Avon 2006 Annual Report Download - page 55

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CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Years ended December 31 2006 2005 2004
Cash Flows from Operating Activities
Net income $ 477.6 $ 847.6 $ 846.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 115.6 106.5 103.5
Amortization 44.0 33.1 30.2
Provision for doubtful accounts 144.7 135.6 140.0
Provision for obsolescence 173.3 83.9 76.7
Share-based compensation 62.9 10.1 8.8
Foreign exchange losses (gains) 4.0 (16.3) (1.1)
Deferred income taxes (110.7) (31.7) (55.0)
Net (gains) losses on investments – (2.4) 13.5
Asset write-off restructuring charges 8.0 21.2 –
Other 4.1 (2.7) –
Changes in assets and liabilities:
Accounts receivable (188.3) (163.5) (164.6)
Inventories (233.9) (152.6) (126.5)
Prepaid expenses and other (18.9) (2.7) (55.8)
Accounts payable and accrued liabilities 323.4 126.4 96.9
Income and other taxes 40.3 (30.2) 10.3
Noncurrent assets and liabilities (50.0) (66.8) (40.4)
Net cash provided by operating activities 796.1 895.5 882.6
Cash Flows from Investing Activities
Capital expenditures (174.8) (206.8) (250.1)
Disposal of assets 16.4 30.3 19.6
Acquisitions and other investing activities (39.4) (156.6) (47.5)
Purchases of investments (36.2) (107.9) (30.0)
Proceeds from sale of investments 26.1 97.9 28.6
Net cash used by investing activities (207.9) (343.1) (279.4)
Cash Flows from Financing Activities*
Cash dividends (317.6) (313.8) (269.7)
Book overdrafts 6.2 .4 .4
Debt, net (maturities of three months or less) (375.0) 731.5 23.2
Proceeds from debt 541.8 78.7 18.4
Repayment of debt (31.3) (56.9) (237.4)
Proceeds from exercise of stock options 32.5 61.4 122.3
Excess tax benefit realized from share-based compensation 8.1 – –
Repurchase of common stock (355.1) (728.0) (224.2)
Net cash used by financing activities (490.4) (226.7) (567.0)
Effect of exchange rate changes on cash and equivalents 42.4 (36.6) 39.4
Net increase in cash and equivalents 140.2 289.1 75.6
Cash and equivalents at beginning of year 1,058.7 769.6 694.0
Cash and equivalents at end of year $1,198.9 $1,058.7 $ 769.6
Cash paid for:
Interest, net of amounts capitalized $ 76.4 $ 51.0 $ 35.4
Income taxes, net of refunds received $ 333.2 $ 309.8 $ 384.0
* Non-cash financing activities included the change in fair market value of interest rate swap agreements of $21.8, $15.3, and $15.1, in 2006, 2005, and 2004
respectively (see Note 4, Debt and Other Financing).
The accompanying notes are an integral part of these statements.
A V O N 2006 F-5