Acct Business
The following is the 2016 statement of cash flows for PulteGroup, Inc.
|
PULTE HOMES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the 12 months ended December 31 |
|
($ thousands) |
2016 |
2015 |
2014 |
|||
|
Cash flows from operating activities: |
||||||
|
Net income |
$ 602,703 |
$ 494,090 |
$ 474,338 |
|||
|
Adjustments to reconcile net income to net cash from operating activities: |
||||||
|
Deferred income tax expense |
334,787 |
311,699 |
223,769 |
|||
|
Write-down of land and pre-acquisition costs |
19,357 |
11,467 |
11,168 |
|||
|
Depreciation and amortization |
54,007 |
46,222 |
39,864 |
|||
|
Stock-based compensation expense |
22,228 |
24,752 |
29,292 |
|||
|
Loss on debt retirements |
657 |
— |
8,584 |
|||
|
Other, net |
1,614 |
(4,865 |
) |
(2,566 |
) |
|
|
Increase (decrease) in cash due to: |
||||||
|
Inventories |
(897,092 |
) |
(917,298 |
) |
(337,939 |
) |
|
Residential mortgage loans available-for-sale |
(99,527 |
) |
(104,609 |
) |
(53,734 |
) |
|
Other assets |
(45,721 |
) |
(175,150 |
) |
(46,249 |
) |
|
Accounts payable and other liabilities |
75,257 |
(23,898 |
) |
(38,646 |
) |
|
|
Net cash provided by (used in) operating activities |
68,270 |
(337,590 |
) |
307,881 |
||
|
Cash flows from investing activities: |
||||||
|
Capital expenditures |
(39,295 |
) |
(45,440 |
) |
(48,790 |
) |
|
Investment in unconsolidated subsidiaries |
(14,539 |
) |
(454 |
) |
(9 |
) |
|
Cash used for business acquisition |
(430,458 |
) |
— |
(82,419 |
) |
|
|
Other investing activities, net |
13,100 |
11,330 |
8,605 |
|||
|
Net cash used in investing activities |
(471,192 |
) |
(34,564 |
) |
(122,613 |
) |
|
Cash flows from financing activities: |
||||||
|
Proceeds from debt issuance |
1,995,937 |
498,087 |
— |
|||
|
Repayments of debt |
(986,919 |
) |
(239,193 |
) |
(250,631 |
) |
|
Borrowings under revolving credit facility |
619,000 |
125,000 |
— |
|||
|
Repayments under revolving credit facility |
(619,000 |
) |
(125,000 |
) |
— |
|
|
Financial services borrowings |
63,744 |
127,636 |
34,577 |
|||
|
Stock option exercises |
5,845 |
10,535 |
15,627 |
|||
|
Share repurchases |
(603,206 |
) |
(442,738 |
) |
(253,019 |
) |
|
Dividends paid |
(124,666 |
) |
(115,958 |
) |
(75,646 |
) |
|
Net cash provided by (used in) financing activities |
350,735 |
(161,631 |
) |
(529,092 |
) |
|
|
Net increase (decrease) |
(52,187 |
) |
(533,785 |
) |
(343,824 |
) |
|
Cash and equivalents at beginning of period |
775,435 |
1,309,220 |
1,653,044 |
|||
|
Cash and equivalents at end of period |
$ 723,248 |
$ 775,435 |
$1,309,220 |
Required:
|
a. |
In determining operating cash flow in 2016, the company includes share-based compensation expense of $22,228 thousand. Why does the company add this amount? |
|
b. |
The operating section in 2016 includes an increase in cash of $75,257 for “Accounts payable, accrued and other liabilities.” Explain this reconciling item. |
|
c. |
Does the composition of PulteGroup’s cash flow statement present a “healthy” picture? Explain. |
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