[ The transcript was presubmitted by Loews Corporation. No live call was conducted for the fourth quarter earnings call. ] Good morning and welcome to our fourth quarter report. Loews had a strong quarter to close out the fiscal year, with each of our consolidated subsidiaries delivering stellar results. Loews's earnings per share increased by more than 80% year-over-year to $6.29 in 2023. All our consolidated companies experienced strong growth during 2023, and all of them performed well. CNA experienced robust growth during the year and reported record core income of nearly $1.3 billion, a more than 50% increase over 2022's core income. The company's net written and net earned premiums increased by 9% and 10% respectively, driven by higher rates, an 11% increase in new business, and strong retention of 85%. Additionally, CNA's earnings growth was fueled by its investment portfolio, which contributed $459 million more pre-tax income this year, split evenly between CNA's fixed income portfolio, and LP and common stock returns. While the LP and common stock portfolios are prone to yearly fluctuations (CNA earned 9.4% this year versus a 1.4% loss in 2022), we would expect the boost from CNA's fixed income portfolio to be a tailwind that remains with us for the foreseeable future. On the underwriting side, CNA's growth did not come at the expense of profitability. The company's yearly combined ratio was 93.5% and the company had record underwriting income of $585 million. We remain impressed by the CNA management team's strategies for delivering greater profitability. They continue to build productive relationships with key distribution partners, to mitigate the long-tailed risk of their run-off long-term care book, and to pursue a disciplined approach to capital management. Given the strength of CNA's business, I continue to find the market's valuation of CNA perplexing. As…

Good morning. Loews finished 2023 with an outstanding fourth quarter, reporting net income of $446 million or $1.99 per share, which compares favorably to net income of $355 million or $1.49 per share in the prior year's fourth quarter. The increase of 26% was driven by higher underwriting and investment income from CNA and higher income from Boardwalk, partially offset by lower investment income at Loews parent company. For the full year, Loews reported net income of $1.434 billion or $6.29 per share compared to $822 million or $3.38 per share in 2022. The 74% increase in net income was driven by strong operating performance at our subsidiaries and higher investment income at the parent company. As a reminder, 2022 results have been adjusted to reflect the application of the LDTI (long duration targeted improvement) accounting standard related to CNA's run-off long-term care business. Book value per share increased from $60.81 at the end of 2022 to $70.69 at the end of 2023. Excluding accumulated other comprehensive income, book value per share increased by 9% from $74.88 to $81.92. The increase was driven by strong 2023 earnings and accretive share repurchases. CNA had a terrific fourth quarter, contributing net income of $336 million to Loews, compared to $214 million in the fourth quarter of 2022. The $122 million year-over-year improvement was driven by higher net investment income as well as higher underwriting income, driven mostly by lower catastrophe losses. For the full year, CNA's net income contribution to Loews increased by $482 million to $1.094 billion from $612 million in 2022. That improvement was driven by higher net investment income and continued strong profitable growth within the P&C insurance business, as well as improved results within Life & Group. For the year, CNA's after-tax net investment income contribution to Loews…

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. How would potential interest rate cuts impact the subsidiaries, particularly CNA?

Lower interest rates are generally not favorable for the insurance industry as they impact future investment income. That said, interest rates are expected to remain substantially higher than they were during and right before the pandemic, which is a positive for CNA. CNA has also taken advantage of the higher interest rate environment in 2023 to lengthen the duration of its investment portfolio, which reduces reinvestment risk. Lower rates will also reduce the size of the company's unrealized loss position on its fixed maturity securities portfolio. For example, at the end of the fourth quarter, the company's unrealized loss position improved by about $2.5 billion from about $4.5 billion on September 30, 2023 to about $2.0 billion on December 31, 2023. It is important to note that regardless of prevailing interest rates, CNA will still receive the same cash flows from the fixed income securities that are currently in its portfolio, and the company intends to hold most of those securities to maturity. Therefore, we view the company's unrealized loss position as transitory in nature.

Jim, you mentioned that Loews is trading near an all-time high. How does that impact your share repurchase strategy?

We continue to believe that our shares trade at a discount to their intrinsic value and therefore share repurchases will remain a key component of our capital allocation strategy. Currently Loews has a market capitalization of $16.2 billion. When you subtract our $10.8 billion stake in CNA (which is a paltry ten times earnings) and our $800 million net cash position, the market is valuing our non-publicly traded subsidiaries at about $4.6 billion. That valuation is extraordinarily cheap when you consider that the sum of Boardwalk's EBITDA and Loews Hotels' Adjusted EBITDA is nearly $1.3 billion.

How much have you invested in the four new developments at Loews Hotels and when do you expect the earnings potential of those hotels to be fully reflected in the financial results?

Loews Hotels has substantially completed its equity investment of nearly $435 million in these four new developments. The total cost incurred for the four properties (including debt and partner equity) through the end of 2023 was $1 billion. Given the hotel company's strong internal cash flow generation, Loews Hotels self-funded the vast majority of its investment in these new projects, with the parent company contributing $38 million in 2023. We typically evaluate the attractiveness of new hotel projects using a cash-on-cash return metric. We compare the all-in stabilized cash flow projections to the amount of equity required and we generally target mid-to-high teens returns based on that metric. In terms of earnings expectations, it normally takes three to four years after a hotel opens for the property to produce fully stabilized results.

How is the regulatory environment impacting Boardwalk's growth prospects?

Current regulations and permitting requirements regarding new pipeline construction are extremely onerous, which inhibits development of new pipelines. On the positive side, the lack of new pipeline development generally increases demand for existing pipelines. While we're on the subject of natural gas pipelines, I would like to say a few words about the recent Biden administration moratorium on new licenses for LNG export facilities. There are two reasons that limiting the construction of these facilities seems absolutely crazy to me. First, to the extent that the U.S. does not export natural gas, other nations will fill that gap and the U.S. will lose out on jobs and GDP. Secondly, if the production and export of natural gas is limited, coal-fired power plants will be utilized instead to generate electricity. A coal plant emits more than twice as much carbon dioxide as a natural gas-fired power plant, so pausing the construction of LNG export facilities will result in an increase – not decrease – in worldwide carbon dioxide emissions. What is lost in the discussion about renewables is that we need reliable and dispatchable electricity that can be generated when the sun doesn't shine and the wind doesn't blow. For that reason, I firmly believe that natural gas will remain a critical transition fuel for decades to come.

What is your outlook for the U.S. natural gas market and how does that impact Boardwalk?

We believe that natural gas will remain an essential component of the U.S. energy infrastructure due to its ability to fuel dispatchable electricity. As the country adds more renewables to the grid, the increased volatility in natural gas demand may actually create new pipeline storage revenue opportunities. Boardwalk's assets are also well-located to take advantage of demand growth in the Gulf Coast region. Not only are Boardwalk's assets located near LNG export terminals, but the company's pipelines may also be able to take advantage of coal to gas switching in the states it serves. For example, nearly 70% of Kentucky's electricity is still generated by coal-fired plants.

Are there any updates on the Boardwalk litigation?

As a reminder, in December of 2022 the Delaware Supreme Court reversed the Delaware Court of Chancery's ruling in favor of the former Boardwalk minority unitholders. As part of that decision, the Delaware Supreme Court remanded the three unresolved issues back to the Chancery Court. The Delaware Court of Chancery will hold a hearing in April of this year on those remaining issues.