8-KOther Events

TRAVELERS COMPANIES, INC. 8-K Report (Oct 15, 2001)

Filed October 15, 2001For Securities:TRV

Summary

This 8-K filing from The St. Paul Companies, Inc. (TRV) reports on two significant events: the completion of the sale of its subsidiary, Fidelity and Guaranty Life Insurance Company (F&G Life), and a key leadership change. On September 28, 2001, St. Paul Fire and Marine Insurance Company finalized the sale of F&G Life to Old Mutual plc for a combination of Old Mutual ordinary shares valued at $300 million, $335 million in cash, and approximately $4 million in interest. This strategic divestiture marks a move to streamline operations and focus on core business areas. Additionally, on October 11, 2001, the company announced a significant leadership transition. Jay S. Fishman, formerly of Citigroup Inc., has been appointed as the new Chairman and Chief Executive Officer, succeeding Douglas W. Leatherdale. This change in leadership signals a new direction for the company. The filing also includes pro forma financial information reflecting the impact of the F&G Life sale on the company's balance sheet and income statement, indicating a net loss from discontinued operations.

Key Highlights

  • 1Completed the sale of Fidelity and Guaranty Life Insurance Company (F&G Life) to Old Mutual plc for $300 million in stock, $335 million in cash, and $4 million in interest.
  • 2The sale of F&G Life is classified as a disposition of assets, impacting the company's financial statements as a discontinued operation.
  • 3Jay S. Fishman appointed as the new Chairman and CEO, succeeding Douglas W. Leatherdale.
  • 4Pro forma financial statements show the balance sheet and income statement adjustments resulting from the F&G Life divestiture.
  • 5The sale of F&G Life resulted in a net loss from discontinued operations of $65 million for the six months ended June 30, 2001, impacting EPS by $(0.30) on a basic and $(0.28) on a diluted basis.
  • 6Douglas W. Leatherdale will remain on the board until May 2002.

Frequently Asked Questions

The total consideration received for F&G Life included approximately $300 million worth of Old Mutual plc ordinary shares, $335 million in cash, and approximately $4 million in interest, totaling roughly $639 million.

The pro forma financial information presents the company's balance sheet and income statement as if the sale of F&G Life had occurred at an earlier date. This allows investors to better understand the ongoing financial performance and position of the company, excluding the divested business.

The sale of F&G Life resulted in a net loss from discontinued operations of $65 million for the six months ended June 30, 2001. This reduced the basic earnings per share by $0.30 and diluted earnings per share by $0.28 for that period.

The new Chairman and CEO is Jay S. Fishman, who previously served as chairman and chief executive officer of Travelers Insurance Group Inc. and chief operating officer, finance and risk, of Travelers' parent, Citigroup Inc.