the progressive corporation 2006 annual report
financial review
Consolidated Statements of Income | Consolidated Balance Sheets | Consolidated Statements of Changes in Shareholders' Equity | Consolidated Statements of Cash Flows | Notes to Consolidated Financial Statements
The Progressive Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2006, 2005 and 2004
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10) Other Comprehensive Income
The components of other comprehensive income for the years ended December 31 were as follows:
| 2006 | 2005 | 2004 | ||||||||||||||||
| (millions) | Pretax | Tax (Provision) Benefit |
After Tax |
Pretax | Tax (Provision) Benefit |
After Tax |
Pretax | Tax (Provision) Benefit |
After Tax |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Unrealized gains (losses) arising during period: | ||||||||||||||||||
| Fixed maturities | $ | 10.7 | $ | (3.7) | $ | 7.0 | $ | (138.7) | $ | 48.6 | $ | (90.1) | $ | (48.0) | $ | 16.8 | $ | (31.2) |
| Equity securities | 292.3 | (102.3) | 190.0 | 135.8 | (47.5) | 88.3 | 241.4 | (84.5) | 156.9 | |||||||||
| Reclassification adjustment:1 | ||||||||||||||||||
| Fixed maturities | 27.5 | (9.7) | 17.8 | (12.0) | 4.2 | (7.8) | (74.4) | 26.0 | (48.4) | |||||||||
| Equity securities | (12.4) | 4.3 | (8.1) | (54.4) | 19.0 | (35.4) | (93.0) | 32.6 | (60.4) | |||||||||
| Change in unrealized gains | 318.1 | (111.4) | 206.7 | (69.3) | 24.3 | (45.0) | 26.0 | (9.1) | 16.9 | |||||||||
| Net unrealized gains on forecasted transactions2 | (1.8) | .7 | (1.1) | (1.7) | .6 | (1.1) | (1.5) | .5 | (1.0) | |||||||||
| Foreign currency translation adjustment3 | — | — | — | — | — | — | 3.9 | — | 3.9 | |||||||||
| Other comprehensive income | $ | 316.3 | $ | (110.7) | $ | 205.6 | $ | (71.0) | $ | 24.9 | $ | (46.1) | $ | 28.4 | $ | (8.6) | $ | 19.8 |
1) Represents adjustments for gains (losses) realized in net income for securities held in the portfolio at December 31 of the preceding year.
2) Entered into for the purpose of managing interest rate risk associated with our debt issuances. See Note 4 – Debt. We expect to reclassify $1.9 million into income within the next 12 months.
3) Foreign currency translation adjustments have no tax effect.
