Mercury Insurance 2015 Annual Report Download - page 72

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See accompanying notes to consolidated financial statements.
60
MERCURY GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2015 2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 74,479 $ 177,949 $ 112,143
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 26,478 28,054 30,587
Net realized investment losses (gains) 83,807 (81,184) 11,422
Bond amortization, net 21,360 18,918 12,529
Excess tax benefit from exercise of stock options (27) (148) (202)
Increase in premiums receivable (41,512) (23,934) (20,688)
Changes in current and deferred income taxes (35,287) 8,343 3,451
Increase in deferred policy acquisition costs (4,560) (2,736) (8,556)
Increase in unpaid losses and loss adjustment expenses 36,214 52,813 2,861
Increase in unearned premiums 42,552 46,271 33,098
(Decrease) increase in accounts payable and accrued expenses (35,086) 31,019 30,367
Share-based compensation 5,208 4,112 974
Increase (decrease) in other payables 18,114 (10,988) 12,135
Other, net (1,496) (1,954) (10,317)
Net cash provided by operating activities 190,244 246,535 209,804
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed maturity securities available for sale in nature:
Purchases (965,701) (542,494) (831,796)
Sales 260,946 209,680 228,116
Calls or maturities 386,644 330,637 343,628
Equity securities available for sale in nature:
Purchases (748,217) (868,383) (596,883)
Sales 805,417 745,058 872,997
Calls 2,851 1,044 —
Changes in securities payable and receivable (1,387) 9,294 1,702
Net decrease (increase) in short-term investments and purchased options 187,492 (56,530) (20,005)
Purchase of fixed assets (20,112) (26,037) (18,671)
Sale of fixed assets 141 224 820
Business acquisition, net of cash acquired 7,771 — —
Other, net 2,473 3,472 1,741
Net cash used in investing activities (81,682) (194,035) (18,351)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid to shareholders (136,386) (135,496) (134,776)
Excess tax benefit from exercise of stock options 27 148 202
Proceeds from stock options exercised 2,111 6,247 1,446
Proceeds from bank loan — 100,000 50,000
Net cash used in financing activities (134,248) (29,101) (83,128)
Net (decrease) increase in cash (25,686) 23,399 108,325
Cash:
Beginning of year 289,907 266,508 158,183
End of year $ 264,221 $ 289,907 $ 266,508
SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest paid $ 2,989 $ 2,543 $ 998
Income taxes paid $ 31,390 $ 61,139 $ 16,503