[ The transcript was presubmitted by Loews Corporation. No live call was conducted for the first quarter earnings call. ] Good morning. Loews had a strong first quarter in 2023, with each of our consolidated subsidiaries producing stellar results. Let's start by taking a look at our property and casualty insurance subsidiary, CNA. CNA's performance was solid, with the company reporting its highest ever quarterly underlying underwriting income. The company reported a first quarter underlying combined ratio of 90.8%, which represents a 0.6-point improvement over the company's strong results in the first quarter of 2022. However, CNA's all-in combined ratio increased by two points year-over-year to 93.9% due to higher catastrophe losses and unfavorable prior period development. On a positive note, net written premiums grew by 11% in the first quarter compared to a year ago. This growth was a result of rate increases, improved retention and robust new business, which grew by 12%. The company also reported strong core income of $325 million, a 9% increase year-over-year due to higher investment income. There has been a lot of discussion as of late about the commercial real estate market. Like most insurance companies, CNA has exposure to commercial real estate through its commercial mortgage-backed securities, CMBS, real estate investment trusts, REITs, and direct lending portfolios. CNA's commercial real estate portfolio is well diversified both geographically and by property type. It is of high quality and predominantly investment grade. Furthermore, CNA's exposure to the commercial office sector is a relatively small portion of the overall portfolio. Given what we currently know, we do not anticipate CNA to be materially impacted by the current challenges in the real estate industry, including the commercial office sector. For more details regarding CNA's commercial real estate exposure please refer to the MD&A section of our…

For the first quarter of 2023, Loews reported net income of $375 million or $1.61 per share, compared with net income of $322 million or $1.29 per share in last year's first quarter. This year-over-year increase was driven by higher investment income at the Parent Company, as well as higher income from Loews Hotels. A slight increase in CNA's net income was offset by a small decrease in Boardwalk's net income. Book value per share increased from $61.86 at the end of 2022 to $63.41 at the end of the first quarter of 2023, and book value per share excluding AOCI, Accumulated Other Comprehensive Income, increased from $75.78 at the end of 2022 to $76.84 at the end of the first quarter. This increase was driven by earnings and accretive share repurchases in the first quarter. Before I discuss the financial performance of our subsidiaries, I'd like to explain the new accounting standard we adopted for the first quarter 2023. As I mentioned in last quarter's earnings remarks, CNA's long-term care business is now being accounted for under the new GAAP accounting standard of "long-duration contracts targeted improvements," or LDTI. While this change became effective January 1, 2023, CNA, as well as Loews, applied these changes from the transition date of January 1, 2021. Therefore, you will notice that our first quarter 2022 results and December 2022 balance sheet have been adjusted to implement the new standard. In our 10-Q this quarter, we presented the effect of adoption of LDTI on selected financial data for all four quarters of 2022 and the full years of 2022 and 2021. Under this accounting standard, changes in discount rates and operating assumptions have been decoupled: discount rates now run through the balance sheet under AOCI, and changes in operating assumptions run through the…

Every quarter, we encourage shareholders to send us questions in advance of earnings that they would like us to answer in our remarks. Please see below for the questions we have received, along with some additional questions we found relevant. Loews has a substantial net cash position. How do you manage it? At the end of the first quarter, Loews had $3.1 billion of cash and investments. However, only a minuscule portion of that cash and investment balance is actually held in the form of cash deposits. In fact, we typically hold less than $10 million of cash at any given time. The remaining cash is held as short-term treasuries or swept into money market accounts. The average duration of our treasury portfolio is typically less than four months. Also, higher interest rates are benefiting our holdings as the average yield on this portfolio is 4.8%. Jane, is Loews planning on refinancing its May 2023 bond maturity?

We are planning to repay the $500 million maturity. In 2020, at the height of the COVID pandemic, we issued a $500 million bond to have extra liquidity in light of the unprecedented level of uncertainty in the economy. At the time we stated that we would use the funds to repay our 2023 maturity if there was no need for incremental liquidity. Given that our subsidiaries are all performing well and are mostly self-funding their growth, there is no need to refinance this maturity. Jim, would you like to share your latest thoughts on the economy, interest rates and inflation?

When I started making these remarks on the economy more than two years ago, I never expected that things would get so exciting in the usually staid world of economic forecasting. In our last quarter's remarks, I made the argument that the Fed should consider pausing their rate increases to assess the economy over the next three months, cautioning the Fed to be careful not to raise rates too far too fast, lest it cause a calamity. I had no idea how prescient my words would be: I would certainly classify what happened in the U.S. banking system in the first few weeks of March as a calamity. With the troubles at Silicon Valley Bank and at Signature Bank, the Fed found itself on its back foot, being forced to react. As Warren Buffett says, "When the tide goes out, you see who was swimming without a bathing suit." What is now obvious in hindsight is that the rate increases engineered by the Fed over the past year -- the highest and fastest at any time in the past forty years -- were too much for some institutions in the banking system to handle. As a result of those steep rate increases, last month the Fed had to worry about a run on a major portion of the American banking system. The Fed and the FDIC did what they had to do to prevent a full-fledged banking catastrophe. Those who complain that the Fed overstepped and did too much to bail out large depositors and the banking system don't understand the ramifications of a massive, uncontrolled bank scare. In such a scare, people and institutions withdraw their money first and ask questions later. It would have been the equivalent of a neutron bomb hitting the economy. If the Fed hadn't…