Travelers 2010 Annual Report Download - page 129

2008. On March 15, 2008, the Company’s $400 million, 3.75% senior notes matured and were
fully paid. On May 13, 2008, the Company issued $500 million aggregate principal amount of 5.80%
senior notes that will mature on May 15, 2018. The net proceeds of the issuance, after original issuance
discount and the deduction of underwriting expenses and commissions and other expenses, totaled
approximately $496 million. Interest on the senior notes is payable semi-annually on May 15 and
November 15. The senior notes are redeemable in whole at any time or in part from time to time, at
the Company’s option, at a redemption price equal to the greater of (a) 100% of the principal amount
of senior notes to be redeemed or (b) the sum of the present values of the remaining scheduled
payments of principal and interest on the senior notes to be redeemed (exclusive of interest accrued to
the date of redemption) discounted to the date of redemption on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the then current Treasury rate plus 30 basis points
for the senior notes.
On December 15, 2008, two medium-term notes with a cumulative par value of $149 million, each
bearing an interest rate of 6.38%, matured and were fully paid.
The amounts of debt obligations, other than commercial paper, that becomes due in 2011, 2012
and 2013 are $9 million, $250 million and $500 million, respectively.
Dividends. Dividends paid to shareholders totaled $673 million, $693 million and $715 million in
2010, 2009 and 2008, respectively. On February 2, 2011, the Company’s board of directors declared a
quarterly dividend of $0.36 per share, payable March 31, 2011 to shareholders of record on March 10,
2011. The declaration and payment of future dividends to holders of the Company’s common stock will
be at the discretion of the Company’s board of directors and will depend upon many factors, including
the Company’s financial position, earnings, capital requirements of the Company’s operating
subsidiaries, legal requirements, regulatory constraints and other factors as the board of directors
deems relevant. Dividends would be paid by the Company only if declared by its board of directors out
of funds legally available, subject to any other restrictions that may be applicable to the Company.
Share Repurchases. The Company’s board of directors has approved common share repurchase
authorizations under which repurchases may be made from time to time in the open market, pursuant
to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of
1934, in private transactions or otherwise. The authorizations do not have a stated expiration date. The
timing and actual number of shares to be repurchased in the future will depend on a variety of factors,
including the Company’s financial position, earnings, catastrophe losses, capital requirements of the
Company’s operating subsidiaries, legal requirements, regulatory constraints, other investment
opportunities (including mergers and acquisitions), market conditions and other factors. The following
table summarizes repurchase activity in 2010 and remaining repurchase capacity at December 31, 2010.
Number of Remaining capacity
shares Cost of shares Average price paid under share repurchase
Quarterly Period Ending purchased repurchased per share authorization
March 31, 2010 .............. 26,985,323 $1,400,047,070 $51.88 $5,109,655,637
June 30, 2010 ............... 27,961,897 1,400,173,784 50.07 3,709,481,853
September 30, 2010 ........... 11,828,725 600,056,933 50.73 3,109,424,920
December 31, 2010 ........... 28,948,317 1,600,031,383 55.27 1,509,393,537
Total .................... 95,724,262 $5,000,309,170 $52.24 $1,509,393,537
In January 2011, the board of directors approved a share repurchase authorization that added an
additional $5 billion of repurchase capacity to the $1.51 billion of capacity remaining at December 31,
2010.
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