As of December 31, 2015, Compass had derivative financial instruments in place for the volumes and prices shown below (based on calendar year periods):
|
| | | | | | | | | | | |
(in millions, except volumes and prices) | | Volume Mmbtus/Mbbls | | Weighted average strike price per Mmbtu/Bbl | | Fair Value at December 31, 2015 |
Natural gas two-way collars (February - December 2016) | | 3,350 |
| | | | $ | (0.2 | ) |
Short call | | | | $ | 2.77 |
| | |
Long put | | | | 2.15 |
| | |
Total natural gas | | 3,350 |
| | | | $ | (0.2 | ) |
| | | | | | |
Oil three-way collars (January - December 2016) | | 183 |
| | | | $ | 1.5 |
|
Short call | | | | $ | 76.00 |
| | |
Long put | | | | 56.00 |
| | |
Short Put | | | | 42.00 |
| | |
Total oil | | 183 |
| | | | $ | 1.5 |
|
Total oil and natural gas derivatives | | | | | | $ | 1.3 |
|
Compass’ derivative financial instruments are comprised of swap and three-way collar contracts. Swap contracts allow it to receive a fixed price and pay a floating market price to the counterparty for the hedged commodity. Collar contracts allows Compass to receive a market price if the market price settles within the call/put spread portion of the contract, to receive the put price if the market settles below the purchased put or a market price plus the difference between the purchased and sold puts, should the settlement price be below the sold put threshold.
Discussion of Consolidated Cash Flows
Summary of Consolidated Cash Flows
Presented below is a table that summarizes the cash provided or used in our activities and the amount of the respective increases or decreases in cash provided or used from those continuing activities between the fiscal periods (in millions):
|
| | | | | | | | | | | | |
| | Fiscal Quarter |
Cash provided by (used in) continuing activities: | | 2016 | | 2015 | | Increase / (Decrease) |
Operating activities | | $ | (227.5 | ) | | $ | (263.4 | ) | | $ | 35.9 |
|
Investing activities | | 248.8 |
| | (106.8 | ) | | 355.6 |
|
Financing activities | | (137.0 | ) | | 389.6 |
| | (526.6 | ) |
Effect of exchange rate changes on cash and cash equivalents | | (3.1 | ) | | (6.3 | ) | | 3.2 |
|
Net change in cash and cash equivalents in continuing operations | | $ | (118.8 | ) | | $ | 13.1 |
| | $ | (131.9 | ) |
Operating Activities
Cash used in operating activities totaled $227.5 million for the Fiscal 2016 Quarter as compared to cash used of $263.4 million for the Fiscal 2015 Quarter. The $35.9 million decrease in cash used was the result of (i) a $54.8 million decrease in cash used by the Corporate and Other segment; and (ii) a $0.2 million decrease in cash used by the Asset Management segment, offset by (i) a $76.7 million increase in cash used by the Consumer Products segment; (ii) a $12.9 million increase in cash used by the Energy segment; and (iii) a $12.8 million increase in cash used by the Insurance segment (which also reflects an increase in cash used for net withdrawals from contractholder accounts related to the cession between Front Street and FGL, which is reflected in operating cash for the Insurance segment).
The $54.8 million decrease in cash used by the Corporate and Other segment was primarily due to the of severance costs associated with the departure of Company’s former CEO during the Fiscal 2015 Quarter, as well as lower acquisition and integration costs, and legal expenses for the Fiscal 2016 Quarter when compared to the Fiscal 2015 Quarter.
The $76.7 million increase in cash used by operating activities in the Consumer Products segment was primarily due to the incremental use of cash for working capital driven by higher inventory, higher receivables, lower accounts payable and accrued expenses of $106.0 million coupled with increase in cash paid for interest of $6.0 million, partially offset by cash generated from higher Adjusted EBITDA of $31.3 million.
