Travelers 2004 Annual Report Download - page 148

THE ST. PAUL TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2. MERGER AND ACQUISITION, Continued
Supplemental Schedule of Noncash Investing and Financing Activities
The allocated purchase price calculated above results in an estimate of the fair value of assets acquired and
liabilities assumed as of the merger date, as follows:
(in millions)
As of April 1,
2004
Assets acquired ................................................................... $ 42,989
Liabilities assumed, including debt obligations totaling $3.98 billion ......................... (34,233)
Allocated purchase price ............................................................ $ 8,756
Pro Forma Results
The following unaudited pro forma information presents the combined results of operations of TPC and SPC
for the twelve months ended December 31, 2004 and 2003, respectively, with pro forma purchase accounting
adjustments as if the acquisition had been consummated as of the beginning of the periods presented. This pro
forma information is not necessarily indicative of what would have occurred had the acquisition and related
transactions been made on the dates indicated, or of future results of the Company.
(for the year ended December 31, in millions, except per share data) 2004 2003
Revenue ................................................................... $25,195 $23,683
Net income ................................................................ $ 1,080 $ 2,123
Net income per share—basic ................................................... $ 1.61 $ 3.18
Net income per share—diluted ................................................. $ 1.58 $ 3.09
Repurchase of Minority Interest in Commercial Insurance Resources, Inc.
On May 28, 2004, The Travelers Indemnity Company (Indemnity), a subsidiary of the Company, completed
its previously announced transaction with Trident II, L.P., Marsh & McLennan Capital Professionals Fund, L.P.,
Marsh & McLennan Employees’ Securities Company, L.P. and Trident Gulf Holding, LLC (collectively,
Trident) to purchase all of the outstanding shares (8,970,000 shares) of the mandatorily convertible preferred
stock of Commercial Insurance Resources, Inc. (CIRI) held by Trident at a purchase price of $8.83 per share and
the convertible notes held by Trident for $46 million. By June 30, 2004, Indemnity completed its purchase from
employees of $7 million of the mandatorily convertible preferred stock at a purchase price of $8.83 per share,
convertible notes with an aggregate principal amount of $4 million, and common equity of $3 million at a
purchase price of $8.83 per share. The notes that were previously issued to employees to finance 50% of their
investment in CIRI were assumed by Indemnity as part of the agreement to purchase the employees’ investments
in CIRI. The excess of the cost to repurchase the minority interest over the minority interest carrying value on the
consolidated balance sheet was recorded as a charge to additional paid-in capital during the second quarter.
136