Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Reynolds American Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Net income	6,073)	3,253)	1,470)	1,718)	1,272)
Income from discontinued operations, net of tax	—)	—)	(25)	—)	—)
Gain on divestitures	(4,861)	(3,181)	—)	—)	—)
Loss on early extinguishment of debt and related expenses	239)	—)	—)	124)	21)
Asset impairment and exit charges, net of cash payments	—)	94)	—)	—)	—)
Depreciation and amortization expense	123)	122)	106)	103)	131)
Trademark and other intangible asset impairment charges	—)	—)	—)	32)	129)
Deferred income tax expense (benefit)	387)	(659)	(180)	312)	(44)
Accounts and other receivables	24)	86)	(3)	(18)	11)
Inventories	89)	31)	(154)	(143)	(17)
Related party, net	(5)	14)	—)	10)	5)
Accounts payable	42)	32)	(43)	(2)	74)
Accrued liabilities, including other working capital	(160)	(242)	30)	78)	(65)
Tobacco settlement accruals	(314)	239)	92)	(763)	(40)
Pension and postretirement	(415)	91)	317)	(185)	129)
Other, net	58)	316)	13)	42)	(38)
Other changes that provided (used) cash	(681)	567)	252)	(981)	59)
Adjustments to reconcile to net cash flows from operating activities	(4,793)	(3,057)	178)	(410)	296)
Net cash flows from operating activities	1,280)	196)	1,623)	1,308)	1,568)
Capital expenditures	(206)	(174)	(204)	(153)	(88)
Proceeds from settlement of investments	266)	332)	4)	6)	—)
Acquisition, net of cash acquired	—)	(17,220)	—)	—)	—)
Proceeds from divestitures	5,015)	7,056)	—)	—)	—)
Proceeds from termination of joint venture	—)	—)	35)	31)	30)
Other, net	3)	1)	(40)	3)	4)
Net cash flows (used in) from investing activities	5,078)	(10,005)	(205)	(113)	(54)
Dividends paid on common stock	(2,369)	(1,583)	(1,411)	(1,335)	(1,307)
Repurchase of common stock	(226)	(124)	(440)	(775)	(1,101)
Repayments of long-term debt	(500)	(450)	—)	(1,035)	(1,076)
Early extinguishment of debt	(3,650)	—)	—)	—)	—)
Premiums paid for early extinguishment of debt	(207)	—)	—)	(155)	(20)
Proceeds from termination of interest rate swaps	66)	—)	—)	—)	—)
Proceeds from BAT Share Purchase	—)	4,673)	—)	—)	—)
Issuance of long-term debt	—)	8,975)	—)	1,097)	2,539)
Debt issuance costs and financing fees	(8)	(70)	(79)	(18)	(22)
Borrowings under revolving credit facility	—)	1,400)	1,000)	—)	—)
Repayments of borrowings under revolving credit facility	—)	(1,400)	(1,000)	—)	—)
Principal borrowings under term-loan credit facility	—)	—)	—)	500)	750)
Repayments under term-loan credit facility	—)	—)	—)	(500)	(750)
Excess tax benefit on stock-based compensation plans	28)	17)	12)	14)	39)
Payment to settle forward starting interest rate contracts	—)	—)	—)	—)	(23)
Net cash flows from (used in) financing activities	(6,866)	11,438)	(1,918)	(2,207)	(971)
Effect of exchange rate changes on cash and cash equivalents	(8)	(28)	(34)	10)	3)
Net change in cash and cash equivalents	(516)	1,601)	(534)	(1,002)	546)
Cash and cash equivalents at beginning of year	2,567)	966)	1,500)	2,502)	1,956)
Cash and cash equivalents at end of year	2,051)	2,567)	966)	1,500)	2,502)

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

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Cash flow statement item	Description	The company
Net cash flows from operating activities	Amount of cash inflow (outflow) from operating activities, excluding discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities.	Reynolds American Inc. net cash flows from operating activities decreased from 2014 to 2015 but then increased from 2015 to 2016 not reaching 2014 level.
Net cash flows (used in) from investing activities	Amount of cash inflow (outflow) of investing activities, excluding discontinued operations. Investing activity cash flows include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets.	Reynolds American Inc. net cash flows (used in) from investing activities decreased from 2014 to 2015 but then increased from 2015 to 2016 exceeding 2014 level.
Net cash flows from (used in) financing activities	Amount of cash inflow (outflow) of financing activities, excluding discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.	Reynolds American Inc. net cash flows from (used in) financing activities increased from 2014 to 2015 but then decreased significantly from 2015 to 2016.

Reynolds American Inc. (NYSE:RAI)

Cash Flow Statement