Travelers 2008 Annual Report Download - page 171

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
For the year ended December 31, 2008 2007 2006
Cash flows from operating activities
Net income ..................................................... $ 2,924 $ 4,601 $ 4,208
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized investment (gains) losses ................................. 415 (154) (11)
Depreciation and amortization ...................................... 821 811 808
Deferred federal income tax expense (benefit) ............................ (58) 230 521
Amortization of deferred acquisition costs ............................... 3,880 3,706 3,339
Equity in (income) loss from other investments ........................... 312 (570) (478)
Premiums receivable ............................................ 166 (4) (57)
Reinsurance recoverables ......................................... 1,209 2,172 1,998
Deferred acquisition costs ......................................... (3,845) (3,925) (3,427)
Claims and claim adjustment expense reserves ............................ (2,033) (1,410) (2,565)
Unearned premium reserves ....................................... (270) 103 300
Trading account activities ......................................... 11 (3) 6
Loss (gain) on redemption of subordinated debentures ....................... —32 (42)
Excess tax benefits from share-based payment arrangements ................... (10) (25) (16)
Other ...................................................... (384) (278) 190
Net cash provided by operating activities .............................. 3,138 5,286 4,774
Cash flows from investing activities
Proceeds from maturities of fixed maturities ................................ 4,869 5,305 5,810
Proceeds from sales of investments:
Fixed maturities ................................................. 6,932 7,323 4,401
Equity securities ................................................ 53 106 285
Real estate .................................................... 25 11 —
Other investments ............................................... 655 1,460 1,111
Purchases of investments:
Fixed maturities ................................................. (11,127) (14,719) (13,845)
Equity securities ................................................ (95) (135) (83)
Real estate .................................................... (38) (74) (75)
Other investments ............................................... (667) (740) (705)
Net (purchases) sales of short-term securities ................................ (406) (562) (85)
Securities transactions in course of settlement ............................... (318) (123) 447
Other ......................................................... (45) (378) (325)
Net cash used in investing activities ................................. (162) (2,526) (3,064)
Cash flows from financing activities
Issuance of debt .................................................. 496 2,461 786
Payment of debt .................................................. (552) (1,956) (806)
Dividends paid to shareholders ......................................... (715) (742) (702)
Issuance of common stock—employee share options ........................... 89 218 216
Treasury stock acquired—share repurchase authorization ........................ (2,167) (2,920) (1,103)
Treasury stock acquired—net employee share-based compensation .................. (29) (39) (17)
Excess tax benefits from share-based payment arrangements ...................... 10 25 16
Other ......................................................... ——17
Net cash used in financing activities ................................. (2,868) (2,953) (1,593)
Effect of exchange rate changes on cash ................................... (29) 55
Net increase (decrease) in cash ........................................ 79 (188) 122
Cash at beginning of period ........................................... 271 459 337
Cash at end of period .............................................. $ 350 $ 271 $ 459
Supplemental disclosure of cash flow information
Income taxes paid ................................................. $ 841 $ 1,346 $ 861
Interest paid .................................................... $ 375 $ 357 $ 358
See notes to consolidated financial statements.
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