturns. As of the most recent reporting period, the company had:

• Cash and Cash Equivalents: $541 million

• Total Assets: $83.29 billion
• Total Liabilities: $60.32 billion
• Shareholders' Equity: $22.97 billion
• Debt/Equity Ratio: 0.52
• Available Credit Line: $1 billion revolving credit facility, fully available as of December 31, 2024

The company's robust balance sheet and consistent cash flow generation support its ongoing operations, strategic investments, and shareholder returns through dividends and share repurchases.

Segment Performance

CNA Financial Corporation: CNA is the largest contributor to Loews' revenue, accounting for 81.5% of consolidated total revenue in 2024. The segment's performance was driven by higher net investment income from favorable returns on limited partnership and common stock investments, as well as higher income from fixed income securities. Improved underlying underwriting results were partially offset by higher catastrophe losses, primarily from severe weather events.

Boardwalk Pipeline Partners, LP: Boardwalk Pipelines accounted for 11.8% of Loews' consolidated total revenue in 2024. The segment's financial performance improved due to increased transportation revenues from higher re-contracting rates and recently completed growth projects, as well as increased storage and parking and lending revenues. The acquisition of Bayou Ethane in 2023 also contributed incremental operating revenues, primarily from ethane product sales.

Loews Hotels Holding Corporation: Loews Hotels Co accounted for 5.3% of Loews' consolidated total revenue in 2024. The segment's performance was impacted by the opening of the Loews Arlington Hotel and Convention Center in the first quarter of 2024, which increased operating revenues and expenses. The decrease in net income was driven by lower equity income from joint ventures, partially offset by improved occupancy levels at many city center hotels as group travel continued to recover.

Corporate Segment:

The Corporate segment, which includes investment income, interest expense, and administrative costs at the parent company level, saw an increase in net investment income due to higher returns on equity-based investments. Administrative costs decreased compared to 2023, which included a $47 million pension settlement expense.

Outlook and Conclusion: A Resilient Conglomerate Poised for the Future

Loews Corporation's performance and strategic positioning point to a future marked by resilience and growth. The company's diversified business model, disciplined capital allocation, and adaptable management team have enabled it to weather various industry storms and position itself for long-term success.

Looking ahead, Loews is well-positioned to capitalize on the underlying strengths of its core segments. In the insurance business, CNA Financial is expected to continue its focus on underwriting discipline and product innovation, while the energy infrastructure segment is poised to benefit from strategic investments and expansions. The hospitality division is anticipated to leverage its brand recognition and service excellence to navigate the post-pandemic recovery, while the packaging business is expected to capitalize on evolving consumer preferences and industry trends.

Guided by the Tisch family's legacy of prudent stewardship, Loews Corporation remains committed to creating value for its shareholders through a balanced approach of organic growth, strategic acquisitions, and shareholder-friendly initiatives. As the company navigates the dynamic business landscape, its diversified portfolio, financial strength, and experienced leadership team suggest a promising outlook for the years to come.

While specific long-term guidance is not provided, Loews' consistent operational and financial performance, coupled with its strategic initiatives across its various segments, positions the company for continued growth and value creation in the coming years. The company's focus on reinvesting in its businesses, maintaining financial flexibility, and returning capital to shareholders through dividends and share buybacks underscores its commitment to long-term success and shareholder value.