Mercury Insurance 2007 Annual Report Download - page 66

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64 MERCURYNOW 2007
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31,
Amounts expressed in thousands 2007 2006 2005
Cash flows from operating activities:
Net income $ 237,832 $ 214,817 $ 253,259
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 26,324 24,262 18,781
Net realized investment gains (20,808) (15,436) (16,160)
Bond amortization, net 7,414 4,701 11,814
Excess tax benefit from exercise of stock options (273) (505) —
Decrease (increase) in premiums receivable 4,109 (13,989) (14,741)
Decrease (increase) in premium notes receivable 2,036 (2,611) (3,300)
Increase in deferred policy acquisition costs (22) (11,840) (23,103)
Increase in unpaid losses and loss adjustment expenses 15,093 66,219 121,859
(Decrease) increase in unearned premiums (11,974) 47,777 102,888
(Decrease) increase in accrued income taxes payable,
excluding deferred tax on change in unrealized gain (21,817) 24,435 (6,443)
Decrease in accounts payable and accrued expenses (11,439) (467) (1,175)
Net increase in trading securities (10,101) — —
Share-based compensation 487 886 —
Other, net (740) 24,947 62,114
Net cash provided by operating activities 216,121 363,196 505,793
Cash flows from investing activities:
Fixed maturities available for sale:
Purchases (1,782,206) (2,701,195) (1,787,879)
Sales 1,442,863 1,912,718 937,481
Calls or maturities 311,714 522,193 409,520
Equity securities available for sale:
Purchases (578,573) (429,564) (406,974)
Sales 546,314 404,730 401,016
(Decrease) increase in payable for securities, net (5,141) 949 250
Net decrease in short-term investments 9,624 38,747 100,320
Purchase of fixed assets (42,036) (40,644) (42,211)
Sale of fixed assets 1,110 529 1,211
Other, net 3,455 8,675 3,442
Net cash used in investing activities (92,876) (282,862) (383,824)
CONSOLIDATED STATEMENTS OF CASH FLOWS