Travelers 2007 Annual Report Download - page 161

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
For the year ended December 31, 2007 2006 2005
Cash flows from operating activities
Net income ........................................................ $ 4,601 $ 4,208 $ 1,622
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations, net of tax ................................ —— 439
Net realized investment gains .......................................... (154) (11) (17)
Depreciation and amortization ......................................... 811 808 691
Deferred federal income tax on continuing operations ........................... 230 521 500
Amortization of deferred policy acquisition costs .............................. 3,706 3,339 3,252
Equity income from other investments ..................................... (570) (478) (395)
Premiums receivable ............................................... (4) (57) 77
Reinsurance recoverables ............................................. 2,172 1,998 (520)
Deferred acquisition costs ............................................ (3,925) (3,427) (3,220)
Claims and claim adjustment expense reserves ................................ (1,410) (2,565) 2,032
Unearned premium reserves ........................................... 103 300 (383)
Trading account activities ............................................. (3) 66
Loss (gain) on redemption of subordinated debentures ........................... 32 (42) —
Excess tax benefits from share-based payment arrangements ....................... (25) (16) —
Other ........................................................ (278) 190 (495)
Net cash provided by operating activities of continuing operations .................. 5,286 4,774 3,589
Net cash provided by operating activities of discontinued operations ................. ——24
Net cash provided by operating activities .................................. 5,286 4,774 3,613
Cash flows from investing activities
Proceeds from maturities of fixed maturities .................................... 5,305 5,810 4,952
Proceeds from sales of investments:
Fixed maturities .................................................... 7,323 4,401 5,192
Equity securities ................................................... 106 285 403
Real estate ....................................................... 11 —37
Other investments .................................................. 1,460 1,111 1,360
Purchases of investments:
Fixed maturities .................................................... (14,719) (13,845) (16,046)
Equity securities ................................................... (135) (83) (63)
Real estate ....................................................... (74) (75) (49)
Other investments .................................................. (740) (705) (636)
Net (purchases) sales of short-term securities ................................... (562) (85) 142
Securities transactions in course of settlement ................................... (123) 447 (595)
Other ........................................................... (378) (325) (132)
Net cash used in investing activities of continuing operations ..................... (2,526) (3,064) (5,435)
Net cash used in investing activities of discontinued operations .................... —— (20)
Net cash used in investing activities ..................................... (2,526) (3,064) (5,455)
Cash flows from financing activities
Issuance of debt ..................................................... 2,461 786 400
Payment of debt ..................................................... (1,956) (806) (815)
Dividends paid to shareholders ............................................ (742) (702) (628)
Issuance of common stock—employee share options ............................... 218 216 164
Treasury stock acquired—share repurchase program ............................... (2,920) (1,103) —
Treasury stock acquired—net employee share-based compensation ...................... (39) (17) (33)
Excess tax benefits from share-based payment arrangements .......................... 25 16 —
Issuance of common stock—maturity of equity unit forward contracts .................... —— 442
Other ........................................................... —17 (3)
Net cash used in financing activities of continuing operations ..................... (2,953) (1,593) (473)
Net cash provided by financing activities of discontinued operations ................. ——4
Net cash used in financing activities .................................... (2,953) (1,593) (469)
Effect of exchange rate changes on cash ...................................... 55(5)
Elimination of cash provided by discontinued operations ............................ ——(8)
Net proceeds from sale of discontinued operations ................................ —— 2,399
Net increase (decrease) in cash ............................................ (188) 122 75
Cash at beginning of period .............................................. 459 337 262
Cash at end of period ................................................. $ 271 $ 459 $ 337
Supplemental disclosure of cash flow information
Income taxes paid .................................................... $ 1,346 $ 861 $ 826
Interest paid ....................................................... $ 357 $ 358 $ 337
See notes to consolidated financial statements.
149