Consolidated financial statements
Consolidated statements of cash flows
| in USD millions, for the years ended December 31 | 2006 | 2005 |
|---|---|---|
| Cash flows from operating activities | ||
| Net income attributable to shareholders | 4,527 | 3,214 |
| Adjustments for: | ||
| Net loss on divestments of businesses | 43 | 2 |
| Share of equity in income from investments in associates | (85) | (105) |
| Depreciation, amortization and impairments of fixed and intangible assets | 460 | 447 |
| Other non-cash items | 1,759 | (5) |
| Underwriting activities: | 9,493 | 14,959 |
| Reserves for insurance contracts, gross | 4,989 | 10,629 |
| Reinsurers' share of reserves for insurance contracts | 1,011 | 43 |
| Liabilities for investment contracts | 4,204 | 6,163 |
| Deferred policy acquisition costs | (890) | (1,085) |
| Deferred origination costs | (32) | (31) |
| Deposits made under assumed reinsurance contracts | 434 | 820 |
| Deposits received under ceded reinsurance contracts | (223) | (1,580) |
| Investments: | (14,343) | (16,586) |
| Net capital gains on investments and impairments | (10,739) | (13,382) |
| Net change in trading securities | (351) | 383 |
| Sales and maturities: | ||
| Debt securities | 58,544 | 72,771 |
| Equity securities | 46,044 | 41,585 |
| Other (primarily other investments) | 32,115 | 12,410 |
| Purchases: | ||
| Debt securities | (61,193) | (75,364) |
| Equity securities | (46,191) | (41,417) |
| Other (primarily other investments) | (32,572) | (13,572) |
| Movement in receivables and payables | 324 | 779 |
| Net changes in other operational assets and liabilities | (1,740) | (1,104) |
| Deferred income tax, net | 305 | 867 |
| Net cash provided by operating activities | 743 | 2,468 |
| Cash flows from investing activities | ||
| Sales of fixed assets | 79 | 216 |
| Purchases of fixed assets | (280) | (339) |
| Investments in associates, net | 243 | 75 |
| Acquisitions of companies, net of cash acquired | – | (1) |
| Divestments of companies, net of cash balances | – | 40 |
| Dividends from associates | 12 | – |
| Net cash provided by/(used in) investing activities | 54 | (9) |
| Cash flows from financing activities | ||
| Proceeds from sale and repurchase agreements | 116 | 836 |
| Dividends paid | (581) | (64) |
| Nominal value reduction of share capital | (276) | (449) |
| Redemption of preferred securities and repayments to minority interests | (802) | 12 |
| Issuance of debt | 311 | 2,576 |
| Payments on debt outstanding | (592) | (274) |
| Net change of debt for capital markets and banking activities | (219) | (1,784) |
| Net cash (used in)/provided by financing activities | (2,043) | 853 |
| Foreign currency translation effects on cash and cash equivalents | 1,637 | (1,661) |
| Change in cash and cash equivalents excluding change in cash received as collateral for securities lending | 391 | 1,651 |
| Change in cash received as collateral for securities lending | (751) | (626) |
| Cash and cash equivalents as of January 1, including cash received as collateral for securities lending | 23,482 | 22,457 |
| Cash and cash equivalents as of December 31, including cash received as collateral for securities lending | 23,122 | 23,482 |
| Other supplementary cash flow disclosures | ||
| Other interest income received | 7,760 | 7,605 |
| Dividend income received | 2,289 | 1,833 |
| Other interest expense paid | (1,504) | (1,502) |
| Income tax paid | (2,564) | (1,234) |
As of December 31, 2006 and 2005, cash and cash equivalents restricted as to use were USD 423 million and USD 331 million, respectively. Cash and cash equivalents held for the benefit of policyholders in connection with unit-linked products amounted to USD 5,696 million and USD 4,758 million as of December 31, 2006 and 2005, respectively. Cash received as collateral for securities lending was USD 3,820 million and USD 4,571 million as of December 31, 2006 and 2005, respectively.
Cash and cash equivalents
| in USD millions, as of December 31 | 2006 | 2005 |
|---|---|---|
| Cash and cash equivalents comprise the following: | ||
| Cash at bank and in hand | 7,815 | 5,075 |
| Cash equivalents | 11,487 | 13,836 |
| Cash held as collateral for securities lending | 3,820 | 4,571 |
| Total | 23,122 | 23,482 |
The notes to the consolidated financial statements are an integral part of these consolidated financial statements.
