UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported) February 1, 2005 (January 31, 2005)
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The Travelers Insurance Company
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(Exact name of registrant as specified in its charter)
Connecticut 33-33691 06-0566090
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
One Cityplace, Hartford, Connecticut 06103-3415
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(Address of principal executive offices) (Zip Code)
(860) 308-1000
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
The Travelers Insurance Company
Current Report on Form 8-K
ITEM 8.01 OTHER EVENTS.
On January 31, 2005, Citigroup Inc., the indirect parent company of The
Travelers Insurance Company (the "Company"), announced that it had agreed to
sell its Life Insurance and Annuity businesses, including the Company, to
MetLife, Inc. The transaction is subject to certain domestic and international
regulatory approvals, as well as other customary conditions to closing. It is
expected to close this summer.
The transaction contemplates that the Company's Primerica Life segment and
certain other assets will remain with Citigroup. Accordingly, prior to the
closing, the Company will distribute to its parent company by way of dividend
(i) all of the outstanding shares of common stock of the Company's 100% owned
subsidiary, Primerica Life Insurance Company ("Primerica Life"), (ii) all shares
of Citigroup's Series YYY and Series YY preferred stock held by the Company and
(iii) certain other assets, including certain assets and liabilities related to
the Company's share of the non-qualified pension plan, and post retirement
benefits related to inactive employees of the former Travelers Insurance
entities, assumed during Citigroup's 2002 spin-off of the Travelers Property
Casualty operations (collectively, the "Dispositions"). The Dispositions require
certain regulatory approvals. The pro forma financial information included under
Item 9.01(b) gives effect to the Dispositions as if they occurred on the dates
indicated therein.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro forma financial information
The following unaudited pro forma condensed consolidated financial information
of the Company is based on and should be read in conjunction with the historical
consolidated financial statements and notes thereto appearing in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and the
unaudited consolidated financial statements appearing in the Company's Quarterly
Report on Form 10-Q for the period ended September 30, 2004. The pro forma
condensed consolidated statement of income for the nine months ended September
30, 2004 and the year ended December 31, 2003 give effect to the Dispositions
(as defined in Item 8.01, which is incorporated by reference herein) as if they
occurred on January 1, 2003. The pro forma condensed consolidated balance sheet
gives effect to the Dispositions as if they occurred on September 30, 2004.
The unaudited pro forma condensed consolidated financial information has been
presented for illustrative purposes only and is not necessarily indicative of
the future financial position or future results of operations of the Company, or
of the financial position or results of operations of the Company that would
have actually occurred had the Dispositions taken place on the dates indicated
above.
THE TRAVELERS INSURANCE COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 (UNAUDITED)
(IN MILLIONS)
Dispositions
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Citigroup
Primerica Pref. Other
REVENUES Historical (a) Stock (b) (c) Pro Forma
- -------- ---------- --------- ------------ ----- ---------
Premiums $ 1,634 $ (978) $ -- $ -- $ 656
Net investment income 2,475 (251) (137) -- 2,087
Net realized investment
gains/(losses) (13) (3) -- -- (16)
Fee income 574 (69) -- -- 505
Other income 103 (15) -- (9) 79
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Total Revenues 4,773 (1,316) (137) (9) 3,311
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BENEFITS AND EXPENSES
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Current and future insurance
benefits 1,446 (413) -- -- 1,033
Interest credited to 962 -- -- -- 962
contractholders
Amortization of deferred
acquisition costs 481 (190) -- -- 291
General & administrative
expenses 353 (170) -- (14) 169
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Total Benefits and Expenses 3,242 (773) -- (14) 2,455
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Income from operations
before federal taxes 1,531 (543) (137) 5 856
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Federal income taxes 437 (176) -- 2 263
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Net Income $ 1,094 $ (367) $ (137) $ 3 $ 593
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(a) Reflects the distribution by way of dividend of all of the outstanding
shares of common stock and the associated assets, liabilities and
earnings of the Company's 100% owned subsidiary, Primerica Life
Insurance Company ("Primerica Life"). Primerica Life and its
subsidiaries comprise the Company's Primerica Life segment.
(b) Reflects the distribution by way of dividend of 2,225 shares of
Citigroup Cumulative Preferred Stock, Series YYY, carried at a cost of
$2,225 million. Series YYY Preferred Stock pays cumulative dividends at
the rate of 6.767% per annum, has a liquidation value of $1 million per
share, a perpetual duration, and is not subject to a sinking fund or
mandatory redemption. Dividends received and accrued during the nine
months ended September 30, 2004 totaled $113 million and which are
passed through to the Company's parent are also reflected in the
September 30, 2004 pro forma balance sheet.
Also reflects the distribution of 596 shares of Citigroup Cumulative
Preferred Stock, Series YY, carried at a cost of $596 million. Series YY
Preferred Stock pays cumulative dividends at the rate of 5.321% per
annum, has a liquidation value of $1 million per share, a perpetual
duration, and is not subject to a sinking fund or mandatory redemption.
Dividends totaling $24 million were received for the nine months ended
September 30, 2004. Dividends accrued of $2 million at September 30,
2004 are reflected in the September 30, 2004 pro forma balance sheet.
(c) Other primarily represents the disposition of the assets and liabilities
related to the Company's share of the non-qualified pension plan, and
post retirement benefits related to inactive employees of the former
Travelers Insurance entities assumed during Citigroup's 2002 spin-off of
the Travelers Property Casualty operations.
THE TRAVELERS INSURANCE COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2004 (UNAUDITED)
(IN MILLIONS)
Dispositions
Citigroup
Primerica Pref. Other
ASSETS Historical (a) Stock (b) (c) Pro Forma
- ------ ---------- --------- ------------ -------- ---------
Investments $ 60,382 $ (5,847) $ (2,921) $ (338) $ 51,276
Separate and variable
accounts 28,840 (514) -- -- 28,326
Reinsurance recoverables 4,624 (770) -- -- 3,854
Deferred Acquisition Costs 4,788 (2,132) -- -- 2,656
Other assets 2,869 (579) (15) (4) 2,271
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Total Assets $101,503 $ (9,842) $ (2,936) $ (342) $ 88,383
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LIABILITIES
Contractholder funds $ 32,967 (324) -- -- 32,643
Future policy benefits and
insurance reserves 16,555 (3,471) -- -- 13,084
Separate and variable
accounts 28,840 (515) -- -- 28,325
Deferred taxes 2,355 (858) (974) 158 681
Other liabilities 6,985 (489) -- (544) 5,952
-------- -------- -------- -------- --------
Total Liabilities 87,702 (5,657) (974) (386) 80,685
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EQUITY
Common stock, par value
$2.50; 40 million shares
authorized, issued and
outstanding 100 -- -- -- 100
Additional paid in capital 5,448 (1,097) (1,848) (138) 2,365
Retained earnings 6,773 (2,940) (114) 182 3,901
Accumulated other changes in
equity from non-owner sources 1,480 (148) -- -- 1,332
-------- -------- -------- -------- --------
Total Equity 13,801 (4,185) (1,962) 44 7,698
-------- -------- -------- -------- --------
Total Liabilities and Equity $101,503 $ (9,842) $ (2,936) $ (342) $ 88,383
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(a) Reflects the distribution by way of dividend of all of the outstanding
shares of common stock and the associated assets, liabilities and
earnings of the Company's 100% owned subsidiary, Primerica Life
Insurance Company ("Primerica Life"). Primerica Life and its
subsidiaries comprise the Company's Primerica Life segment.
(b) Reflects the distribution by way of dividend of 2,225 shares of
Citigroup Cumulative Preferred Stock, Series YYY, carried at a cost of
$2,225 million. Series YYY Preferred Stock pays cumulative dividends at
the rate of 6.767% per annum, has a liquidation value of $1 million per
share, a perpetual duration, and is not subject to a sinking fund or
mandatory redemption. Dividends received and accrued during the nine
months ended September 30, 2004 totaled $113 million and which are
passed through to the Company's parent are also reflected in the
September 30, 2004 pro forma balance sheet.
Also reflects the distribution of 596 shares of Citigroup Cumulative
Preferred Stock, Series YY, carried at a cost of $596 million. Series YY
Preferred Stock pays cumulative dividends at the rate of 5.321% per
annum, has a liquidation value of $1 million per share, a perpetual
duration, and is not subject to a sinking fund or mandatory redemption.
Dividends totaling $24 million were received for the nine months ended
September 30, 2004. Dividends accrued of $2 million at September 30,
2004 are reflected in the September 30, 2004 pro forma balance sheet.
(c) Other primarily represents the disposition of the assets and liabilities
related to the Company's share of the non-qualified pension plan, and
post retirement benefits related to inactive employees of the former
Travelers Insurance entities assumed during Citigroup's 2002 spin-off of
the Travelers Property Casualty operations.
THE TRAVELERS INSURANCE COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2003 (UNAUDITED)
(IN MILLIONS)
Dispositions
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Citigroup
REVENUES Historical Primerica (a) Pref. Stock (b) Other (c) Pro Forma
- -------- ---------- ------------- --------------- --------- ---------
Premiums $ 2,327 $(1,245) $ -- $- $ 1,082
Net investment income 3,058 (316) (182) (0) 2,560
Net realized investment
gains/(losses) 37 (5) -- -- 32
Fee income 606 (75) -- -- 531
Other income 111 (19) -- (7) 85
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Total Revenues $ 6,139 $(1,660) $ (182) $ (7) $ 4,290
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BENEFITS AND EXPENSES
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Current and future insurance
benefits 2,102 (534) -- -- 1,568
Interest credited to
contractholders 1,248 -- -- -- 1,248
Amortization of deferred
acquisition costs 501 (236) -- -- 265
General and administrative
expenses 459 (219) -- (18) 222
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Total Benefits and Expenses 4,310 (989) -- (18) 3,303
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Income from operations
before federal taxes 1,829 (671) (182) 11 987
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Federal income taxes 471 (231) -- 4 244
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Net Income $ 1,358 $ (440) $ (182) $ 7 $ 743
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(a) Reflects the distribution by way of dividend of all of the outstanding
shares of common stock and the associated assets, liabilities and
earnings of the Company's 100% owned subsidiary, Primerica Life
Insurance Company ("Primerica Life"). Primerica Life and its
subsidiaries comprise the Company's Primerica Life segment.
(b) Reflects the distribution by way of dividend of 2,225 shares of
Citigroup Cumulative Preferred Stock, Series YYY, carried at a cost of
$2,225 million. Series YYY Preferred Stock pays cumulative dividends at
the rate of 6.767% per annum, has a liquidation value of $1 million per
share, a perpetual duration, and is not subject to a sinking fund or
mandatory redemption. Dividends totaling $151 were received for the
twelve months ending December 31, 2003.
Also reflects the distribution of 596 shares of Citigroup Cumulative
Preferred Stock, Series YY, carried at a cost of $596 million. Series YY
Preferred Stock pays cumulative dividends at the rate of 5.321% per
annum, has a liquidation value of $1 million per share, a perpetual
duration, and is not subject to a sinking fund or mandatory redemption.
Dividends totaling $32 million were received for the twelve months
ending December 31, 2003.
(c) Other primarily represents the disposition of the assets and liabilities
related to the Company's share of the non-qualified pension plan, and
post retirement benefits related to inactive employees of the former
Travelers Insurance entities assumed during Citigroup's 2002 spin-off of
the Travelers Property Casualty operations.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: February 1, 2005 THE TRAVELERS INSURANCE COMPANY
By: /s/ Glenn D. Lammey
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Name: Glenn D. Lammey
Title: Chief Financial Officer,
Chief Accounting Officer
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