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) March 28, 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.
RECENT DEVELOPMENTS
Pursuant to an Acquisition Agreement dated as of January 31, 2005 (the
"Acquisition Agreement"), by and between Citigroup Inc., a Delaware corporation
("Citigroup"), and MetLife, Inc., a Delaware corporation ("MetLife"), Citigroup
will sell to MetLife for approximately $11.5 billion, subject to closing
adjustments, all of the outstanding shares of capital stock (or equivalent
equity interests) of certain of Citigroup's indirect subsidiaries (the
"Transferred Shares"), including The Travelers Insurance Company (the
"Company"), a Connecticut-domiciled insurer. As a result of MetLife's
acquisition of the Company, MetLife will also indirectly acquire certain of the
Company's subsidiaries, including The Travelers Life and Annuity Company, a
Connecticut-domiciled insurer ("TLAC"). The transactions, which are currently
expected to close this summer, are subject to certain regulatory approvals in
the United States and in certain foreign jurisdictions, as well as other
customary conditions to closing. Prior to the closing date (the "Closing Date"),
Citigroup and the subsidiaries of Citigroup that own the Transferred Shares are
subject to certain business conduct restrictions with respect to the business
being sold.
MetLife has filed with the Insurance Department of the State of Connecticut (the
"Department") a Form A Statement Regarding the Acquisition of Control of or
Merger with a Domestic Insurer, dated March 7, 2005 (the "Form A"), seeking the
approval of the Department to acquire control of the Company and TLAC. The Form
A includes MetLife's post-acquisition business plan and financial projections
for the Company and TLAC after the Closing Date (the "Business Plan"). Pursuant
to the Business Plan, the Company would generally cease issuing certain
institutional annuity and other products immediately following the Closing Date,
including funding agreements and guaranteed investment contracts. Both the
Company and TLAC will generally phase out the remaining products that they
currently issue by the end of 2006.
According to the financial projections included in the Business Plan and based
on the assumptions described therein, MetLife expects the Company's capital and
surplus to decrease from $7,886,000,000 as of December 31, 2004 to a
projected $3,626,000,000 as of December 31, 2005 (following the Company's
distribution of certain assets to its parent), $3,704,000,000 as of December
31, 2006, and $3,750,000,000 as of December 31, 2014. The Company's total
premium income is expected to decrease from $4,965,000,000 in 2004 to a
projected $2,372,000,000 in 2006, and $1,951,000,000 in 2014 and the Company's
total expenses are expected to decrease from approximately $522,000,000 in
2004 to a projected $317,000,000 in 2006 and $235,000,000 in 2014.
Certain of the statements contained herein that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. The Company's actual results may differ materially from
those included in the forward-looking statements. Forward-looking statements are
typically identified by the words "believe," "expect," "anticipate," "intend,"
"estimate," "may increase," "may fluctuate," and similar expressions or future
or conditional verbs such as "will," "should," "would," and "could." These
forward-
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looking statements involve risks and uncertainties including, but not limited
to, regulatory matters, the resolution of legal proceedings, the impact that the
proposed sale to MetLife, Inc., and the transactions to be effected before that
sale, may have on the Company and its prospects, the potential impact of a
decline in credit quality of investments on earnings; and the company's market
risk. The financial projections referred to herein are inherently uncertain
because they are based on certain underlying assumptions. Actual amounts may
differ from these projections under different assumptions and conditions. Such
differences may be material.
The full Form A and Business Plan are on file with and available to the public
at the Department, located at 153 Market Street, Hartford, CT 06103.
Item 9.01 Financial Statements and Exhibits.
On February 2, 2005, the Company filed a Current Report on Form 8-K (the
"February 2005 Form 8-K"), regarding the distribution to its parent company by
way of dividend of (i) all 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 February 2005 Form 8-K included pro forma financial data as of September 30,
2004. In this Current Report on Form 8-K, the Company is updating, in paragraph
(b) below, the previously filed pro forma financial data for that period. The
Company is also filing, in Exhibit 99.1, certain selected consolidated financial
data for the year ended December 31, 2004.
(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
February 2005 Form 8-K. The pro forma condensed consolidated statement of income
for the year ended December 31, 2004 gives effect to the Dispositions as if they
occurred on January 1, 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.
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The Travelers Insurance Company
Pro Forma Condensed Consolidated Statement of Income
For the Year Ended December 31, 2004 (Unaudited)
(in millions)
Dispositions
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Citigroup Pref.
Revenues Historical Primerica(a) Stock(b) Other(c) Pro-Forma
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Premiums $2,226 $(1,315) $ - $ - $ 911
Net investment income 3,348 (336) (182) - 2,830
Net realized investment
gains/(losses) 16 (7) - - 9
Fee income 781 (91) - - 690
Other income 124 (21) - (14) 89
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Total Revenues 6,495 (1,770) (182) (14) 4,529
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Benefits and Expenses
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Current and future insurance 1,971 (560) - - 1,411
benefits
Interest credited to
contractholders 1,305 - - 1,305
Amortization of deferred
acquisition costs 649 (249) - - 400
General & administrative expenses 487 (229) - (18) 240
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Total Benefits and Expenses 4,412 (1,038) - (18) 3,356
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Income from operations before
federal taxes 2,083 (732) (182) 4 1,173
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Federal income taxes 602 (241) - 1 362
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Net Income $1,481 $(491) $(182) $ 3 $811
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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 year ended December
31, 2004 totaled $150 million.
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 year ended December 31, 2004.
(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.
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(c) Exhibits
99.1. Selected Consolidated Financial Information for the Year Ended
December 31, 2004.
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: March 28, 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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Exhibit Index
99.1 Selected Consolidated Financial Information for the Year Ended
December 31, 2004
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