Travelers 2011 Annual Report Download - page 136

are frequently estimated separately. An estimation of both amount and timing of future cash flows
related to claims and claim-related payments is generally reliable only in the aggregate with some
unavoidable estimation uncertainty.
The contractual obligations related to debt, operating leases, purchase obligations, long-term
unfunded investment commitments, estimated claims and claim-related payments (gross of the
estimated reinsurance recoveries) and liabilities related to unrecognized tax benefits, at December 31,
2011 were as follows:
Payments Due by Period Less than After
(in millions) Total 1 Year 1-3 Years 3-5 Years 5 Years
Debt
Senior notes ............................ $ 6,150 $ 250 $ 500 $ 800 $ 4,600
Junior subordinated debentures .............. 369 — — — 369
Total debt principal ...................... 6,519 250 500 800 4,969
Interest ............................... 5,562 375 698 651 3,838
Total long-term debt obligations(1) .......... 12,081 625 1,198 1,451 8,807
Operating leases(2) ........................ 520 143 203 133 41
Purchase obligations
Information systems administration and
maintenance commitments(3) .............. 32 29 3 — —
Reinsurance brokerage commitment(4) ........ 22———
Other purchase commitments(5) ............. 126 78 13 7 28
Total purchase obligations .................. 160 109 16 7 28
Long-term unfunded investment commitments(6) ... 1,154 255 344 366 189
Estimated claims and claim-related payments
Claims and claim adjustment expenses(7) ....... 49,388 10,766 12,906 7,397 18,319
Claims from large deductible policies(8) ........ ———— —
Loss-based assessments(9) .................. 201 36 46 20 99
Reinsurance contracts accounted for as
deposits(10) .......................... 11———
Payout from ceded funds withheld(11) ......... 282 29 120 32 101
Total estimated claims and claim-related
payments ............................ 49,872 10,832 13,072 7,449 18,519
Liabilities related to unrecognized tax benefits(12) .. 356 — 356 — —
Total ................................ $64,143 $11,964 $15,189 $9,406 $27,584
(1) See note 8 of notes to the Company’s consolidated financial statements for a further discussion of
outstanding indebtedness. Because the amounts reported in the foregoing table include principal
and interest, the total long-term debt obligations will not agree with the amounts reported in
note 8.
(2) Represents agreements entered into in the ordinary course of business to lease office space,
equipment and furniture.
(3) Includes agreements with vendors to purchase system software administration and maintenance
services.
(4) In connection with the sale of its insurance brokerage operations, the Company committed to
acquire brokerage services from the buyer through May 16, 2012.
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