Progressive 2008 Annual Report Download - page 30

For the years ended December 31, 2008 2007 2006
Retained Earnings
Balance, Beginning of year $ 2,927.7 $ 4,646.9 $ 4,726.0
Net income (loss) (70.0) $ (70.0) 1,182.5 $ 1,182.5 1,647.5 $ 1,647.5
Cash dividends declared on common shares
($0, $2.145, and $.0325 per share) — (1,507.6) (25.0)
Treasury shares purchased1(157.1) (1,388.4) (1,111.6)
Capitalization of stock spilt ——(585.9)
Other, net2(2.8) (5.7) (4.1)
Balance, End of year $ 2,697.8 $ 2,927.7 $ 4,646.9
Accumulated Other Comprehensive Income (Loss), Net of Tax
Balance, Beginning of year $ 492.8 $ 604.3 $ 398.7
Changes in:
Net unrealized gains (losses) on securities (541.8) (131.8) 206.7
Net unrealized gains on forecasted transactions (2.9) 20.3 (1.1)
Other comprehensive income (loss) (544.7) (544.7) (111.5) (111.5) 205.6 205.6
Balance, End of year $ (51.9) $ 492.8 $ 604.3
Comprehensive Income (Loss) $ (614.7) $ 1,071.0 $ 1,853.1
Common Shares, $1.00 Par Value
Balance, Beginning of year $ 680.2 $ 748.0 $ 197.3
Stock options exercised 3.5 3.4 3.7
Treasury shares purchased1(9.9) (72.9) (39.1)
Restricted stock issued, net of forfeitures 2.7 1.7 .2
Capitalization of stock split ——585.9
Balance, End of year $ 676.5 $ 680.2 $ 748.0
Paid-in Capital
Balance, Beginning of year $ 834.8 $ 847.4 $ 848.2
Stock options exercised 23.5 27.4 39.6
Tax benefits from exercise/vesting of
stock-based compensation 11.1 15.5 38.8
Treasury shares purchased1(12.4) (87.1) (63.8)
Restricted stock issued, net of forfeitures (2.7) (1.7) (.2)
Amortization of stock-based compensation 35.1 28.0 27.8
SFAS 123(R) reclass3——(51.5)
Other23.5 5.3 8.5
Balance, End of year $ 892.9 $ 834.8 $ 847.4
Unamortized Restricted Stock
Balance, Beginning of year $— $— $(62.7)
SFAS 123(R) reclass3——62.7
Balance, End of year $— $— $—
Total Shareholders’ Equity $ 4,215.3 $ 4,935.5 $ 6,846.6
1Progressive did not split its treasury shares in conjunction with the May 18, 2006, 4-for-1 stock 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.
2Primarily reflects activity associated with our deferred compensation and incentive plans.
3Upon 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 2008 Annual Report to Shareholders, which is attached as an
Appendix to Progressive’s 2009 Proxy Statement.
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES32
(millions—except per share amounts)
Consolidated Statements of Changes in Shareholders’ Equity