Cash Flow and Liquidity In the Absence of Easy Money Steven C. - - PowerPoint PPT Presentation
Cash Flow and Liquidity In the Absence of Easy Money Steven C. Isberg, Ph.D Senior Fellow, Credit Research Foundation Associate Professor of Finance, Merrick School of Business, University of Baltimore Presented to the National Chemical Credit
Steven C. Isberg, Ph.D Senior Fellow, Credit Research Foundation Associate Professor of Finance, Merrick School of Business, University of Baltimore Presented to the National Chemical Credit Group
February 2018
Feb-17 Peak: Feb-2018 Fri Feb 16 20,172 26,616 25,219 31.95%
25.02% Pre tax income $10 $10 Tax rate 35% 21% Net income 6.50 $ 7.90 $ Payout ratio 50% 50% Risk Free rate 2.10% 2.10% Beta 1.00 1.00 Cost of Equity 9.100% 9.100% Growth 2.00% 2.00% Price 45.77 $ 55.63 $ 21.54% DJIA Feb 2017-2018 Impact of Tax Cut Price = Dividend / (k - g) Cost of Equity = k = Risk free + (Beta * 7.00%) Recent Stock Market Behavior Net growth Net change
assets and liabilities)
Cash Flows from Operating Activities: ' ' ' Net earnings including noncontrolling interests 1,957 $ 2,049 $ 1,747 $ $ 1,531 $ 1,508 $ 596 Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities: ' ' ' Depreciation and amortization $2,340 $2,089 $1,948 $1,703 $1,652 $1,638 Asset impairment charge $26 $46 $37 $39 $18 $37 LIFO charge $19 $28 $147 $52 $55 $216 Stock-based employee compensation $141 $165 $155 $107 $82 $81 Expense for Company-sponsored pension plans $94 $103 $55 $74 $89 $70 Deferred income taxes $201 $317 $73 $72 $176 $31 Other
$54 $72 $47 $23 $3 Changes in operating assets and liabilities net of effects from mergers of businesses: ' ' ' Store deposits in-transit $13 $95
$25
Receivables
Inventories
Prepaid and other current assets
$2
$52 Trade accounts payable $16 $440 $135 $3 $67 $83 Accrued expenses
$275 $249 $77 $67 $215 Income taxes receivable and payable $261
$164
Contribution to Company-sponsored pension plans
Other $14
$338 Net cash provided by operating activities $4,272 $4,917 $4,215 $3,380 $2,833 $2,658 CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions 12 Months Ended 12 Months Ended
Cash Flows from Investing Activities: ' ' ' Payments for property and equipment, including payments for lease buyouts
Proceeds from sale of assets $132 $45 $37 $24 $49 $51 Payments for mergers
Other $93
Net cash used by investing activities
Cash Flows from Financing Activities: ' ' ' Proceeds from issuance of long-term debt $2,781 $1,181 $576 $3,548 $863 $453 Payments on long-term debt
Net borrowings (payments) on commercial paper $435
$25
$1,275 $370 Dividends paid
Excess tax benefits on stock-based awards $97 $52 Proceeds from issuance of capital stock $68 $120 $110 $196 $110 $118 Treasury stock purchases
Investment in the remaining equity of a noncontrolling interest
Other
$193 $125 $23 Net cash used by financing activities
$1,554
Net increase (decrease) in cash and temporary cash investments $45 $9
$163 $50
Cash and temporary cash investments: ' ' ' Beginning of year $277 $268 $401 $238 $188 $825 End of year $322 $277 $268 $401 $238 $188
Kroger Debt Structure Expected Year of Maturity 2017 2018 2019 2020 2021 Thereafter Total (in millions) Debt Fixed rate ($MM) (716) $ (1,298) $ (1,246) $ (699) $ (797) $ (6,955) $ (11,711) $ Average interest rate (%) 4.94 4.54 4.68 4.62 4.63 4.57 Variable rate ($MM) (1,481) $ (17) $
(25) $
(81) $ (1,604) $ Average interest rate (%) 0.93 3.53 0.00 5.00 0.00 3.73 (2,197) $ (1,315) $ (1,246) $ (724) $ (797) $ (7,036) $ (13,315) $
Cash Flows from Operating Activities: Net earnings including noncontrolling interests $ 1,036 $ 1,455 Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities: Depreciation and amortization 1,871 1,768 LIFO charge 46 19 Stock-based employee compensation 118 110 Expense for Company-sponsored pension plans 68 62 Deferred income taxes 267 5 Other 5 (27) Changes in operating assets and liabilities net of effects from mergers of businesses: Store deposits in-transit (268) (120) Receivables 45 48 Inventories (466) (798) Prepaid and other current assets 426 219 Trade accounts payable 620 509 Accrued expenses 26 (144) Income taxes receivable and payable 143 267 Contribution to Company-sponsored pension plans (1,000) Other 117 83 Net cash provided by operating activities 3,054 3,456 CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions 9 Months Ended
Cash Flows from Investing Activities: Payments for property and equipment, including payments for lease buyouts (2,137) (3,025) Proceeds from sale of assets 120 114 Payments for acquisitions, net of cash acquired (16) (401) Other (2) 39 Net cash used by investing activities (2,035) (3,273) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt 1,503 1,785 Payments on long-term debt (769) (1,332) Net borrowings (payments) on commercial paper (45) 1,200 Dividends paid (333) (316) Proceeds from issuance of capital stock 31 51 Treasury stock purchases (1,292) (1,401) Other (84) (73) Net cash used by financing activities (989) (86) Net increase in cash and temporary cash investments 30 97 Cash and temporary cash investments: Beginning of year 322 277 End of year 352 374 CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions 9 Months Ended
Component cost of debt: Financial Statement Breakdown method 28-Jan-17 Kroger Debt Structure Expected Year of Maturity 2017 2018 2019 2020 2021 Thereafter Total Fair value Fair value adjustment (in millions) Debt Fixed rate ($MM) (716) $ (1,298) $ (1,246) $ (699) $ (797) $ (6,955) $ (11,711) $ (12,301) $ (590) $ Average interest rate (%) 4.94 4.54 4.68 4.62 4.63 4.57 Variable rate ($MM) (1,481) $ (17) $
(25) $
(81) $ (1,604) $ (1,604) $
Average interest rate (%) 0.93 3.53 0.00 5.00 0.00 3.73 (2,197) $ (1,315) $ (1,246) $ (724) $ (797) $ (7,036) $ (13,315) $ Debt Fixed rate (weight) 0.0538 0.0975 0.0936 0.0525 0.0599 0.5223 Average interest rate (%) 4.94% 4.54% 4.68% 4.62% 4.63% 4.57% 4.05% Variable rate (weight) 0.1112 0.0013 0.0000 0.0019 0.0000 0.0061 Average interest rate (%) 0.93% 3.53% 0.00% 5.00% 0.00% 3.73% 0.14% Weighted Average Rate 4.19% Cost of debt: Financial Statement method Interest expense 522 $ Interest Bearing debt Current portion of LTD (average past two years) 2,311 $ Long term debt (average past two years) 10,767 $ Total Debt 13,078 $ Capital lease obligations 1,016 $ Debt net of capital lease obligations 12,062 $ Rate estimate 4.33% Fair value adjustment 590 $ Fair value debt 12,652 $ fair value adjusted interest rate estimate 4.13% Cost of Debt: Market Benchmarks Moody's Aaa 3.51% Moody's Baa 4.22% NYU Estimate 3.91%
Cost of Equity Capital Risk free Rate Six month treasury 1.66% One year treasury 1.88% Three year treasury 2.27% Five year treasury 2.51% Ten year treasury 2.73% Average 2.21% CAPM Beta (Yahoo finance) 0.43 Market premium 7.00% Cost of Equity (CAPM) 5.22% Relevered CAPM Beta: relevered Industry beta (NYU database) 0.71 Industry equity/capital 54.44% Industry debt/capital 45.56% Industry D/E 0.84 Industry unlevered beta 0.39 Kroger D/E 1.99 Kroger relevered beta 1.15 Cost of Capital (relevered) 10.29%
Element Amount Weight Rate (1-Tax rate) Component Debt 13,315 $ 0.665 4.19% 0.790 2.20% Common Stock 6,698 $ 0.335 7.76% 1.000 2.60% Total Capital 20,013 $ 1.000 4.80% Operating Net Cash flow 1,330.00 $ 40,907.40 $ Growth Rate 1.50% (13,315) $ 27,592.40 $ 28.53 $ PV Net Cash Flow Less debt Equity Value Per share value Kroger Company Weighted Average Cost of Capital and Valuation Element Amount Weight Rate (1-Tax rate) Component Debt 13,315 $ 0.665 5.69% 0.790 2.99% Common Stock 6,698 $ 0.335 8.26% 1.000 2.76% Total Capital 20,013 $ 1.000 5.76% Operating Net Cash flow 1,330.00 $ 31,725.12 $ Growth Rate 1.50% (13,315) $ 18,410.12 $ 19.04 $ PV Net Cash Flow Less debt Equity Value Per share value Kroger Company Weighted Average Cost of Capital and Valuation
5 February 2018
Kroger Co KR 0.35% announced Monday it has sold its convenience store assets to British company EG Group for $2.15 billion. The deal is part of Kroger’s “Restock Kroger” initiative to improve its customer service and product offerings by utilizing more data and technology. “As part of our regular review of assets, it has become clear that our strong convenience store business unit will better meet its full potential outside of our business,” Kroger CFO Mike Schlotman said in a statement. Kroger informed shareholders it was exploring alternative strategies for its convenience stores back in October. The assets include 66 franchise operations in 18 U.S. states. Brands include Turkey Hill, Loaf ‘N Jug, Kwik Shop, Tom Thumb and Quik Stop. In 2016, Kroger’s convenience store segment generated $4 billion in revenue. Kroger said it would use proceeds from the sale to buy back shares of Kroger stock and pay down debt.
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands
Current assets: Cash and cash equivalents $ 2,435,115 $ 2,741,832 Accounts receivable, less allowances for returns and doubtful accounts: 2017 — $1,050,361; 2016 — $905,345 10,303,324 9,175,876 Merchandise inventories 11,461,428 10,723,920 Prepaid expenses and other 103,432 210,219 Total current assets 24,303,299 22,851,847 Property and equipment, at cost: Land 40,302 40,290 Buildings and improvements 979,589 859,148 Machinery, equipment, and other 2,071,314 1,717,298 Total property and equipment 3,091,205 2,616,736 Less accumulated depreciation (1,293,260) (1,086,054) Property and equipment, net 1,797,945 1,530,682 Goodwill 6,044,281 5,991,497 Other intangible assets 2,833,281 2,967,849 Other assets 337,664 295,626 TOTAL ASSETS 35,316,470 33,637,501
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands
Current liabilities: Accounts payable 25,404,042 23,926,320 Accrued expenses and other 1,402,002 743,839 Short-term debt 12,121 610,210 Total current liabilities 26,818,165 25,280,369 Long-term debt 3,429,934 3,576,493 Long-term financing obligation 351,635 275,991 Deferred income taxes 2,492,612 2,214,774 Other liabilities 159,663 160,470 Stockholders' equity: Common stock, $0.01 par value — authorized, issued, and outstanding: 2017 — 600,000,000 shares, 280,584,076 shares and 217,993,598 shares; 2016 — 600,000,000 shares, 277,753,762 shares and 220,050,502 shares 2,806 2,778 Additional paid-in capital 4,517,635 4,333,001 Retained earnings 2,395,218 2,303,941 Accumulated other comprehensive loss (95,850) (114,308) Treasury stock, at cost: 2017 — 62,590,478 shares; 2016 — 57,703,260 shares (4,755,348) (4,396,008) Total stockholders' equity 2,064,461 2,129,404 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 35,316,470 $ 33,637,501
Income Statement [Abstract] Revenue $ 153,143,826,000 $ 146,849,686,000 $ 135,961,803,000 Cost of goods sold 148,597,824,000 142,577,080,000 132,432,490,000 Gross profit 4,546,002,000 4,272,606,000 3,529,313,000 Operating expenses: Distribution, selling, and administrative 2,128,730,000 2,091,237,000 1,907,840,000 Depreciation 237,100,000 212,242,000 192,144,000 Amortization 160,503,000 152,493,000 56,491,000 Warrants 140,342,000 912,724,000 Employee severance, litigation, and other 959,327,000 102,911,000 37,894,000 Pension settlement 47,607,000 Operating income 1,060,342,000 1,525,774,000 422,220,000 Other (income) loss (2,730,000) (5,048,000) 13,598,000 Impairment charge on equity investment 30,622,000 Interest expense, net 145,185,000 139,912,000 109,036,000 Income before income taxes 917,887,000 1,390,910,000 268,964,000 Income tax expense (benefit) 553,403,000 (37,019,000) 407,129,000 Net income (loss) $ 364,484,000 $ 1,427,929,000 $ (138,165,000) CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands 12 Months Ended
Note 6. Debt Debt consisted of the following:
(in thousands)
Total, net of current portion $ 3,429,934 $ 3,576,493 Less current portion 12,121 610,210 Total debt $ 3,442,055 $ 4,186,703 $500,000, 4.25% senior notes due 2045 494,082 493,866 $500,000, 3.25% senior notes due 2025 494,950 494,266 $500,000, 3.40% senior notes due 2024 496,766 496,276 $500,000, 3.50% senior notes due 2021 497,877 497,361 $400,000, 4.875% senior notes due 2019 398,399 397,669 $600,000, 1.15% senior notes due 2017 — 598,935 Overdraft facility due in 2021 12,121 11,275 Multi-currency revolving credit facility due 2021 — — Term loans due in 2020 547,860 697,055 $ — Receivables securitization facility due 2019 500,000 500,000
September 30, 2017 2016
Revolving credit note $ —
$1.4MMM line
5,172,488 $ 92,307 $ 295,477 $ 309,184 2,288,606 Total $ 4,475,520 $ 159,345 — 1,090,605 After 5 years 2,052,750 76,511 58,656 6,061 1,526,012 4-5 years 963,936 61,952 62,477 35,661 $ 267,265 1-3 years 1,332,536 95,338 $ 50,585 $ 61,676 $ 28,706 Within 1 year $ 126,298
Financing Obligations 1 Other Commitments Total Payments Due by Period (in thousands) Debt, Including Interest Payments Operating Leases
OPERATING ACTIVITIES Net income (loss) $ 364,484,000 $ 1,427,929,000 $ (138,165,000) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, including amounts charged to cost of goods sold 262,420,000 232,538,000 193,290,000 Amortization, including amounts charged to interest expense 169,911,000 159,628,000 62,698,000 Provision for doubtful accounts 8,934,000 13,124,000 8,119,000 Provision (benefit) for deferred income taxes 319,069,000 (130,927,000) 20,826,000 Warrants expense 140,342,000 912,724,000 Share-based compensation expense 62,206,000 64,992,000 60,944,000 LIFO (credit) expense (157,782,000) 200,230,000 542,807,000 Pension settlement 47,607,000 (Gain) loss on sale of businesses (3,677,000) 12,953,000 Impairment charge on equity investment 30,622,000 Other 11,421,000 (5,171,000) (11,604,000) Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures: Accounts receivable (1,277,896,000) (912,724,000) (1,478,793,000) Merchandise inventories (431,454,000) (1,107,252,000) (1,379,189,000) Prepaid expenses and other assets 33,646,000 (46,159,000) (37,131,000) Accounts payable 1,473,389,000 3,011,508,000 4,957,227,000 Accrued expenses 661,174,000 (43,267,000) 152,762,000 Income taxes and other liabilities 8,293,000 126,099,000 12,138,000 NET CASH PROVIDED BY OPERATING ACTIVITIES 1,504,138,000 3,178,497,000 3,922,228,000 CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($) 12 Months Ended
INVESTING ACTIVITIES Capital expenditures (466,397,000) (464,616,000) (231,585,000) Cost of acquired companies, net of cash acquired (61,648,000) (2,731,356,000) (2,633,412,000) Cost of equity investments (11,347,000) (19,034,000) Proceeds from sales of businesses 12,094,000 17,163,000 Proceeds from sales of investment securities available-for-sale 74,778,000 101,829,000 Purchases of investment securities available-for-sale (48,635,000) (42,083,000) (86,214,000) Other 3,114,000 (13,919,000) 2,883,000 NET CASH USED IN INVESTING ACTIVITIES (498,041,000) (3,169,179,000) (2,931,165,000) FINANCING ACTIVITIES Term loan and senior notes borrowings 1,000,000,000 1,996,390,000 Senior notes and term loan repayments (750,000,000) (800,000,000) (500,000,000) Borrowings under revolving and securitization credit facilities 9,336,400,000 8,846,876,000 111,100,000 Repayments under revolving and securitization credit facilities (9,335,953,000) (8,333,662,000) (111,100,000) Purchases of common stock (329,929,000) (2,266,344,000) (1,859,106,000) Exercises of warrants 2,360,479,000 Exercises of stock options, including excess tax benefits of $88,116 in fiscal 2015 102,923,000 74,768,000 193,991,000 Cash dividends on common stock (320,270,000) (288,477,000) (253,919,000) Purchases of call options (180,000,000) Employee tax withholdings related to restricted share vesting (9,411,000) (22,148,000) (14,511,000) Other (6,574,000) (6,420,000) (14,979,000) NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (1,312,814,000) 565,072,000 (632,134,000) (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (306,717,000) 574,390,000 358,929,000 Cash and cash equivalents at beginning of year 2,741,832,000 2,167,442,000 1,808,513,000 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 2,435,115,000 $ 2,741,832,000 $ 2,167,442,000 CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($) 12 Months Ended
NEW YORK (AP) -- Shares of AmerisourceBergen soared Tuesday on reports that Walgreens is pursuing a complete takeover of the huge drug distributor. The Wall Street Journal reported late Monday that Walgreens Boots Alliance Inc. reached out to AmerisourceBergen Corp. about a potential deal several weeks ago. The paper, citing anonymous sources, said no offer is on the table. Walgreens already owns about 26 percent of the company, according to data provider FactSet. AmerisourceBergen Corp. jumped more than 8 percent, to $96.88, while broader indexes slipped in late morning trading. Walgreens Boots Alliance Inc. runs more than 13,200 stores in 11 countries, and is the largest U.S. drugstore chain. Last September, it said it would spend $4.38 billion to buy nearly 2,000 Rite Aid stores and some distribution centers and inventory. Adding the rest of AmerisourceBergen would give the company a tighter grip on its supply
imposing new rivals like Amazon.com Inc. Walgreens started buying shares of AmerisourceBergen in 2013, when it entered a 10-year supply agreement with the company.
Amerisource shares jump on Walgreens buyout report
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands
Current Assets Cash and equivalents $ 181,308 $ 869,531 $ 297,089 Accounts receivable, net 1,506,145 1,115,217 1,528,808 Inventories 989,995 613,798 910,546 Prepaid expenses and other current assets 352,711 341,518 342,362 Total current assets 3,030,159 2,940,064 3,078,805 Noncurrent Assets Property, plant, and equipment, net 821,228 773,965 747,451 Goodwill 1,397,642 1,387,628 1,392,155 Other noncurrent assets 950,655 1,392,137 1,430,456 Total Assets 6,199,684 6,493,794 6,648,867 Current Liabilities Short-term borrowings 732,649 192,168 Current portion of long-term debt 250,000 300,000 Accounts payable 713,488 664,857 694,757 Accrued liabilities 568,845 628,826 629,114 Income taxes payable 32,296 19,722 21,695 Total current liabilities 2,297,278 1,505,573 1,645,566 Noncurrent Liabilities Long-term debt 1,886,404 2,134,271 2,133,489 Other noncurrent liabilities 576,327 446,168 454,434 Total noncurrent liabilities 2,462,731 2,580,439 2,587,923 Stockholders’ Equity Common stock $1.00 par value, 1.0 billion shares authorized; 441.4 million shares issued 441,369 441,369 441,369 Additional paid-in capital 1,793,036 1,790,832 1,781,540 Treasury stock at cost: 97.7 million shares, 99.3 million shares, and 99.0 million shares, respectively (2,392,422) (2,426,749) (2,434,520) Retained earnings 2,460,224 3,545,359 3,502,076 Accumulated other comprehensive loss (862,532) (943,029) (875,087) Total stockholders’ equity 1,439,675 2,407,782 2,415,378 Total Liabilities and Stockholders’ Equity $ 6,199,684 $ 6,493,794 $ 6,648,867 Mattel
For the Year Ended December 31, December 31, December 31, 2016 2015 2014 Net Sales 5,456,650 $ 5,702,613 $ 6,023,819 $ Cost of sales 2,902,259 2,896,255 3,022,797 Gross Profit 2,554,391 2,806,358 3,001,022 Advertising and promotion expenses 634,947 717,852 733,243 Other selling and administrative expenses 1,400,211 1,547,584 1,614,065 Operating Income 519,233 540,922 653,714 Interest expense 95,118 85,270 79,271 Interest (income) (9,144) (7,230) (7,382) Other non-operating expense (income), net 23,517 (1,033) (5,085) Income Before Income Taxes 409,742 463,915 586,910 Provision for income taxes 91,720 94,499 88,036 Net Income 318,022 $ 369,416 $ 498,874 $ Net Income Per Common Share-Basic 0.93 $ 1.08 $ 1.46 $ Weighted average number of common shares 341,480 339,172 339,016 Net Income Per Common Share-Diluted 0.92 $ 1.08 $ 1.45 $ Weighted average number of common and potential common shares 344,233 339,748 340,768 Dividends Declared Per Common Share 1.52 $ 1.52 $ 1.52 $ MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts)
For the Year Ended December 31, December 31, December 31, 2016 2015 2014 (In thousands) Cash Flows From Operating Activities: Net income 318,022 $ 369,416 $ 498,874 $ Adjustments to reconcile net income to net cash flows from operating activities: Depreciation 235,797 233,025 207,701 Amortization 26,543 32,402 41,000 Deferred income taxes 1,236 4,133 8,142 Share-based compensation 53,950 56,691 51,993 Decrease (increase) from changes in assets and liabilities, net of acquired assets and liabilities: Accounts receivable (24,033) (136,259) 90,285 Inventories (37,195) (74,262) 43,392 Prepaid expenses and other current assets 34,754 (36,865) (25,319) Accounts payable, accrued liabilities, and income taxes payable 9,006 248,047 (34,653) Other, net (23,571) 38,229 7,149 Net cash flows from operating activities 594,509 734,557 888,564 MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS MATTEL INC /DE/ CASH_FLOW Form Type: 10-K Period End: Dec 31, 2016 Date Filed: Feb 23, 2017 Table Of Contents
For the Year Ended December 31, December 31, December 31, 2016 2015 2014 (In thousands) Cash Flows From Investing Activities: Purchases of tools, dies, and molds (140,124) (142,363) (147,236) Purchases of other property, plant, and equipment (122,069) (111,818) (113,221) Payments for acquisition, net of cash acquired (33,154)
Payments for foreign currency forward exchange contracts (6,103) (61,509) (19,933) Other, net (10,460) 33,195 (4,853) Net cash flows used for investing activities (311,910) (282,495) (708,552) Cash Flows From Financing Activities: Payments of short-term borrowings, net (83,914)
Proceeds from short-term borrowings, net 259,168 16,914
(300,000)
Proceeds from long-term borrowings, net 350,000
Share repurchases
Payment of dividends on common stock (518,529) (515,073) (514,813) Proceeds from exercise of stock options 34,065 14,995 43,299 Other, net (22,261) (17,058) (25,237) Net cash flows used for financing activities (281,471) (500,222) (227,319) Effect of Currency Exchange Rate Changes on Cash (24,411) (30,676) (20,259) Decrease in Cash and Equivalents (23,283) (78,836) (67,566) Cash and Equivalents at Beginning of Year 892,814 971,650 1,039,216 Cash and Equivalents at End of Year 869,531 $ 892,814 $ 971,650 $ Supplemental Cash Flow Information: Cash paid during the year for: Income taxes, gross 113,022 $ 120,232 $ 141,964 $ Interest 84,763 83,005 79,122 MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Mattel
Debt issuance costs ) ) The aggregate principal amount of long-term debt maturing in the next five years and thereafter is as follows: 2013 Senior Notes due March 2018 and March 2023 500,000 500,000 500,000 2011 Senior Notes due November 2016 and November 2041 300,000 600,000 2010 Senior Notes due October 2020 and October 2040 $ 500,000 $ 2016 Senior Notes due August 2021 350,000 — 2014 Senior Notes due May 2019 500,000 500,000 Less: current portion — (300,000 ) (15,729 (15,279 2,134,271 2,084,721 1,784,721
2010 Senior Notes 2011 Senior
Total long-term debt $ 2,134,271 $
Total (In thousands)
2017 $ — $ —
2014 Senior Notes 2016 Senior Notes Notes 2013 Senior Notes
$ — 2018 — — $ — $ — $ — 2019 — — — — 250,000 250,000 — 500,000 2020 250,000 — 500,000 — — 250,000 2021 — — — — Thereafter 250,000 300,000 250,000 350,000 350,000 — — $ 500,000 800,000 $ 500,000 $ 300,000 — — $ 2,150,000 $ 500,000 $ 350,000
Income Statement [Abstract] Net Sales $ 1,560,983 $ 1,795,575 $ 3,271,078 $ 3,622,250 Cost of sales 913,834 924,810 1,945,386 1,929,247 Gross Profit 647,149 870,765 1,325,692 1,693,003 Advertising and promotion expenses 179,691 202,900 348,752 384,614 Other selling and administrative expenses 381,756 350,469 1,066,943 1,051,799 Operating Income (Loss) 85,702 317,396 (90,003) 256,590 Interest expense 24,646 24,989 68,557 70,133 Interest (income) (1,575) (2,477) (6,337) (7,550) Other non-operating expense, net 1,368 856 5,928 23,210 Income (Loss) Before Income Taxes 61,263 294,028 (158,151) 170,797 Provision for income taxes 664,510 57,778 614,402 26,620 Net (Loss) Income $ (603,247) $ 236,250 $ (772,553) $ 144,177 Net (Loss) Income Per Common Share—Basic (in USD per share) $ (1.75) $ 0.69 $ (2.25) $ 0.42 Weighted average number of common shares 343,870 341,961 343,304 341,089 Net (Loss) Income Per Common Share—Diluted (in USD per share) $ (1.75) $ 0.68 $ (2.25) $ 0.42 Weighted average number of common and potential common shares 343,870 344,226 343,304 343,298 Dividends Declared Per Common Share (in USD per share) $ 0.15 $ 0.38 $ 0.91 $ 1.14 CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands 3 Months Ended 9 Months Ended Mattel
Cash Flows From Operating Activities: Net (loss) income $ (772,553) $ 144,177 Adjustments to reconcile net (loss) income to net cash flows used for operating activities: Depreciation 179,831 177,939 Amortization 16,264 19,577 Asset impairments 14,942 Deferred income taxes 2,057 (38,424) Valuation allowance on deferred tax assets 561,915 Share-based compensation 47,582 38,744 (Decrease) increase from changes in assets and liabilities, net of acquired assets and liabilities: Accounts receivable (355,821) (389,550) Inventories (359,013) (311,141) Prepaid expenses and other current assets (19,027) 25,292 Accounts payable, accrued liabilities, and income taxes payable 9,893 42,006 Other, net (66,140) (39,966) Net cash flows used for operating activities (740,070) (331,346) CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands 9 Months Ended Mattel
Cash Flows From Investing Activities: Purchases of tools, dies, and molds (101,428) (101,562) Purchases of other property, plant, and equipment (133,895) (77,586) Payments for acquisition, net of cash acquired (33,154) Proceeds from foreign currency forward exchange contracts 60,376 6,228 Other, net 38 1,349 Net cash flows used for investing activities (174,909) (204,725) Cash Flows From Financing Activities: Payments of short-term borrowings, net (878,937) (83,914) Proceeds from short-term borrowings, net 1,419,418 67,000 Proceeds from long-term borrowings, net 350,000 Payments of dividends on common stock (311,973) (388,518) Proceeds from exercise of stock options 1,768 28,531 Other, net (16,543) (16,341) Net cash flows provided by (used for) financing activities 213,733 (43,242) Effect of Currency Exchange Rate Changes on Cash 13,023 (16,412) Decrease in Cash and Equivalents (688,223) (595,725) Cash and Equivalents at Beginning of Period 869,531 892,814 Cash and Equivalents at End of Period $ 181,308 $ 297,089 CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands 9 Months Ended Mattel