Progressive 2007 Annual Report Download - page 33

Consolidated Statements of Changes in Shareholders’ Equity
(millions — except per share amounts)
For the years ended December 31, 2007 2006 2005
RETAINED EARNINGS
Balance, Beginning of year $4,646.9 $4,726.0 $ 3,812.9
Net income 1,182.5 $ 1,182.5 1,647.5 $ 1,647.5 1,393.9 $ 1,393.9
Cash dividends declared on Common Shares
($2.1450, $.0325 and $.0300 per share)1(1,507.6) (25.0) (23.7)
Treasury shares purchased2(1,388.4) (1,111.6) (457.0)
Capitalization of stock spilt — (585.9) —
Other, net3(5.7) (4.1) (.1)
Balance, End ofyear $2,927.7 $4,646.9 $4,726.0
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Balance, Beginning of year $ 604.3 $ 398.7 $ 444.8
Changes in:
Net unrealized gains on securities (131.8) 206.7 (45.0)
Net unrealized gains on forecasted transactions 20.3 (1.1) (1.1)
Other comprehensive income (111.5) (111.5) 205.6 205.6 (46.1) (46.1)
Balance, End of year $ 492.8 $ 604.3 $ 398.7
Comprehensive Income $ 1,071.0 $ 1,853.1 $ 1,347.8
COMMON SHARES, $1.00 PAR VALUE
Balance, Beginning of year $ 748.0 $ 197.3 $ 200.4
Stock options exercised 3.4 3.7 1.6
Treasury shares purchased2(72.9) (39.1) (5.2)
Restricted stock issued, net of forfeitures 1.7 .2 .5
Capitalization of stock split — 585.9 —
Balance, End of year $ 680.2 $ 748.0 $197.3
PAID-IN CAPITAL
Balance, Beginning of year $ 847.4 $ 848.2 $ 743.3
Stock options exercised 27.4 39.6 42.6
Tax benefits from exercise/vesting of
stock-based compensation
15.5 38.8 41.2
Treasury shares purchased2(87.1) (63.8) (20.6)
Restricted stock issued, net of forfeitures (1.7) (.2) 41.7
Amortization of stock-based compensation 28.0 27.8 —
SFAS 123(R) reclass4— (51.5) —
Other35.3 8.5 —
Balance, End of year $ 834.8 $ 847.4 $ 848.2
UNAMORTIZED RESTRICTED STOCK
Balance, Beginning of year $ — $ (62.7) $ (46.0)
Restricted stock issued, net of forfeitures — — (42.2)
Restricted stock market value adjustment — — (8.2)
Amortization of restricted stock — — 33.7
SFAS 123(R) reclass4— 62.7 —
Balance, End of year $ — $ — $ (62.7)
Total Shareholders’ Equity $4,935.5 $6,846.6 $ 6,107.5
1All per share amounts were adjusted for the May 18, 2006, 4-for-1stock split.
2Progressive did not split its treasury shares in conjunction with the May 18, 2006, 4-for-1stock split. In 2006, we repurchased 3,182,497 common
shares prior to the stock split and 35,887,246 common shares subsequent to the stock split.
3Primarily reflects activity associated with our deferred compensation plans.
4Upon adoption of SFAS 123(R), companies were required to eliminate any unearned compensation (i.e., contra-equity) accounts against the
appropriate equity accounts. As a result, as of January 1, 2006, we were required to reclassify $62.7 million of “Unamortized restricted stock,” of
which $51.5 million related to equity awards and $11.2 million related to liability awards.
There are 20.0 million Serial Preferred Shares authorized; no such shares are issued or outstanding.
There are 5.0 million Voting Preference Shares authorized; no such shares have been issued.
See notes to the complete consolidated financial statements included in Progressive’s 2007 Annual Report to Shareholders, which is attached
as an Appendix to Progressive’s 2008 Proxy Statement.
32 THE PROGRESSIVE CORPORATION AND SUBSIDIARIES