Travelers 2006 Annual Report Download - page 160

See notes to consolidated financial statements.
148
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
For the year ended December 31, 2006 2005 2004
Cash flows from operating activities
Net income........................................................................ $ 4,208 $ 1,622 $ 955
Adjustmentsto reconcile net income tonet cash provided by operating activities:
Loss (income) from d iscontinued opera tions, net of tax..................................... — 439 (88)
Netrealized investment (gains) losses.................................................. (11)(17 ) 39
Depreciation and amortization....................................................... 808 691 522
Deferred federal income tax (benefit) on continuing operations ............................... 521 500 (280)
Amortization of deferred policy acqui sition costs. ......................................... 3,339 3,252 2,978
Premiums receivable.............................................................. (57)77 320
Reinsurance recove rables .......................................................... 1,998 (520 ) 584
Deferred acquisition costs.......................................................... (3,427)(3,220 ) (2,948)
Claims and claim adjustment expense reserves ........................................... (2,565)2,032 3,473
Unearned premiumreserves........................................................ 300 (383 ) (42)
Trading account activities.......................................................... 6 6 20
Gain onredemption of subordinated deb entures. ......................................... (42) — —
Excess tax benefits from share-based payment arrangements................................. (16) — —
Other. ........................................................................ (288)(890 ) (467)
Net cashprovided by operating activities of continuing operations ........................... 4,774 3,589 5,066
Net cashprovided by operating activities of discontinued operations.......................... — 24 175
Net cashprovided by operating activities.............................................. 4,774 3,613 5,241
Cash flows from investing activities
Proceedsfrom maturities offixed maturities................................................ 5,810 4,952 5,621
Proceeds from sales of investments:
Fixed maturities ................................................................... 4,401 5,192 7,945
Equity securities. .................................................................. 285 403 265
Real estate. ...................................................................... — 37 —
Purchases of investments:
Fixed maturities ................................................................... (13,845)(16,046 ) (16,522)
Equity securities. .................................................................. (83)(63 ) (94)
Real estate. ...................................................................... (75)(49 ) (22)
Short-term securities, (purchases) sales, net. ................................................ (85)142 (1,913)
Other investments, net................................................................ 406 724 964
Securities transactions incourse of settlement............................................... 447 (595 ) (1,108)
Net cashacquired in merger............................................................ — — 148
Other............................................................................ (325)(132 ) 69
Net cash used in investing activities of continuing operations ............................... (3,064)(5,435 ) (4,647)
Net cash used in investing activities of discontinued operations ............................. — (20 ) (139)
Net cash used in investing activities ................................................. (3,064)(5,455 ) (4,786)
Cash flows from financing activities
Issuance of debt ..................................................................... 786 400 302
Payment of debt..................................................................... (806)(815 ) (227)
Dividends paidtoshareholders.......................................................... (702)(628 ) (642)
Issuance of common stock—- employee share options......................................... 216 164 111
Treasury stock acquired—share repurchase program .......................................... (1,103)— —
Treasury stock acquired—net employee share-based compensation. ............................... (17)(33 ) (23)
Excess taxbenefits from share-based payment arrangements..................................... 16 — —
Issuance of common stock—maturity of equity unit forward contracts.............................. — 442
—
Repurchase of minority interest of subsidiary................................................ — — (76)
Other............................................................................ 17 (3 ) 39
Net cash used in financing activities of continuing operations............................... (1,593)(473 ) (516)
Net cashprovided by (used in) financing activities of discontinued operations................... — 4 (24)
Net cash used in financing activities ................................................. (1,593)(469 ) (540)
Effect of exchangerate changes on cash.................................................... 5 (5 ) 7
Elimination of cash provided by discontinued operations ....................................... — (8 ) (12)
Net proceeds from sale of discontinued operations. ........................................... — 2,399 —
Net increase (decrease) incash.......................................................... 122 75 (90)
Cash at beginning of period ............................................................ 337 262 352
Cash at end of period................................................................. $ 459 $ 337 $ 262
Supplemental disclosure of cash flow information
Income taxes paid ................................................................... $ 861 $ 826 $ 606
Interest paid....................................................................... $ 358 $ 337 $ 286