Cincinnati Financial Corporation

Chairman and President's Letter

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Condensed Balance Sheets and Income Statements
                 
Cincinnati Financial Corporation and Subsidiaries
(Dollars in millions)
  At December 31,  
    2007     2006  
             
Assets
               
Investments
    12,261       13,759  
Cash and cash equivalents
    226       202  
Premiums receivable
    1,107       1,128  
Reinsurance receivable
    754       683  
Other assets
    2,289       1,450  
 
           
Total assets
  $ 16,637     $ 17,222  
 
           
 
               
Liabilities
               
Insurance reserves
  $ 5,445     $ 5,305  
Unearned premiums
    1,564       1,579  
Deferred income tax
    977       1,653  
6.125% senior notes due 2034
    371       371  
6.9% senior debentures due 2028
    28       28  
6.92% senior debentures due 2028
    392       392  
Other liabilities
    1,931       1,086  
 
           
Total liabilities
    10,708       10,414  
 
           
 
               
Shareholders’ Equity
               
Common stock and paid-in capital
    1,442       1,406  
Retained earnings
    3,404       2,786  
Accumulated other comprehensive income
    2,151       3,379  
Treasury stock
    (1,068)       (763)  
 
           
Total shareholders’ equity
    5,929       6,808  
 
           
Total liabilities and shareholders’ equity
  $ 16,637     $ 17,222  
 
           
                         
 
(Dollars in millions except per share data)   Years ended December 31,  
    2007     2006     2005  
                   
Revenues
                       
Earned premiums
  $ 3,250     $ 3,278     $ 3,153  
Investment income, net of expenses
    608       570       526  
Realized investment gains and losses
    382       684       61  
Other income
    19       18       16  
 
                 
Total revenues
    4,259       4,550       3,767  
 
                 
 
                       
Benefits and Expenses
                       
Insurance losses and policyholder benefits
    1,963       2,128       1,911  
Commissions
    624       630       627  
Other operating expenses
    480       463       406  
 
                 
Total benefits and expenses
    3,067       3,221       2,944  
 
                 
 
                       
Income Before Income Taxes
    1,192       1,329       823  
 
                       
 
                       
Provision for Income Taxes
    337       399       221  
 
                 
 
                       
Net Income
  $ 855     $ 930     $ 602  
 
                 
 
                       
Per Common Share
                       
Net income — basic
  $ 5.01     $ 5.36     $ 3.44  
Net income — diluted
  $ 4.97     $ 5.30     $ 3.40  
 
                       



This report contains forward-looking statements that involve potential risks and uncertainties. For factors that could cause results to differ materially from those discussed, please see the most recent edition of our safe harbor statement under the Private Securities Litigation Reform Act of 1995. To view or print the edition in effect as of this report's initial publication date, please view this document as a printable PDF.