Travelers 2007 Annual Report Download - page 196

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
The following table presents the carrying amount of the Company’s goodwill by segment at
December 31, 2007 and 2006:
(at December 31, in millions) 2007 2006
Business Insurance ................................................. $2,168 $2,168
Financial, Professional & International Insurance ........................... 555 551
Personal Insurance ................................................. 613 613
Other .......................................................... 30 106
Total ......................................................... $3,366 $3,438
During the year ended December 31, 2007, the Company effectively settled IRS tax examinations
for all years through December 31, 2004. Previously unrecognized tax benefits of $63 million related to
the IRS settlement were recognized through a reduction of goodwill in 2007.
Other Intangible Assets
The following presents a summary of other intangible assets by major asset class at December 31,
2007 and 2006:
Gross
Carrying Accumulated
(at December 31 2007, in millions) Amount Amortization Net
Intangibles subject to amortization
Customer-related ......................................... $1,036 $655 $381
Fair value adjustment on claims and claim adjustment expense reserves
and reinsurance recoverables(1) ............................. 191 (26) 217
Total intangible assets subject to amortization ................... 1,227 629 598
Intangible assets not subject to amortization(2) ................... 216 — 216
Total other intangible assets ................................ $1,443 $629 $814
Gross
Carrying Accumulated
(at December 31 2006, in millions) Amount Amortization Net
Intangibles subject to amortization
Customer-related ......................................... $1,036 $537 $499
Fair value adjustment on claims and claim adjustment expense reserves
and reinsurance recoverables(1) ............................. 191 (54) 245
Total intangible assets subject to amortization ................... 1,227 483 744
Intangible assets not subject to amortization ..................... 20 — 20
Total other intangible assets ................................ $1,247 $483 $764
(1) The fair value adjustment of $191 million was recorded in connection with the merger of The
St. Paul Companies, Inc. and Travelers Property Casualty Corp. in 2004 and was based on
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