Progressive 2014 Annual Report Download - page 6

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The Progressive Corporation and Subsidiaries
Consolidated Statements of Cash Flows
For the years ended December 31,
(millions) 2014 2013 2012
Cash Flows From Operating Activities
Net income $ 1,281.0 $ 1,165.4 $ 902.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 97.1 101.3 94.4
Net amortization of fixed-income securities 78.2 134.0 186.7
Amortization of equity-based compensation 51.4 64.9 63.4
Net realized (gains) losses on securities (224.2) (318.4) (306.8)
Net (gains) losses on disposition of property and equipment 5.4 5.6 7.1
(Gains) losses on extinguishment of debt 4.8 4.3 1.8
Changes in:
Premiums receivable (227.1) (127.4) (253.8)
Reinsurance recoverables (141.7) (189.2) (83.0)
Prepaid reinsurance premiums (10.4) (8.6) 3.5
Deferred acquisition costs (9.6) (13.1) (0.9)
Income taxes 97.5 57.8 19.8
Unearned premiums 266.4 244.8 351.1
Loss and loss adjustment expense reserves 378.0 641.6 592.6
Accounts payable, accrued expenses, and other liabilities 92.0 165.0 123.6
Other, net (13.2) (28.1) (10.4)
Net cash provided by operating activities 1,725.6 1,899.9 1,691.4
Cash Flows From Investing Activities
Purchases:
Fixed maturities (7,967.5) (7,100.6) (5,199.2)
Equity securities (369.7) (322.2) (463.1)
Sales:
Fixed maturities 5,637.5 3,083.9 3,705.6
Equity securities 560.1 369.2 793.0
Maturities, paydowns, calls, and other:
Fixed maturities 2,296.6 1,859.6 1,488.9
Equity securities 14.3 21.5 16.0
Net sales (purchases) of short-term investments (876.0) 716.6 (438.2)
Net unsettled security transactions (30.0) 152.2 (44.0)
Purchases of property and equipment (108.1) (140.4) (127.7)
Sales of property and equipment 5.9 3.7 3.8
Net cash used in investing activities (836.9) (1,356.5) (264.9)
Cash Flows From Financing Activities
Proceeds from exercise of stock options 0 0 0.5
Tax benefit from exercise/vesting of equity-based compensation 12.8 10.3 5.8
Net proceeds from debt issuance 344.7 0 0
Payment of debt 0 (150.0) (350.0)
Reacquisition of debt (48.9) (58.1) (32.5)
Dividends paid to shareholders (892.6) (175.6) (853.7)
Acquisition of treasury shares (271.4) (273.4) (174.2)
Net cash used in financing activities (855.4) (646.8) (1,404.1)
Effect of exchange rate changes on cash 0 (0.6) 1.0
Increase (decrease) in cash 33.3 (104.0) 23.4
Cash, Beginning of year 75.1 179.1 155.7
Cash, End of year $ 108.4 $ 75.1 $ 179.1
See notes to consolidated financial statements.
App.-A-5