CONSOLIDATED STA TEMENTS OF CASH FLOWS (Dollars in thousands) TWELVE MONTHS ENDED DECEMBER 31, 2003 2002 2001 Cash Flows from Operating Activities: Net income $ 173,141 $ 122,806 $ 33,046 Adjustments to reconcile net income to net cash provided by operating activities: Change in: Accrued investment income (11,480) (4,958) 7,101  Premiums receivable (166,868) (95,989) 64,929  Deferred policy acquisition costs (596,482) (274,033) (180,110) Reinsurance ceded balances (38,170) (41,273) (114,579) Future policy benefits, other policy claims and benefits,  and other reinsurance balances 1,164,871 460,601 357,840 Deferred income taxes 63,895 73,793 (32,901) Other assets and other liabilities, net 23,469 (74,576) 70,139  Amortization of net investment discounts and other (40,227) (35,902) (38,985) Realized investment (gains) losses, net (5,360) 14,651 68,431 Other, net 5,485  16,731 9,020 Net cash provided by operating activities 572,274  161,851 243,931 Cash Flows from Investing Activities: Sales of fixed maturity securities – available for sale 1,768,107  2,204,813 1,129,263 Maturities of fixed maturity securities – available for sale 27,623  22,863 12,410 Purchases of fixed maturity securities – available for sale (2,536,847) (2,749,069) (1,211,104) Cash invested in mortgage loans of real estate (264,205) (78,605) (51,050) Cash invested in policy loans (67,727) (70,240) (67,784) Cash invested in funds withheld at interest (137,125) (41,828) (257,101) Principal payments on mortgage loans on real estate 12,812 15,069 15,376 Principal payments on policy loans 5,991 3,780 1 Change in short-term investments and other invested assets (93,857) 110,717 (146,388) Net cash used in investing activities (1,285,228) (582,500) (576,377) Cash Flows from Financing Activities: Dividends to stockholders (11,940) (11,854) (11,855) Proceeds from PIERS units offering, net – – 217,340 Borrowings under credit agreements 64,662 1,610 49,029 Proceeds from offering of common stock, net 426,701 – – Purchase of treasury stock – (6,594) – Exercise of stock options 13,761 1,623 4,684 Excess deposits on universal life and other investment type policies and contracts 210,160 300,761 228,667 Net cash provided by financing activities 703,344 285,546 487,865 Effect of exchange rate changes 6,095 (3,466) 454  Change in cash and cash equivalents (3,515) (138,569) 155,873  Cash and cash equivalents, beginning of period 88,101 226,670 70,797 Cash and cash equivalents, end of period $ 84,586  $ 88,101 $ 226,670 Supplementary Disclosure of Cash Flow Information: Amount of interest paid $ 35,873  $ 34,687 $ 18,483 Amount of income taxes paid $ 8,043  $ 17,403 $ 26,418 See accompanying notes to consolidated financial statements. THIS IS RGA. 2003 ANNUAL REPORT 49