Travelers 2015 Annual Report Download - page 219

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. SHAREHOLDERS’ EQUITY AND DIVIDEND AVAILABILITY (Continued)
Common Stock
The Company is governed by the Minnesota Business Corporation Act. All authorized shares of
voting common stock have no par value. Shares of common stock reacquired are considered authorized
and unissued shares.
Treasury Stock
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 acquisitions
and related financings), market conditions and other factors. In April 2015, the board of directors
approved a share repurchase authorization that added an additional $5.0 billion of repurchase capacity.
The following table summarizes repurchase activity in 2015 and remaining repurchase capacity at
December 31, 2015.
Number of Cost of Remaining capacity
Quarterly Period Ending shares shares Average price under share repurchase
(in millions, except per share amounts) purchased repurchased paid per share authorization
March 31, 2015 ..................... 5.6 $ 600 $106.97 $ 884
June 30, 2015 ...................... 7.9 800 101.62 5,084
September 30, 2015 .................. 7.3 750 102.81 4,334
December 31, 2015 .................. 8.8 1,000 113.47 3,334
Total ........................... 29.6 $3,150 106.46 3,334
The Company’s Amended and Restated 2004 Stock Incentive Plan and the 2014 Stock Incentive
Plan provide settlement alternatives to employees in which the Company retains shares to cover tax
withholding costs and exercise costs. During the years ended December 31, 2015 and 2014, the
Company acquired $74 million and $58 million, respectively, of its common stock under this plan.
Common shares acquired are reported as treasury stock in the consolidated balance sheet.
Dividend Availability
The Company’s U.S. insurance subsidiaries, domiciled principally in the State of Connecticut, are
subject to various regulatory restrictions that limit the maximum amount of dividends available to be
paid by each insurance subsidiary to its respective parent company without prior approval of insurance
regulatory authorities. A maximum of $3.81 billion is available by the end of 2016 for such dividends to
the holding company, TRV, without prior approval of the Connecticut Insurance Department. The
Company may choose to accelerate the timing within 2016 and/or increase the amount of dividends
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