Mattel 2013 Annual Report Download - page 48

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Over the long term, assuming cash flows from operating activities remain strong, Mattel plans to use its free
cash flows to invest in strategic acquisitions and to return funds to stockholders through cash dividends and share
repurchases. Mattel’s share repurchase program has no expiration date and repurchases will take place from time
to time, depending on market conditions. The ability to successfully implement the capital deployment plan is
directly dependent on Mattel’s ability to generate strong cash flows from operating activities. There is no
assurance that Mattel will continue to generate strong cash flows from operating activities or achieve its targeted
goals for investing activities.
Operating Activities
Cash flows from operating activities were $698.4 million during 2013, as compared to $1.28 billion during
2012 and $664.7 million during 2011. The decrease in cash flows from operating activities in 2013 from 2012
was primarily due to higher working capital usage, including payment of the Litigation Charge of approximately
$138 million, partially offset by higher net income. The increase in cash flows from operating activities in 2012
from 2011 was primarily due to reductions in working capital usage.
Investing Activities
Cash flows used for investing activities were $242.1 million during 2013, as compared to $900.2 million
during 2012 and $174.5 million during 2011. The decrease in cash flows used for investing activities in 2013
from 2012 was primarily due to the acquisition of HIT Entertainment in 2012, partially offset by higher
purchases of tools, dies, and molds and other property, plant, and equipment. The increase in cash flows used for
investing activities in 2012 from 2011 was primarily due to the acquisition of HIT Entertainment in 2012 and
higher purchases of other property, plant, and equipment.
Financing Activities
Cash flows used for financing activities were $740.0 million during 2013, as compared to $410.9 million
during 2012 and $397.3 million during 2011. The increase in cash flows used for financing activities in 2013
from 2012 was primarily due to higher share repurchases and higher repayments of long-term borrowings,
partially offset by net proceeds from long-term borrowings. The increase in cash flows used for financing
activities in 2012 from 2011 was primarily due to lower net proceeds from long-term borrowings and higher
dividend payments, partially offset by lower share repurchases and lower repayments of long-term borrowings.
During 2013, Mattel repurchased 11.0 million shares of its common stock at a cost of $469.2 million.
During 2012, Mattel repurchased 2.3 million shares of its common stock at a cost of $77.9 million, of which
$23.5 million was unsettled at December 31, 2012. During 2011, Mattel repurchased 20.4 million shares of its
common stock at a cost of $536.3 million, of which $12.3 million was unsettled at December 31, 2011. During
both 2013 and 2011, Mattel’s Board of Directors authorized the repurchase of an additional $500.0 million of
Mattel’s common stock under its share repurchase program. Mattel’s share repurchase program was first
announced on July 21, 2003. At December 31, 2013, share repurchase authorizations of $380.2 million had not
been executed. Repurchases under the program will take place from time to time, depending on market
conditions. Mattel’s share repurchase program has no expiration date.
During 2013, 2012, and 2011, Mattel paid total dividends per share of $1.44, $1.24, and $0.92, respectively,
to holders of its common stock. The Board of Directors declared the dividends on a quarterly basis, and Mattel
paid the dividends during the quarters in which the dividends were declared. The payment of dividends on
common stock is at the discretion of the Board of Directors and is subject to customary limitations. Dividend
payments were $494.4 million, $423.4 million, and $316.5 million in 2013, 2012, and 2011, respectively.
Seasonal Financing
See Item 8 “Financial Statements and Supplementary Data—Note 5 to the Consolidated Financial
Statements—Seasonal Financing and Debt.”
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