Discover 2015 Annual Report Download - page 106

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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Cash Flows
For the Years Ended December 31,
2015 2014 2013
(dollars in millions)
Cash flows from operating activities
Net income .............................................................................................................................. $ 2,297 $ 2,323 $ 2,470
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses ........................................................................................................ 1,512 1,443 1,086
Depreciation and amortization ............................................................................................... 391 369 334
Amortization of deferred revenues and accretion of accretable yield on acquired loans ............... (432) (474) (465)
Net gain on origination and sale of loans, investments, and other assets .................................... (26) (56) (123)
Proceeds from sale of mortgage loans originated for sale ......................................................... 2,714 2,811 4,160
Net principal disbursed on mortgage loans originated for sale .................................................. (2,519) (2,700) (3,805)
Other, net ............................................................................................................................ (8) 275 381
Changes in assets and liabilities:
Increase in other assets ...................................................................................................... (237) (238) (252)
Increase (decrease) in accrued expenses and other liabilities ................................................. 162 73 (269)
Net cash provided by operating activities ....................................................................................... 3,854 3,826 3,517
Cash flows from investing activities
Maturities and sales of available-for-sale investment securities ................................................... 1,517 1,460 1,423
Purchases of available-for-sale investment securities ................................................................. (677) (390) (325)
Maturities of held-to-maturity investment securities .................................................................... 17 10 29
Purchases of held-to-maturity investment securities .................................................................... (37) (53) (2)
Net principal disbursed on loans originated for investment ........................................................ (3,479) (5,095) (3,915)
Purchases of loan receivables ................................................................................................. — — (136)
Purchases of other investments ............................................................................................... (51) (60) (114)
Decrease in restricted cash ..................................................................................................... 7 76 108
Proceeds from sale of premises and equipment ........................................................................ 1 — —
Purchases of premises and equipment ..................................................................................... (168) (145) (231)
Proceeds from sale of subsidiaries .......................................................................................... 2 — —
Net cash used for investing activities ............................................................................................... (2,868) (4,197) (3,163)
Cash flows from financing activities
Net decrease in short-term borrowings .................................................................................... (113) (27) (231)
Proceeds from issuance of securitized debt .............................................................................. 2,975 5,049 4,650
Maturities and repayment of securitized debt ........................................................................... (3,634) (4,678) (3,638)
Proceeds from issuance of other long-term borrowings ............................................................. 2,789 1,646 1,744
Payment of contingent consideration for purchase of net assets of a business, at fair value ........... — — (9)
Proceeds from issuance of common stock ................................................................................ 5 5 13
Purchases of treasury stock .................................................................................................... (1,715) (1,564) (1,296)
Net increase in deposits ........................................................................................................ 1,510 1,137 2,782
Dividends paid on common and preferred stock ....................................................................... (515) (467) (399)
Net cash provided by financing activities ........................................................................................ 1,302 1,101 3,616
Net increase in cash and cash equivalents ...................................................................................... 2,288 730 3,970
Cash and cash equivalents, at beginning of period .......................................................................... 7,284 6,554 2,584
Cash and cash equivalents, at end of period ................................................................................... $ 9,572 $ 7,284 $ 6,554
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest expense .................................................................................................................... $ 1,070 $ 933 $ 975
Income taxes, net of income tax refunds .................................................................................. $ 1,341 $ 1,388 $ 1,348
See Notes to the Consolidated Financial Statements.