Mercury Insurance 2011 Annual Report Download - page 87

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MERCURY GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Year Ended December 31,
2011 2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ................................................... $191,164 $ 152,198 $ 403,072
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization ............................ 40,657 40,735 35,692
Net realized investment gains ............................. (58,397) (57,089) (346,444)
Bond amortization, net .................................. 4,615 1,062 6,655
Excess tax benefit from exercise of stock options ............. (56) (132) (5)
(Increase) decrease in premiums receivable .................. (7,819) (4,192) 17,138
Decrease in current and deferred income taxes ................ 45,431 11,399 150,850
(Increase) decrease in deferred policy acquisition costs ......... (851) 5,287 24,139
Decrease in unpaid losses and loss adjustment expenses ........ (48,926) (19,129) (80,174)
Increase (decrease) in unearned premiums ................... 10,048 (11,161) (35,111)
(Decrease) increase in accounts payable and accrued expenses . . . (9,985) (9,054) 15,757
Decrease in trading securities in nature, net of realized gains and
losses .............................................. 0 0 3,209
Share-based compensation ............................... 899 812 763
Decrease in other payables ............................... (4,142) (23,186) (2,742)
Other, net ............................................. (4,113) 4,231 (3,774)
Net cash provided by operating activities ................ 158,525 91,781 189,025
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed maturities available for sale in nature:
Purchases ................................................. (379,963) (432,869) (430,692)
Sales .................................................... 217,535 204,543 238,308
Calls or maturities .......................................... 418,616 285,454 218,037
Equity securities available for sale in nature:
Purchases ................................................. (351,198) (272,519) (295,513)
Sales .................................................... 325,562 240,764 337,018
Calls ..................................................... 0 4,826 0
Net (decrease) increase in payable for securities ...................... (9,137) 10,763 1,192
Net (increase) decrease in short-term investments ..................... (93,737) 12,815 48,718
Purchase of fixed assets .......................................... (18,079) (28,886) (36,336)
Sale of fixed assets ............................................. 2,990 1,341 369
Business acquisition, net of cash acquired ........................... 0 0 (115,488)
Other, net ..................................................... 12,026 6,868 2,690
Net cash provided by (used in) investing activities ......... 124,615 33,100 (31,697)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid to shareholders .................................... (132,142) (129,863) (127,617)
Excess tax benefit from exercise of stock options ..................... 56 132 5
Payment to retire senior notes ..................................... (125,000) 0 0
Payoff bank loan ............................................... (18,000) 0 0
Proceeds from stock options exercised .............................. 1,951 733 393
Proceeds from bank loan ......................................... 20,000 0 120,000
Net cash used in financing activities .................... (253,135) (128,998) (7,219)
Net increase (decrease) in cash ........................................ 30,005 (4,117) 150,109
Cash:
Beginning of year .......................................... 181,388 185,505 35,396
End of year ............................................... $211,393 $ 181,388 $ 185,505
SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest paid ................................................... $ 6,193 $ 6,607 $ 7,244
Income taxes paid .............................................. $ 8,503 $ 18,792 $ 17,615
See accompanying notes to consolidated financial statements.
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