Prudential 2007 Annual Report Download - page 104

PRUDENTIAL FINANCIAL, INC.
Consolidated Statements of Cash Flows
Years Ended December 31, 2007, 2006 and 2005 (in millions)
2007 2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ...................................................................................... $ 3,704 $ 3,428 $ 3,540
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment gains, net ................................................................... (613) (774) (1,378)
Policy charges and fee income ................................................................... (915) (726) (852)
Interest credited to policyholders’ account balances .................................................. 3,222 2,917 2,699
Depreciation and amortization ................................................................... 272 350 501
Change in:
Deferred policy acquisition costs ............................................................. (1,253) (1,294) (792)
Future policy benefits and other insurance liabilities .............................................. 3,136 2,782 3,140
Trading account assets supporting insurance liabilities and other trading account assets .................. (1,649) (1,245) (931)
Income taxes ............................................................................. 105 593 (575)
Other, net ................................................................................ (43) (1,656) (1,320)
Cash flows from operating activities ..................................................... 5,966 4,375 4,032
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available for sale ................................................................ 99,134 94,653 84,465
Fixed maturities, held to maturity ................................................................. 255 317 462
Equity securities, available for sale ................................................................ 5,140 3,785 3,108
Commercial loans ............................................................................. 4,647 4,524 5,734
Policy loans .................................................................................. 1,299 1,188 1,212
Other long-term investments ..................................................................... 1,095 1,731 1,239
Short-term investments ......................................................................... 18,649 11,782 13,022
Payments for the purchase/origination of:
Fixed maturities, available for sale ................................................................ (98,671) (102,815) (96,578)
Fixed maturities, held to maturity ................................................................. (209) (542) (1,278)
Equity securities, available for sale ................................................................ (5,326) (4,032) (3,645)
Commercial loans ............................................................................. (8,264) (5,793) (4,850)
Policy loans .................................................................................. (1,306) (1,354) (1,026)
Other long-term investments ..................................................................... (2,503) (1,393) (791)
Short-term investments ......................................................................... (18,737) (12,721) (12,778)
Acquisitions, net of cash acquired. .................................................................... (103) 724 —
Other, net ........................................................................................ (104) (201) 431
Cash flows used in investing activities .................................................... (5,004) (10,147) (11,273)
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholders’ account deposits ...................................................................... 20,906 23,331 20,550
Policyholders’ account withdrawals ................................................................... (20,569) (22,377) (20,927)
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities ............... (1,546) 2,478 2,137
Cash dividends paid on Common Stock ................................................................ (514) (421) (375)
Cash dividends paid on Class B Stock ................................................................. (19) (19) (19)
Net change in financing arrangements (maturities 90 days or less) ........................................... 352 (822) 4,821
Common Stock acquired ............................................................................ (3,000) (2,512) (2,095)
Common Stock reissued for exercise of stock options ..................................................... 221 166 169
Proceeds from the issuance of debt (maturities longer than 90 days) .......................................... 10,429 7,918 4,381
Repayments of debt (maturities longer than 90 days) ...................................................... (5,124) (2,126) (1,496)
Excess tax benefits from share-based payment arrangements ............................................... 106 92 —
Other, net ........................................................................................ 297 814 2
Cash flows from financing activities ......................................................... 1,539 6,522 7,148
Effect of foreign exchange rate changes on cash balances .................................................. (30) 40 (180)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ................................. 2,471 790 (273)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR .......................................... 8,589 7,799 8,072
CASH AND CASH EQUIVALENTS, END OF YEAR ................................................. $11,060 $ 8,589 $ 7,799
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid (received) ........................................................................ $ 653 $ (384) $ 509
Interest paid ...................................................................................... $ 1,602 $ 1,230 $ 794
NON-CASH TRANSACTIONS DURING THE YEAR
Treasury stock issued for convertible debt redemption .................................................... $ 135 $ — $ —
Treasury stock issued for stock based compensation programs .............................................. $ 101 $ 90 $ 9
See Notes to Consolidated Financial Statements
102 Prudential Financial 2007 Annual Report