Exhibit 99.03
Unaudited Pro Forma Condensed Combined Financial Statements
The Merger Agreement provides that each share of Salomon Inc ("Salomon")
common stock will be exchanged for 1.695 shares of Travelers Group Inc.
("Travelers") common stock. The exchange ratio and all per share amounts
contained in the unaudited pro forma condensed combined financial statements and
the notes thereto reflect the three-for-two stock split declared by Travelers on
October 22, 1997 and payable on November 19, 1997 to all stockholders of record
on November 3, 1997. The merger, which is expected to be completed in the fourth
quarter of 1997, is expected to be accounted for under the pooling of interests
method and, accordingly, Travelers' historical consolidated financial statements
presented in future reports will be restated to include the accounts and results
of ▇▇▇▇▇▇▇. The merger is subject to customary closing conditions, including
regulatory and Salomon stockholder approval.
The following unaudited pro forma condensed combined statement of
financial condition combines the historical consolidated statement of financial
condition of Travelers and the historical consolidated statement of financial
condition of ▇▇▇▇▇▇▇ giving effect to the merger as though it had been
consummated on June 30, 1997. The following unaudited pro forma condensed
combined statements of income combine the historical statements of income of
Travelers and ▇▇▇▇▇▇▇ giving effect to the merger as if it had occurred on
January 1, 1994. The unaudited pro forma condensed combined statements of income
for the six months ended June 30, 1996 and for the year ended December 31, 1996
also give effect to the acquisition in April 1996 of the domestic property and
casualty operations of Aetna Life and Casualty Company (the "Aetna P&C"
operations) and transactions related to the funding of the acquisition, as if
they had occurred on January 1, 1996. This information should be read in
conjunction with the accompanying notes hereto; the separate historical
financial statements of Travelers as of June 30, 1997 and for the six months
ended June 30, 1997 and 1996, and for each of the three years ended December 31,
1996 which are contained in Travelers' Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1997 and its Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, respectively; and the separate historical
financial statements of ▇▇▇▇▇▇▇ as of June 30, 1997 and for the six months ended
June 30, 1997 and 1996, and for each of the three years ended December 31, 1996
which are contained in Salomon's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1997 and its Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, respectively. In addition, the information related
to the pro forma condensed combined statements of income for the six months
ended June 30, 1996 and for the year ended December 31, 1996 should be read in
conjunction with the historical financial statements of the Aetna P&C operations
for the period ended March 31, 1996 contained in Travelers' Current Report on
Form 8-K dated June 7, 1996.
The pro forma financial data is not necessarily indicative of the results
of operations that would have occurred had the merger been consummated or of
future operations of the combined company.
Travelers Group Inc. and Subsidiaries
Unaudited Pro Forma Condensed Combined Statement of Financial Position
As of June 30, 1997
(in millions of dollars)
Travelers Salomon Pro Forma Pro Forma
Historical Historical Adjustments Combined
---------- ---------- ----------- --------
Assets
Cash and cash equivalents ................................. $ 1,739 $ 2,081 $ $ 3,820
Investments and real estate held for sale:
Fixed maturities, primarily available for sale at market
value .................................................... 45,981 45,981
Equity securities, at market value ........................ 1,377 1,377
Mortgage loans ............................................ 3,748 3,748
Real estate held for sale ................................. 502 502
Policy loans .............................................. 1,873 1,873
Short-term and other ...................................... 5,135 5,135
-------- -------- ------- --------
Total investments and real estate held for sale ........... 58,616 -- -- 58,616
-------- -------- ------- --------
Securities borrowed or purchased under agreements to resell 27,950 91,320 119,270
Brokerage receivables ..................................... 8,507 6,014 14,521
Trading securities owned, at market value ................. 14,014 132,848 146,862
Commodities and related products and instruments .......... 1,533 1,533
Net consumer finance receivables .......................... 8,834 8,834
Reinsurance recoverables .................................. 9,876 9,876
Value of insurance in force and deferred policy acquisition
costs .................................................... 2,698 2,698
Cost of acquired businesses in excess of net assets ....... 2,991 2,991
Separate and variable accounts ............................ 9,830 9,830
Other receivables ......................................... 5,108 624 5,732
Other assets .............................................. 9,443 1,533 10,976
-------- -------- ------- --------
Total assets .............................................. $159,606 $235,953 $ -- $395,559
======== ======== ======= ========
Liabilities
Investment banking and brokerage borrowings ............... $ 4,268 $ 8,036 $ $ 12,304
Short-term borrowings ..................................... 2,812 2,812
Long-term debt ............................................ 11,122 16,080 27,202
Securities loaned or sold under agreements to repurchase .. 26,889 108,814 135,703
Brokerage payables ........................................ 5,042 7,269 12,311
Trading securities sold not yet purchased, at market value 9,640 87,058 96,698
Contractholder funds ...................................... 14,601 14,601
Insurance policy and claims reserves ...................... 43,940 43,940
Separate and variable accounts ............................ 9,818 9,818
Accounts payable and other liabilities .................... 15,196 2,843 450 18,489
-------- -------- ------- --------
Total liabilities ......................................... 143,328 230,100 450 373,878
-------- -------- ------- --------
ESOP Preferred stock--Series C ............................ 140 140
Redeemable preferred stock ................................ 420 420
Mandatorily redeemable preferred securities of subsidiary
trusts ................................................... 1,900 345 2,245
Stockholders' equity
Preferred stock ........................................... 1,075 450 1,525
Common stock .............................................. 11 159 (158) 12
Additional paid-in capital ................................ 7,557 438 (1,089) 6,906
Retained earnings ......................................... 8,524 5,811 (2,807) 11,078
(450)
Treasury stock, at cost ................................... (2,958) (1,769) 4,054 (673)
Unrealized gain on investment securities .................. 436 436
Other ..................................................... (407) (1) (408)
-------- -------- ------- --------
Total stockholders' equity ................................ 14,238 5,088 (450) 18,876
-------- -------- ------- --------
Total liabilities and stockholders' equity ................ $159,606 $235,953 $ -- $395,559
======== ======== ======= ========
See accompanying Notes to Unaudited Pro Forma
Condensed Combined Financial Statements
2
Travelers Group Inc. and Subsidiaries
Unaudited Pro Forma Condensed Combined Statement of Income
For the Six Months Ended June 30, 1997
(in millions of dollars, except per share amounts)
Travelers Salomon Pro Forma
Historical Historical Combined
---------- ---------- ---------
Revenues:
Insurance premiums ........................................... $ 4,444 $ $ 4,444
Commissions and fees ......................................... 1,718 640 2,358
Interest and dividends ....................................... 3,206 3,045 6,251
Finance related interest and other charges ................... 627 627
Principal transactions ....................................... 514 927 1,441
Asset management and administration fees ..................... 762 29 791
Other income ................................................. 630 630
------- ------ -------
Total revenues ............................................. 11,901 4,641 16,542
------- ------ -------
Expenses:
Policyholder benefits and claims ............................. 3,811 3,811
Non-insurance compensation and benefits ...................... 1,950 1,111 3,061
Insurance underwriting, acquisition and operating ............ 1,604 1,604
Interest ..................................................... 1,349 2,527 3,876
Provision for consumer finance credit losses ................. 145 145
Other operating .............................................. 876 374 1,250
------- ------ -------
Total expenses ............................................. 9,735 4,012 13,747
------- ------ -------
Income before income taxes and minority interest ............. 2,166 629 2,795
Provision for income taxes ................................... 763 236 999
Minority interest, net of income taxes ....................... 98 98
------- ------ -------
Income from continuing operations ............................ $ 1,305 $ 393 $ 1,698
======= ====== =======
Income per share of common stock and common stock equivalents:
Continuing operations ........................................ $ 1.31 $ 3.34 $ 1.41
======= ====== =======
Weighted average common shares outstanding and common stock
equivalents (in millions and giving effect to the 3-for-2
stock split payable November 19, 1997) ...................... 968.6 108.8 1,152.9
======= ====== =======
See accompanying Notes to Unaudited Pro Forma
Condensed Combined Financial Statements
3
Travelers Group Inc. and Subsidiaries
Unaudited Pro Forma Condensed Combined Statement of Income
For the Six Months Ended June 30, 1996
(in millions of dollars, except per share amounts)
Pro Forma
Travelers Aetna P&C Pro Forma Before Salomon Pro Forma
Historical Historical* Adjustments Salomon Historical Combined
---------- ----------- ----------- --------- ---------- ---------
Revenues:
Insurance premiums .................. $3,316 $1,038 $ -- $ 4,354 $ $ 4,354
Commissions and fees ................ 1,766 1,766 597 2,363
Interest and dividends .............. 2,543 243 2 (5a) 2,780 3,008 5,788
(8)(5b)
Finance related interest and other
charges ............................ 571 571 571
Principal transactions .............. 543 543 1,235 1,778
Asset management and administration
fees ............................... 648 648 22 670
Other income ........................ 554 325 879 879
------ ------ ----- ------- ------ -------
Total revenues .................... 9,941 1,606 (6) 11,541 4,862 16,403
------ ------ ----- ------- ------ -------
Expenses:
Policyholder benefits and claims .... 3,590 964 4,554 4,554
Non-insurance compensation and
benefits ........................... 1,930 1,930 1,096 3,026
Insurance underwriting, acquisition
and operating ...................... 1,367 325 (1)(5a) 1,691 1,691
Interest ............................ 1,060 45 (5c) 1,105 2,401 3,506
Provision for consumer finance
credit losses ...................... 128 128 128
Other operating ..................... 850 850 352 1,202
------ ------ ----- ------- ------ -------
Total expenses .................... 8,925 1,289 44 10,258 3,849 14,107
------ ------ ----- ------- ------ -------
Gain on sale of subsidiaries and
affiliates ......................... 397 (363)(5d) 34 34
------ ------ ----- ------- ------ -------
Income before income taxes and
minority interest .................. 1,413 317 (413) 1,317 1,013 2,330
Provision for income taxes .......... 361 99 (15)(5e) 445 405 850
Minority interest, net of income
taxes .............................. (44) 58 (5f) 14 14
------ ------ ----- ------- ------ -------
Income from continuing operations ... $1,096 $ 218 $(456) $ 858 $ 608 $ 1,466
====== ====== ===== ======= ====== =======
Income per share of common stock
and common stock equivalents:
Continuing operations ............... $ 1.10 $ 0.85 $ 5.41 $ 1.22
====== ======= ====== =======
Weighted average common shares
outstanding and common stock
equivalents (in millions and giving
effect to the 3-for-2 stock split
payable November 19, 1997) ......... 954.2 954.2 106.0 1,133.9
====== ======= ====== =======
----------
* Represents historical results for Aetna P&C for the quarterly period ended
March 31, 1996.
See accompanying Notes to Unaudited Pro Forma
Condensed Combined Financial Statements
4
Travelers Group Inc. and Subsidiaries
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 1996
(in millions of dollars, except per share amounts)
Pro Forma
Travelers Aetna P&C Pro Forma Before Salomon Pro Forma
Historical Historical* Adjustments Salomon Historical Combined
---------- ---------- ----------- ------- ---------- ---------
Revenues:
Insurance premiums ...................... $ 7,633 $ 1,038 $ $ 8,671 $ $ 8,671
Commissions and fees .................... 3,422 3,422 1,179 4,601
Interest and dividends .................. 5,549 243 2 (5a) 5,786 5,748 11,534
(8)(5b)
Finance related interest and other
charges ................................ 1,163 1,163 1,163
Principal transactions .................. 990 990 1,990 2,980
Asset management and administration fees 1,349 1,349 48 1,397
Other income ............................ 1,239 325 1,564 81 1,645
------- ------- ----- ------- ------ -------
Total revenues ........................ 21,345 1,606 (6) 22,945 9,046 31,991
------- ------- ----- ------- ------ -------
Expenses:
Policyholder benefits and claims ........ 7,366 964 8,330 8,330
Non-insurance compensation and benefits . 3,768 3,768 2,039 5,807
Insurance underwriting, acquisition and
operating .............................. 3,013 325 (1)(5a) 3,337 3,337
Interest ................................ 2,259 45 (5c) 2,304 4,679 6,983
Provision for consumer finance credit
losses ................................. 260 260 260
Other operating ......................... 1,678 1,678 718 2,396
------- ------- ----- ------- ------ -------
Total expenses ........................ 18,344 1,289 44 19,677 7,436 27,113
------- ------- ----- ------- ------ -------
Gain on sale of subsidiaries and
affiliates ............................. 397 (363)(5d) 34 34
------- ------- ----- ------- ------ -------
Income before income taxes and minority
interest ............................... 3,398 317 (413) 3,302 1,610 4,912
Provision for income taxes .............. 1,051 99 (15)(5e) 1,135 628 1,763
Minority interest, net of income taxes .. 47 58 (5f) 105 105
------- ------- ----- ------- ------ -------
Income from continuing operations ....... $ 2,300 $ 218 $(456) $ 2,062 $ 982 $ 3,044
======= ======= ===== ======= ====== =======
Income per share of common stock and
common stock equivalents:
Continuing operations ................... $2.30 $2.05 $ 8.59 $ 2.53
======= ======= ====== =======
Weighted average common shares
outstanding and common stock
equivalents (in millions and
giving effect to the 3-for-2
stock split payable November
19, 1997) .............................. 958.2 958.2 106.4 1,138.5
======= ======= ====== =======
----------
* Represents historical results for Aetna P&C for the quarterly period ended
March 31, 1996.
See accompanying Notes to Unaudited Pro Forma
Condensed Combined Financial Statements
5
Travelers Group Inc. and Subsidiaries
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 1995
(in millions of dollars, except per share amounts)
Travelers Salomon Pro Forma
Historical Historical Combined
---------- ---------- ---------
Revenues:
Insurance premiums ........................................ $ 4,977 $ $ 4,977
Commissions and fees ...................................... 2,874 804 3,678
Interest and dividends .................................... 4,355 7,021 11,376
Finance related interest and other charges ................ 1,119 1,119
Principal transactions .................................... 1,016 1,077 2,093
Asset management and administration fees .................. 1,052 39 1,091
Other income .............................................. 1,190 12 1,202
-------- ------ --------
Total revenues .......................................... 16,583 8,953 25,536
-------- ------ --------
Expenses:
Policyholder benefits and claims .......................... 5,017 5,017
Non-insurance compensation and benefits ................... 3,442 1,710 5,152
Insurance underwriting, acquisition and operating ......... 1,912 1,912
Interest .................................................. 1,956 5,754 7,710
Provision for consumer finance credit losses .............. 171 171
Other operating ........................................... 1,544 690 2,234
-------- ------ --------
Total expenses .......................................... 14,042 8,154 22,196
-------- ------ --------
Loss on sale of subsidiaries and affiliates ............... (20) (20)
-------- ------ --------
Income before income taxes ................................ 2,521 799 3,320
Provision for income taxes ................................ 893 286 1,179
-------- ------ --------
Income from continuing operations ......................... $ 1,628 $ 513 $ 2,141
======== ====== ========
Income per share of common stock and
common stock equivalents:
Continuing operations ..................................... $ 1.62 $ 4.17 $ 1.76
======== ====== ========
Weighted average common shares outstanding and common stock
equivalents (in millions and giving effect to the 3-for-2
stock split payable November 19, 1997) .................... 952.2 106.5 1,132.7
======== ====== ========
See accompanying Notes to Unaudited Pro Forma
Condensed Combined Financial Statements
6
Travelers Group Inc. and Subsidiaries
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 1994
(in millions of dollars, except per share amounts)
Travelers Salomon Pro Forma
Historical Historical Combined
---------- ---------- ---------
Revenues:
Insurance premiums ........................................ $ 5,144 $ $ 5,144
Commissions and fees ...................................... 2,526 822 3,348
Interest and dividends .................................... 3,401 5,902 9,303
Finance related interest and other charges ................ 1,030 1,030
Principal transactions .................................... 900 (560) 340
Asset management and administration fees .................. 1,010 23 1,033
Other income .............................................. 932 7 939
------- ------- -------
Total revenues .......................................... 14,943 6,194 21,137
------- ------- -------
Expenses:
Policyholder benefits and claims .......................... 5,227 5,227
Non-insurance compensation and benefits ................... 3,241 1,455 4,696
Insurance underwriting, acquisition and operating ......... 1,867 1,867
Interest .................................................. 1,284 4,873 6,157
Provision for consumer finance credit losses .............. 152 152
Other operating ........................................... 1,524 715 2,239
------- ------- -------
Total expenses .......................................... 13,295 7,043 20,338
------- ------- -------
Gain on sale of subsidiaries and affiliates ............... 226 226
------- ------- -------
Income (loss) before income taxes ......................... 1,874 (849) 1,025
Provision for income taxes ................................ 717 (439) 278
------- ------- -------
Income (loss) from continuing operations .................. $ 1,157 $ (410) $ 747
======= ======= =======
Income (loss) per share of common stock
and common stock equivalents:
Continuing operations ..................................... $ 1.11 $ (4.41) $ 0.52
======= ======= =======
Weighted average common shares outstanding and common stock
equivalents (in millions and giving effect to the 3-for-2
stock split payable November 19, 1997) .................... 966.0 106.8 1,147.1
======= ======= =======
See accompanying Notes to Unaudited Pro Forma
Condensed Combined Financial Statements
7
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
1. Description of Transactions and Basis of Presentation
The Merger Agreement provides that each share of Salomon common stock will
be exchanged for 1.695 shares of Travelers common stock. The exchange ratio and
all per share amounts contained in the unaudited pro forma condensed combined
financial statements and the notes thereto reflect the three-for-two stock split
declared by Travelers on October 22, 1997 and payable on November 19, 1997 to
all stockholders of record on November 3, 1997. The merger, which is expected to
be completed in the fourth quarter of 1997, is expected to be accounted for
under the pooling of interests method and, accordingly, Travelers' historical
consolidated financial statements presented in future reports will be restated
to include the accounts and results of ▇▇▇▇▇▇▇. The merger is subject to
customary closing conditions, including regulatory and Salomon stockholder
approval.
The pro forma effect of the acquisition of the Aetna P&C operations is
reflected in the pro forma condensed combined statements of income for the six
months ended June 30, 1996 and for the year ended December 31, 1996 as if the
acquisition had occurred on January 1, 1996. This acquisition has been accounted
for as a purchase. Note that actual results for the Aetna P&C operations are
included in Travelers' historical amounts from the date of acquisition on April
2, 1996.
2. Accounting Policies
Travelers and ▇▇▇▇▇▇▇ are in the process of reviewing their accounting
policies and, as a result of this review, it may be necessary to restate either
Travelers' or ▇▇▇▇▇▇▇'s financial statements to conform to those accounting
policies that are determined to be most appropriate. No such restatements have
been made to the pro forma combined financial statements.
3. Intercompany Transactions
Transactions between Travelers and ▇▇▇▇▇▇▇ are not material in relation to
the pro forma combined financial statements and therefore intercompany balances
have not been eliminated from the pro forma combined amounts.
4. Pro Forma Adjustments -- Salomon
The pro forma adjustments to common stock, additional paid-in capital,
retained earnings and treasury stock at June 30, 1997 reflect (1) the retirement
of shares of Salomon common stock held in treasury pursuant to the Merger
Agreement, (2) adjustments to account for 105 million shares of Travelers common
stock held in treasury to be issued in the transaction as though retired, in
accordance with APB No. 16, (3) the issuance of 182.1 million shares of
Travelers common stock to effect the Merger, and (4) the after-tax effect on
retained earnings of an estimated charge for restructuring (see note 7). The
number of shares to be issued at consummation of the Merger will be based on the
actual number of shares of Salomon common stock outstanding at that time.
8
5. Pro Forma Adjustments -- Aetna P&C
The following pro forma adjustments related to the acquisition of the
Aetna P&C operations are reflected in the pro forma condensed combined
statements of income for the six months ended June 30, 1996 and for the year
ended December 31, 1996. Such adjustments relate only to the quarter ended March
31, 1996 which represents the portion of the year that Travelers did not own the
Aetna P&C operations (in millions):
(a) Principal adjustments resulting from the allocation of purchase
price based on fair value of underlying net assets, as follows:
Increase (decrease)
in pre-tax income
-------------------
Interest and dividends:
Amortization of discount allocated to
investments on a level yield basis
over the life of the investments ...... $ 2
---
Insurance underwriting, acquisition and
operating:
Amortization of loss based assessments
for second injury funds ............... $ 7
Amortization of excess of purchase price
over fair value of net assets acquired,
over 40 years ......................... (7)
Amortization of liabilities related to
employee benefit plans ................ 6
Other .................................... (5)
---
$ 1
===
(b) Represents the reduction in net investment income resulting from the
use of $600 of short-term investments to fund a portion of the
acquisition.
(c) Pro forma adjustments related to the funding of the acquisition as
follows:
Interest expense at 6 3/4% on $500 of
long-term debt and 7 3/4% on $200 of
long-term debt including amortization of
issuance costs .......................... $12
Interest expense at 5 3/4% on short-term
borrowings .............................. 15
Preferred dividends on $900 of mandatorily
redeemable preferred securities of
subsidiary trusts ...................... 18
---
$45
===
(d) Represents the reversal of the gain on the sale of 18% of Travelers
Property Casualty Corp. ("TAP") common stock in an initial public
offering, the proceeds of which were used to finance a portion of
the acquisition.
(e) Adjustment to reflect the income tax effects of (a), (b) and (c)
above.
(f) Pro forma adjustment to reflect minority interest resulting from the
sale of TAP's common stock.
6. Pro Forma Earnings Per Share
The pro forma combined primary earnings per share for the respective
periods presented is based on the combined weighted average number of common
shares and share equivalents of Travelers and Salomon. The number of common
shares and common share equivalents of Salomon is based on an exchange ratio of
1.695 shares of Travelers common stock for each issued and outstanding share and
share equivalent of Salomon. The pro forma combined primary earnings per share
has been calculated as follows:
9
Calculation of pro forma combined earnings per share
(in millions, except per share amounts)
For the six months ended For the fiscal year
---------------------------- --------------------------------------
June 30, 1997 June 30, 1996 1996 1995 1994
------------- ------------- ---------- ---------- ----------
Income from continuing operations $ 1,698 $ 1,466 $ 3,044 $ 2,141 $ 747
Preferred dividends ............. (71) (81) (161) (153) (145)
--------- --------- --------- --------- ---------
Income from continuing operations
available to common stockholders $ 1,627 $ 1,385 $ 2,883 $ 1,988 $ 602
--------- --------- --------- --------- ---------
Average common shares ........... 1,102.5 1,094.6 1,097.5 1,099.3 1,127.4
Assumed exercise of dilutive
warrants ....................... 6.9 4.4 5.0 1.7 --
Assumed exercise of dilutive
options ........................ 19.8 16.4 16.2 14.0 9.2
Incremental shares--restricted
stock .......................... 23.7 18.5 19.8 17.7 10.5
--------- --------- --------- --------- ---------
Shares used in computing earnings
per share ...................... 1,152.9 1,133.9 1,138.5 1,132.7 1,147.1
========= ========= ========= ========= =========
Primary earnings per share from
continuing operations .......... $ 1.41 $ 1.22 $ 2.53 $ 1.76 $ 0.52
========= ========= ========= ========= =========
7. Restructuring Charge
The pro forma condensed combined statements of income do not reflect a
planned merger-related restructuring charge of between $400 million and $500
million (after-tax) primarily for severance and costs related to excess or
unused office space and other facilities since such restructuring charge is
non-recurring. Although there can be no assurance that the restructuring charge
will fall within the range provided, this range represents management's best
estimate based on the currently available information.
8. Future Cost Savings
As ▇▇▇▇▇▇▇'s operations are integrated with the existing operations of
Travelers, management expects to achieve, by the end of a three-year period,
annual cost savings in excess of $200 million (after-tax) from the reduction of
overhead expenses, changes in corporate infrastructure and the elimination of
redundant expenses. There can be no assurance that these projected cost savings
will be achieved. These expected future cost savings are not reflected in the
pro forma financial data.
The statements contained in notes 7 and 8 above may be deemed to be
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1993, as amended. Forward-looking statements are typically identified by
the words "believe," "expect," "anticipate," "intend," "estimate" and similar
expressions. These forward-looking statements are based largely on management's
expectations and are subject to a number of uncertainties. Actual results could
differ materially from these forward-looking statements as a result of a number
of factors, including (1) determination of the number, job classification and
location of employee positions to be eliminated, (2) compatibility of the
operating systems of the combining companies, (3) the degree to which existing
administrative and back-office functions and costs are complementary or
redundant, and (4) the timing of implementation of changes in operations to
effect cost savings. Travelers undertakes no obligation to update publicly or
revise any forward-looking statements.
10