Travelers 2013 Annual Report Download - page 257

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. CONTINGENCIES, COMMITMENTS AND GUARANTEES (Continued)
expiration of the relevant statutes of limitations, although, in some cases, there may be agreed upon
term limitations or no term limitations. Certain of these contingent obligations are subject to
deductibles which have to be incurred by the obligee before the Company is obligated to make
payments. The maximum amount of the Company’s contingent obligation for indemnifications related
to the sale of businesses that are quantifiable was $465 million at December 31, 2013, of which
$9 million was recognized on the balance sheet at that date.
The Company also has contingent obligations for guarantees related to certain investments, third-
party loans related to certain investments, certain insurance policy obligations of former insurance
subsidiaries, and various other indemnifications. The Company also provides standard indemnifications
to service providers in the normal course of business. The indemnification clauses are often standard
contractual terms. Certain of these guarantees and indemnifications have no stated or notional amounts
or limitation to the maximum potential future payments, and, accordingly, the Company is unable to
develop an estimate of the maximum potential payments for such arrangements. The maximum amount
of the Company’s obligation for guarantees of certain investments and third-party loans related to
certain investments that are quantifiable was $153 million at December 31, 2013, approximately
$75 million of which is indemnified by a third party. The maximum amount of the Company’s
obligation related to the guarantee of certain insurance policy obligations of a former insurance
subsidiary was $480 million at December 31, 2013, all of which is indemnified by a third party.
17. NONCASH INVESTING AND FINANCING ACTIVITIES
There were no material noncash financing or investing activities during the years ended
December 31, 2013, 2012 and 2011.
18. CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND
SUBSIDIARIES
The following consolidating financial statements of the Company have been prepared pursuant to
Rule 3-10 of Regulation S-X. These consolidating financial statements have been prepared from the
Company’s financial information on the same basis of accounting as the consolidated financial
statements. The Travelers Companies, Inc. has fully and unconditionally guaranteed certain debt
obligations of TPC, which totaled $700 million at December 31, 2013.
Prior to the merger of TPC and SPC in 2004, TPC fully and unconditionally guaranteed the
payment of all principal, premiums, if any, and interest on certain debt obligations of its wholly-owned
subsidiary, Travelers Insurance Group Holdings, Inc. (TIGHI). Concurrent with the merger, The
Travelers Companies, Inc. fully and unconditionally assumed such guarantee obligations of TPC. TPC is
deemed to have no assets or operations independent of TIGHI. Consolidating financial information for
TIGHI has not been presented herein because such financial information would be substantially the
same as the financial information provided for TPC.
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