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Schedule II
 12 Months Ended
Dec. 31, 2014
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,
  2014   2013   2012  

Revenues

                    

Net investment income

   $ 6   $ 7   $ 9  

Net realized investment gains(1)

     3     2     —  

Other revenues

     —     —     (1 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total revenues

     9     9     8  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Expenses

                    

Interest

     321     308     305  

Other

     15     13     4  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total expenses

     336     321     309  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Loss before income taxes and net income of subsidiaries

     (327 )   (312 )   (301 )

Income tax benefit

     (115 )   (170 )   (119 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Loss before net income of subsidiaries

     (212 )   (142 )   (182 )

Net income of subsidiaries

     3,904     3,815     2,655  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income

   $ 3,692   $ 3,673   $ 2,473  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
(1)
The parent company had no other-than-temporary impairment gains or losses recognized in net realized investment gains or in other comprehensive income during the years ended December 31, 2014, 2013 and 2012.

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.

See the accompanying Report of Independent Registered Public Accounting Firm.

 

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,
  2014   2013   2012  

Consolidated net income

   $ 3,692   $ 3,673   $ 2,473  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other comprehensive income—parent company:

                    

Changes in net unrealized gains on investment securities:

                    

Having no credit losses recognized in the consolidated statement of income

     6     19     10  

Having credit losses recognized in the consolidated statement of income

     —     —     —  

Net changes in benefit plan assets and obligations

     (471 )   616     (58 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other comprehensive income (loss) before income taxes and other comprehensive income (loss) of subsidiaries

     (465 )   635     (48 )

Income tax expense (benefit)

     (163 )   222     (17 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other comprehensive income (loss), net of taxes, before other comprehensive income (loss) of subsidiaries

     (302 )   413     (31 )

Other comprehensive income (loss) of subsidiaries

     372     (1,839 )   262  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Consolidated other comprehensive income (loss)

     70     (1,426 )   231  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Consolidated comprehensive income

   $ 3,762   $ 2,247   $ 2,704  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

        

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.

See the accompanying Report of Independent Registered Public Accounting Firm.

 

SCHEDULE II

THE TRAVELERS COMPANIES, INC.
(Parent Company Only)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(in millions)

CONDENSED BALANCE SHEET

At December 31,
  2014   2013  

Assets

              

Fixed maturities

   $ 30   $ 37  

Equity securities

     141     130  

Short-term securities

     1,530     1,523  

Investment in subsidiaries

     28,821     28,616  

Other assets

     72     144  
​ ​ ​ ​ ​ ​ ​ ​

Total assets

   $ 30,594   $ 30,450  
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​

Liabilities

              

Debt

   $ 5,657   $ 5,654  

Other liabilities

     114     10  
​ ​ ​ ​ ​ ​ ​ ​

Total liabilities

     5,771     5,664  
​ ​ ​ ​ ​ ​ ​ ​

Shareholders' equity

              

Common stock (1,750.0 shares authorized, 322.2 and 353.5 shares issued and outstanding)

     21,843     21,500  

Retained earnings

     27,238     24,281  

Accumulated other comprehensive income

     880     810  

Treasury stock, at cost (437.3 and 401.5 shares)

     (25,138 )   (21,805 )
​ ​ ​ ​ ​ ​ ​ ​

Total shareholders' equity

     24,823     24,786  
​ ​ ​ ​ ​ ​ ​ ​

Total liabilities and shareholders' equity

   $ 30,594   $ 30,450  
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​

        

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.

See the accompanying Report of Independent Registered Public Accounting Firm.

 

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,
  2014   2013   2012  

Cash flows from operating activities

                    

Net income

   $ 3,692   $ 3,673   $ 2,473  

Adjustments to reconcile net income to net cash provided by operating activities:

                    

Equity in net income of subsidiaries

     (3,904 )   (3,815 )   (2,655 )

Dividends received from consolidated subsidiaries

     4,071     2,423     1,920  

Deferred federal income tax expense (benefit)

     51     (59 )   52  

Change in income taxes payable

     (87 )   48     (1 )

Capital contributed to subsidiaries

     —     (500 )   —  

Other

     (13 )   238     (16 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net cash provided by operating activities

     3,810     2,008     1,773  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash flows from investing activities

                    

Net sales (purchases) of short-term securities

     (7 )   435     381  

Other investments, net

     5     (3 )   (8 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net cash provided by (used in) investing activities

     (2 )   432     373  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash flows from financing activities

                    

Treasury stock acquired—share repurchase authorization

     (3,275 )   (2,400 )   (1,474 )

Treasury stock acquired—net employee share-based compensation

     (57 )   (61 )   (53 )

Dividends paid to shareholders

     (729 )   (729 )   (694 )

Issuance of common stock—employee share options

     195     206     295  

Payment of debt

     —     —     (258 )

Issuance of debt

     —     494     —  

Other

     57     51     38  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net cash used in financing activities

     (3,809 )   (2,439 )   (2,146 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net increase (decrease) in cash

     (1 )   1     —  

Cash at beginning of year

     3     2     2  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash at end of year

   $ 2   $ 3   $ 2  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Supplemental disclosure of cash flow information

                    

Cash received during the year for taxes

   $ 136   $ 210   $ 207  

Cash paid during the year for interest

   $ 318   $ 295   $ 302  

        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.

See the accompanying Report of Independent Registered Public Accounting Firm.

 

1. GUARANTEES

        In the ordinary course of selling businesses 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 businesses being sold, covenants and obligations of TRV and/or its subsidiaries following the closing, and in certain cases obligations arising from certain liabilities or adverse reserve development. Such indemnification provisions generally are applicable from the closing date to the 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 TRV is obligated to make payments. The maximum amount of TRV's contingent obligation for indemnifications related to the sale of businesses that are quantifiable was $89 million at December 31, 2014, of which $8 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 $200 million 7.75% notes due 2026 and the $500 million 6.375% notes due 2033.