LOEWS CORP

Note 11. Income Taxes

Loews Corporation and its eligible subsidiaries file a consolidated federal income tax return. Loews Corporation has entered into a separate tax allocation agreement with CNA, a majority-owned subsidiary in which its ownership exceeds 80%. The agreement provides that Loews Corporation will: (i) pay to CNA the amount, if any, by which Loews Corporation’s consolidated federal income tax is reduced by virtue of inclusion of CNA in Loews Corporation’s return or (ii) be paid by CNA an amount, if any, equal to the federal income tax that would have been payable by CNA if it had filed a separate consolidated return. The agreement may be canceled by either of the parties upon thirty days written notice.

For 2021 through 2023, the Company participates in the Internal Revenue Service (“IRS”) Compliance Assurance Process (“CAP”), which is a voluntary program for large corporations. Under CAP, the IRS conducts a real-time audit and works contemporaneously with the Company to resolve any issues prior to the filing of the tax return. For 2021 and 2023, the Company was selected to participate in the phase of CAP reserved for taxpayers whose risk of noncompliance does not support use of IRS resources. The Company believes that participation in CAP should reduce tax-related uncertainties, if any. Although the outcome of tax audits is always uncertain, the Company believes that any adjustments resulting from audits will not have a material impact on its results of operations, financial position or cash flows. The Company and/or its subsidiaries also file income tax returns in various state, local and foreign jurisdictions. These returns, with few exceptions, are no longer subject to examination by the various taxing authorities before 2019.

The current and deferred components of income tax expense are as follows:

The components of U.S. and foreign income before income tax and a reconciliation between the federal income tax expense at statutory rates and the actual income tax expense is as follows:

As of December 31, 2023, no deferred taxes are required on the undistributed earnings of subsidiaries subject to tax.

As of December 31, 2023, 2022 and 2021, there wereno unrecognized tax benefits.

Accrued interest related to unrecognized tax benefits and tax refund claims is recognized in Income tax expense on the Consolidated Statements of Operations. Penalties are recognized in Income tax expense on the Consolidated Statements of Operations. No interest expense andno penalties were recorded for the years ended December 31, 2023, 2022 and 2021.

The following table summarizes deferred tax assets and liabilities:

Net operating loss carryforwards in foreign tax jurisdictions of $169 million and foreign tax credit carryforwards of $9 million have no expiration.

Although realization of deferred tax assets is not assured, management believes it is more likely than not that the recognized deferred tax assets will be realized through recoupment of ordinary and capital taxes paid in prior carryback years and through future earnings, reversal of existing temporary differences and available tax planning strategies. As of December 31, 2023, a valuation allowance of $18 million was recorded related to state net operating losses and disallowed business interest expense from joint ventures.