Travelers 2005 Annual Report Download - page 145

See notes to consolidated financial statements.
133
THE ST. PAUL TRAVELERS COMPANIES, INC.AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
For the year ended December 31, 2005(1) 2004(1) 2003
Cash flows from operating activities
Net income ....................................................................... $1,622 $955 $ 1,696
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (income) from d iscontinued operations, net of tax.................................. 439 (88 ) —
Net realized investment (gains) losses ............................................... (17 ) 39 (38)
Depreciation and amortization .................................................... 691 522 85
Deferred federal income tax (benefit) on continuing operations........................... 500 (280 ) 539
Amortization of deferred policy acquisition costs ...................................... 3,252 2,978 1,984
Premiums receivable............................................................ 77 320 (228)
Reinsurance recoverables ........................................................ (520 ) 584 (197)
Deferred acquisition costs ........................................................ (3,220 ) (2,948 ) (2,076)
Claims and claim adjustment expense reserves ........................................ 2,032 3,473 837
Unearned premium reserves ...................................................... (383 ) (42 ) 651
Trading account activities........................................................ 6 20 (16)
Recoveries from former affiliate ................................................... — — 361
Other....................................................................... (890 ) (467 ) 236
Net cash provided by operating activities of continuing operations....................... 3,589 5,066 3,834
Net cash provided by operating activities of discontinued operations..................... 24 175 —
Net cash provided by operating activities .......................................... 3,613 5,241 3,834
Cash flows from investing activities
Proceeds from maturities of investments:
Fixed maturities................................................................. 4,952 5,621 4,462
Mortgage loans .................................................................. 51 76 59
Proceeds from sales of investments:
Fixed maturities................................................................. 5,192 7,945 8,343
Equity securities ................................................................. 403 265 254
Mortgage loans .................................................................. — 61 —
Real estate ..................................................................... 37 — 11
Purchases of investments:
Fixed maturities................................................................. (16,046 ) (16,522 ) (15,555)
Equity securities ................................................................. (63 ) (94 ) (61)
Mortgage loans .................................................................. — (55 ) (12)
Real estate ..................................................................... (49 ) (22 ) —
Short-term securities, (purchases) sales, net .............................................. 142 (1,913 ) 2,910
Other investments, net .............................................................. 673 882 60
Securities transactions in course of settlement ............................................ (595 ) (1,108 ) (2,946)
Net proceeds from the sale of discontinued operations...................................... 2,399 — —
Net cash acquired in merger .......................................................... — 148 —
Other........................................................................... (132 ) 69 —
Net cash used in investing activities of continuing operations ........................... (3,036 ) (4,647 ) (2,475)
Net cash used in investing activities of discontinued operations......................... (20 ) (139 ) —
Net cash used in investing activities .............................................. (3,056 ) (4,786 ) (2,475)
Cash flows from financing activities
Issuance of debt................................................................... 400 302 1,932
Payment of debt ................................................................... (815 ) (227 ) (1,103)
Issuance of common stock—maturity of equity unit forward contracts .......................... 442 — —
Dividends to shareholders............................................................ (628 ) (642 ) (282)
Issuance of common stock-employee stock options. ........................................ 164 111 40
Treasury stock acquired—net employee stock-based compensation ............................ (33 ) (23 ) (18)
Repurchase of minority interest of subsidiary ............................................. — (76 ) —
Payment of dividend on subsidiary’s stock. ............................................... — — (5)
Payment of note payable to former affiliate .............................................. — — (700)
Redemption of mandatorily redeemable securities of subsidiary trusts.......................... — — (900)
Treasury stock purchased ............................................................ — — (40)
Transfer of employee benefit obligations to former affiliates. ................................. — — (23)
Other........................................................................... (3 ) 39 —
Net cash used in financing activities of continuing operations........................... (473 ) (516 ) (1,099)
Net cash provided by (used in) financing activities of discontinued operations.............. 4 (24 ) —
Net cash used in financing activities .............................................. (469 ) (540 ) (1,099)
Effect of exchange rate changes on cash ................................................. (5 ) 7 —
Elimination of cash provided by discontinued operations.................................... (8 ) (12 ) —
Net increase (decrease) in cash ........................................................ 75 (90 ) 260
Cash at beginning of period .......................................................... 262 352 92
Cash at end of period ............................................................... $337 $262 $ 352
Supplemental disclosure of cash flow information
Income taxes paid (refunded)......................................................... $826 $606 $ (64)
Interest paid ...................................................................... $337 $286 $ 140
(1) See note 3.