EXHIBIT 99.12
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
CONTENTS
Page
----
Report of Independent Accountants 1
Financial Statements:
Fixed (Fund 2) 2
Common Stock-Employee (Fund 3) 4
Common Stock-Employer (Fund 5) 6
Fixed-IRA (Fund 6) 8
The S&P 500 Flagship Fund (Fund 7) 10
The Russell 2000 Fund (Fund 8) 12
ESOP (Fund 9) 14
Total of All Funds 16
Notes to Financial Statements 18 - 25
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Trustees and Participants of
The Travelers Savings, Investment and Stock Ownership Plan:
We have audited the accompanying financial statements of The Travelers Savings,
Investment and Stock Ownership Plan as listed in the contents to the financial
statements as of December 31, 1993 and 1992, and for each of the three years in
the period ended December 31, 1993. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the statements of net assets available for plan benefits
as of December 31, 1993 and 1992, and the related statements of changes in net
assets available for plan benefits for each of the three years in the period
ended December 31, 1993, as listed in the contents to the financial statements
in conformity with generally accepted accounting principles.
As more fully described in Note 3 to the financial statements, in 1993 the Plan
changed its method of accounting for amounts allocated to participants who have
elected to withdraw from the Plan but have not yet been paid.
As explained in Note 3 to the financial statements, net assets available for
plan benefits of ESOP (Fund 9) and total net assets available for plan benefits
include securities valued at $264,385,860 (28.6% of total net assets available
for plan benefits) whose values have been estimated by the trustee of ESOP (Fund
9) in the absence of readily ascertainable market values. We have reviewed the
procedures used by the trustee in arriving at its estimate of value of such
securities and have inspected underlying documentation and, in the
circumstances, we believe the procedures are reasonable and the documentation
appropriate. However, because of the inherent uncertainty of valuation, those
estimated values may differ significantly from the values that would have been
used had a ready market for the securities existed, and the differences could be
material.
/s/ Coopers & Lybrand
Hartford, Connecticut
March 18, 1994
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1993 AND 1992
FIXED
(FUND 2)
__________________________________
1993 1992
________________________________________________________________________________
ASSETS:
AMOUNTS HELD BY THE TRAVELERS INSURANCE
COMPANY UNDER A GROUP ANNUITY CONTRACT $434,018,292 $393,597,171
LOANS RECEIVABLE FROM EMPLOYEES 21,493,743 18,575,200
CONTRIBUTIONS RECEIVABLE FROM EMPLOYEES - 10,699
INTERFUND TRANSFERS RECEIVABLE - 188,635
______________ ______________
TOTAL ASSETS 455,512,035 412,371,705
______________ ______________
LIABILITIES:
DISTRIBUTIONS PAYABLE TO EMPLOYEES - 137,818,152
FORFEITURE CREDITS DUE TO EMPLOYER 62,489 32,443
INTERFUND TRANSFERS PAYABLE 1,722,943 -
OTHER LIABILITIES 53,908 -
______________ ______________
TOTAL LIABILITIES 1,839,340 137,850,595
______________ ______________
NET ASSETS AVAILABLE FOR PLAN BENEFITS $453,672,695 $274,521,110
============== ==============
SEE NOTES TO FINANCIAL STATEMENTS.
2
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
FIXED
(FUND 2)
________________________________________________
1993 1992 1991
_______________________________________________________________________________
BALANCE, BEGINNING OF YEAR $274,521,110 $255,219,182 $225,417,435
____________ ____________ ____________
INTEREST INCOME 31,497,860 31,756,494 29,341,945
____________ ____________ ____________
CONTRIBUTIONS BY EMPLOYEES 37,352,528 41,313,437 43,847,605
____________ ____________ ____________
DEDUCTIONS:
DISTRIBUTIONS TO EMPLOYEES (35,216,739) (61,213,882) (50,385,108)
EMPLOYER CONTRIBUTIONS
FORFEITED (30,046) (32,443) -
____________ ____________ ____________
(35,246,785) (61,246,325) (50,385,108)
____________ ____________ ____________
INTERFUND TRANSFERS 7,729,830 7,478,322 6,997,305
____________ ____________ ____________
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING METHOD 137,818,152 - -
____________ ____________ ____________
BALANCE, END OF YEAR $453,672,695 $274,521,110 $255,219,182
============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
3
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1993 AND 1992
COMMON STOCK-EMPLOYEE
(FUND 3)
__________________________________
1993 1992
________________________________________________________________________________
ASSETS:
INVESTMENT IN COMMON STOCK OF THE
TRAVELERS INC. AT MARKET VALUE
(COST $84,933,735 AND $-) $84,933,735 $ -
INVESTMENT IN COMMON STOCK OF THE
TRAVELERS CORPORATION AT MARKET VALUE
(COST $- AND $66,873,219) - 76,482,122
CONTRIBUTIONS RECEIVABLE FROM EMPLOYEES 79,268 37,000
RECEIVABLE FOR INVESTMENTS SOLD 2,674,359 2,205,933
INTERFUND TRANSFERS RECEIVABLE 1,550,061 -
______________ ______________
TOTAL ASSETS 89,237,423 78,725,055
______________ ______________
LIABILITIES:
DISTRIBUTIONS PAYABLE TO EMPLOYEES - 17,624,131
INTERFUND TRANSFERS PAYABLE - 971,246
______________ ______________
TOTAL LIABILITIES - 18,595,377
______________ ______________
NET ASSETS AVAILABLE FOR PLAN BENEFITS $89,237,423 $60,129,678
============== ==============
SEE NOTES TO FINANCIAL STATEMENTS.
4
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
COMMON STOCK-EMPLOYEE
(FUND 3)
________________________________________________
1993 1992 1991
_______________________________________________________________________________
BALANCE, BEGINNING OF YEAR $60,129,678 $50,745,396 $38,401,604
____________ ____________ ____________
INVESTMENT INCOME:
DIVIDENDS 4,402,731 4,469,276 4,297,315
INTEREST 4,178 5,967 25,639
____________ ____________ ____________
4,406,909 4,475,243 4,322,954
____________ ____________ ____________
NET APPRECIATION IN THE
FAIR VALUE OF INVESTMENTS 10,449,980 15,745,894 13,251,040
____________ ____________ ____________
CONTRIBUTIONS BY EMPLOYEES 6,884,796 6,814,174 8,378,728
____________ ____________ ____________
DISTRIBUTIONS TO EMPLOYEES (4,988,090) (9,684,796) (6,375,968)
____________ ____________ ____________
INTERFUND TRANSFERS (5,269,981) (7,966,233) (7,232,962)
____________ ____________ ____________
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING METHOD 17,624,131 - -
____________ ____________ ____________
BALANCE, END OF YEAR $89,237,423 $60,129,678 $50,745,396
============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
5
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1993 AND 1992
COMMON STOCK-EMPLOYER
(FUND 5)
__________________________________
1993 1992
________________________________________________________________________________
ASSETS:
INVESTMENT IN COMMON STOCK OF THE
TRAVELERS INC. AT MARKET VALUE
(COST $101,913,675 AND $-) $101,913,675 $ -
INVESTMENT IN COMMON STOCK OF THE
TRAVELERS CORPORATION AT MARKET VALUE
(COST $- AND $100,989,650) - 92,809,680
INTERFUND TRANSFERS RECEIVABLE 131,706 -
______________ ______________
TOTAL ASSETS 102,045,381 92,809,680
______________ ______________
LIABILITIES:
DISTRIBUTIONS PAYABLE TO EMPLOYEES - 30,001,430
FORFEITURE CREDITS DUE TO EMPLOYER 1,157,811 1,095,612
PAYABLE FOR INVESTMENTS PURCHASED 792,074 449,920
INTERFUND TRANSFERS PAYABLE - 171,634
______________ ______________
TOTAL LIABILITIES 1,949,885 31,718,596
______________ ______________
NET ASSETS AVAILABLE FOR PLAN BENEFITS $100,095,496 $61,091,084
============== ==============
SEE NOTES TO FINANCIAL STATEMENTS.
6
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
COMMON STOCK-EMPLOYER
(FUND 5)
________________________________________________
1993 1992 1991
_______________________________________________________________________________
BALANCE, BEGINNING OF YEAR $ 61,091,084 $ 49,977,746 $ 42,832,556
____________ ____________ ____________
DIVIDEND INCOME 5,262,451 5,343,129 5,255,381
____________ ____________ ____________
NET APPRECIATION IN THE
FAIR VALUE OF INVESTMENTS 13,567,481 19,484,718 16,495,669
____________ ____________ ____________
DEDUCTIONS:
DISTRIBUTIONS TO EMPLOYEES (6,064,684) (14,504,007) (11,232,267)
EMPLOYER CONTRIBUTIONS
REALLOCATED(FORFEITED) (372,080) 2,299,894 (2,652,130)
____________ ____________ ____________
(6,436,764) (12,204,113) (13,884,397)
____________ ____________ ____________
INTERFUND TRANSFERS (3,390,186) (1,510,396) (721,463)
____________ ____________ ____________
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING METHOD 30,001,430 - -
____________ ____________ ____________
BALANCE, END OF YEAR $100,095,496 $ 61,091,084 $ 49,977,746
============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
7
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1993 AND 1992
FIXED - IRA
(FUND 6)
__________________________________
1993 1992
________________________________________________________________________________
ASSETS:
AMOUNTS HELD BY THE TRAVELERS INSURANCE
COMPANY UNDER A GROUP ANNUITY CONTRACT $67,443,858 $67,260,710
______________ ______________
TOTAL ASSETS 67,443,858 67,260,710
______________ ______________
LIABILITIES:
DISTRIBUTIONS PAYABLE TO EMPLOYEES - 2,697,788
______________ ______________
TOTAL LIABILITIES - 2,697,788
______________ ______________
NET ASSETS AVAILABLE FOR PLAN BENEFITS $67,443,858 $64,562,922
============== ==============
SEE NOTES TO FINANCIAL STATEMENTS.
8
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
FIXED - IRA
(FUND 6)
________________________________________________
1993 1992 1991
_______________________________________________________________________________
BALANCE, BEGINNING OF YEAR $64,562,922 $64,675,222 $63,644,820
____________ ____________ ____________
INTEREST INCOME 5,246,045 5,535,467 5,499,875
____________ ____________ ____________
DISTRIBUTIONS TO EMPLOYEES (5,062,897) (5,647,767) (4,469,473)
____________ ____________ ____________
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING METHOD 2,697,788 - -
____________ ____________ ____________
BALANCE, END OF YEAR $67,443,858 $64,562,922 $64,675,222
============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
9
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1993 AND 1992
THE S & P 500
FLAGSHIP FUND
(FUND 7)
__________________________________
1993 1992
________________________________________________________________________________
ASSETS:
INVESTMENT IN STATE STREET GLOBAL ADVISORS
FLAGSHIP FUND AT VALUE
(COST $44,908,010 AND $-) $44,908,010 $ -
INVESTMENT IN THE TRAVELERS
LARGE CAP INDEX FUND AT VALUE
(COST $- AND $32,618,793) - 38,561,688
CONTRIBUTIONS RECEIVABLE FROM EMPLOYEES 109,726 70,942
INTERFUND TRANSFERS RECEIVABLE - 430,535
______________ ______________
TOTAL ASSETS 45,017,736 39,063,165
______________ ______________
LIABILITIES:
DISTRIBUTIONS PAYABLE TO EMPLOYEES - 10,358,837
INTERFUND TRANSFERS PAYABLE 237,216 -
______________ ______________
TOTAL LIABILITIES 237,216 10,358,837
______________ ______________
NET ASSETS AVAILABLE FOR PLAN BENEFITS $44,780,520 $28,704,328
============== ==============
SEE NOTES TO FINANCIAL STATEMENTS.
10
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
THE S & P 500
FLAGSHIP FUND
(FUND 7)
________________________________________________
1993 1992 1991
_______________________________________________________________________________
BALANCE, BEGINNING OF YEAR $28,704,328 $24,477,862 $16,661,520
____________ ____________ ____________
NET APPRECIATION IN THE
FAIR VALUE OF INVESTMENTS 3,961,000 2,716,125 6,936,247
____________ ____________ ____________
CONTRIBUTIONS BY EMPLOYEES 6,485,141 6,014,167 4,981,903
____________ ____________ ____________
DISTRIBUTIONS TO EMPLOYEES (2,717,593) (4,958,863) (4,352,992)
____________ ____________ ____________
INTERFUND TRANSFERS (2,011,193) 455,037 251,184
____________ ____________ ____________
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING METHOD 10,358,837 - -
____________ ____________ ____________
BALANCE, END OF YEAR $44,780,520 $28,704,328 $24,477,862
============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
11
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1993 AND 1992
THE RUSSELL 2000 FUND
(FUND 8)
__________________________________
1993 1992
________________________________________________________________________________
ASSETS:
INVESTMENT IN STATE STREET GLOBAL ADVISORS
RUSSELL 2000 FUND AT VALUE
(COST $28,058,276 AND $-) $28,058,276 $ -
INVESTMENT IN THE TRAVELERS
SMALL CAP INDEX FUND AT VALUE
(COST $- AND $14,564,287) - 18,310,624
CONTRIBUTIONS RECEIVABLE FROM EMPLOYEES 189,700 26,180
INTERFUND TRANSFERS RECEIVABLE 278,392 523,710
______________ ______________
TOTAL ASSETS 28,526,368 18,860,514
______________ ______________
LIABILITIES:
DISTRIBUTIONS PAYABLE TO EMPLOYEES - 5,144,446
______________ ______________
TOTAL LIABILITIES - 5,144,446
______________ ______________
NET ASSETS AVAILABLE FOR PLAN BENEFITS $28,526,368 $13,716,068
============== ==============
SEE NOTES TO FINANCIAL STATEMENTS.
12
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
THE RUSSELL 2000 FUND
(FUND 8)
________________________________________________
1993 1992 1991
_______________________________________________________________________________
BALANCE, BEGINNING OF YEAR $13,716,068 $ 9,988,471 $ 5,724,042
____________ ____________ ____________
NET APPRECIATION IN THE
FAIR VALUE OF INVESTMENTS 3,811,908 2,635,646 3,504,439
____________ ____________ ____________
CONTRIBUTIONS BY EMPLOYEES 4,269,319 2,811,436 1,896,304
____________ ____________ ____________
DISTRIBUTIONS TO EMPLOYEES (1,356,903) (3,262,755) (1,842,250)
____________ ____________ ____________
INTERFUND TRANSFERS 2,941,530 1,543,270 705,936
____________ ____________ ____________
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING METHOD 5,144,446 - -
____________ ____________ ____________
BALANCE, END OF YEAR $28,526,368 $13,716,068 $ 9,988,471
============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
13
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1993 AND 1992
ESOP
(FUND 9)
__________________________________
1993 1992
________________________________________________________________________________
ASSETS:
INVESTMENT IN SERIES C PREFERRED STOCK OF
THE TRAVELERS INC. AT VALUE
(COST $264,385,860 AND $-) $264,385,860 $ -
INVESTMENT IN SERIES A PREFERENCE STOCK OF
THE TRAVELERS CORPORATION AT VALUE
(COST $- AND $224,823,257) - 236,560,565
CONTRIBUTIONS RECEIVABLE FROM EMPLOYER 6,607,039 18,363,318
SHORT TERM INVESTMENTS 4,240,811 3,736,362
INVESTMENT INCOME ACCRUED 31,934 26,162
______________ ______________
TOTAL ASSETS 275,265,644 258,686,407
______________ ______________
LIABILITIES:
DISTRIBUTIONS PAYABLE TO EMPLOYEES - 11,732,493
FORFEITURE CREDITS DUE TO EMPLOYER 7,883,350 4,315,158
ESOP NOTE PAYABLE 124,900,000 148,700,000
ACCRUED INTEREST PAYABLE 346,696 380,505
______________ ______________
TOTAL LIABILITIES 133,130,046 165,128,156
______________ ______________
NET ASSETS AVAILABLE FOR PLAN BENEFITS $142,135,598 $ 93,558,251
============== ==============
SEE NOTES TO FINANCIAL STATEMENTS.
14
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
ESOP
(FUND 9)
________________________________________________
1993 1992 1991
_______________________________________________________________________________
BALANCE, BEGINNING OF YEAR $ 93,558,251 $ 57,511,288 $ 21,830,076
____________ ____________ ____________
INVESTMENT INCOME:
DIVIDENDS 19,689,657 18,811,734 17,461,023
INTEREST 69,574 68,129 80,366
____________ ____________ ____________
19,759,231 18,879,863 17,541,389
____________ ____________ ____________
NET APPRECIATION IN THE
FAIR VALUE OF INVESTMENTS 17,517,503 11,737,308 -
____________ ____________ ____________
CONTRIBUTIONS BY EMPLOYER 16,511,979 31,734,012 30,587,614
____________ ____________ ____________
DEDUCTIONS:
DISTRIBUTIONS TO EMPLOYEES (9,752,466) (16,933,477) (3,128,518)
EMPLOYER CONTRIBUTIONS
FORFEITED (3,568,192) (4,315,158) -
INTEREST EXPENSE (3,623,201) (5,055,585) (9,319,273)
____________ ____________ ____________
(16,943,859) (26,304,220) (12,447,791)
____________ ____________ ____________
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING METHOD 11,732,493 - -
____________ ____________ ____________
BALANCE, END OF YEAR $142,135,598 $ 93,558,251 $ 57,511,288
============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
15
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1993 AND 1992
TOTAL OF ALL FUNDS
__________________________________
1993 1992
________________________________________________________________________________
ASSETS:
AMOUNTS HELD BY THE TRAVELERS INSURANCE
COMPANY UNDER GROUP ANNUITY CONTRACTS $ 501,462,150 $460,857,881
INVESTMENT IN COMMON STOCK OF THE
TRAVELERS INC. AT MARKET VALUE
(COST $186,847,410 AND $-) 186,847,410 -
INVESTMENT IN COMMON STOCK OF THE
TRAVELERS CORPORATION AT MARKET VALUE
(COST $- AND $167,862,869) - 169,291,802
INVESTMENT IN STATE STREET GLOBAL ADVISORS
FLAGSHIP FUND AT VALUE
(COST $44,908,010 AND $-) 44,908,010 -
INVESTMENT IN THE TRAVELERS LARGE CAP INDEX
FUND AT VALUE (COST $- AND $32,618,793) - 38,561,688
INVESTMENT IN STATE STREET GLOBAL ADVISORS
RUSSELL 2000 FUND AT VALUE
(COST $28,058,276 AND $-) 28,058,276 -
INVESTMENT IN THE TRAVELERS SMALL CAP INDEX
FUND AT VALUE (COST $- AND $14,564,287) - 18,310,624
INVESTMENT IN SERIES C PREFERRED STOCK OF
THE TRAVELERS INC. AT VALUE
(COST $264,385,860 AND $-) 264,385,860 -
INVESTMENT IN SERIES A PREFERENCE STOCK OF
THE TRAVELERS CORPORATION AT VALUE
(COST $- AND $224,823,257) - 236,560,565
LOANS RECEIVABLE FROM EMPLOYEES 21,493,743 18,575,200
CONTRIBUTIONS RECEIVABLE FROM EMPLOYEES 378,694 144,821
CONTRIBUTIONS RECEIVABLE FROM EMPLOYER 6,607,039 18,363,318
SHORT TERM INVESTMENTS 4,240,811 3,736,362
RECEIVABLE FOR INVESTMENTS SOLD 2,674,359 2,205,933
INVESTMENT INCOME ACCRUED 31,934 26,162
______________ ______________
TOTAL ASSETS 1,061,088,286 966,634,356
______________ ______________
LIABILITIES:
DISTRIBUTIONS PAYABLE TO EMPLOYEES - 215,377,277
FORFEITURE CREDITS DUE TO EMPLOYER 9,103,650 5,443,213
ESOP NOTE PAYABLE 124,900,000 148,700,000
PAYABLE FOR INVESTMENTS PURCHASED 792,074 449,920
ACCRUED INTEREST PAYABLE 346,696 380,505
OTHER LIABILITIES 53,908 -
______________ ______________
TOTAL LIABILITIES 135,196,328 370,350,915
______________ ______________
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 925,891,958 $596,283,441
============== ==============
SEE NOTES TO FINANCIAL STATEMENTS.
16
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
TOTAL OF ALL FUNDS
________________________________________________
1993 1992 1991
_______________________________________________________________________________
BALANCE, BEGINNING OF YEAR $596,283,441 $512,595,167 $414,512,053
____________ ____________ ____________
INVESTMENT INCOME:
DIVIDENDS 29,354,839 28,624,139 27,013,719
INTEREST 36,817,657 37,366,057 34,947,825
____________ ____________ ____________
66,172,496 65,990,196 61,961,544
____________ ____________ ____________
NET APPRECIATION IN THE
FAIR VALUE OF INVESTMENTS 49,307,872 52,319,691 40,187,395
____________ ____________ ____________
CONTRIBUTIONS BY EMPLOYEES 54,991,784 56,953,214 59,104,540
CONTRIBUTIONS BY EMPLOYER 16,511,979 31,734,012 30,587,614
____________ ____________ ____________
71,503,763 88,687,226 89,692,154
____________ ____________ ____________
DEDUCTIONS:
DISTRIBUTIONS TO EMPLOYEES (65,159,372) (116,205,547) (81,786,576)
EMPLOYER CONTRIBUTIONS
FORFEITED (3,970,318) (2,047,707) (2,652,130)
INTEREST EXPENSE (3,623,201) (5,055,585) (9,319,273)
____________ ____________ ____________
(72,752,891) (123,308,839) (93,757,979)
____________ ____________ ____________
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING METHOD 215,377,277 - -
____________ ____________ ____________
BALANCE, END OF YEAR $925,891,958 $596,283,441 $512,595,167
============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
17
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
1. PLAN DESCRIPTION
The Travelers Savings and Investment Plan was adopted as of October 1,
1970 and, effective June 15, 1989, was renamed The Travelers Savings,
Investment and Stock Ownership Plan (the plan). The plan is a
qualified defined contribution plan under Section 401(a) of the
Internal Revenue Code. Employees may make cash or deferred
contributions under Section 401(k) of the Internal Revenue Code.
On December 31, 1993, The Travelers Corporation was merged into
Primerica Corporation which was renamed The Travelers Inc. This was
effected through the exchange of .80423 shares of The Travelers Inc.
common stock for each share of The Travelers Corporation common stock
(the merger). All subsidiaries of the former Travelers Corporation
were contributed to The Travelers Insurance Group Inc. (TIG), a second
tier subsidiary of The Travelers Inc.
Eligible employees of TIG and certain of its subsidiaries and former
subsidiaries (the company) may authorize regular payroll deductions or
elect to tax defer a portion of their salary. These deductions can be
made in any whole percent and in total cannot exceed 15% of annual
salary. Effective April 1, 1993, the company matches 50% of the first
5% of tax deferred contributions by employees. The company's matching
contribution may be increased to up to 150% of the first 5% of tax
deferred contributions by employees depending on the company's annual
profitability. Prior to April 1, 1993, the company's matching
contribution was 100% of the first 5% of tax deferred contributions by
employees.
Prior to January 1, 1990, employer contributions were invested
principally in common stock of The Travelers Corporation that was held
in Common Stock-Employer (Fund 5). Effective January 1, 1990,
employer contributions were invested principally in The Travelers
Corporation's $4.53 Series A ESOP Convertible Preference Stock (Series
A Preference Stock). Effective December 31, 1993, employer
contributions are invested in The Travelers Inc.'s $4.53 ESOP
Convertible Preferred Stock, Series C, $1.00 par value (Series C
Preferred Stock).
On June 15, 1989, the plan was amended to include an Employee Stock
Ownership Plan (the ESOP). On June 21, 1989, the ESOP borrowed $200
million, at a variable interest rate, from Chase Manhattan Bank. The
variable interest rate was 3.0281% as of December 31, 1993.
Increasing semi-annual payments that began January 1, 1990 will fully
amortize the debt by July 1, 1997. Principal payments made during
1993 and 1992 totaled $23.8 million and $20.5 million, respectively.
The minimum principal payments to be made in 1994, 1995, 1996 and
1997 are $27.7 million, $29.9 million, $32.4 million and $34.9
million, respectively. The loan is guaranteed by The Travelers Inc.
18
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
1. PLAN DESCRIPTION, Continued
On June 21, 1989, the trustee for the ESOP, Shawmut Bank,
purchased 3,755,869 shares of Series A Preference Stock for the
ESOP for $200 million with the proceeds of the loan. On December
31, 1993, in conjunction with the merger, the shares of Series A
Preference Stock were converted into shares of Series C Preferred
Stock, which have substantially the same rights and privileges as
the shares so converted. The Series C Preferred Stock is pledged
as collateral for the loan and is being released from collateral
as the loan is repaid. The company matches tax deferred
contributions by employees with the Series C Preferred Stock
valued at the greater of its minimum value of $53.25 per share or
the fair market value of the Series C Preferred Stock determined
as described in note 3. Each share of Series C Preferred Stock
is guaranteed by The Travelers Inc. at a minimum value of $53.25
and is entitled to receive a cumulative annual dividend of $4.53.
Such dividends are reinvested in additional shares of Series C
Preferred Stock at a cost equal to the value determined as
described in note 3. These shares are then subject to the
same guaranteed minimum value. The Series C Preferred Stock may
be held only by the ESOP trustee. It is convertible into The
Travelers Inc. common stock at a one-to-one conversion rate.
The Series C Preferred Stock is allocated to participants by a
method that considers the debt service requirements of the ESOP.
To the extent that the shares allocated by this method are not
sufficient to meet the company's matching obligation under the
plan, the company will contribute additional Series C Preferred
Stock, common stock or cash. The 1993 matching obligation was
met by the shares allocated by the debt service requirements.
The 1992 matching obligation was met by the shares allocated by
the debt service requirements and a contribution of 184,397
additional shares of Series A Preference Stock in January 1993.
As of December 31, 1993 and 1992, participants in the ESOP had an
aggregate beneficial interest in Series C Preferred Stock
totaling $146.9 million and in Series A Preference Stock totaling
$115.1 million (2,449,164 shares in 1993 based on the $60.00 per
share fair market value, and 2,054,784 shares in 1992 based on
the $56.03 per share fair market value). The 1993 interest was
satisfied by the release in 1993 of 279,847 shares of Series A
Preference Stock held by the trustee and by 114,533 shares of
Series C Preferred Stock held by the trustee in January 1994.
The 1992 interest was satisfied by the release of Series A
Preference Stock as follows: 394,044 shares held by the trustee
in 1992, 149,514 shares held by the trustee in January 1993 and
by the company's contribution of 184,397 additional shares also
in January 1993.
The plan allows active, salaried employees to borrow up to 50% of
their vested balance from the plan not to exceed the total of
their Fixed (Fund 2) balance, subject to the maximum limitations
set forth in the Internal Revenue Code. All loans pay interest
at a fixed rate set by the plan administrator that is at least
equal to the Fixed (Fund 2) interest rate at the time of origination.
19
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
1. PLAN DESCRIPTION, Continued
As a result of the merger, the plan cannot be amended or modified
in any way prior to December 31, 1995 that would reduce or
adversely affect the benefits provided by the plan immediately
prior to the merger. Following the merger and until December 31,
1995, there can be no merger, consolidation or termination of the
plan.
More detailed information as to contribution, withdrawal and
termination provisions and federal income tax effects of the plan
to participants is contained in The Travelers Savings, Investment
and Stock Ownership Plan prospectus.
2. INVESTMENT ALTERNATIVES
Pursuant to the plan, eligible employees of the company may elect
to invest their basic and supplemental contributions, as defined
by the plan, in several investment alternatives. The investment
alternatives include: a group annuity contract issued by The
Travelers Insurance Company, a subsidiary of TIG, having a fixed
interest rate subject to annual adjustment (Fund 2); common stock
of The Travelers Corporation through December 31, 1993 and common
stock of The Travelers Inc. effective January 1, 1994 (Fund 3);
participation in The Travelers Large Cap Index Fund through
December 31, 1993 and participation in State Street Global
Advisors S&P 500 Flagship Fund effective January 1, 1994 (Fund
7); or participation in The Travelers Small Cap Index Fund
through December 31, 1993 and participation in State Street
Global Advisors Russell 2000 Fund effective January 1, 1994 (Fund
8). Participants may invest their contributions in more than one
fund. There were 27,851, 28,158 and 27,585 persons participating
in the plan at December 31, 1993, 1992 and 1991, respectively.
This includes active, retired and terminated employee account
balances.
Effective January 1, 1987, the plan was amended to prohibit
contributions to individual retirement accounts. Prior to
January 1, 1987, contributions were invested in a group annuity
contract issued by The Travelers Insurance Company having a
guaranteed fixed rate of interest for five plan years (Fixed-IRA
(Fund 6)). There were 4,622, 4,925 and 5,270 persons
participating under the individual retirement account provisions
at December 31, 1993, 1992 and 1991, respectively. This
includes active, retired and terminated employee account
balances.
20
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
3. SIGNIFICANT ACCOUNTING POLICIES
Change in Accounting Method - Distributions Payable to Employees
----------------------------------------------------------------
In July 1993, the American Institute of Certified Public
Accountants issued an audit guide entitled "Audits of Employee
Benefit Plans With Conforming Changes as of May 1, 1993" (the
Guide). The Guide prohibits the recognition as a liability of
amounts allocated to participants who have withdrawn from the
plan as of year-end, but for which distribution has not been made
by year-end, including amounts due to retired and terminated
employees who have elected to maintain their assets in the plan
until a future date, in the statement of net assets available for
plan benefits. Disclosure of such amounts, however, is required.
Accordingly, the balances relating to distributions payable for
each fund as shown below, have not been recorded as a liability
in the statement of net assets available for plan benefits at
December 31, 1993. These amounts have been recorded as
distributions payable in the plan's Annual Return/Report of
Employee Benefit Plan (Form 5500), in accordance with Department
of Labor's regulations. In the prior year, the plan reported
such amounts as a liability. Accordingly, the cumulative effect
of this change in accounting method has been reflected in the
statement of changes in net assets available for plan benefits
for the year ended December 31, 1993.
Distributions Payable
Fund at December 31, 1993
---- --------------------
Fixed (Fund 2) $199,510,513
Common Stock-Employee (Fund 3) 27,460,209
Common Stock-Employer (Fund 5) 46,724,815
Fixed - IRA (Fund 6) 2,881,140
The S&P 500 Flagship Fund
(Fund 7) 15,062,290
The Russell 2000 Fund (Fund 8) 10,078,455
ESOP (Fund 9) 25,896,543
-------------
Total $327,613,965
=============
Valuation of Investments
------------------------
Fund 2: The amount held by The Travelers Insurance Company's
general account under a group annuity contract is represented by
contributions received and interest credited and reduced by
amounts disbursed to participants. This contract provides for
the repayment of principal and the crediting of interest. For
1993, 1992 and 1991, the annual interest rates earned under this
contract were 7.50%, 8.50% and 9.10%, respectively. The group
annuity contract is valued at contract value which approximates
fair value.
21
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
3. SIGNIFICANT ACCOUNTING POLICIES, Continued
Valuation of Investments, Continued
------------------------
Funds 3 and 5: At December 31, 1993, Fund 3 held 2,728,795
shares of common stock of The Travelers Corporation, which were
converted into 2,194,579 shares of common stock of The Travelers
Inc. At December 31, 1993, Fund 5 held 3,274,335 shares of
common stock of The Travelers Corporation, which were converted
into 2,633,318 shares of common stock of The Travelers Inc. At
December 31, 1992, Fund 3 held 2,806,683 shares, and Fund 5 held
3,405,860 shares of common stock of The Travelers Corporation.
The shares are carried at fair market value. The converted value
of The Travelers Inc. common stock at December 31, 1993 was
approximately $38.70. At the time of the merger, the shares of
common stock of The Travelers Corporation that were held for plan
participants were exchanged for The Travelers Inc. common stock,
at the exchange rate of .80423 shares of The Travelers Inc.
common stock for each share of The Travelers Corporation common
stock. The closing price of The Travelers Corporation common
stock at December 31, 1993 and 1992 was $31.125 and $27.250,
respectively.
Fund 6: The amount held by The Travelers Insurance Company's
general account under a group annuity contract for individual
retirement accounts is represented by interest credited and
reduced by amounts disbursed to participants. This contract
provides for the repayment of principal and the crediting of
interest. No contributions have been allowed since December 31,
1986. For amounts left on deposit for the 1993, 1992 and 1991
plan periods, the interest rates guaranteed by the company were
7.05%, 8.00% and 9.15%, respectively. These rates are guaranteed
for five plan years. Early withdrawal penalties apply. The
group annuity contract is valued at contract value which
approximates fair value.
Fund 7: The State Street Global Advisors S&P 500 Flagship Fund
is an investment fund managed by The State Street Bank and Trust
Company. The Travelers Large Cap Index Fund is a pooled separate
account of The Travelers Insurance Company. The principal
investment objective of both funds is to track the return of the
Standard and Poor's 500 Stock Index. The investments in both
funds are carried at fair market value.
Fund 8: The State Street Global Advisors Russell 2000 Fund is an
investment fund managed by The State Street Bank and Trust
Company. The Travelers Small Cap Index Fund was a pooled
separate account of The Travelers Insurance Company, and
terminated on December 31, 1993. The principal investment
objective of both funds is to track the return of the Russell
2000 Small Stock Index. The investments in both funds are
carried at fair market value.
22
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
3. SIGNIFICANT ACCOUNTING POLICIES, Continued
Valuation of Investments, Continued
------------------------
Fund 9: The principal objective of the ESOP is to invest the
company's matching contributions in shares of the Series C
Preferred Stock at December 31, 1993 and Series A Preference
Stock at December 31, 1992, which are carried at value. Value of
each of these series is equal to the greater of the minimum value
of $53.25 per share or fair market value as determined from an
appraisal prepared by an independent appraiser. The appraiser is
selected by the ESOP trustee with the approval of The Travelers
Insurance Group Inc. The value of the Series C Preferred Stock
was $60.00 per share at December 31, 1993 and the value of the
Series A Preference Stock was $56.03 per share at December 31,
1992. Temporary cash funds pending permanent investment or
distribution may be invested by the trustee in qualifying short-
term investments as defined in Section 2.4 of the Trust
Agreement. These short-term investments are carried at market
value less accrued interest thereon, which is included in
investment income accrued. Short-term investments consisted of a
short-term money market account and investment grade commercial
paper at December 31, 1993 and 1992.
Other
-----
Purchases and sales of investments are recorded on the trade
date.
Purchases and sales of The State Street Global Advisors S&P 500
Flagship Fund, The State Street Global Advisors Russell 2000
Fund, The Travelers Large Cap Index Fund and The Travelers Small
Cap Index Fund participation units are recorded on the valuation
dates.
Dividend income and capital gain distributions are recognized on
the ex-dividend date. Interest income is recorded when earned.
Interest expense is recorded when incurred.
Net appreciation (depreciation) in the fair value of investments
consists of the realized gains or losses and the unrealized
appreciation (depreciation) on investments, and is reflected in
the statement of changes in net assets available for plan
benefits.
Certain prior year amounts have been reclassified to conform with
the 1993 presentation.
23
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
4. TAX STATUS
The plan is not subject to federal income tax. The Internal
Revenue Service advised (June 2, 1986) that the plan and its
related trust satisfied the qualification and exemption
requirements of Sections 401(a) and 501(a) of the Internal
Revenue Code.
In accordance with the removal of the Internal Revenue Service
prohibition of rulings on plans containing 401(k) and employee
stock ownership features, the plan intends to apply to the
Internal Revenue Service for a favorable determination regarding
its continuing tax-exempt status for plan amendments effective on
and after January 1, 1987.
5. FEES AND EXPENSES
Transaction Fees
----------------
Participants in The Travelers Small Cap Index Fund were assessed
transaction fees through July 7, 1993. Transaction fees were
discontinued after this date due to The Travelers Insurance
Company's decision to terminate this and other index funds.
Transaction fees were assessed on deposits, withdrawals and
transfers based on actual brokerage and commission costs incurred
on net participant activity, allocated on a pro rata basis.
Transaction fees assessed to The Travelers Small Cap Index Fund
(Fund 8) on purchases of units were added to the investment
basis. Transaction fees assessed to The Travelers Small Cap
Index Fund (Fund 8) on sales of units were included in net
appreciation (depreciation) in the fair value of investments.
Administrative Expenses
-----------------------
All expenses (excluding expenses incurred in connection with the
purchase and sale of securities) incurred in administering the
plan are paid by The Travelers Insurance Group Inc. The
administrative expenses paid amounted to $1,611,744, $1,678,926
and $1,351,475 for the years ended December 31, 1993, 1992 and
1991, respectively.
Trustee fee expenses assessed to the ESOP are reimbursed by The
Travelers Insurance Group Inc. Trustee fee expenses of the ESOP
amounted to $91,387, $82,035 and $75,000 for the years ended
December 31, 1993, 1992 and 1991, respectively.
24
THE TRAVELERS SAVINGS, INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
6. PLAN PARTICIPANTS
The following affiliates and former affiliates of The Travelers
Insurance Group Inc. have participated in the plan during the past
three years:
The Travelers Insurance Group Inc.
The Travelers Insurance Company
The Travelers Indemnity Company
The Phoenix Insurance Company
The Charter Oak Fire Insurance Company
The Travelers Investment Management Company
* The Travelers Corporation
The Travelers Indemnity Company of Rhode Island
The Travelers Indemnity Company of America
The Travelers Indemnity Company of Illinois
The Travelers Insurance Company of Illinois
The Travelers Life and Annuity Company
* The Travelers Life Insurance Company
The Travelers Health Network, Inc. and Subsidiaries
Constitution Plaza, Inc.
The Plaza Corporation
The Prospect Company
The Center for Corporate Health, Inc.
Conservco, Inc.
Bankers and Shippers Insurance Company
Travelers Specialty Property Casualty Company, Inc.
* The Constitution State Insurance Company
Constitution State Service Company
* The Massachusetts Company, Inc.
* Travelers/EBS, Inc.
Travelers Equity Sales, Inc.
The Travelers Realty Investment Company
KP Properties Corporation
First Trenton Indemnity Company
Burlington Acceptance Corporation
Bankers and Shippers Indemnity Company
Premier Insurance Company of Massachusetts
Travelers Home and Marine Insurance Company
Travco Insurance Company
* Former Affiliate
25