Good day, everyone, and welcome to today's Loews Corporation Q3 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please note this call is recorded. I will be standing by if you should need any assistance. And it's now my pleasure to turn the conference over to Mr. Chris Nugent.

Thank you, Shelby. Good morning, everyone, and welcome to Loews Corporation's third quarter earnings conference call. A copy of our earnings release and investor presentation maybe found on our Web site, loews.com. On the call this morning, we will have our Chief Executive Officer, Jim Tisch; and Chief Financial Officer, Jane Wang. Following our prepared remarks this morning, we will have a question-and-answer session with questions from our shareholders. Before we begin, however, I will remind you that this conference call may include statements that are forward-looking in nature. Actual results achieved by the company may differ materially from those made or implied in any forward-looking statements due to a wide range of risks and uncertainties, including those set forth in our SEC filings. Forward-looking statements reflect circumstances at the time they are made. The company expressly disclaims any obligation to update or revise any forward-looking statements. This disclaimer is only a brief summary of the company's statutory forward-looking statements disclaimer, which is included in the company's filings with the SEC. During the call today, we may also discuss non-GAAP financial measures. Please refer to our security filings and investor presentation for a reconciliation to the most comparable GAAP measures. With that, I'd like to turn the call over to Jim. Jim, over to you.

Thank you, Chris, and good morning. Before I discuss our financial results, I'd like to tell you about some executive changes that are taking place at Loews Hotels. On January 1, of next year, Jon Tisch will become the Executive Chairman of Loews Hotels, and Alex Tisch will assume the role of President and CEO. Jon will also continue to be a member of the Office of the President of Loews Corp. and the Co-Chairman of the Loews Corporation Board of Directors, along with Andrew Tisch. In his 43 years of Loews Hotels, Jon has engineered the company's expansion and emergence as the leading hotel business. In particular, Jon was instrumental in building Loews Hotels' long-standing partnership in Orlando with Universal Studios, also having the foresight to develop the iconic Loews Miami Beach Hotel. As a result, Loews Hotels now has nearly 10,000 rooms in the sought-after Florida market. Additionally, Jon created a corporate culture that places a high value on empowering team members, satisfying customers, and contributing to communities. Jon has successfully guided the company through several of the more turbulent periods in the hospitality industry, most recently the COVID pandemic. Loews Hotels is now stronger than it has ever been as evidenced by the company's outstanding financial results. We are deeply grateful for Jon's contributions to the company and his continued presence will be of tremendous value to Loews Hotels. Alex Tisch joined Loews Hotels in June of 2017, after working at Loews Corp. since 2008. Over the last five years, Alex has been instrumental in the creation and execution of the company's highly effective growth strategy, and has proven himself to be a dynamic leader and a talented hotel executive. Alex oversaw the development of Loews Hotels' 800-room property in Kansas City, and was integral in developing…

Thank you, Jim, and good morning, everyone. For the third quarter of 2022, Loews reported net income of $130 million or $0.54 per share, compared to the net income of $220 million or $0.85 per share in last year's third quarter. This year-over-year decrease was driven mainly by CNA's lower net investment income and higher investment losses. While Hurricane Ian impacted CNA and hotels, both companies posted another quarter of strong, profitable growth. Boardwalk continues its consistent robust performance, and the Loews parent company navigated through volatile equity capital markets. Book value per share declined from $71.84 at year-end 2021, to $58.14 at the end of the third quarter due to effect of higher interest rates lowering the market value of CNA's fixed income investments. Excluding accumulated other comprehensive income where this unrealized loss sits, book value per share actually increased from $71.09 at yearend to $74.11 on September 30th. This increase was driven by our current year's earnings and accretive share repurchases. Turning to our largest subsidiary, CNA contribute a net income of $150 million to Loews this quarter compared to $229 million last year. The year-over-year decline primarily reflects a $68 million decrease in net investment income attributable to Loews driven by lower net investment income from LPs and common stocks, partially offset by higher earnings from the fixed income portfolio. During the third quarter, LPs and common stocks together returned negative 2.1% versus the S&P 500 which had a negative 4.9% return. In comparison in last year's third quarter, LPs and common stock returned a positive 3.8%. In addition, investment gains and losses declined driven in part by realized losses from the sale of short-dated bonds, strategically buy longer dated bonds at higher rates. On the underwriting side, CNA again posted another quarter of strong profitable growth…

Thank you, Jane.

Moving on to the Q&A portion of the call, we have a number of questions from our shareholders. Every quarter, we encourage shareholders to send us questions in advance that they would like us to answer on our earnings call. Our first question is for Jane. Jane, Jim provided an update on the Boardwalk litigation and referred us to his prior comments earlier in the year. Are you able to give us any further updates on this litigation?

Well, as Jim mentioned, we argued our case before the Delaware Supreme Court, on September 14. We really appreciate the support of our legal team of advisors. And along with them, we're hopeful that a decision will be released by the end of the year.

Thanks, Jane. Our next question is for Jim. Jim, does Alex's promotion to President and CEO of Loews Hotels signal any shift in Loews Hotels' strategy?

No, there is no change in Loews Hotels' strategy. The leadership change is seamless and will support the hotel company's current growth strategy. Let me repeat, that strategy is based on two core pillars. First, catering to group travel at high-quality destinations, and second, developing and operating hotels immersive destinations. The first pillar focuses on hotels with 300-plus keys and ample meeting space that also will offer a unique experience to attract group and transient customers alike. We are very encouraged by the recent pickup in group travel at these locations, and all our locations with significant meeting space. The properties that Loews Hotels owns in partnership with Universal Orlando are a great example of the second pillar of the Loews Hotels strategy; immersive destinations with built-in demand generators. The Universal Orlando partnership has been highly successful, spanning more than two decades and currently including eight hotels, with 9,000 rooms. Regarding Alex, he assumed the position of President in September of 2020, and has been instrumental in executing the strategy that I just laid out, and is driving our strong results for Loews Hotels. Under his leadership, Loews Hotels strengthened the partnership with Universal, and made advances in leveraging data analytics to drive growth. His promotion recognizes the many contributions he's made over the last several years, and reflects our confidence in his ability to lead Loews Hotels' future growth.

Thank you, Jim. Our final question is also for you. Would you like to update us on your thoughts about interest rates, inflation, and the economy as we head into the final quarter of 2022?

Sure. When I started sharing my observations about inflation and the economy in the first quarter of 2021, it was very obvious, at least to me, that the Fed should be tightening monetary policy. At that time, the economy was running very hot, and interest rates were ridiculously low. 12 months ago, year-over-year CPI was running at over 5%. And so far this year, it's running at over 8%. At the end of the first quarter of this year, the Fed abandoned the word "Transitory," and finally kicked into gear. The Fed started to steadily increase the Fed funds rate and, more recently, to shrink its balance sheet. In the past seven months, Fed funds have moved from almost zero to more than 3%, with expectations of another 125 basis point increase in the next two months. And the bond market, as exemplified by the 10-Year Note, has moved smartly higher, from 1.5% at the beginning of this year to around 4% now. There's no doubt in my mind that the rate increases we have seen in the past year will translate into a slower economy, and likewise a reduction in the inflation rate. Home mortgage rates have moved up, from 3% at the beginning of the year, to over 7% now. This increase in mortgage rates means that the monthly cost of buying a new home has more than doubled in the past 10 months. As a result of the increase in the cost of home ownership, we will begin to see a significant reduction in home prices, and the fall in the number of housing starts will continue to accelerate, all leading to a weakening GDP. Likewise, other sectors of the economy will react negatively to higher interest rates as well. So far, we haven't seen that reduction…

Thank you, Jim. We have no further questions. So, that concludes our call for today. As always, we appreciate your continued interest. Please feel free to reach out to me with any questions. My email is cnugent@loews.com. A replay of this call will be available on our Web site loews.com in approximately two hours. Thank you again. You may now all disconnect.

That concludes today's teleconference. Thank you for your participation. You may now disconnect.