The Travelers Companies Inc. (TRV, Financial) filed Quarterly Report for the period ended 2010-09-30.
The Travelers Companies Inc. has a market cap of $25.68 billion; its shares were traded at around $54.64 with a P/E ratio of 8.6 and P/S ratio of 1. The dividend yield of The Travelers Companies Inc. stocks is 2.7%. The Travelers Companies Inc. had an annual average earning growth of 28.3% over the past 5 years.TRV is in the portfolios of David Einhorn of Greenlight Capital Inc, Jeff Auxier of Auxier Focus Fund, Diamond Hill Capital of Diamond Hill Capital Management Inc, Bill Frels of Mairs & Power Inc. , Steven Romick of FPA Crescent Fund, Richard Aster Jr of Meridian Fund, Irving Kahn of Kahn Brothers & Company Inc., John Buckingham of Al Frank Asset Management, Inc., Dodge & Cox, First Pacific Advisors of First Pacific Advisors, LLC, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, NWQ Managers of NWQ Investment Management Co, James Barrow of Barrow, Hanley, Mewhinney & Strauss, Pioneer Investments, Brian Rogers of T Rowe Price Equity Income Fund, Brian Rogers of T Rowe Price Equity Income Fund, Paul Tudor Jones of The Tudor Group, Jeremy Grantham of GMO LLC, George Soros of Soros Fund Management LLC, Charles Brandes of Brandes Investment, David Dreman of Dreman Value Management, John Keeley of Keeley Fund Management, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors.
Net cash flows used in financing activities in the first nine months of 2010 totaled $4.00 billion, compared with $1.84 billion in the same 2009 period. The 2010 total primarily reflected common share repurchases, dividends to shareholders and the repayment of debt, partially offset by the proceeds from employee stock option exercises. On April 15, 2010, the Companys $250 million, 8.125% senior notes matured and were fully paid. On August 23, 2010, the Companys $21 million, 7.415% medium-term notes matured and were fully paid. On September 16, 2010, the Company repaid the remaining $4 million principal balance on its 7.81% private placement senior notes. The 2009 total primarily reflected common share repurchases and dividends to shareholders, partially offset by the proceeds from the issuance of debt and employee stock option exercises.
Since May 2006, the Companys board of directors has approved four common share repurchase authorizations, for a cumulative authorization of up to $16 billion of shares of the Companys common stock. Under these authorizations, the most recent of which totaled $6 billion and was approved by the board of directors in October 2009, repurchases may be made from time to time in the open market, pursuant to preset trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in private transactions or otherwise. The authorizations do not have a stated expiration date. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including the Companys financial position, earnings, catastrophe losses, capital requirements of the Companys operating subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions), market conditions and other factors. During the three months and nine months ended September 30, 2010, the Company repurchased 11.8 million shares and 66.8 million shares, respectively, under its share repurchase authorization for a total cost of approximately $600 million and $3.40 billion, respectively. The average cost per share repurchased was $50.73 and $50.92, respectively. At September 30, 2010, the Company had $3.11 billion of capacity remaining under its share repurchase authorization.
The $395 million decrease in total capitalization from December 31, 2009 reflected the impact of the $3.40 billion of common share repurchases made under the Companys share repurchase authorization, shareholder dividends of $515 million and the repayment of $275 million of debt, largely offset by net income of $2.32 billion in the first nine months of 2010 and the $1.15 billion increase in accumulated other changes in equity from nonowner sources.
Catastrophe Bond Program. On December 18, 2009, Longpoint Re II, Ltd. (Longpoint Re II), a newly formed independent Cayman Islands insurance company, successfully completed an offering to unrelated investors of $500 million aggregate principal amount of catastrophe bonds. In connection with the offering, the Company and Longpoint Re II entered into two reinsurance agreements (covering a three-year and four-year period, respectively), each providing up to $250 million of reinsurance to the Company from losses resulting from certain hurricane events in the northeastern United States.
The index-based losses attachment point and maximum limit are reset annually to maintain modeled probabilities of attachment and expected loss on the respective catastrophe bonds equal to the initial modeled probabilities of attachment and expected loss. With regard to the Longpoint Re II program, the two reinsurance agreements entered into on December 18, 2009 provide protection for covered events occurring before or on December 18, 2012 and December 18, 2013, respectively. The Company will be entitled to begin recovering amounts under the two reinsurance agreements if the index-based losses in the covered area for a single occurrence reach an initial attachment amount of $2.250 billion. The full $250 million coverage amount of each agreement is available on a proportional basis until index-based losses reach a maximum $2.850 billion limit. The Company has not incurred any losses that have resulted in a recovery under the Longpoint Re II agreements since their inception.
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The Travelers Companies Inc. has a market cap of $25.68 billion; its shares were traded at around $54.64 with a P/E ratio of 8.6 and P/S ratio of 1. The dividend yield of The Travelers Companies Inc. stocks is 2.7%. The Travelers Companies Inc. had an annual average earning growth of 28.3% over the past 5 years.TRV is in the portfolios of David Einhorn of Greenlight Capital Inc, Jeff Auxier of Auxier Focus Fund, Diamond Hill Capital of Diamond Hill Capital Management Inc, Bill Frels of Mairs & Power Inc. , Steven Romick of FPA Crescent Fund, Richard Aster Jr of Meridian Fund, Irving Kahn of Kahn Brothers & Company Inc., John Buckingham of Al Frank Asset Management, Inc., Dodge & Cox, First Pacific Advisors of First Pacific Advisors, LLC, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, NWQ Managers of NWQ Investment Management Co, James Barrow of Barrow, Hanley, Mewhinney & Strauss, Pioneer Investments, Brian Rogers of T Rowe Price Equity Income Fund, Brian Rogers of T Rowe Price Equity Income Fund, Paul Tudor Jones of The Tudor Group, Jeremy Grantham of GMO LLC, George Soros of Soros Fund Management LLC, Charles Brandes of Brandes Investment, David Dreman of Dreman Value Management, John Keeley of Keeley Fund Management, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
On June 10, 2010, the Company entered into a three-year, $1.0 billion revolving credit agreement with a syndicate of financial institutions, replacing its five-year, $1.0 billion credit agreement that expired on that date. No borrowings have been made under the credit agreement since its inception. Pursuant to the credit agreement covenants, the Company must maintain a minimum consolidated net worth (generally defined as shareholders equity plus certain trust preferred and mandatorily convertible securities, reduced for goodwill and other intangible assets). That threshold is adjusted downward by an amount equal to 70% of the aggregate amount of common stock repurchased by the Company after March 31, 2010, up to a maximum deduction of $1.75 billion. The threshold was $14.70 billion at September 30, 2010, and will decline to a minimum of $14.35 billion during the term of the credit agreement, subject to the Company repurchasing an additional $500 million of its common stock. The Company must also maintain a ratio of total debt to the sum of total debt plus consolidated net worth of not greater than 0.40 to 1.00. In addition, the credit agreement contains other customary restrictive covenants as well as certain customary events of default, including with respect to a change in control, which is defined to include the acquisition of 35% or more of the Companys voting stock and certain changes in the composition of the Companys board of directors. At September 30, 2010, the Company was in compliance with these covenants. Generally, the cost of borrowing under this agreement will range from LIBOR plus 100 basis points to LIBOR plus 175 basis points depending on theNet cash flows used in financing activities in the first nine months of 2010 totaled $4.00 billion, compared with $1.84 billion in the same 2009 period. The 2010 total primarily reflected common share repurchases, dividends to shareholders and the repayment of debt, partially offset by the proceeds from employee stock option exercises. On April 15, 2010, the Companys $250 million, 8.125% senior notes matured and were fully paid. On August 23, 2010, the Companys $21 million, 7.415% medium-term notes matured and were fully paid. On September 16, 2010, the Company repaid the remaining $4 million principal balance on its 7.81% private placement senior notes. The 2009 total primarily reflected common share repurchases and dividends to shareholders, partially offset by the proceeds from the issuance of debt and employee stock option exercises.
Since May 2006, the Companys board of directors has approved four common share repurchase authorizations, for a cumulative authorization of up to $16 billion of shares of the Companys common stock. Under these authorizations, the most recent of which totaled $6 billion and was approved by the board of directors in October 2009, repurchases may be made from time to time in the open market, pursuant to preset trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in private transactions or otherwise. The authorizations do not have a stated expiration date. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including the Companys financial position, earnings, catastrophe losses, capital requirements of the Companys operating subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions), market conditions and other factors. During the three months and nine months ended September 30, 2010, the Company repurchased 11.8 million shares and 66.8 million shares, respectively, under its share repurchase authorization for a total cost of approximately $600 million and $3.40 billion, respectively. The average cost per share repurchased was $50.73 and $50.92, respectively. At September 30, 2010, the Company had $3.11 billion of capacity remaining under its share repurchase authorization.
The $395 million decrease in total capitalization from December 31, 2009 reflected the impact of the $3.40 billion of common share repurchases made under the Companys share repurchase authorization, shareholder dividends of $515 million and the repayment of $275 million of debt, largely offset by net income of $2.32 billion in the first nine months of 2010 and the $1.15 billion increase in accumulated other changes in equity from nonowner sources.
Catastrophe Bond Program. On December 18, 2009, Longpoint Re II, Ltd. (Longpoint Re II), a newly formed independent Cayman Islands insurance company, successfully completed an offering to unrelated investors of $500 million aggregate principal amount of catastrophe bonds. In connection with the offering, the Company and Longpoint Re II entered into two reinsurance agreements (covering a three-year and four-year period, respectively), each providing up to $250 million of reinsurance to the Company from losses resulting from certain hurricane events in the northeastern United States.
The index-based losses attachment point and maximum limit are reset annually to maintain modeled probabilities of attachment and expected loss on the respective catastrophe bonds equal to the initial modeled probabilities of attachment and expected loss. With regard to the Longpoint Re II program, the two reinsurance agreements entered into on December 18, 2009 provide protection for covered events occurring before or on December 18, 2012 and December 18, 2013, respectively. The Company will be entitled to begin recovering amounts under the two reinsurance agreements if the index-based losses in the covered area for a single occurrence reach an initial attachment amount of $2.250 billion. The full $250 million coverage amount of each agreement is available on a proportional basis until index-based losses reach a maximum $2.850 billion limit. The Company has not incurred any losses that have resulted in a recovery under the Longpoint Re II agreements since their inception.
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