Tecumseh Products 2012 Annual Report Download - page 25

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With respect to working capital, reduced inventory levels provided $9.4 million of cash. Inventory days on hand decreased by
19 days to 71 days at December 31, 2012, primarily due to increased sales for the three months ended December 31, 2012 as
compared to the three months ended December 31, 2011 and continued cost containment measures.
Increased accounts receivable resulted in a use of cash of $15.4 million during the year primarily as a result of our increased
sales in the fourth quarter of 2012 compared to the fourth quarter of 2011. Our days sales outstanding increased by one day as
compared to December 31, 2011 to 55 days at December 31, 2012. This increase was primarily related to a decrease in
factoring of our receivables as a percentage of the outstanding receivables balance in Brazil, partially offset by increased
factoring due to our new European facility.
Payables and accrued expenses provided $12.4 million of cash mainly as a result of an increase in inventory purchases and
timing of those purchases, as well as an increase in accrued expenses due to our annual incentive plan. Payable days
outstanding remained at 63 days at both December 31, 2012 and December 31, 2011.
Recoverable non-income taxes provided cash of $1.1 million, which included $9.2 million cash received from the Brazilian
government and $15.8 million cash received from the Indian government, partially offset by accruals of additional recoverable
non-income taxes.
Employee retirement benefits were a use of cash of $1.7 million due to benefit payments and contributions related to our non-
U.S. pension and U.S. postretirement benefit plans.
Cash used in investing activities was $5.7 million in 2012 as compared to $9.1 million in 2011. The 2012 use of cash in
investing activities includes $13.8 million of capital expenditures. This use of cash was partially offset by the release of
restricted cash of $7.1 million and proceeds from the sale of assets of $1.0 million, primarily related to the sale of our Grafton
facility. The release of restricted cash primarily relates to $2.4 million of restricted cash that became available to fund our 401
(k) matching contributions and a $4.9 million decrease in cash pledged on our derivatives related to our hedging activities,
partially offset by a $0.2 million increase in cash collateral on our letters of credit.
Cash provided by financing activities was $3.1 million in 2012 compared to $0.6 million provided by financing activities in
2011. The increase in borrowings in 2012 is mainly due to financing our regional operating needs, partially offset by our cash
management strategy to increase our usage of accounts receivable factoring programs from December 2011 levels.
2011 vs. 2010
Cash used in operations amounted to $5.3 million in 2011, as compared to $46.0 million of cash used in operations in 2010. The
2011 cash flows from operations included our net loss of $73.2 million, a non-operating-activities-cash gain on disposal of property
and equipment of $2.5 million, and a non-cash gain on an adjustment for employee retirement benefits of $6.9 million, partially
offset by non-cash impacts of depreciation of $40.5 million, decreased deferred income taxes of $0.1 million, and a reversal of
share-based compensation of $1.6 million. With respect to working capital, reduced inventory levels provided $6.5 million of
cash primarily due to our efforts to match inventory on hand with the decrease in sales volumes due to the weakened global
economic conditions. Despite our efforts to decrease inventory levels, inventory days on hand increased by nineteen days to 90
days at December 31, 2011, primarily due to lower than expected sales.
Decreased accounts receivable provided cash of $34.9 million during 2011, primarily as a result of a decrease in sales in the fourth
quarter of 2011 compared to the fourth quarter of 2010. We also decreased our days sales outstanding by seven days to 54 days
at December 31, 2011.
Payables and accrued expenses used $43.7 million of cash mainly as a result of a decrease in inventory purchases and payable
days outstanding decreasing by eleven days to 63 days at December 31, 2011.
Recoverable non-income taxes provided cash of $41.7 million primarily due to refunds received for non-income taxes in foreign
jurisdictions, mainly Brazil.
Employee retirement benefits were a use of cash of $0.5 million due to contributions relating to our retiree pension plans.
Cash used in investing activities was $9.1 million in 2011 as compared to cash used in investing activities of $9.0 million in
2010. The 2011 use of cash in investing activities includes $17.7 million of capital expenditures. This use of cash was partially
offset by a decrease in restricted cash funds of $5.2 million that were released from our former bank and related to letters of
credit and $2.5 million of restricted cash that became available to fund our defined contribution retirement plan, partially offset
by additional required deposits of $3.9 million related to our hedging activities. We also received $4.8 million of proceeds from
the sale of assets, primarily excess land in India.