Prudential 2005 Annual Report Download - page 86

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PRUDENTIAL FINANCIAL, INC.
Consolidated Statements of Cash Flows
Years Ended December 31, 2005, 2004 and 2003 (in millions)
2005 2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ....................................................................................... $ 3,540 $ 2,256 $ 1,264
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment gains, net .................................................................... (1,375) (798) (380)
Policy charges and fee income .................................................................... (858) (822) (528)
Interest credited to policyholders’ account balances ................................................... 2,699 2,359 1,857
Depreciation and amortization, including premiums and discounts ........................................ 501 537 716
Net loss on business dispositions .................................................................. — — 510
Change in:
Deferred policy acquisition costs .............................................................. (792) (665) (606)
Future policy benefits and other insurance liabilities ............................................... 3,150 2,291 2,088
Trading account assets supporting insurance liabilities and other trading account assets ................... (931) (1,794) (2,342)
Income taxes payable ....................................................................... (575) 470 263
Securities sold but not yet purchased ........................................................... (204) 485 1,373
Other, net ................................................................................. (1,113) 264 (2,809)
Cash flows from operating activities ...................................................... 4,042 4,583 1,406
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available for sale ................................................................. 84,524 70,173 46,905
Fixed maturities, held to maturity .................................................................. 462 610 1,418
Equity securities, available for sale ................................................................. 3,049 2,262 1,412
Commercial loans .............................................................................. 5,734 5,663 3,206
Policy loans ................................................................................... 1,303 1,392 2,231
Other long-term investments ...................................................................... 1,239 1,530 1,146
Short-term investments .......................................................................... 13,426 22,154 20,132
Payments for the purchase of:
Fixed maturities, available for sale ................................................................. (96,653) (80,896) (50,433)
Fixed maturities, held to maturity .................................................................. (1,278) (211) (1,816)
Equity securities, available for sale ................................................................. (3,470) (2,498) (1,394)
Commercial loans .............................................................................. (4,850) (4,263) (2,762)
Policy loans ................................................................................... (1,117) (1,086) (1,161)
Other long-term investments ...................................................................... (891) (1,081) (1,185)
Short-term investments .......................................................................... (12,778) (18,789) (22,646)
Acquisition of subsidiaries, net of cash acquired. .......................................................... — (1,082) (1,109)
Cash of operations contributed to Wachovia Securities Financial Holdings, LLC ................................ — — (229)
Proceeds from sale of subsidiaries, net of cash disposed .................................................... 27 (76) 91
Cash flows used in investing activities ..................................................... (11,273) (6,198) (6,194)
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholders’ account deposits ....................................................................... 20,540 14,627 10,235
Policyholders’ account withdrawals .................................................................... (20,927) (14,584) (9,471)
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities ................ 2,137 2,064 (124)
Proceeds from issuance of Common Stock ............................................................... — 690 —
Cash dividends paid on Common Stock ................................................................. (375) (322) (256)
Cash dividends paid on Class B Stock .................................................................. (19) (19) (19)
Net change in financing arrangements (maturities 90 days or less) ............................................ 4,821 (419) 3,603
Common Stock acquired ............................................................................. (2,095) (1,493) (1,007)
Common Stock reissued for exercise of stock options ...................................................... 169 107 53
Proceeds from the issuance of debt (maturities longer than 90 days) ........................................... 4,381 4,212 3,607
Repayments of debt (maturities longer than 90 days) ....................................................... (1,496) (2,652) (3,380)
Cash payments to or in respect of eligible policyholders .................................................... (292) (327) (147)
Other, net ......................................................................................... 294 (77) (438)
Cash flows from financing activities ...................................................... 7,138 1,807 2,656
Effect of foreign exchange rate changes on cash balances ................................................... (180) (69) 183
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .................................. (273) 123 (1,949)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ........................................... 8,072 7,949 9,898
CASH AND CASH EQUIVALENTS, END OF YEAR .................................................. $ 7,799 $ 8,072 $ 7,949
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid (received) ......................................................................... $ 509 $ (24) $ (84)
Interest paid ....................................................................................... $ 794 $ 494 $ 399
See Notes to Consolidated Financial Statements
Prudential Financial 2005 Annual Report84