Travelers 2014 Annual Report Download - page 128

Table of Contents
Financing Activities
Net cash flows used in financing activities were $3.81 billion, $2.94 billion and $2.15 billion in 2014, 2013 and 2012, respectively. The totals in
each year primarily reflected common share repurchases and dividends to shareholders, partially offset by the proceeds from employee stock
option exercises. The total in 2013 also included the issuance of 4.60% senior notes for net proceeds of $494 million and the payment of the
Company's $500 million, 5.00% senior notes at maturity. Common share repurchases in 2014, 2013 and 2012 were $3.33 billion, $2.46 billion and
$1.53 billion, respectively.
Debt Transactions
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2013. On July 25, 2013, the Company issued $500 million aggregate principal amount of 4.60% senior notes that will mature on August 1,
2043. The net proceeds of the issuance, after original issuance discount and the deduction of underwriting expenses and commissions and other
expenses, totaled approximately $494 million. Interest on the senior notes is payable semi
- annually in arrears on February 1 and August 1,
commencing on February 1, 2014. 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 value 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 15 basis points.
On March 15, 2013, the Company's $500 million, 5.00% senior notes matured and were fully paid.
2012. On May 29, 2012, the Company purchased and retired $8.5 million aggregate principal amount of its 6.25% fixed
- to - floating rate junior
subordinated debentures due March 15, 2067 in an open market transaction. The Company's $250 million, 5.375% senior notes matured on June 15,
2012 and were paid from existing holding company liquidity.
In 2015, the amount of debt obligations, other than commercial paper, that comes due is $400 million. The Company may refinance maturing
debt through funds generated internally or, depending on market conditions, through funds generated externally, including as a result of the
issuance of debt or other securities.
Dividends. Dividends paid to shareholders were $729 million, $729 million and $694 million in 2014, 2013 and 2012, respectively. 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. On January 22, 2015, the Company announced that it declared a regular quarterly dividend of $0.55 per share, payable March 31,
2015, to shareholders of record on March 10, 2015.
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, maintaining capital levels commensurate with the Company's desired ratings from independent rating agencies, 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
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