Exhibit 99.01 UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION Sale of Group Life, transfer of Medical Business to MetraHealth and subsequent sale of investment in MetraHealth - -------------------------------------------------------------------------------- In December 1994 Travelers Group Inc. (the Company) sold its group dental insurance business to Metropolitan Life Insurance Company (MetLife), for $52 million, and on January 3, 1995, completed the sale of its group life business and remaining non-medical group insurance business to MetLife for $350 million. The assets transferred included customer lists, books and records, and furniture and equipment. In connection with the sale, The Travelers Insurance Company (TIC) ceded 100% of its risks in the group life and related businesses to MetLife on an indemnity reinsurance basis, effective January 1, 1995. In connection with the reinsurance transaction, TIC transferred assets with a fair market value of approximately $1.5 billion to MetLife, equal to the statutory reserves and other liabilities transferred. On January 3, 1995, TIC and MetLife and certain of their affiliates formed the MetraHealth joint venture by contributing their medical businesses to MetraHealth, in exchange for shares of common stock of MetraHealth. The total contribution made by TIC and its affiliates amounted to approximately $483 million at carrying value on the date of contribution. No gain was recognized upon the formation of the joint venture. Upon formation of the joint venture TIC and its affiliates owned 50% of the outstanding capital stock of MetraHealth, and the other 50% was owned by MetLife and its affiliates. In March 1995, MetraHealth acquired HealthSpring, Inc., for common stock of MetraHealth. The acquisition resulted in a reduction in the participation of the Company and MetLife in the MetraHealth venture to 48.25% each. In connection with the formation of the joint venture, the transfer of the fee-based medical business (Administrative Services Only) and other noninsurance business to MetraHealth was completed on January 3, 1995. As the medical insurance business of TIC and its affiliates comes due for renewal, and after obtaining regulatory approvals, the risks will be transferred to MetraHealth. In the interim, the related operating results for this medical insurance business (run off) are being reported in the Company's consolidated financial statements. On June 25, 1995 the Company agreed to United Health Care Corporation's (United) proposed acquisition of MetraHealth, which is 48.25% owned by the Company. The terms of the transaction call for United to pay a total consideration to MetraHealth's owners of $1.65 billion, $1.15 billion in cash and $0.5 billion in convertible preferred stock. In addition, United will pay up to $350 million to these owners if certain 1995 operating results are achieved and other contingency payments. According to the terms, the Company will receive a total of $831 million in cash, and up to an additional $169 million if a contingency payment for 1995 (the only year in which the Company will participate in such payments) is made. Transport Life Spinoff - ---------------------- In June 1995, the Company announced that it plans to make a pro rata distribution to the Company's stockholders of shares of Class A Common Stock, $.01 par value per share, of Transport Holdings Inc., (Holdings) currently a wholly owned subsidiary of the Company and which, at the time of the distribution, will be the indirect owner of the business of Transport Life Insurance Company. The distribution is subject to the satisfaction of various conditions. Assumptions - ----------- The following unaudited pro forma condensed consolidated statements of income of the Company for the three months ended March 31, 1995, and year ended December 31, 1994, present consolidated operating results for the Company as if the above transactions had occurred at the beginning of each period presented. The accompanying unaudited pro forma condensed consolidated statement of financial position as of March 31, 1995, gives effect to the above transactions as if they occurred as of March 31, 1995. The unaudited pro forma consolidated financial data do not purport to represent what the Company's financial position or results of operations actually would have been had the transactions in fact occurred on the dates indicated, or to project the Company's financial position or results of operations for any future date or period. The pro forma adjustments are based upon available information and certain assumptions that the Company currently believes are reasonable in the circumstances. The unaudited pro forma consolidated financial information should be read in conjunction with the accompanying notes thereto; the separate historical financial statements of the Company as of and for the three months ended March 31, 1995, and for the year ended December 31, 1994, which are contained in the Company's Form 10-Q for the quarterly period ended March 31, 1995, and in its Annual Report on Form 10-K for the fiscal year ended December 31, 1994, respectively. The pro forma adjustments and pro forma amounts are provided for informational purposes only, and if each transaction is consummated, the Company's financial statements will reflect the effects of each transaction only from the date such transaction occurs. Although the final amounts will differ, the pro forma condensed financial information reflects management's best estimate based on currently available information. Travelers Group Inc. and Subsidiaries Unaudited Pro Forma Condensed Consolidated Statement of Financial Position As of March 31, 1995 (In millions of dollars) Pro forma Travelers Less: before Less: Group Inc. Medical Pro forma Transport Transport Pro historical Business adjustments Life Spinoff Business forma ---------- -------- ----------- ------------ --------- -------- Assets Cash and cash equivalents $ 1,249 $ $ 831 (B) $ 2,080 $ $ 2,080 Investments: Fixed maturities: Available for sale at market value 25,618 (499)(A) 25,119 (572)(C) 24,547 Held to maturity at amortized cost 87 87 87 Equity securities, at market value 605 605 (8)(C) 597 Mortgage loans 5,213 (5)(A) 5,208 (11)(C) 5,197 Real estate held for sale 318 318 318 Policy loans 1,596 1,596 (19)(C) 1,577 Short-term and other 4,769 (601)(A) 4,168 (21)(C) 4,147 ---------- -------- ----------- ------------ --------- --------- Total investments 38,206 (1,105) 0 37,101 (631) 36,470 ---------- -------- ----------- ------------ --------- --------- Securities borrowed or purchased under agreements to resell 22,533 22,533 22,533 Brokerage receivables 6,709 6,709 6,709 Trading securities owned, at market value 8,099 8,099 8,099 Net consumer finance receivables 6,824 6,824 6,824 Reinsurance recoverable 6,698 (6)(A) 6,692 (25)(C) 6,667 Value of insurance in force and deferred policy acquisition costs 2,194 (2)(A) 2,192 (106)(C) 2,086 Cost of acquired businesses in excess of net assets 1,966 1,966 1,966 Separate and variable accounts 5,573 5,573 5,573 Other receivables 4,438 4,438 (7)(C) 4,431 Other assets 7,704 (485)(A) 7,219 (16)(C) 7,203 Investment in MetraHealth 491 (491)(A) 0 0 ---------- -------- --------- ------------ -------- -------- Total assets $112,684 $(2,089) $ 831 $111,426 $ (785) $110,641 ---------- -------- --------- ------------ -------- -------- Liabilities Investment banking and brokerage borrowings $ 2,194 $ $ $ 2,194 $ $ 2,194 Short-term borrowings 2,137 2,137 (40)(C) 2,097 Long-term debt 7,475 7,475 7,475 Securities loaned or sold under agreements to repurchase 22,056 22,056 22,056 Brokerage payables 3,055 3,055 3,055 Trading securities sold not yet purchased, at market value 7,198 7,198 7,198 Contractholder funds 15,532 (419)(A) 15,113 15,113 Insurance policy and claims reserves 27,764 (447)(A) 27,317 (510)(C) 26,807 Separate and variable accounts 5,544 5,544 5,544 Accounts payable and other liabilities 9,926 (740)(A) 109 (B) 9,295 (72)(C) 9,223 ---------- -------- --------- ------------ --------- -------- Total liabilities 102,881 (1,606) 109 101,384 (622) 100,762 ---------- -------- --------- ------------ --------- -------- ESOP preferred stock - series C 235 235 235 Guaranteed ESOP obligation (82) (82) (82) ---------- -------- ----------- ------------ --------- -------- 153 0 0 153 0 153 ---------- -------- ----------- ------------ --------- -------- Stockholders' equity Preferred stock 800 800 800 Common stock 4 4 4 Additional paid-in capital 6,690 6,690 6,690 Retained earnings 4,453 (490)(A) 722 (B) 4,685 (177)(C) 4,508 Treasury stock, at cost (1,481) (1,481) (1,481) Unrealized gain (loss) on investment securities and other ,net (816) 7 (A) (809) 14 (C) (795) ---------- -------- ---------- ------------ --------- --------- Total stockholders' equity 9,650 (483) 722 9,889 (163) 9,726 ---------- -------- ---------- ------------ --------- --------- Total liabilities and stockholders' equity $112,684 $ (2,089) $ 831 $111,426 $(785) $110,641 ---------- -------- ---------- ------------ --------- --------- See Accompanying Notes Travelers Group Inc. and Subsidiaries Notes to Unaudited Pro Forma Condensed Consolidated Statement of Financial Position (In millions of dollars) Adjustments relating to the Medical Business and subsequent sale of investment in MetraHealth. (A) Medical Business column - reflects the elimination of the assets, liabilities and equity related to the run off business of the group medical businesses and the elimination of the equity investment in MetraHealth included in the Company's consolidated statements at March 31, 1995. (B) Pro forma adjustments column - gives effect to the sale of the equity investment in MetraHealth and related estimated after-tax proceeds. Adjustments relating to the Transport Life spinoff: (C) Transport Business column - reflects the elimination of the assets, liabilities and equity of the Transport Life Business included in the Company's consolidated statements at March 31, 1995, which will be included in the pro rata distribution to the Company's stockholders. Travelers Group Inc. and Subsidiaries Unaudited Pro Forma Condensed Consolidated Statement of Income For Year Ended December 31, 1994 (In millions of dollars, except for per share amounts) Less: Travelers Group Life Less: Group Inc. and Medical Transport historical Business Business Pro forma ---------- ----------- --------- --------- Revenues Insurance premiums $ 7,590 $ (2,428)(1) $ (228)(3) $ 4,934 Commissions and fees 2,691 2,691 Net investment income 3,637 (153)(1) (46)(3) 3,438 Finance related interest and other charges 1,030 1,030 Principal transactions 900 900 Asset management fees 795 795 Other income 1,822 (799)(1) (1)(3) 1,022 ------ ------ ----- ------- Total revenues 18,465 (3,380) (275) 14,810 ------ ------ ----- ------- Expenses Policyholder benefits and claims 7,797 (2,492)(1) (138)(3) 5,167 Non-insurance compensation and benefits 3,241 3,241 Insurance underwriting, acquisition and operating 2,572 (638)(1) (97)(3) 1,837 Interest 1,284 1,284 Provision for credit losses 152 152 Other operating 1,524 1,524 ------ ------ ----- ------- Total expenses 16,570 (3,130) (235) 13,205 ------ ------ ----- ------- Gain on sale of subsidiaries and affiliates 254 (28)(1) 226 ------ ------ ----- ------- Income (loss) before income taxes 2,149 (278) (40) 1,831 Provision for income taxes 823 (107)(1) (13)(3) 703 ------ ------ ----- ------- Net income $ 1,326 $ (171) $ (27) $ 1,128 ------ ------ ----- ------- Income per share of common stock and common stock equivalents Net income per share $ 3.86 $ 3.25 ------ ------- Weighted average common shares outstanding and common stock equivalents (in millions) 322.0 322.0 ------ ------- See Accompanying Notes Travelers Group Inc. and Subsidiaries Unaudited Pro Forma Condensed Consolidated Statement of Income For the Three Months Ended March 31, 1995 (In millions of dollars, except for per share amounts) Travelers Less: Less: Group Inc. Medical Transport historical Business Business Pro forma ---------- ----------- --------- --------- Revenues Insurance premiums $ 1,597 $ (308)(2) $ (56)(3) $ 1,233 Commissions and fees 610 610 Net investment income 1,058 (15)(2) (12)(3) 1,031 Finance related interest and other charges 271 271 Principal transactions 282 282 Asset management fees 182 182 Other income 299 (16)(2) 283 ------ ------ ----- ------- Total revenues 4,299 (339) (68) 3,892 ------ ------ ----- ------- Expenses Policyholder benefits and claims 1,612 (278)(2) (38)(3) 1,296 Non-insurance compensation and benefits 806 806 Insurance underwriting, acquisition and operating 522 (20)(3) 502 Interest 455 455 Provision for credit losses 40 40 Other operating 372 (39)(2) 333 ------ ------ ----- ------- Total expenses 3,807 (317) (58) 3,432 ------ ------ ----- ------- Gain on sale of subsidiaries 31 (31)(2) 0 ------ ------ ----- ------- Income (loss) before income taxes 523 (53) (10) 460 Provision for income taxes 183 (18)(2) (3)(3) 162 ------ ------ ----- ------- Net income $ 340 $ (35) $ (7) $ 298 ------ ------ ----- ------- Income per share of common stock and common stock equivalents Net income per share $ 1.01 $ 0.88 ------ ------- Weighted average common shares outstanding and common stock equivalents (in millions) 315.5 315.5 ------ ------- See Accompanying Notes Travelers Group Inc. and Subsidiaries Notes to Unaudited Pro Forma Condensed Consolidated Statements of Income (In millions of dollars) Adjustments relating to the sale of Group Life, transfer of Medical Business to MetraHealth and subsequent sale of investment in MetraHealth. - ------------------------------------------------------------------------------- Year ended December 31, 1994 (1) Group Life and Medical Business column - reflects the elimination of the operating results of the group life and related businesses sold to MetLife, the group medical businesses (Medical) which were exchanged for a 50% equity interest in The MetraHealth Companies, Inc. (MetraHealth), and the $28 pre-tax gain on the sale of the group dental business included in the Company's consolidated statements. Three months ended March 31, 1995 (2) Medical Business column - reflects the elimination of the operating results for the run off of the medical insurance business (i.e., risks not yet transferred), the equity earnings in MetraHealth, and the $31 pre-tax gain on the sale of the group life business included in the Company's consolidated statements. In accordance with practice in filings with the SEC, no effect has been given to the use of proceeds from the sale of the Company's interest in MetraHealth, which are estimated to be $831 million pre-tax, excluding contingent consideration. Adjustments relating to the Transport Life spinoff: (3) Transport Business column - reflects the elimination of the operating results of the Transport Life Business included in the Company's consolidated statements for the year ended December 31, 1994, and for the three months ended March 31, 1995.