Travelers 2006 Annual Report Download - page 75

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questions and comments, the Company continues to believe thatits accounting treatment for these
adjustments is appropriate. If, however, the staff disagrees, some or all of the adjustments being discussed
may not be recorded as charges in the Company’s consolidated statement of income, thereby increasingnet
income for the second quarter and full year 2004 and increasing shareholders’ equity at December 31,
2006, 2005 and 2004, ineach case by the approximate after-tax amount of the change. The effect on
tangible shareholders’ equity (adjusted for the effects of deferred taxes associated with goodwill and
intangible assets) at December 31, 2006, 2005 and 2004 would not be material. Increases to goodwill and
deferred tax liabilities would be reflected on the Company’s balance sheet as of April 1, 2004, either due to
purchase accounting or adjustment of SPC’s reserves prior to the merger of SPC and TPC. On May 3,
2006, the Company received a letter from the Division of Enforcement of the SEC (the “Division”)
advising the Company that it is conducting an inquiry relating to the second quarter 2004 adjustments and
the April 1, 2004 mergerof SPC and TPC. The Company is cooperating with the Division’s requests for
information.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE.
EXECUTIVEOFFICERS OF THE REGISTRANT
Information about the Company’s executive officers is incorporated by reference from Part III,
Item 10 of this Report.