Travelers 2011 Annual Report Download - page 133

On September 16, 2010, the Company repaid the remaining $4 million principal balance on its
7.81% private placement senior notes. On August 23, 2010, the Company’s $21 million, 7.415%
medium-term notes matured and were fully paid. On April 15, 2010, the Company’s $250 million,
8.125% senior notes matured and were fully paid. All of these debt payments were made from
internally-generated funds.
2009. On June 2, 2009, the Company issued $500 million aggregate principal amount of 5.90%
senior notes that will mature on June 2, 2019. The net proceeds of the issuance, after original issuance
discount and the deduction of underwriting expenses and commissions and other expenses, were
approximately $494 million. Interest on the senior notes is payable semi-annually in arrears on June 2
and December 2 of each year. 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 (as
defined) plus 35 basis points.
On March 3, 2009, the Company’s zero coupon convertible notes with an effective yield of 4.17%
and a remaining principal balance of $141 million matured and were fully paid.
The amounts of debt obligations, other than commercial paper, that becomes due in 2012 and
2013 are $250 million and $500 million, respectively. In 2014, no debt obligations become due.
Dividends. Dividends paid to shareholders were $665 million, $673 million and $693 million in
2011, 2010 and 2009, respectively. On January 24, 2012, the Company’s board of directors declared a
regular quarterly dividend of $0.41 per share, payable March 30, 2012 to shareholders of record on
March 9, 2012. 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 will 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, share price, catastrophe losses, funding of the
Company’s qualified pension plan, 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 2011 and remaining repurchase capacity at December 31, 2011.
Number of Remaining capacity
Quarterly Period Ending shares Cost of shares Average price paid under share repurchase
(in millions, except per share amounts) purchased repurchased per share authorization
March 31, 2011 ................. 18.9 $1,100 $58.23 $5,409
June 30, 2011 .................. 3.9 237 60.27 5,172
September 30, 2011 .............. 7.3 375 51.77 4,797
December 31, 2011 .............. 20.9 1,188 56.74 3,609
Total ....................... 51.0 $2,900 $56.86 $3,609
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