W. R. BERKLEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, (In thousands) 2018 2017 2016 CASH FROM OPERATING ACTIVITIES: Net income to common stockholders $ 640,749 $ 549,094 $ 601,916 Adjustments to reconcile net income to net cash from operating activities: Net realized and unrealized gains on investments (154,488) (335,858) (267,005) Depreciation and amortization 131,108 112,956 86,051 Noncontrolling interests 8,317 4,243 1,569 Investment funds (109,349 ) (69,333 ) (99,301 ) Stock incentive plans 36,591 40,490 37,174 Change in: Arbitrage trading account (19,093) (4,896) (10,633) Premiums and fees receivable (43,813 ) (67,752 ) (60,403 ) Reinsurance accounts (165,287) (66,542) (235,455) Deferred policy acquisition costs 7,788 30,343 (25,912 ) Current income taxes (11,950) 25,859 42,632 Deferred income taxes (74,761 ) (16,893 ) 9,012 Reserves for losses and loss expenses 339,015 438,530 572,196 Unearned premiums 84,142 4,160 149,683 Other (48,770) 66,482 46,852 Net cash from operating activities 620,199 710,883 848,376 CASH FLOWS USED IN INVESTING ACTIVITIES: Proceeds from sale of fixed maturity securities 3,525,149 4,035,162 2,440,310 Proceeds from sale of equity securities 497,989 195,270 143,042 (Contributions) distributions from investment funds (79,635 ) 247,404 142,601 Proceeds from maturities and prepayments of fixed maturity securities 2,676,455 3,556,744 2,189,365 Purchase of fixed maturity securities (6,677,753 ) (7,940,957 ) (5,541,202 ) Purchase of equity securities (85,610) (27,522) (202,736) Real estate purchased (514,064 ) (236,039 ) (299,123 ) Change in loans receivable (13,204) 27,135 166,327 Net additions to property, furniture and equipment (49,860 ) (115,719 ) (50,829 ) Change in balances due from security brokers 4,262 (4,372) 20,992 Cash received in connection with business disposition 8,664 — 250,216 Payment for business purchased, net of cash acquired (6,637) (70,570) (53,451) Net cash used in investing activities (714,244 ) (333,464 ) (794,488 ) CASH FLOWS USED IN FINANCING ACTIVITIES: Net proceeds from issuance of debt 294,562 6,983 388,769 Repayment of senior notes and other debt (4,524) (20) (75,487) Cash dividends to common stockholders (254,951 ) (188,199 ) (183,999 ) Purchase of common treasury shares (24,750) (47,807) (132,392) Other, net (17,740 ) (6,043 ) (3,823 ) Net cash used in financing activities (7,403) (235,086) (6,932) Net impact on cash due to change in foreign exchange rates (31,421 ) 12,853 (15,302 ) Net (decrease) increase in cash and cash equivalents (132,869) 155,186 31,654 Cash and cash equivalents at beginning of year 950,471 795,285 763,631 Cash and cash equivalents at end of year $ 817,602 $ 950,471 $ 795,285 See accompanying notes to consolidated financial statements. 60