Travelers 2005 Annual Report Download - page 221

THE ST. PAUL TRAVELERS COMPANIES, INC.AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
209
19. RESTRUCTURING ACTIVITIES
During the second quarter of 2004, the Company’s management approved and committed to plans to
terminate and relocate certain employees and to exit certain activities. The cost of these actions has been
recognized as a liability and is included in either the allocation of the purchase price or recorded as part of
general and administrativeexpenses. The following table summarizes the Company’s costs related to these
plans.
Original 2004
Balance at
December 31,2005
Balance at
December 31,
(in millions) Accrued Costs Payments Adjustments 2004 Payments Adjustments 2005
Restructuring costs included
in the allocation of the
purchase price:
Employee termination and
relocation costs ......... $ 71 $(43) $ (3) $25 $(23) $5 $ 7
Costs to exitleases ........ 4 (1) 58 (3) (1 ) 4
Other exit costs........... 4 (2) —2 (2) — —
Total included in the
allocation of purchase
price................ 79 (46) 235 (28) 4 11
Employee termination costs
included in general and
administrative expenses:
Commercial. ........... 33 (4) (9) 20 (13) — 7
Specialty.............. 2 (1) —1 (2) 1 —
Personal.............. 4 — (1) 3 (2) — 1
Total included in general and
administrative expenses .. 39 (5) (10)24 (17) 1 8
Total restructuring costs.... $ 118 $(51) $(8) $ 5 9 $(45) $5 $ 1 9
20. NONCASH INVESTING AND FINANCING ACTIVITIES
Remarketing of Senior Notes
In July 2002, concurrent with the issuance of 17.8 million of SPC common shares in a public offering,
SPC issued 8.9 million equity units, each having a stated amount of $50, for gross consideration of $442
million. Each equity unit initially consisted of a forward purchase contract for the Company’s common
stock, which matured in August 2005, and an unsecured $50 senior note of the Company (maturing in
2007). Total annual distributions on the equity units were at the rate of 9.00%, consisting of interest on the
note at a rate of 5.25% andfee payments under the forward contract of 3.75%. Holders of the equity units
had the opportunity to participate in a required remarketing of the senior note component. The initial
remarketing date was May 11, 2005. On that date, the notes were successfully remarketed, and the interest
rate on the notes was reset to 5.01%, from 5.25%, effective May 16, 2005. The remarketed notes mature on
August 16, 2007. There were no other significant noncash financing or investing activities during the year
ended December 31, 2005.
There were no significant noncash financing or investing activities during the years ended
December 31, 2004 and 2003, other than the acquisition of SPC in 2004 (see note 2).