Travelers 2013 Annual Report Download - page 89

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is a discussion and analysis of the Company’s financial condition and results of
operations.
On November 1, 2013, the Company acquired all of the issued and outstanding shares of
Dominion for an aggregate purchase price of approximately $1.034 billion. The results of operations of
the acquired business are reported in the Company’s Financial, Professional & International Insurance
segment from the closing date.
FINANCIAL HIGHLIGHTS
2013 Consolidated Results of Operations
• Net income of $3.67 billion, or $9.84 per share basic and $9.74 per share diluted
• Net earned premiums of $22.64 billion
• Catastrophe losses of $591 million ($387 million after-tax)
• Net favorable prior year reserve development of $840 million ($552 million after-tax)
• GAAP combined ratio of 89.8%
• Net investment income of $2.72 billion ($2.19 billion after-tax)
• Benefit of $91 million ($59 million after-tax) from settlement of legal matter
• Benefit of $63 million from resolution of prior year tax matters
• Operating cash flows of $3.82 billion
• Net realized investment gains of $166 million ($106 million after-tax)
2013 Consolidated Financial Condition
• Total investments of $73.16 billion; fixed maturities and short-term securities comprise 93% of
total investments
• Total assets of $103.81 billion
• Total debt of $6.35 billion, resulting in a debt-to-total capital ratio of 20.4% (21.3% excluding
net unrealized investment gains, net of tax)
• Repurchased 28.4 million common shares for a total cost of $2.40 billion under share repurchase
authorization
• Share repurchase authorization increased by $5.0 billion in 2013
• Shareholders’ equity of $24.80 billion
• Book value per common share of $70.15
• Holding company liquidity of $1.59 billion
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