8-K/AOther Events

TRAVELERS COMPANIES, INC. 8-K/A Report (Oct 29, 2001)

Filed October 29, 2001For Securities:TRV

Summary

This filing is an amendment to a previous 8-K report by The St. Paul Companies, Inc. (not Travelers Companies, Inc. as initially stated) and concerns the restatement of certain pro forma financial information related to the sale of Fidelity and Guaranty Life Insurance Company (F&G Life) to Old Mutual plc. The primary focus for investors is the adjustment to the previously reported pro forma financial statements following this divestiture. The amendment clarifies the financial impact of a decline in the fair value of certain investments prior to the closing of the sale, which resulted in an additional payable amount to Old Mutual plc. This adjustment led to a revised net income for the six months ended June 30, 2001, and a reduction in shareholders' equity. Investors should note that while the company's core operations (income from continuing operations) remain unaffected, the net income attributable to shareholders and the reported earnings per share were negatively impacted by this post-closing adjustment. The restated figures provide a more accurate representation of the financial consequences of the F&G Life sale.

Key Highlights

  • 1Amendment to a prior 8-K report concerning the sale of Fidelity and Guaranty Life Insurance Company (F&G Life).
  • 2Restatement of pro forma financial information related to the F&G Life sale to Old Mutual plc.
  • 3An additional payable amount of $12 million (net of $4 million tax benefit) was recorded due to a decline in the fair value of certain investments before the sale's closing.
  • 4This adjustment reduced shareholders' equity by $8 million.
  • 5Net income for the six months ended June 30, 2001, was reduced by $8 million, resulting in a restated net income of $232 million.
  • 6Basic earnings per common share for the six months ended June 30, 2001, were restated to $1.03 from $1.07.
  • 7Diluted earnings per common share for the six months ended June 30, 2001, were restated to $1.01 from $1.04.

Frequently Asked Questions

This filing is an amendment to a previous 8-K report to correct and restate certain pro forma financial information related to the sale of Fidelity and Guaranty Life Insurance Company (F&G Life) to Old Mutual plc. The restatement accounts for an additional payment due to Old Mutual plc resulting from a decline in the fair value of certain investments before the sale's closure.

The amendment primarily impacts the net income and shareholders' equity. Specifically, it records an additional payable of $12 million (net of tax) to Old Mutual plc, reducing shareholders' equity by $8 million and decreasing net income for the six months ended June 30, 2001, by $8 million. This led to revised basic and diluted earnings per share for that period.

No, the amendment explicitly states that the income from continuing operations before and after taxes remains unchanged. The adjustments relate solely to discontinued operations and the specific financial consequences of the F&G Life sale transaction.

The primary pro forma adjustment was the recording of an additional amount payable to Old Mutual plc ($12 million), offset by a tax benefit ($4 million), resulting in a net impact of $8 million on shareholders' equity. This also affected the net income and earnings per share from discontinued operations.