Annual Report 2011 - SNL Financial

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Annual Report 2011 - SNL Financial

Eastern Insurance Holdings, Inc.

Schedule II—Condensed Financial Information of Parent Company

Condensed Statements of Cash Flows

For the Years ended December 31, 2011, 2010 and 2009

(In thousands)

2011 2010 2009

Cash flows from operating activities:

Net income (loss) ....................................................... $ 7,722 $ (9,185) $ 8,401

Adjustments to reconcile net income (loss) to net cash provided by operating

activities:

Equity in undistributed (income) loss of subsidiaries ....................... (9,536) 5,957 (11,840)

Dividends from subsidiaries (1) ....................................... — — 25,750

Gain on sale of investments ........................................... (212) (1,008) —

Stock compensation ................................................. 2,524 2,148 2,025

Intangible asset amortization .......................................... 1,026 1,284 1,732

Deferred income tax provision ........................................ (301) (272) (338)

Other ............................................................ (172) (102) (951)

Net cash provided by (used in) operating activities .................... 1,051 (1,178) 24,779

Cash flows from investing activities:

Purchase of fixed income securities ........................................ (1,272) (25,684) —

Purchase of equity securities .............................................. — (9) —

Proceeds from sale of fixed income securities ................................ 16,242 8,330 —

Proceeds from maturities/calls of fixed income securities ....................... 718 213 —

Merger of Eastern Holding Company. Ltd. into EIHI .......................... — 136

Capital contributions to subsidiaries ........................................ (2,387) (2,658) (23,015)

Sale of Eastern Life ..................................................... — 32,352 —

Net cash provided by (used in) investing activities ..................... 13,301 12,680 (23,015)

Cash flows from financing activities:

Repurchase of common stock ............................................. (13,274) (8,169) (11)

Shareholder dividends ................................................... (2,176) (2,489) (2,540)

Tax expense related to equity awards ....................................... 24 23 —

Net cash used in financing activities ................................ (15,426) (10,635) (2,551)

Net (decrease) increase in cash and cash equivalents ................... (1,074) 867 (787)

Cash and cash equivalents at beginning of period ................................. 1,649 782 1,569

Cash and cash equivalents at end of period ....................................... $ 575 $ 1,649 $ 782

Cash received during the year for:

Income taxes .......................................................... $ 1,896 $ 900 $ 232

(1) During 2009, Eastern Alliance, Allied Eastern and Eastern Life paid dividends to EIHI in the amount of $10,000, $2,000

and $13,000, respectively. During 2009, EIHI also received a dividend of $750 from one of the segregated portfolio

cells for which it is a preferred shareholder. The dividends from Eastern Alliance, Allied Eastern and Eastern Life were

primarily for the purpose of funding the capital contribution to Eastern Re in 2009.

See accompanying notes to consolidated financial statements.

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