Mercury Insurance 2010 Annual Report Download - page 76

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MERCURY GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Year Ended December 31,
2010 2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) ............................................................... $152,198 $ 403,072 $(242,119)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization ................................................. 40,735 35,692 27,037
Net realized investment (gains) losses ........................................... (57,089) (346,444) 550,520
Bond amortization, net ....................................................... 1,062 6,655 12,263
Excess tax benefit from exercise of stock options .................................. (132) (5) (121)
(Increase) decrease in premiums receivable ....................................... (4,192) 17,138 28,314
Decrease (increase) in current and deferred income taxes ............................ 11,399 150,850 (247,812)
Decrease in deferred policy acquisition costs ...................................... 5,287 24,139 9,800
(Decrease) increase in unpaid losses and loss adjustment expenses ..................... (19,129) (80,174) 29,593
Decrease in unearned premiums ................................................ (11,161) (35,111) (58,719)
(Decrease) increase in accounts payable and accrued expenses ........................ (9,054) 15,757 (30,816)
Decrease in trading securities in nature, net of realized gains and losses ................. 0 3,209 3,463
Share-based compensation .................................................... 812 763 652
Decrease in other payables .................................................... (23,186) (2,742) (11,969)
Other, net .................................................................. 4,231 (3,774) (5,485)
Net cash provided by operating activities ..................................... 91,781 189,025 64,601
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed maturities available for sale in nature:
Purchases .................................................................. (432,869) (430,692) (673,231)
Sales ..................................................................... 204,543 238,308 550,687
Calls or maturities ........................................................... 285,454 218,037 235,846
Equity securities available for sale in nature:
Purchases .................................................................. (272,519) (295,513) (386,585)
Sales ..................................................................... 240,764 337,018 282,650
Calls ..................................................................... 4,826 0 0
Net increase (decrease) in payable for securities ....................................... 10,763 1,192 (1,050)
Net decrease in short-term investments .............................................. 12,815 48,718 68,002
Purchase of fixed assets .......................................................... (28,886) (36,336) (48,513)
Sale and write-off of fixed assets ................................................... 1,341 369 1,514
Business acquisition, net of cash acquired ............................................ 0 (115,488) 0
Other, net ...................................................................... 6,868 2,690 5,334
Net cash provided by (used in) investing activities ............................. 33,100 (31,697) 34,654
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid to shareholders ..................................................... (129,863) (127,617) (127,011)
Excess tax benefit from exercise of stock options ...................................... 132 5 121
Repayment of debt .............................................................. 0 0 (4,500)
Proceeds from stock options exercised ............................................... 733 393 1,286
Proceeds from bank loan .......................................................... 0 120,000 18,000
Net cash used in financing activities ......................................... (128,998) (7,219) (112,104)
Net (decrease) increase in cash ......................................................... (4,117) 150,109 (12,849)
Cash:
Beginning of year ........................................................... 185,505 35,396 48,245
End of year ................................................................ $181,388 $ 185,505 $ 35,396
SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest paid .................................................................... $ 6,607 $ 7,244 $ 5,787
Income taxes paid ............................................................... $ 18,792 $ 17,615 $ 39,087
Net realized gains (losses) from sale of investments .................................... $ 11,207 $ (52,748) $ (18,698)
See accompanying notes to consolidated financial statements.
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