Travelers 2012 Annual Report Download - page 134

From the inception of the first authorization in May 2006 through December 31, 2012, the
Company repurchased a cumulative total of 362.4 million shares for a total cost of $18.84 billion, or an
average of $51.99 per share.
In 2012, 2011 and 2010, the Company acquired 0.9 million, 1.4 million and 1.3 million shares,
respectively, of common stock from employees as treasury stock primarily to cover payroll withholding
taxes related to the vesting of restricted stock awards and exercises of stock options.
Conversion of Preferred Stock to Common Stock. In May 2011, the Company’s board of directors
authorized the redemption of the Company’s preferred stock held by The Travelers 401(k) Savings Plan
(the Savings Plan) and gave notice of that redemption to the appropriate fiduciaries of the Savings
Plan. Following a fiduciary review, the Savings Plan exercised its right to convert each preferred share
into eight shares of the Company’s common stock. As a result, all preferred shares outstanding on
June 7, 2011 (190,083 shares) were converted into a total of 1.52 million shares of the Company’s
common stock.
Capital Resources
Capital resources reflect the overall financial strength of the Company and its ability to borrow
funds at competitive rates and raise new capital to meet its needs. The following table summarizes the
components of the Company’s capital structure at December 31, 2012 and 2011.
(at December 31, in millions) 2012 2011
Debt:
Short-term ............................................. $ 600 $ 350
Long-term ............................................. 5,761 6,269
Net unamortized fair value adjustments and debt issuance costs ...... (11) (14)
Total debt ............................................ 6,350 6,605
Shareholders’ equity:
Common stock and retained earnings, less treasury stock ........... 23,169 22,472
Accumulated other comprehensive income ...................... 2,236 2,005
Total shareholders’ equity ................................ 25,405 24,477
Total capitalization .................................... $31,755 $31,082
Total capitalization at December 31, 2012 was $31.76 billion, $673 million higher than at
December 31, 2011 primarily reflecting the impact of net income of $2.47 billion and an increase in net
unrealized appreciation of investments, partially offset by common share repurchases under the
Company’s share repurchase authorization totaling $1.45 billion, shareholder dividends of $700 million
and debt repayments of $258 million.
The following table provides a reconciliation of total capitalization excluding net unrealized gains
on investments to total capitalization presented in the foregoing table.
(at December 31, dollars in millions) 2012 2011
Total capitalization excluding net unrealized gains on investments ............. $28,652 $28,211
Net unrealized gain on investments, net of taxes .......................... 3,103 2,871
Total capitalization .............................................. $31,755 $31,082
Debt-to-total capital ratio ......................................... 20.0% 21.3%
Debt-to-total capital ratio excluding net unrealized gains on investments ....... 22.2% 23.4%
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