Progressive 2015 Annual Report Download - page 81

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our indexed common stock portfolio, which reduced the fair value of our actively managed equities by $161.2 million and the
cost basis by $158.4 million based on the September 30, 2015 valuation.
Other risk investments include private equity investments and limited partnership interests in private equity and mezzanine
investment funds, which have no off-balance-sheet exposure or contingent obligations.
The following is a summary of our indexed common stock portfolio holdings by sector compared to the Russell 1000 Index
composition:
Sector
Equity Portfolio
Allocation at
December 31, 2015
Russell 1000
Allocation at
December 31, 2015
Russell 1000
Sector Return
in 2015
Consumer discretionary 14.9% 15.5% 6.4%
Consumer staples 7.7 8.7 8.2
Financial services 18.2 19.4 0.7
Health care 14.7 14.3 7.1
Materials and processing 3.2 3.6 (7.6)
Other energy 6.5 6.1 (22.3)
Producer durable 9.7 10.3 (2.4)
Technology 18.0 16.9 4.3
Utilities 5.2 5.2 (1.8)
Other equity 1.9 NA NA
Total common stocks 100.0% 100.0% 0.9%
NA = Not Applicable
Derivative Instruments
CASH FLOW HEDGES
We issued $400 million of 3.70% Senior Notes in January 2015 and $350 million of 4.35% Senior Notes in April 2014. Upon
issuance, we closed forecasted debt issuance hedges, which were entered into to hedge against a possible rise in interest
rates, and recognized a $12.9 million and a $1.6 million pretax loss, respectively, as part of accumulated other
comprehensive income (loss). The losses will be recognized as an adjustment to interest expense and amortized over the
applicable lives of the Senior Notes.
We repurchased a portion of our 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 during 2015 and
2014, and we reclassified $0.2 million and $0.5 million, respectively, of unrealized gains on forecasted transactions to net
realized gains on securities.
See Note 2 – Investments for further discussion.
App.-A-80