Consolidated Statements of Cash Flow
| Years ended December 31 | ||||||||||||
| (In millions) | 2007 | 2006 | 2005 | |||||||||
| Operating activities | ||||||||||||
| Net income | $ | 3,345.4 | $ | 3,094.9 | $ | 2,463.8 | ||||||
| Adjustments to reconcile net income to net cash | ||||||||||||
| provided by operating activities: | ||||||||||||
| Net realized (gains) losses on investments | (11.2 | ) | 0.3 | 10.2 | ||||||||
| Loss on disposal of assets | 11.3 | 1.7 | 2.7 | |||||||||
| Deferred income taxes | (105.5 | ) | 273.7 | (102.6 | ) | |||||||
| Amortization, net of accretion | 466.0 | 471.9 | 437.9 | |||||||||
| Depreciation expense | 120.2 | 133.0 | 118.7 | |||||||||
| Share-based compensation | 177.1 | 246.9 | 81.2 | |||||||||
| Excess tax benefits from share-based | ||||||||||||
| compensation | (153.3 | ) | (136.5 | ) | — | |||||||
| Changes in operating assets and liabilities, | ||||||||||||
| net of effect of business combinations: | ||||||||||||
| Receivables, net | (448.6 | ) | (627.8 | ) | (230.4 | ) | ||||||
| Other invested assets, current | 26.9 | 234.9 | — | |||||||||
| Other assets | 174.4 | (362.4 | ) | (165.6 | ) | |||||||
| Policy liabilities | 257.7 | 852.6 | 46.3 | |||||||||
| Unearned income | 125.5 | (69.5 | ) | (38.2 | ) | |||||||
| Accounts payable and accrued expenses | (235.2 | ) | (91.7 | ) | 188.6 | |||||||
| Other liabilities | 176.5 | 134.2 | (136.7 | ) | ||||||||
| Income taxes | 447.3 | (112.0 | ) | 459.6 | ||||||||
| Other, net | (29.9 | ) | — | — | ||||||||
| Net cash provided by operating activities | 4,344.6 | 4,044.2 | 3,135.5 | |||||||||
| Investing activities | ||||||||||||
| Purchases of fixed maturity securities | (8,512.0 | ) | (11,198.0 | ) | (17,457.0 | ) | ||||||
| Proceeds from fixed maturity securities: | ||||||||||||
| Sales | 6,709.0 | 9,630.1 | 14,391.4 | |||||||||
| Maturities, calls and redemptions | 1,618.4 | 721.6 | 1,344.5 | |||||||||
| Purchase of equity securities | (1,389.2 | ) | (2,434.5 | ) | (4,530.6 | ) | ||||||
| Proceeds from sales of equity securities | 1,411.7 | 2,950.9 | 4,480.0 | |||||||||
| Changes in securities lending collateral | 50.6 | 485.2 | (731.4 | ) | ||||||||
| Purchases of subsidiaries, net of cash acquired | (298.5 | ) | (25.4 | ) | (2,589.7 | ) | ||||||
| Proceeds from sales of subsidiaries, net of cash sold | — | — | 92.8 | |||||||||
| Purchases of property and equipment | (322.0 | ) | (193.9 | ) | (161.8 | ) | ||||||
| Proceeds from sale of property and equipment | 57.3 | 6.4 | 10.2| |
| ||||||||
| Other, net | (94.2 | ) | (399.7 | ) | –| |
| ||||||
| Net cash used in investing activities | (768.9 | ) | (457.3 | ) | (5,151.6| ) |
| ||||||
| Financing activities | | |
| ||||||||||
| Net proceeds from (repayments of) commercial | | |
| ||||||||||
| paper borrowings | 502.8 | (306.0 | ) | 808.2| |
| |||||||
| Proceeds from long-term borrowings | 1,978.3 | 2,668.2 | 1,700.0| |
| ||||||||
| Repayment of long-term borrowings | (509.7 | ) | (2,162.1 | ) | (155.1| ) |
| ||||||
| Changes in securities lending payable | (50.6 | ) | (485.2 | ) | 731.4| |
| ||||||
| Changes in bank overdrafts | (117.1 | ) | 414.3 | 121.2| |
| |||||||
| Repurchase and retirement of common stock | (6,151.4 | ) | (4,550.2 | ) | (333.4| ) |
| ||||||
| Proceeds from exercise of employee stock options | | |
| ||||||||||
| and employee stock purchase plan | 784.5 | 559.5 | 429.3| |
| ||||||||
| Excess tax benefits from share-based compensation | 153.3 | 136.5 | –| |
| ||||||||
| Other, net | — | — | (2.5| ) |
| ||||||||
| Net cash (used in) provided by financing | | |
| ||||||||||
| activities | (3,409.9 | ) | (3,725.0 | ) | 3,299.1| |
| ||||||
| Change in cash and cash equivalents | 165.8 | (138.1 | ) | 1,283.0| |
| |||||||
| Cash and cash equivalents at beginning of year | 2,602.1 | 2,740.2 | 1,457.2| |
| ||||||||
| Cash and cash equivalents at end of year | $ | 2,767.9 | $ | 2,602.1 | $ | 2,740.2| |
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The information presented above should be read in conjunction with the audited financial statements and accompanying notes included in WellPoint’s 2007 Annual Report on Form 10-K.