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

FORM 10-Q

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

For the quarterly period ended March 31, 2022

OR

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

For the Transition Period From ____________ to _____________

Commission File Number 1-06541

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

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

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

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

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

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

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

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

1
INDEX

 Page
No.
  
 
  
 
  
March 31, 2022 and December 31, 2021
 
 
Three months ended March 31, 2022 and 2021
 
 
Three months ended March 31, 2022 and 2021
 
 
Three months ended March 31, 2022 and 2021
 
 
Three months ended March 31, 2022 and 2021
 
 
  
  
  
  
  
  
  
  
2
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

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

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

See accompanying Notes to Consolidated Condensed Financial Statements.
4
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)

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

See accompanying Notes to Consolidated Condensed Financial Statements.
5
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF EQUITY
(Unaudited)

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

See accompanying Notes to Consolidated Condensed Financial Statements.
6
Loews Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

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

See accompanying Notes to Consolidated Condensed Financial Statements.
7
Loews Corporation and Subsidiaries
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

1. Basis of Presentation

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

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

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

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

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

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

The most significant impact at the transition date will be the effect of updating the discount rate assumption to reflect an upper-medium grade fixed-income instrument yield, which will be partially offset by the de-recognition of Shadow Adjustments associated with long-duration contracts. The Company expects the net impact of these changes will be a $2.0
8
billion - $2.3 billion (after tax and noncontrolling interests) decrease in Accumulated other comprehensive income (“AOCI”) as of the transition date of January 1, 2021. There is a minimal transition impact expected to retained earnings.

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

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

2. Investments

Net investment income is as follows:

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

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

Investment gains (losses) are as follows:

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

(a)
During the three months ended March 31, 2022 and 2021, $38 of investment losses and $2 of investment gains were recognized due to the change in fair value of non-redeemable preferred stock still held as of March 31, 2022 and 2021.
9
The following tables present the activity related to the allowance on available-for-sale securities with credit impairments and purchased credit-deteriorated (“PCD”) assets. Accrued interest receivables on available-for-sale fixed maturity securities totaled $389 million, $369 million and $389 million as of March 31, 2022, December 31, 2021 and March 31, 2021 and are excluded from the estimate of expected credit losses and the amortized cost basis in the tables within this Note.

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

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

10
The components of available-for-sale impairment losses recognized in earnings by asset type are presented in the following table. The table includes losses on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date:

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

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

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

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

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

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

12
The available-for-sale securities in a gross unrealized loss position for which an allowance for credit losses has not been recorded are as follows:

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