Schedule II

12 Months Ended

Dec. 31, 2012

Schedule II

Schedule II [Text Block]

SCHEDULE II

THE TRAVELERS COMPANIES, INC.
(Parent Company Only)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(in millions)

CONDENSED STATEMENT OF INCOME

For the year ended December 31,	2012			2011			2010
Revenues
Net investment income	$	9		$	8		$	11
Net realized investment gains (losses)(1)		—			(5	)		7
Other revenues		(1	)		—			(60	)
Total revenues		8			3			(42	)
Expenses
Interest		305			313			315
Other		4			27			14
Total expenses		309			340			329
Loss before income taxes and net income of subsidiaries		(301	)		(337	)		(371	)
Income tax benefit		(119	)		(199	)		(90	)
Loss before net income of subsidiaries		(182	)		(138	)		(281	)
Net income of subsidiaries		2,655			1,564			3,497
Net income	$	2,473		$	1,426		$	3,216

(1)

The parent company had no other-than-temporary impairment gains or losses recognized in net realized investment gains (losses) or in other comprehensive income during the years ended December 31, 2012, 2011 and 2010.

        The condensed financial statements should be read in conjunction with the notes to the condensed financial information of the registrant, as well as the consolidated financial statements and notes thereto.

SCHEDULE II

THE TRAVELERS COMPANIES, INC.
(Parent Company Only)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(in millions)

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

For the year ended December 31,	2012			2011			2010
Consolidated net income	$	2,473		$	1,426		$	3,216
Other comprehensive income—parent company:
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income		10			(2	)		1
Having credit losses recognized in the consolidated statement of income		—			—			—
Net changes in benefit plan assets and obligations		(58	)		(303	)		33
Net changes in unrealized foreign currency translation and other changes		—			—			—
Other comprehensive income (loss) before income taxes and other comprehensive income of subsidiaries		(48	)		(305	)		34
Income tax expense (benefit)		(17	)		(106	)		11
Other comprehensive income (loss), net of taxes before other comprehensive income of subsidiaries		(31	)		(199	)		23
Other comprehensive income of subsidiaries		262			949			13
Consolidated other comprehensive income		231			750			36
Consolidated comprehensive income	$	2,704		$	2,176		$	3,252

        The condensed financial statements should be read in conjunction with the notes to the condensed financial information of the registrant, as well as the consolidated financial statements and notes thereto.

SCHEDULE II

THE TRAVELERS COMPANIES, INC.
(Parent Company Only)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(in millions)

CONDENSED BALANCE SHEET

At December 31,	2012			2011
Assets
Fixed maturities	$	38		$	33
Equity securities		106			94
Short-term securities		1,958			2,339
Investment in subsidiaries		28,562			27,565
Other assets		26			506
Total assets	$	30,690		$	30,537
Liabilities
Debt	$	5,159		$	5,415
Other liabilities		136			655
Total liabilities		5,295			6,070
Shareholders' equity
Common stock (1,750.0 shares authorized, 377.4 and 392.8 shares issued and outstanding)		21,161			20,732
Retained earnings		21,342			19,569
Accumulated other comprehensive income		2,236			2,005
Treasury stock, at cost (372.3 and 349.0 shares)		(19,344	)		(17,839	)
Total shareholders' equity		25,395			24,467
Total liabilities and shareholders' equity	$	30,690		$	30,537

        The condensed financial statements should be read in conjunction with the notes to the condensed financial information of the registrant, as well as the consolidated financial statements and notes thereto.

SCHEDULE II

THE TRAVELERS COMPANIES, INC.
(Parent Company Only)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(in millions)

CONDENSED STATEMENT OF CASH FLOWS

For the year ended December 31,	2012			2011			2010
Cash flows from operating activities
Net income	$	2,473		$	1,426		$	3,216
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net income of subsidiaries		(2,655	)		(1,564	)		(3,497	)
Dividends received from consolidated subsidiaries		1,920			2,300			6,676
Capital (contributed to) repaid from subsidiaries		—			(10	)		19
Deferred federal income tax (benefit) expense		52			43			(46	)
Change in income taxes payable		(1	)		(162	)		63
Other		(16	)		28			411
Net cash provided by operating activities		1,773			2,061			6,842
Cash flows from investing activities
Net sales (purchases) of short-term securities		381			1,276			(1,723	)
Other investments, net		(8	)		(41	)		99
Net cash provided by (used in) investing activities		373			1,235			(1,624	)
Cash flows from financing activities
Payment of debt		(258	)		—			(1,156	)
Issuance of debt		—			—			1,234
Dividends paid to shareholders		(694	)		(665	)		(673	)
Issuance of common stock—employee share options		295			314			408
Treasury stock acquired—share repurchase authorization		(1,474	)		(2,919	)		(4,998	)
Treasury stock acquired—net employee share-based compensation		(53	)		(46	)		(40	)
Other		38			18			10
Net cash used in financing activities		(2,146	)		(3,298	)		(5,215	)
Net increase (decrease) in cash		—			(2	)		3
Cash at beginning of year		2			4			1
Cash at end of year	$	2		$	2		$	4
Supplemental disclosure of cash flow information
Cash received during the year for taxes	$	207		$	97		$	116
Cash paid during the year for interest	$	302		$	309		$	324

        The condensed financial statements should be read in conjunction with the notes to the condensed financial information of the registrant, as well as the consolidated financial statements and notes thereto.

THE TRAVELERS COMPANIES, INC.
(Parent Company Only)

NOTES TO THE CONDENSED FINANCIAL INFORMATION OF REGISTRANT

1.     OTHER REVENUES

        In 2010, other revenues included $60 million of expenses related to the Company's purchase and retirement of $885 million of its $1.0 billion 6.25% fixed-to-floating rate junior subordinated debentures.

2.     GUARANTEES

        In the ordinary course of selling business entities to third parties, The Travelers Companies, Inc. (TRV) has agreed to indemnify purchasers for losses arising out of breaches of representations and warranties with respect to the business entities being sold, covenants and obligations of TRV and/or its subsidiaries following the closing, and in certain cases obligations arising from undisclosed liabilities, adverse reserve development, imposition of additional taxes due to either a change in the tax law or an adverse interpretation of the tax law, or certain named litigation. Such indemnification provisions generally survive for periods ranging from eight years following the applicable closing date to the expiration of the relevant statutes of limitations, although, in some cases, there may be other 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 TRV is obligated to make payments. The maximum amount of TRV's contingent obligation for indemnifications related to the sale of business entities that are quantifiable was $95 million at December 31, 2012, of which $9 million was recognized on the balance sheet at that date.

        TRV also has contingent obligations for guarantees related to its subsidiary's debt obligations and various other indemnifications. TRV 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, TRV is unable to develop an estimate of the maximum potential payments for such arrangements.

        TRV fully and unconditionally guarantees the payment of all principal, premiums, if any, and interest on certain debt obligations of its subsidiaries TPC and Travelers Insurance Group Holdings Inc. (TIGHI). The guarantees pertain to the $500 million 5.00% notes due 2013, the $200 million 7.75% notes due 2026 and the $500 million 6.375% notes due 2033.