For the years ended December 31, | 2009 | 2008 | 2007 | |||
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Cash Flows From Operating Activities |
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Net income (loss) | $ | 1,057.5 | $ | (70.0) | $ | 1,182.5 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
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Depreciation | 87.3 | 99.1 | 106.9 | |||
Amortization of fixed-income securities | 230.8 | 249.6 | 284.1 | |||
Amortization of stock-based compensation | 40.3 | 34.5 | 26.5 | |||
Net realized (gains) losses on securities | (27.1) | 1,445.1 | (106.3) | |||
Net loss on disposition of property and equipment | 13.3 | 1.6 | .4 | |||
Changes in: | ||||||
Premiums receivable | (46.2) | (13.5) | 103.1 | |||
Reinsurance recoverables | (276.3) | 46.6 | 98.7 | |||
Prepaid reinsurance premiums | (6.9) | 7.4 | 19.7 | |||
Deferred acquisition costs | 11.8 | 12.3 | 14.7 | |||
Income taxes | 29.7 | (423.8) | (30.3) | |||
Unearned premiums | (3.0) | (34.5) | (124.6) | |||
Loss and loss adjustment expense reserves | 475.6 | 234.7 | 217.7 | |||
Accounts payable, accrued expenses, and other liabilities | (71.8) | (101.2) | 2.4 | |||
Other, net | (28.2) | 61.3 | (4.5) | |||
Net cash provided by operating activities | 1,486.8 | 1,549.2 | 1,791.0 | |||
Cash Flows From Investing Activities |
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Purchases: | ||||||
Fixed maturities | (10,046.3) | (7,593.9) | (8,184.6) | |||
Equity securities | (624.2) | (598.3) | (1,490.3) | |||
Short-term investments auction rate securities | — | (631.5) | (7,156.6) | |||
Sales: | ||||||
Fixed maturities | 7,950.0 | 5,629.5 | 8,327.6 | |||
Equity securities | 919.4 | 1,401.0 | 775.2 | |||
Short-term investments auction rate securities | — | 631.5 | 7,325.4 | |||
Maturities, paydowns, calls, and other: | ||||||
Fixed maturities | 842.5 | 505.5 | 557.9 | |||
Equity securities | 15.7 | 34.9 | 10.7 | |||
Net sales (purchases) of short-term investments other | 75.6 | (771.0) | 30.0 | |||
Net unsettled security transactions | (246.5) | 177.2 | 35.1 | |||
Purchases of property and equipment | (66.6) | (98.5) | (136.3) | |||
Sales of property and equipment | 1.8 | 1.1 | 2.0 | |||
Net cash provided by (used in) investing activities | (1,178.6) | (1,312.5) | 96.1 | |||
Cash Flows From Financing Activities |
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Proceeds from exercise of stock options | 18.8 | 27.0 | 30.8 | |||
Tax benefits from exercise/vesting of stock-based compensation | 9.7 | 11.1 | 15.5 | |||
Proceeds from debt1 | — | — | 1,021.7 | |||
Dividends paid to shareholders | — | (98.3) | (1,406.5) | |||
Acquisition of treasury shares | (180.6) | (179.4) | (1,548.4) | |||
Net cash used in financing activities | (152.1) | (239.6) | (1,886.9) | |||
Effect of exchange rate changes on cash | 1.7 | — | — | |||
Increase (decrease) in cash | 157.8 | (2.9) | .2 | |||
Cash, Beginning of year | 2.9 | 5.8 | 5.6 | |||
Cash, End of year | $ | 160.7 | $ | 2.9 | $ | 5.8 |
1) 2007 includes a pretax gain received upon closing a forecasted debt issuance hedge. See Note 4 – Debt for further discussion.
See notes to consolidated financial statements.