Supplementary Data on Cash Flows

12 Months Ended

Dec. 31, 2011

Supplementary Data on Cash Flows

Supplementary Data on Cash Flows

Note 21.   Supplementary Data on Cash Flows

Indirect method of cash flows

A reconciliation of net income to net cash provided by operating activities as presented in the Consolidated Statements of Cash Flows is as follows for the years ended December 31:

(in millions)	Erie Insurance Group
	2011		2010		2009
Cash flows from operating activities:
Net income	$ 268		$ 660		$ 446
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	4		12		9
Amortization of deferred policy acquisition costs	680		652		624
Impairment of goodwill	–		22		–
Deferred income tax (benefit) expense	(105	)	342		15
Realized losses (gains) and impairments on investments	6		(307	)	(285	)
Equity in (earnings) losses of limited partnerships	(149	)	(128	)	369
Net amortization of bond premium (discount)	26		9		(12	)
Increase in deferred compensation	4		7		0
Limited partnership distributions	166		122		81
Decrease (increase) in receivables, reinsurance recoverables and reserve credits	91		(158	)	209
(Increase) decrease in prepaid expenses	(56	)	10		(9	)
Increase in deferred policy acquisition costs	(701	)	(667	)	(642	)
Increase (decrease) in accounts payable and accrued expenses	83		18		(1	)
Increase (decrease) in accrued commissions and agent bonuses	4		1		(15	)
(Decrease) increase in loss reserves	(85	)	(11	)	12
Increase in future life policy benefits and claims reserves	28		21		37
Increase in unearned premiums	96		116		51
Net cash provided by operating activities	$ 360		$ 721		$ 889