Grupo Sanborns, S.A.B. de C.V. and Subsidiaries (Subsidiary of Grupo Carso, S.A.B. de C.V.)

Consolidated statements of cash flows

for the years ended December 31, 2017, 2016 and 2015
(In thousands of Mexican pesos)

    2017   2016   2015
Cash flows from operating activities:            
Consolidated net income for the year $ 4,161,981 $ 4,733,987 $ 3,458,417
Adjustments not requiring (providing) cash:            
Income tax recognized in net income   1,227,272   2,034,667   1,596,746
Depreciation and amortization   1,258,361   1,116,873   950,405
Impairment of property   31,349   -   26,814
(Gain) loss on sale of property, machinery and equipment   (3,409)   (2,368)   16,606
Provisions   23,416   42,629   (26,081)
Gain arising on changes in fair value of investment properties   (115,955)   (121,718)   (177,624)
Gain on stock purchase   -   (1,141,267)   -
Interest expense   143,794   128,748   101,411
Equity in income of associates   (173,293)   (89,992)   -
Interest income   (3,804,754)   (3,430,773)   (3,220,082)
    2,748,762   3,228,157   2,752,693
Items related to operating activities:            
(Increase) decrease in:            
Accounts receivable   (966,841)   (1,516,340)   (434,523)
Interest received from operating activities   3,577,472   3,140,534   2,920,455
Inventories   (350,099)   (1,249,618)   (238,537)
Prepaid expenses   (13,786)   (17,618)   (38,147)
Other assets   (50,738)   (81,919)   (3,392)
Long-term accounts receivable   10,143   17,336   18,521
Net assets projected for future employee retirement benefits   (116,357)   9,644   (38,014)
(Decrease) increase in:            
Trade accounts payable   338,912   1,111,390   (108,857)
Other accounts payable and accrued liabilities   471,573   236,365   316,853
Due to related parties   (20,097)   223,526   (48,251)
Direct employee benefits   38,570   21,632   16,134
Income taxes paid   (1,492,407)   (1,671,225)   (1,615,075)
Net cash flows provided by operating activities   4,175,107   3,494,493   3,473,779
             
Cash flows from investing activities:            
Purchase of property, machinery and equipment   (1,583,697)   (2,904,643)   (2,255,645)
Sales of property, machinery and equipment   194,670   6,447   12,286
Acquisition of shares   -   (1,945,602)   -
Business acquisition   -   403,008   -
Interest received   35,411   99,460   289,026
Net cash flows used in investing activities   (1,353,616)   (4,341,330)   (1,954,333)
             
Cash flows from financing activities:            
Repurchase of shares   (424,062)   (235,891)   (650,548)
Interest paid   (12,166)   (10,188)   (101,411)
Dividends paid to controlling interest and non-controlling interest   (2,161,070)   (2,106,825)   (2,069,289)
Net cash flows used in financing activities   (2,597,298)   (2,352,904)   (2,821,248)
Effects of exchange rate changes on cash and cash equivalents   (13,948)   58,524   45,136
Net decrease in cash and cash equivalents   210,245   (3,141,217)   (1,256,666)
Cash and cash equivalents at beginning of the year   1,714,356   4,855,573   6,112,239
Cash and cash equivalents at end of the year $ 1,924,601 $ 1,714,356 $ 4,855,573

See accompanying notes to consolidated financial statements.