Travelers 2004 Annual Report Download - page 152

THE ST. PAUL TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
4. INTANGIBLE ASSETS AND GOODWILL, Continued
carrying amount of $555 million and accumulated amortization of $133 million. All of these intangible assets
were customer-related and subject to amortization.
The following presents a summary of the Company’s amortization expense for intangible assets by major
asset class:
(for the year ended December 31, in millions) 2004 2003 2002
Customer-related ........................................................... $132 $42 $35
Marketing-related .......................................................... 7——
Contract-based ............................................................. 12 ——
Fair value adjustment on claims and claim adjustment expense reserves and reinsurance
recoverables ............................................................. (58) ——
Total amortization expense ............................................... $93 $42 $35
Intangible asset amortization expense is estimated to be $165 million in 2005, $169 million in 2006, $161
million in 2007, $137 million in 2008 and $110 million in 2009.
Goodwill
The Company had goodwill with a carrying amount of $2.41 billion as of December 31, 2003. As a result of
the acquisition of SPC, $2.89 billion of goodwill was recorded on April 1, 2004. Changes in goodwill in 2004
also included a decrease of $44 million representing additional purchase accounting adjustments for changes in
the estimated fair value of assets acquired and liabilities assumed as of April 1, 2004, and an increase of $20
million primarily related to Nuveen Investments’ purchase of common shares from minority shareholders.
The following table presents the carrying amount of the Company’s goodwill by segment:
(at December 31, in millions) 2004
Commercial ......................................................................... $1,893
Specialty ............................................................................ 900
Personal ............................................................................ 613
Asset management .................................................................... 1,717
Other ............................................................................... 158
Total ........................................................................... $5,281
5. SEGMENT INFORMATION
The company comprises four reportable business segments: Commercial, Specialty, Personal and Asset
Management.
The accounting policies used to generate the following segment data are the same as those described in the
Summary of Significant Accounting Policies in note 1. The amount of investments in equity method investees
and total expenditures for additions to long-lived assets other than financial instruments were not significant.
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