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SCHEDULE II - Condensed Financial Information Of Registrant
 12 Months Ended
Dec. 31, 2015
Text Block [Abstract]  
SCHEDULE II - Condensed Financial Information Of Registrant
SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
THE PROGRESSIVE CORPORATION (PARENT COMPANY)
(millions)
 
 
Years Ended December 31,
 
2015
 
2014
 
2013
Revenues
 
 
 
 
 
Dividends from subsidiaries
$
852.5

 
$
1,000.2

 
$
1,119.7

Undistributed income (loss) from subsidiaries
500.0

 
358.3

 
117.5

Equity in net income of subsidiaries*
1,352.5

 
1,358.5

 
1,237.2

Intercompany investment income*
3.9

 
2.4

 
2.8

Gains (losses) on extinguishment of debt
(0.9
)
 
(4.8
)
 
(4.3
)
Other income1
0

 
0

 
2.6

Total revenues
1,355.5

 
1,356.1

 
1,238.3

Expenses
 
 
 
 
 
Interest expense
136.1

 
120.2

 
121.2

Deferred compensation2 
5.3

 
2.8

 
9.5

Other operating costs and expenses
5.4

 
4.4

 
4.0

Total expenses
146.8

 
127.4

 
134.7

Income before income taxes
1,208.7

 
1,228.7

 
1,103.6

Benefit for income taxes
(58.9
)
 
(52.3
)
 
(61.8
)
Net income attributable to Progressive
1,267.6

 
1,281.0

 
1,165.4

Other comprehensive income (loss)
(222.7
)
 
71.4

 
80.7

Comprehensive income attributable to Progressive
$
1,044.9

 
$
1,352.4

 
$
1,246.1

 
* Eliminated in consolidation.
1 Represents gain on net death benefit received on life insurance policies.
2 See Note 4 – Employee Benefit Plans in these condensed financial statements.
See notes to condensed financial statements.
CONDENSED BALANCE SHEETS
THE PROGRESSIVE CORPORATION (PARENT COMPANY)
(millions)
 
 
December 31,
 
2015
 
2014
Assets
 
 
 
Investment in affiliate
$
5.0

 
$
5.0

Investment in subsidiaries*
9,192.3

 
7,423.5

Receivable from investment subsidiary*
1,200.5

 
1,677.5

Intercompany receivable*
406.0

 
413.0

Net deferred income taxes
90.6

 
74.5

Other assets
124.8

 
123.9

Total Assets
$
11,019.2

 
$
9,717.4

Liabilities and Shareholders’ Equity
 
 
 
Accounts payable, accrued expenses, and other liabilities
$
202.7

 
$
220.0

Dividend payable
519.2

 
404.1

Debt
2,543.0

 
2,164.7

Total liabilities
3,264.9

 
2,788.8

Redeemable noncontrolling interest (NCI)
464.9

 
0

Shareholders' Equity
 
 
 
Common shares, $1.00 par value (authorized 900.0; issued 797.6, including treasury shares of 214.0 and 209.8)
583.6

 
587.8

Paid-in capital
1,218.8

 
1,184.3

Retained earnings
4,686.6

 
4,133.4

Total accumulated other comprehensive income
800.4

 
1,023.1

Total shareholders’ equity
7,289.4

 
6,928.6

Total Liabilities, Redeemable NCI, and Shareholders’ Equity
$
11,019.2

 
$
9,717.4

 
*Eliminated in consolidation.
See notes to condensed financial statements.
CONDENSED STATEMENTS OF CASH FLOWS
THE PROGRESSIVE CORPORATION (PARENT COMPANY)
(millions)
 
 
Years Ended December 31,
 
2015
 
2014
 
2013
Cash Flows From Operating Activities:
 
 
 
 
 
Net income attributable to Progressive
$
1,267.6

 
$
1,281.0

 
$
1,165.4

Adjustments to reconcile net income attributable to Progressive to net cash provided by operating activities:
 
 
 
 
 
Undistributed (income) loss from subsidiaries
(500.0
)
 
(358.3
)
 
(117.5
)
Amortization of equity-based compensation
2.4

 
2.2

 
2.1

(Gains) losses on extinguishment of debt
0.9

 
4.8

 
4.3

Changes in:
 
 
 
 
 
Intercompany receivable
7.0

 
(105.4
)
 
(11.4
)
Accounts payable, accrued expenses, and other liabilities
(46.2
)
 
18.2

 
19.4

Income taxes
12.3

 
61.1

 
(55.8
)
Other, net
(3.1
)
 
0.4

 
(16.3
)
Net cash provided by operating activities
740.9

 
904.0

 
990.2

Cash Flows From Investing Activities:
 
 
 
 
 
Additional investments in equity securities of consolidated subsidiaries
(40.2
)
 
(21.1
)
 
(13.9
)
Investment in affiliate
0.0

 
0

 
(4.0
)
Acquisition of ARX
(890.1
)
 
0

 
0

(Paid to) received from investment subsidiary
409.1

 
(29.1
)
 
(325.5
)
Net cash used in investing activities
(521.2
)
 
(50.2
)
 
(343.4
)
Cash Flows From Financing Activities:
 
 
 
 
 
Tax benefit from exercise/vesting of equity-based compensation
16.8

 
12.8

 
10.3

Net proceeds from debt issuance
394.9

 
346.3

 
0

Payment of debt
0

 
0

 
(150.0
)
Reacquisition of debt
(19.3
)
 
(48.9
)
 
(58.1
)
Dividends paid to shareholders
(403.6
)
 
(892.6
)
 
(175.6
)
Acquisition of treasury shares
(208.5
)
 
(271.4
)
 
(273.4
)
Net cash used in financing activities
(219.7
)
 
(853.8
)
 
(646.8
)
Change in cash
0

 
0

 
0

Cash, beginning of year
0

 
0

 
0

Cash, end of year
$
0

 
$
0

 
$
0

See notes to condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
The accompanying condensed financial statements of The Progressive Corporation (parent company) should be read in conjunction with the consolidated financial statements and notes thereto in the Annual Report to Shareholders of The Progressive Corporation and its subsidiaries, which is included as Exhibit 13 to this Form 10-K.
Note 1. Statements of Cash Flows — For the purpose of the Statements of Cash Flows, cash includes only bank demand deposits. The Progressive Corporation does not hold any cash but has unrestricted access to funds maintained in a non-insurance, investment subsidiary to meet its holding company obligations; at year-end 2015 and 2014, $1.3 billion and $1.9 billion, respectively, of marketable securities were available in this subsidiary. Non-cash activity includes declared but unpaid dividends, the transfer of the previous 5% ownership interest in ARX to The Progressive Corporation from an investment subsidiary, and the change in redemption value of the redeemable NCI. For the years ended December 31, The Progressive Corporation paid the following:
 
(millions)
2015
2014
2013
Income taxes
$
625.0

$
515.0

$
497.0

Interest
128.2

116.0

122.3

Note 2. Income Taxes — The Progressive Corporation files a consolidated federal income tax return with all eligible subsidiaries and acts as an agent for the consolidated tax group when making payments to the Internal Revenue Service. Since The Progressive Corporation owns less than 80% of ARX's outstanding stock, ARX and its subsidiaries are not eligible to file on a consolidated basis with The Progressive Corporation. The Progressive Corporation consolidated group’s net income taxes currently payable/recoverable are included in other liabilities/assets, respectively, in the accompanying Condensed Balance Sheets based on the balance at the end of the year. The Progressive Corporation and its eligible subsidiaries have adopted, pursuant to a written agreement, a method of allocating consolidated federal income taxes. Amounts allocated to the eligible subsidiaries under the written agreement are included in “Intercompany Receivable” in the accompanying Condensed Balance Sheets.
Note 3. Debt — The information relating to debt is incorporated by reference from Note 4 – Debt in our Annual Report, which is included as Exhibit 13 to this Form 10-K.
Note 4. Employee Benefit Plans — The information relating to incentive compensation plans and deferred compensation is incorporated by reference from Note 9 – Employee Benefit Plans in our Annual Report, which is included as Exhibit 13 to this Form 10-K.
Note 5. Other Comprehensive Income — On the condensed Statements of Comprehensive Income, other comprehensive income represents activity of the subsidiaries of The Progressive Corporation and includes net unrealized gains (losses) on securities, net unrealized gains on forecasted transactions, and foreign currency translation adjustments.
Note 6. Dividends — The information relating to our dividend policy is incorporated by reference from Note 14 – Dividends in our Annual Report, which is included as Exhibit 13 to this Form 10-K.