Travelers 2003 Annual Report Download - page 22

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20
Note 4 — Identified Intangible Assets
A summary of the significant identifiable intangible assets and their respective estimated useful lives is as follows:
December 31, 2003
Intangible
Asset
Balance
Estimated
Useful Life
Amortization
Method
($ in millions)
Insurance Operations:
Customer relationships $ 540 8 years Accelerated(a)
Contractual agency relationships 20 2 years Straight line
SPC trademark and trade name 20 2 years Straight line
State licenses 30 Indefinite N/A
Total Insurance Operations $ 610
Asset Management Business(b):
Management contracts and customer relationships:
Closed-end funds $ 435 Indefinite N/A
Open-end funds 65 12 years Straight line
Managed wrap/hedge accounts 50 4 years Straight line
Managed institutional accounts 25 7 years Straight line
Nuveen trade name 15 Indefinite N/A
Total Asset Management $ 590
(a) Based on rates derived from expected business retention and profitability levels
(b) Amounts related to this business are included at SPC's 79% approximate ownership interest of Nuveen Investments
Note 5 — Earnings Per Share
The pro forma earnings per common share data has been computed based on the combined historical income of SPC
and TPC and the impact of purchase accounting adjustments. Weighted average shares were calculated using SPC's
historical weighted average common shares outstanding and TPC’s weighted average common shares outstanding
multiplied by the exchange ratio.
Note 6 — Net Realized Investment Gains (Losses)
The investment portfolio fair value adjustment treats net unrealized investment gains (losses) as though they were
realized, thereby creating a new basis for such investments. No separate adjustment has been made in the preliminary
Unaudited Pro Forma Condensed Combined Income Statement to adjust historical net realized investment gains
(losses) for the resulting new basis that would have been established had the merger been completed on January 1,
2003.
Note 7 — Pension and Post Retirement Benefit Cost
The fair value adjustment for SPC's pension and postretirement benefit plans treats the previously unrecognized prior
service cost and net actuarial loss as though they were recognized. No separate adjustment has been made in the
preliminary Unaudited Pro Forma Condensed Combined Income Statement to adjust net periodic pension and
postretirement benefit cost.