Toggle SGML Header (+)


Section 1: 10-Q (10-Q)

Document
Table of Contents


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________
FORM 10-Q
_________________________________________________________
 
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
___________________________________________________________________
 
Commission file number: 001-10898
___________________________________________________________________
The Travelers Companies, Inc.
(Exact name of registrant as specified in its charter)
 ____________________________________________________________________
Minnesota
 
41-0518860
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
485 Lexington Avenue
New York, NY 10017
(Address of principal executive offices) (Zip Code)
 
(917) 778-6000
(Registrant’s telephone number, including area code)
 _________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.        Yes ý    No o 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).          
Yes ý    No o 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
ý
Accelerated filer
o
 
 
 
 
Non-accelerated filer
o
Smaller reporting company
o
 
 
 
 
Emerging growth company
o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o    No ý 
The number of shares of the Registrant’s Common Stock, without par value, outstanding at April 15, 2019 was 261,908,210.




Table of Contents

The Travelers Companies, Inc.
 
Quarterly Report on Form 10-Q
 
For Quarterly Period Ended March 31, 2019
_________________________________________________________
 
TABLE OF CONTENTS
 
 
 
Page
 
 
 
 
 
Item 1.
 
 
 
 
 
Consolidated Statement of Income (Unaudited) — Three Months Ended March 31, 2019 and 2018
 
 
 
 
Consolidated Statement of Comprehensive Income (Unaudited) — Three Months Ended March 31, 2019 and 2018
 
 
 
 
Consolidated Balance Sheet — March 31, 2019 (Unaudited) and December 31, 2018
 
 
 
 
Consolidated Statement of Changes in Shareholders’ Equity (Unaudited) — Three Months Ended March 31, 2019 and 2018
 
 
 
 
Consolidated Statement of Cash Flows (Unaudited) — Three Months Ended March 31, 2019 and 2018
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 5.
 
 
 
Item 6.
 
 
 
 
 
 
 


2

Table of Contents

PART 1 — FINANCIAL INFORMATION
 
Item 1.  FINANCIAL STATEMENTS
 
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(in millions, except per share amounts)
 
 
 
Three Months Ended
March 31,
 
 
2019
 
2018
 
 
 
 
 
Revenues
 
 
 
 
Premiums
 
$
6,855

 
$
6,537

Net investment income
 
582

 
603

Fee income
 
109

 
103

Net realized investment gains (losses) (1)
 
53

 
(11
)
Other revenues
 
72

 
54

 
 
 
 
 
Total revenues
 
7,671

 
7,286

 
 
 
 
 
Claims and expenses
 
 
 
 
Claims and claim adjustment expenses
 
4,442

 
4,296

Amortization of deferred acquisition costs
 
1,117

 
1,061

General and administrative expenses
 
1,057

 
1,062

Interest expense
 
88

 
89

Total claims and expenses
 
6,704

 
6,508

 
 
 
 
 
Income before income taxes
 
967

 
778

Income tax expense
 
171

 
109

Net income
 
$
796

 
$
669

 
 
 
 
 
Net income per share
 
 
 
 
Basic
 
$
3.01

 
$
2.45

Diluted
 
$
2.99

 
$
2.42

 
 
 
 
 
Weighted average number of common shares outstanding
 
 
 
 
Basic
 
262.9

 
271.0

Diluted
 
264.8

 
273.9

 
 
 
 
 
Cash dividends declared per common share
 
$
0.77

 
$
0.72


________________________________________________________
(1)
Total other-than-temporary impairment (OTTI) gains (losses) were $(1) million and $0 for the three months ended March 31, 2019 and 2018, respectively.  Of total OTTI, credit losses of $(1) million and $0 for the three months ended March 31, 2019 and 2018, respectively, were recognized in net realized investment gains (losses).  In addition, unrealized gains (losses) from other changes in total OTTI of $0 for each of the three months ended March 31, 2019 and 2018, respectively, were recognized in other comprehensive income (loss) as part of changes in net unrealized gains (losses) on investment securities having credit losses recognized in the consolidated statement of income.
 
The accompanying notes are an integral part of the consolidated financial statements.

3

Table of Contents

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
(in millions)
 
 
 
Three Months Ended
March 31,
 
 
2019
 
2018
 
 
 
 
 
Net income
 
$
796

 
$
669

 
 
 
 
 
Other comprehensive income (loss)
 
 
 
 
Changes in net unrealized gains (losses) on investment securities:
 
 
 
 
Having no credit losses recognized in the consolidated statement of income
 
1,416

 
(1,203
)
Having credit losses recognized in the consolidated statement of income
 
5

 
(2
)
Net changes in benefit plan assets and obligations
 
12

 
22

Net changes in unrealized foreign currency translation
 
50

 
6

Other comprehensive income (loss) before income taxes
 
1,483

 
(1,177
)
Income tax expense (benefit)
 
306

 
(244
)
Other comprehensive income (loss), net of taxes
 
1,177

 
(933
)
Comprehensive income (loss)
 
$
1,973

 
$
(264
)
 






























The accompanying notes are an integral part of the consolidated financial statements.


4

Table of Contents

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
 
 
 
March 31,
2019
 
December 31,
2018
 
 
(Unaudited)
 
 
Assets
 
 
 
 
Fixed maturities, available for sale, at fair value (amortized cost $64,216 and $63,601)
 
$
65,500

 
$
63,464

Equity securities, at fair value  (cost $375 and $382)
 
400

 
368

Real estate investments
 
969

 
904

Short-term securities
 
4,094

 
3,985

Other investments
 
3,554

 
3,557

Total investments
 
74,517

 
72,278

Cash
 
357

 
373

Investment income accrued
 
591

 
624

Premiums receivable
 
7,947

 
7,506

Reinsurance recoverables
 
8,281

 
8,370

Ceded unearned premiums
 
935

 
578

Deferred acquisition costs
 
2,190

 
2,120

Deferred taxes
 
115

 
445

Contractholder receivables
 
4,811

 
4,785

Goodwill
 
3,949

 
3,937

Other intangible assets
 
341

 
345

Other assets
 
3,212

 
2,872

Total assets
 
$
107,246

 
$
104,233

 
 
 
 
 
Liabilities
 
 

 
 

Claims and claim adjustment expense reserves
 
$
50,718

 
$
50,668

Unearned premium reserves
 
14,122

 
13,555

Contractholder payables
 
4,811

 
4,785

Payables for reinsurance premiums
 
635

 
289

Debt
 
7,057

 
6,564

Other liabilities
 
5,563

 
5,478

Total liabilities
 
82,906

 
81,339

 
 
 
 
 
Shareholders’ equity
 
 

 
 

Common stock (1,750.0 shares authorized; 262.0 and 263.7 shares issued, 261.9 and 263.6 shares outstanding)
 
23,243

 
23,144

Retained earnings
 
35,795

 
35,204

Accumulated other comprehensive loss
 
(682
)
 
(1,859
)
Treasury stock, at cost (514.2 and 510.9 shares)
 
(34,016
)
 
(33,595
)
Total shareholders’ equity
 
24,340

 
22,894

Total liabilities and shareholders’ equity
 
$
107,246

 
$
104,233





The accompanying notes are an integral part of the consolidated financial statements.


5

Table of Contents

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
(in millions)
 
 
 
Three Months Ended
March 31,
 
 
2019
 
2018
 
 
 
 
 
Common stock
 
 

 
 

Balance, beginning of year
 
$
23,144

 
$
22,886

Employee share-based compensation
 
54

 
65

Compensation amortization under share-based plans and other changes
 
45

 
44

Balance, end of period
 
23,243

 
22,995

 
 
 
 
 
Retained earnings
 
 

 
 

Balance, beginning of year
 
35,204

 
33,462

Cumulative effect of adoption of updated accounting guidance for equity financial instruments at January 1, 2018
 

 
22

Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018
 

 
24

Net income
 
796

 
669

Dividends
 
(204
)
 
(197
)
Other
 
(1
)
 
1

Balance, end of period
 
35,795

 
33,981

 
 
 
 
 
Accumulated other comprehensive loss, net of tax
 
 

 
 

Balance, beginning of year
 
(1,859
)
 
(343
)
Cumulative effect of adoption of updated accounting guidance for equity financial instruments at January 1, 2018
 

 
(22
)
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018
 

 
(24
)
Other comprehensive income (loss)
 
1,177

 
(933
)
Balance, end of period
 
(682
)
 
(1,322
)
 
 
 
 
 
Treasury stock, at cost
 
 

 
 

Balance, beginning of year
 
(33,595
)
 
(32,274
)
Treasury stock acquired — share repurchase authorization
 
(375
)
 
(350
)
Net shares acquired related to employee share-based compensation plans
 
(46
)
 
(51
)
Balance, end of period
 
(34,016
)
 
(32,675
)
 
 
 
 
 
Total shareholders’ equity
 
$
24,340

 
$
22,979

 
 
 
 
 
Common shares outstanding
 
 

 
 

Balance, beginning of year
 
263.6

 
271.4

Treasury stock acquired — share repurchase authorization
 
(2.9
)
 
(2.5
)
Net shares issued under employee share-based compensation plans
 
1.2

 
1.3

Balance, end of period
 
261.9

 
270.2

 


The accompanying notes are an integral part of the consolidated financial statements.


6

Table of Contents

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(in millions)
 
 
Three Months Ended
 
 
March 31,
 
 
2019
 
2018
Cash flows from operating activities
 
 

 
 

Net income
 
$
796

 
$
669

Adjustments to reconcile net income to net cash provided by operating activities:
 
 

 
 

Net realized investment (gains) losses
 
(53
)
 
11

Depreciation and amortization
 
211

 
212

Deferred federal income tax expense (benefit)
 
32

 
(56
)
Amortization of deferred acquisition costs
 
1,117

 
1,061

Equity in income from other investments
 
(34
)
 
(95
)
Premiums receivable
 
(434
)
 
(397
)
Reinsurance recoverables
 
98

 
5

Deferred acquisition costs
 
(1,185
)
 
(1,124
)
Claims and claim adjustment expense reserves
 
(2
)
 
180

Unearned premium reserves
 
551

 
518

Other
 
(458
)
 
(430
)
Net cash provided by operating activities
 
639

 
554

 
 
 
 
 
Cash flows from investing activities
 
 

 
 

Proceeds from maturities of fixed maturities
 
1,556

 
1,950

Proceeds from sales of investments:
 
 

 
 

Fixed maturities
 
769

 
1,085

Equity securities
 
39

 
26

Real estate investments
 

 

Other investments
 
105

 
114

Purchases of investments:
 
 

 
 

Fixed maturities
 
(2,914
)
 
(3,920
)
Equity securities
 
(22
)
 
(20
)
Real estate investments
 
(77
)
 
(33
)
Other investments
 
(146
)
 
(142
)
Net sales (purchases) of short-term securities
 
(109
)
 
410

Securities transactions in course of settlement
 
295

 
202

Other
 
(82
)
 
(53
)
Net cash used in investing activities
 
(586
)
 
(381
)
 
 
 
 
 
Cash flows from financing activities
 
 

 
 

Treasury stock acquired — share repurchase authorization
 
(375
)
 
(350
)
Treasury stock acquired — net employee share-based compensation
 
(46
)
 
(51
)
Dividends paid to shareholders
 
(205
)
 
(197
)
Payment of debt
 

 
(100
)
Issuance of debt
 
492

 
491

Issuance of common stock — employee share options
 
63

 
85

Net cash used in financing activities
 
(71
)
 
(122
)
Effect of exchange rate changes on cash
 
2

 
2

Net increase (decrease) in cash
 
(16
)
 
53

Cash at beginning of year
 
373

 
344

Cash at end of period
 
$
357

 
$
397

 
 
 
 
 
Supplemental disclosure of cash flow information
 
 

 
 

Income taxes paid
 
$
5

 
$
56

Interest paid
 
$
50

 
$
39

 The accompanying notes are an integral part of the consolidated financial statements.

7

Table of Contents

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 
1.     BASIS OF PRESENTATION AND ACCOUNTING POLICIES
 
Basis of Presentation
 
The interim consolidated financial statements include the accounts of The Travelers Companies, Inc. (together with its subsidiaries, the Company). These financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP) and are unaudited.  In the opinion of the Company’s management, all adjustments necessary for a fair presentation have been reflected.  Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted.  All material intercompany transactions and balances have been eliminated.  The accompanying interim consolidated financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the Company’s 2018 Annual Report).
 
The preparation of the interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and claims and expenses during the reporting period.  Actual results could differ from those estimates.
 
Adoption of Accounting Standards

Leases

Effective for the quarter ended March 31, 2019, the Company adopted the updated guidance for leases and elected to utilize a cumulative-effect adjustment to the opening balance of retained earnings for the year of adoption.  Accordingly, the Company’s reporting for the comparative periods prior to adoption continue to be presented in the financial statements in accordance with previous lease accounting guidance.  The Company also elected to apply all practical expedients applicable to the Company in the updated guidance for transition for leases in effect at adoption, including using hindsight to determine the lease term of existing leases, the option to not reassess whether an existing contract is a lease or contains a lease and whether the lease is an operating or finance lease. The adoption of the updated guidance resulted in the Company recognizing a right-of-use asset of $320 million as part of other assets and a lease liability of $384 million as part of other liabilities in the consolidated balance sheet, as well as de-recognizing the liability for deferred rent that was required under the previous guidance, for its corporate real estate agreements at March 31, 2019.  The cumulative effect adjustment to the opening balance of retained earnings was zero. The adoption of the updated guidance did not have a material effect on the Company’s results of operations or liquidity.

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

Effective for the quarter ended March 31, 2019, the Company adopted the updated guidance regarding Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, and applied the guidance prospectively.  The updated guidance requires an entity to determine the stage of a project that the implementation activity relates to and the nature of the associated costs in order to determine whether those costs should be expensed as incurred or capitalized.  The updated guidance also requires the entity to amortize the capitalized implementation costs as an expense over the term of the hosting arrangement. The adoption of the updated guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

For additional information regarding accounting standards that the Company adopted during the periods presented, see note 1 of notes to the consolidated financial statements in the Company’s 2018 Annual Report.

Accounting Standards Not Yet Adopted
 
For information regarding accounting standards that the Company has not yet adopted, see the “Other Accounting Standards Not Yet Adopted” section of note 1 of notes to the consolidated financial statements in the Company’s 2018 Annual Report.


8

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
1.    BASIS OF PRESENTATION AND ACCOUNTING POLICIES, Continued

Nature of Operations
 
The Company’s results are reported in the following three business segments — Business Insurance, Bond & Specialty Insurance and Personal Insurance. These segments reflect the manner in which the Company’s businesses are currently managed and represent an aggregation of products and services based on the type of customer, how the business is marketed and the manner in which risks are underwritten. For more information regarding the Company’s nature of operations, see the “Nature of Operations section of note 1 of notes to the consolidated financial statements in the Company’s 2018 Annual Report.
 
2.    SEGMENT INFORMATION
 
The following tables summarize the components of the Company’s revenues, income and total assets by reportable business segments:
(For the three months ended March 31, in millions)
 
Business
Insurance
 
Bond & Specialty
Insurance
 
Personal
Insurance
 
Total
Reportable
Segments
 
 
 
 
 
 
 
 
 
2019
 
 

 
 

 
 

 
 

Premiums
 
$
3,742

 
$
606

 
$
2,507

 
$
6,855

Net investment income
 
427

 
56

 
99

 
582

Fee income
 
104

 

 
5

 
109

Other revenues
 
43

 
6

 
22

 
71

Total segment revenues (1)
 
$
4,316

 
$
668

 
$
2,633

 
$
7,617

 
 
 
 
 
 
 
 
 
Segment income (1)
 
$
414

 
$
138

 
$
278

 
$
830

 
 
 
 
 
 
 
 
 
2018
 
 

 
 

 
 

 
 

Premiums
 
$
3,568

 
$
582

 
$
2,387

 
$
6,537

Net investment income
 
446

 
58

 
99

 
603

Fee income
 
99

 

 
4

 
103

Other revenues
 
31

 
6

 
17

 
54

Total segment revenues (1)
 
$
4,144

 
$
646

 
$
2,507

 
$
7,297

 
 
 
 
 
 
 
 
 
Segment income (1)
 
$
452

 
$
173

 
$
129

 
$
754


_________________________________________________________
(1)
Segment revenues for reportable business segments exclude net realized investment gains (losses). Segment income for reportable business segments equals net income excluding the after-tax impact of net realized investment gains (losses).


9

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
2.    SEGMENT INFORMATION, Continued

Business Segment Reconciliations
 
 
Three Months Ended
March 31,
(in millions)
 
2019
 
2018
Revenue reconciliation
 
 

 
 

Earned premiums
 
 

 
 

Business Insurance:
 
 

 
 

Domestic:
 
 

 
 

Workers’ compensation
 
$
972

 
$
971

Commercial automobile
 
628

 
562

Commercial property
 
460

 
438

General liability
 
567

 
521

Commercial multi-peril
 
840

 
805

Other
 
8

 
7

Total Domestic
 
3,475

 
3,304

International
 
267

 
264

Total Business Insurance
 
3,742

 
3,568

Bond & Specialty Insurance:
 
 

 
 

Domestic:
 
 

 
 

Fidelity and surety
 
246

 
246

General liability
 
257

 
242

Other
 
52

 
47

Total Domestic
 
555

 
535

International
 
51

 
47

Total Bond & Specialty Insurance
 
606

 
582

Personal Insurance:
 
 

 
 

Domestic:
 
 

 
 

Automobile
 
1,297

 
1,225

Homeowners and Other
 
1,039

 
995

Total Domestic
 
2,336

 
2,220

International
 
171

 
167

Total Personal Insurance
 
2,507

 
2,387

Total earned premiums
 
6,855

 
6,537

Net investment income
 
582

 
603

Fee income
 
109

 
103

Other revenues
 
71

 
54

Total segment revenues
 
7,617

 
7,297

Other revenues
 
1

 

Net realized investment gains (losses)
 
53

 
(11
)
Total revenues
 
$
7,671

 
$
7,286

Income reconciliation, net of tax
 
 

 
 

Total segment income
 
$
830

 
$
754

Interest Expense and Other (1)
 
(75
)
 
(76
)
Core income
 
755

 
678

Net realized investment gains (losses)
 
41

 
(9
)
Net income
 
$
796

 
$
669

_________________________________________________________
(1) The primary component of Interest Expense and Other was after-tax interest expense of $70 million for both the three months ended March 31, 2019 and 2018.

10

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
2.    SEGMENT INFORMATION, Continued

(in millions)
 
March 31,
2019
 
December 31,
2018
Asset reconciliation
 
 

 
 

Business Insurance
 
$
82,022

 
$
78,965

Bond & Specialty Insurance
 
8,363

 
8,693

Personal Insurance
 
16,288

 
15,943

Total assets by reportable segment
 
106,673

 
103,601

Other assets (1)
 
573

 
632

Total consolidated assets
 
$
107,246

 
$
104,233

 _________________________________________________________
(1)
The primary components of other assets at both March 31, 2019 and December 31, 2018 were accrued over-funded benefit plan assets related to the Company’s qualified domestic pension plan and other intangible assets.

3.      INVESTMENTS
 
Fixed Maturities
 
The amortized cost and fair value of investments in fixed maturities classified as available for sale were as follows:
 
 
Amortized
 
Gross Unrealized
 
Fair
(at March 31, 2019, in millions)
 
Cost
 
Gains
 
Losses
 
Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
 
$
2,029

 
$
7

 
$
6

 
$
2,030

Obligations of states, municipalities and political subdivisions:
 
 

 
 

 
 

 
 

Local general obligation
 
14,879

 
468

 
14

 
15,333

Revenue
 
9,757

 
336

 
8

 
10,085

State general obligation
 
1,300

 
37

 
2

 
1,335

Pre-refunded
 
2,515

 
79

 

 
2,594

Total obligations of states, municipalities and political subdivisions
 
28,451

 
920

 
24

 
29,347

Debt securities issued by foreign governments
 
1,184

 
12

 
2

 
1,194

Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
 
2,601

 
64

 
16

 
2,649

All other corporate bonds
 
29,873

 
482

 
156

 
30,199

Redeemable preferred stock
 
78

 
3

 

 
81

Total
 
$
64,216

 
$
1,488

 
$
204

 
$
65,500


 

11

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
3.    INVESTMENTS, Continued

 
 
Amortized
 
Gross Unrealized
 
Fair
(at December 31, 2018, in millions)
 
Cost
 
Gains
 
Losses
 
Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
 
$
2,076

 
$
4

 
$
16

 
$
2,064

Obligations of states, municipalities and political subdivisions:
 
 

 
 

 
 

 
 

Local general obligation
 
14,473

 
219

 
120

 
14,572

Revenue
 
9,755

 
172

 
74

 
9,853

State general obligation
 
1,329

 
18

 
13

 
1,334

Pre-refunded
 
2,772

 
80

 

 
2,852

Total obligations of states, municipalities and political subdivisions
 
28,329

 
489

 
207

 
28,611

Debt securities issued by foreign governments
 
1,255

 
7

 
5

 
1,257

Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
 
2,557

 
54

 
38

 
2,573

All other corporate bonds
 
29,307

 
156

 
583

 
28,880

Redeemable preferred stock
 
77

 
2

 

 
79

Total
 
$
63,601

 
$
712

 
$
849

 
$
63,464

 
Pre-refunded bonds of $2.59 billion and $2.85 billion at March 31, 2019 and December 31, 2018, respectively, were bonds for which states or municipalities have established irrevocable trusts, almost exclusively comprised of U.S. Treasury securities and obligations of U.S. government and government agencies and authorities.  These trusts were created to fund the payment of principal and interest due under the bonds.
 
Proceeds from sales of fixed maturities classified as available for sale were $769 million and $1.09 billion during the three months ended March 31, 2019 and 2018, respectively. Gross gains of $21 million and $6 million and gross losses of $4 million and $6 million were realized on those sales during the three months ended March 31, 2019 and 2018, respectively.
 
Equity Securities
 
The cost and fair value of investments in equity securities were as follows:
 
 
 
 
 
 
Fair
(at March 31, 2019, in millions)
 
Cost
 
Gross Gains
 
Gross Losses
 
Value
Public common stock
 
$
339

 
$
24

 
$
6

 
$
357

Non-redeemable preferred stock
 
36

 
7

 

 
43

Total
 
$
375

 
$
31

 
$
6

 
$
400

 
 
 
 
 
 
 
Fair
(at December 31, 2018, in millions)
 
Cost
 
Gross Gains
 
Gross Losses
 
Value
Public common stock
 
$
338

 
$
2

 
$
24

 
$
316

Non-redeemable preferred stock
 
44

 
8

 

 
52

Total
 
$
382

 
$
10

 
$
24

 
$
368

 
For the three months ended March 31, 2019, the Company recognized $39 million of net gains on equity securities still held as of March 31, 2019. For the three months ended March 31, 2018, the Company recognized $13 million of net losses on equity securities still held as of March 31, 2018.


12

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
3.    INVESTMENTS, Continued

Unrealized Investment Losses
 
The following tables summarize, for all investments in an unrealized loss position at March 31, 2019 and December 31, 2018, the aggregate fair value and gross unrealized loss by length of time those securities have been continuously in an unrealized loss position.  The fair value amounts reported in the tables are estimates that are prepared using the process described in note 4 herein and in note 4 of notes to the consolidated financial statements in the Company’s 2018 Annual Report.  The Company also relies upon estimates of several factors in its review and evaluation of individual investments, using the process described in note 1 of notes to the consolidated financial statements in the Company’s 2018 Annual Report to determine whether such investments are other-than-temporarily impaired.
 
 
Less than 12 months
 
12 months or longer
 
Total
(at March 31, 2019, in millions)
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
Fixed maturities
 
 

 
 

 
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
 
$
51

 
$

 
$
1,056

 
$
6

 
$
1,107

 
$
6

Obligations of states, municipalities and political subdivisions
 
103

 

 
2,464

 
24

 
2,567

 
24

Debt securities issued by foreign governments
 
15

 

 
255

 
2

 
270

 
2

Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
 
32

 

 
1,333

 
16

 
1,365

 
16

All other corporate bonds
 
551

 
7

 
9,622

 
149

 
10,173

 
156

Total fixed maturities
 
$
752

 
$
7

 
$
14,730

 
$
197

 
$
15,482

 
$
204

 
 
 
Less than 12 months
 
12 months or longer
 
Total
(at December 31, 2018, in millions)
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
Fixed maturities
 
 
 
 
 
 
 
 
 
 
 
 

U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
 
$
484

 
$
5

 
$
1,011

 
$
11

 
$
1,495

 
$
16

Obligations of states, municipalities and political subdivisions
 
5,241

 
82

 
3,298

 
125

 
8,539

 
207

Debt securities issued by foreign governments
 
96

 

 
328

 
5

 
424

 
5

Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
 
593

 
9

 
1,070

 
29

 
1,663

 
38

All other corporate bonds
 
12,622

 
303

 
6,872

 
280

 
19,494

 
583

Total fixed maturities
 
$
19,036

 
$
399

 
$
12,579

 
$
450

 
$
31,615

 
$
849

 
At March 31, 2019, the amount of gross unrealized losses for all fixed maturity investments reported at fair value for which fair value was less than 80% of amortized cost was not significant.
 
Impairment Charges
 
Impairment charges included in net realized investment gains (losses) in the consolidated statement of income were $1 million and $0 for the three months ended March 31, 2019 and 2018, respectively.

13

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
3.    INVESTMENTS, Continued

The cumulative amount of credit losses on fixed maturities held at March 31, 2019 and 2018 that were recognized in the consolidated statement of income from other-than-temporary impairments (OTTI) and for which a portion of the OTTI was recognized in other comprehensive income (loss) in the consolidated balance sheet was $56 million and $75 million, respectively.  These credit losses represent less than 1% of the fixed maturity portfolio on a pre-tax basis and less than 1% of shareholders’ equity on an after-tax basis at both dates.  There were no significant changes in the credit component of OTTI during the three months ended March 31, 2019 and 2018 compared to what was disclosed in note 3 of notes to the consolidated financial statements in the Company’s 2018 Annual Report.
 
4.    FAIR VALUE MEASUREMENTS
 
The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance.  The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available.  The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable.  In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions.  The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety.  The three levels of the hierarchy are as follows:
 
Level 1 - Unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.
Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable (e.g., interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.
Level 3 - Valuations based on models where significant inputs are not observable.  The unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use.
 
Valuation of Investments Reported at Fair Value in Financial Statements
 
The Company utilized a pricing service to estimate fair value measurements for approximately 99% of its fixed maturities at both March 31, 2019 and December 31, 2018.
 
While the vast majority of the Company’s fixed maturities are included in Level 2, the Company holds a number of municipal bonds and corporate bonds which are not valued by the pricing service and also estimates the fair value of these bonds using another internal pricing matrix that includes some unobservable inputs that are significant to the valuation.  Due to the limited amount of observable market information, the Company includes the fair value estimates for these particular bonds in Level 3.  The fair value of the fixed maturities for which the Company used this internal pricing matrix was $96 million and $82 million at March 31, 2019 and December 31, 2018, respectively.  Additionally, the Company holds a small amount of other fixed maturity investments that have characteristics that make them unsuitable for matrix pricing.  For these fixed maturities, the Company obtains a quote from a broker (primarily the market maker).  The fair value of the fixed maturities for which the Company received a broker quote was $19 million and $104 million at March 31, 2019 and December 31, 2018, respectively.  Due to the disclaimers on the quotes that indicate that the price is indicative only, the Company includes these fair value estimates in Level 3.

For more information regarding the valuation of the Company’s fixed maturities, equity securities and other investments, see note 4 of notes to the consolidated financial statements in the Company’s 2018 Annual Report.

Other Liabilities

The Company has a put/call option that was entered into in connection with a business acquisition that allows the Company to acquire the remaining shares of the acquired company at a future date. The fair value of the put/call at both March 31, 2019 and December 31, 2018 was $10 million and was determined using an internal model and is based on the acquired company's financial

14

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
4.    FAIR VALUE MEASUREMENTS, Continued

performance, adjusted for a risk margin and discounted to present value. The Company includes the fair value estimate of the put/call in Level 3.
 
Fair Value Hierarchy
 
The following tables present the level within the fair value hierarchy at which the Company’s financial assets and financial liabilities are measured on a recurring basis.   
(at March 31, 2019, in millions)
 
Total
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
 
 
 
 
 
Invested assets:
 
 

 
 

 
 

 
 

Fixed maturities
 
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
 
$
2,030

 
$
2,030

 
$

 
$

Obligations of states, municipalities and political subdivisions
 
29,347

 

 
29,335

 
12

Debt securities issued by foreign governments
 
1,194

 

 
1,194

 

Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
 
2,649

 

 
2,649

 

All other corporate bonds
 
30,199

 
4

 
30,092

 
103

Redeemable preferred stock
 
81

 
3

 
78

 

Total fixed maturities
 
65,500

 
2,037

 
63,348

 
115

Equity securities
 
 

 
 

 
 

 
 

Public common stock
 
357

 
356

 
1

 

Non-redeemable preferred stock
 
43

 
14

 
29

 

Total equity securities
 
400

 
370

 
30

 

Other investments
 
58

 
16

 

 
42

Total
 
$
65,958

 
$
2,423

 
$
63,378

 
$
157

 
 
 
 
 
 
 
 
 
Other liabilities
 
$
10

 
$

 
$

 
$
10

 

15

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
4.    FAIR VALUE MEASUREMENTS, Continued

(at December 31, 2018, in millions)
 
Total
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
 
 
 
 
 
Invested assets:
 
 

 
 

 
 

 
 

Fixed maturities
 
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
 
$
2,064

 
$
2,064

 
$

 
$

Obligations of states, municipalities and political subdivisions
 
28,611

 

 
28,599

 
12

Debt securities issued by foreign governments
 
1,257

 

 
1,257

 

Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
 
2,573

 

 
2,554

 
19

All other corporate bonds
 
28,880

 

 
28,725

 
155

Redeemable preferred stock
 
79

 
3

 
76

 

Total fixed maturities
 
63,464

 
2,067

 
61,211

 
186

Equity securities
 
 

 
 

 
 

 
 

Public common stock
 
316

 
316

 

 

Non-redeemable preferred stock
 
52

 
30

 
22

 

Total equity securities
 
368

 
346

 
22

 

Other investments
 
52

 
16

 

 
36

Total
 
$
63,884

 
$
2,429

 
$
61,233

 
$
222

 
 
 
 
 
 
 
 
 
Other liabilities
 
$
10

 
$

 
$

 
$
10

 
There was no significant activity in Level 3 of the hierarchy during the three months ended March 31, 2019 or the year ended December 31, 2018.
 
Financial Instruments Disclosed, But Not Carried, At Fair Value
 
The following tables present the carrying value and fair value of the Company’s financial assets and financial liabilities disclosed, but not carried, at fair value, and the level within the fair value hierarchy at which such assets and liabilities are categorized.
(at March 31, 2019, in millions)
 
Carrying
Value
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
Financial assets
 
 

 
 

 
 

 
 

 
 

Short-term securities
 
$
4,094

 
$
4,094

 
$
483

 
$
3,567

 
$
44

Financial liabilities
 
 

 
 

 
 

 
 

 
 

Debt
 
$
6,957

 
$
7,984

 
$

 
$
7,984

 
$

Commercial paper
 
$
100

 
$
100

 
$

 
$
100

 
$

 
(at December 31, 2018, in millions)
 
Carrying
Value
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
Financial assets
 
 

 
 

 
 

 
 

 
 

Short-term securities
 
$
3,985

 
$
3,985

 
$
632

 
$
3,316

 
$
37

Financial liabilities
 
 

 
 

 
 

 
 

 
 

Debt
 
$
6,464

 
$
7,128

 
$

 
$
7,128

 
$

Commercial paper
 
$
100

 
$
100

 
$

 
$
100

 
$

The Company had no material assets or liabilities that were measured at fair value on a non-recurring basis during the three months ended March 31, 2019 or year ended December 31, 2018.


16

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

5.    GOODWILL AND OTHER INTANGIBLE ASSETS


Goodwill
 
The following table presents the carrying amount of the Company’s goodwill by segment.  Each reportable segment includes goodwill associated with the Company’s international business which is subject to the impact of changes in foreign currency exchange rates.
(in millions)
 
March 31,
2019
 
December 31,
2018
Business Insurance
 
$
2,594

 
$
2,585

Bond & Specialty Insurance
 
550

 
550

Personal Insurance
 
779

 
776

Other
 
26

 
26

Total
 
$
3,949

 
$
3,937


Other Intangible Assets
 
The following tables present a summary of the Company’s other intangible assets by major asset class.
(at March 31, 2019, in millions)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Subject to amortization
 
 
 
 
 
 
Customer-related
 
$
100

 
$
15

 
$
85

Contract-based (1)
 
204

 
174

 
30

Total subject to amortization
 
304

 
189

 
115

Not subject to amortization
 
226

 

 
226

Total
 
$
530

 
$
189

 
$
341

 
(at December 31, 2018, in millions)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Subject to amortization
 
 
 
 
 
 
Customer-related
 
$
98

 
$
12

 
$
86

Contract-based (1)
 
208

 
175

 
33

Total subject to amortization
 
306

 
187

 
119

Not subject to amortization
 
226

 

 
226

Total
 
$
532

 
$
187

 
$
345

 _________________________________________________________
(1)
Contract-based intangible assets subject to amortization are comprised of fair value adjustments on claims and claim adjustment expense reserves, reinsurance recoverables and other contract-related intangible assets. Fair value adjustments recorded in connection with insurance acquisitions were based on management’s estimate of nominal claims and claim adjustment expense reserves and reinsurance recoverables. The method used calculated a risk adjustment to a risk-free discounted reserve that would, if reserves ran off as expected, produce results that yielded the assumed cost-of-capital on the capital supporting the loss reserves.  The fair value adjustments are reported as other intangible assets on the consolidated balance sheet, and the amounts measured in accordance with the acquirer’s accounting policies for insurance contracts have been reported as part of the claims and claim adjustment expense reserves and reinsurance recoverables. The intangible assets are being recognized into income over the expected payment pattern. Because the time value of money and the risk adjustment (cost of capital) components of the intangible assets run off at different rates, the amount recognized in income may be a net benefit in some periods and a net expense in other periods.
 
Amortization expense of intangible assets was $4 million for both the three months ended March 31, 2019 and 2018.  Intangible asset amortization expense is estimated to be $12 million for the remainder of 2019, $15 million in 2020, $14 million in 2021, $13 million in 2022 and $12 million in 2023. Amortization expense for intangible assets arising from insurance contracts acquired

17

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

5.    GOODWILL AND OTHER INTANGIBLE ASSETS, continued


in a business combination is estimated to be $4 million for the remainder of 2019, $5 million in 2020, $4 million in 2021, $3 million in 2022 and $3 million in 2023.

6.    INSURANCE CLAIM RESERVES
 
Claims and claim adjustment expense reserves were as follows:
(in millions)
 
March 31,
2019
 
December 31,
2018
Property-casualty
 
$
50,704

 
$
50,653

Accident and health
 
14

 
15

Total
 
$
50,718

 
$
50,668

 
The following table presents a reconciliation of beginning and ending property casualty reserve balances for claims and claim adjustment expenses:
 
 
 
Three Months Ended
March 31,
(in millions)
 
2019
 
2018
Claims and claim adjustment expense reserves at beginning of year
 
$
50,653

 
$
49,633

Less reinsurance recoverables on unpaid losses
 
8,182

 
8,123

Net reserves at beginning of year
 
42,471

 
41,510

 
 
 
 
 
Estimated claims and claim adjustment expenses for claims arising in the current year
 
4,435

 
4,391

Estimated decrease in claims and claim adjustment expenses for claims arising in prior years
 
(16
)
 
(116
)
Total increases
 
4,419

 
4,275

 
 
 
 
 
Claims and claim adjustment expense payments for claims arising in:
 
 

 
 

Current year
 
970

 
1,009

Prior years
 
3,320

 
3,040

Total payments
 
4,290

 
4,049

Unrealized foreign exchange (gain) loss
 
41

 
(10
)
Net reserves at end of period
 
42,641

 
41,726

Plus reinsurance recoverables on unpaid losses
 
8,063

 
8,068

Claims and claim adjustment expense reserves at end of period
 
$
50,704

 
$
49,794

 
Gross claims and claim adjustment expense reserves at March 31, 2019 increased by $51 million from December 31, 2018, primarily reflecting the impacts of (i) higher volumes of insured exposures and loss cost trends for the current accident year and (ii) catastrophe losses in the first three months of 2019, partially offset by the impacts of (iii) payments related to catastrophe losses incurred in 2018 and (iv) net favorable prior year reserve development.
 
Reinsurance recoverables on unpaid losses at March 31, 2019 decreased by $119 million from December 31, 2018, primarily reflecting the impact of cash collections in the first three months of 2019.
 
Prior Year Reserve Development
 
The following disclosures regarding reserve development are on a “net of reinsurance” basis.
 
For the three months ended March 31, 2019 and 2018, estimated claims and claim adjustment expenses incurred included $16 million and $116 million, respectively, of net favorable development for claims arising in prior years, including $51 million and

18

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
6.    INSURANCE CLAIM RESERVES, Continued

$150 million, respectively, of net favorable prior year reserve development and $12 million and $13 million, respectively, of accretion of discount that impacted the Company's results of operations.
 
Business Insurance. Net unfavorable prior year reserve development in the first quarter of 2019 totaled $21 million, primarily driven by higher than expected loss experience in the segment's domestic operations in (i) the general liability product line for multiple accident years, primarily for years prior to 2009, due to the enactment by New York State of the Child Victims Act (“CVA”) on February 14, 2019 and (ii) the commercial multi-peril product line for recent accident years, partially offset by (iii) better than expected loss experience in the segment's domestic operations in the workers’ compensation product line for multiple accident years. The CVA extends the statute of limitations for claimants asserting childhood sexual molestation, including a “reviver” component that allows claimants of any age to file a civil claim during a one-year window beginning six months after the CVA took effect. Net favorable prior year reserve development in the first quarter of 2018 totaled $66 million, primarily driven by better than expected loss experience in the segment's domestic operations in (i) the workers’ compensation product line for recent accident years and (ii) the commercial property product line for accident year 2016, partially offset by (iii) higher than expected loss experience in the commercial automobile product line for recent accident years.

Bond & Specialty Insurance.  Net favorable prior year reserve development in the first quarter of 2019 of $3 million was not significant. Net favorable prior year reserve development in the first quarter of 2018 totaled $35 million, primarily driven by better than expected loss experience in the segment's domestic operations in the general liability product line for multiple accident years.
 
Personal Insurance.  Net favorable prior year reserve development in the first quarter of 2019 totaled $69 million, primarily driven by better than expected loss experience in the segment's domestic operations in the automobile product line for recent accident years. Net favorable prior year reserve development in the first quarter of 2018 totaled $49 million, primarily driven by better than expected loss experience in the segment's domestic operations in the homeowners and other product line for accident years 2016 and 2017 and in the automobile product line for accident year 2017.


19

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued


7.
OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME
 
The following table presents the changes in the Company’s accumulated other comprehensive income (loss) (AOCI) for the three months ended March 31, 2019.
 
 
Changes in Net Unrealized Gains (Losses) on Investment Securities
 
 
 
 
 
 
(in millions)
 
Having No Credit
Losses Recognized in
the Consolidated
Statement of Income
 
Having Credit 
Losses Recognized 
in the Consolidated
Statement of 
Income
 
Net Benefit Plan Assets and
Obligations
Recognized in
Shareholders’ 
Equity
 
Net Unrealized
Foreign Currency
Translation
 
Total Accumulated
Other
Comprehensive
Income (Loss)
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2018
 
$
(306
)
 
$
193

 
$
(873
)
 
$
(873
)
 
$
(1,859
)
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income (OCI) before reclassifications, net of tax
 
1,129

 
4

 

 
47

 
1,180

Amounts reclassified from AOCI, net of tax
 
(13
)
 

 
10

 

 
(3
)
Net OCI, current period
 
1,116

 
4

 
10

 
47

 
1,177

Balance, March 31, 2019
 
$
810

 
$
197

 
$
(863
)
 
$
(826
)
 
$
(682
)
 
The following table presents the pre-tax components of the Company’s other comprehensive income (loss) and the related income tax expense (benefit).
 
 
Three Months Ended
March 31,
(in millions)
 
2019
 
2018
 
 
 
 
 
Changes in net unrealized gains (losses) on investment securities:
 
 

 
 

Having no credit losses recognized in the consolidated statement of income
 
$
1,416

 
$