IBM 2009 Annual Report Download - page 38

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($ in millions)
For the year ended December 31: 2009 2008
Net cash provided by/(used in):
Operating activities $ 20,773 $ 18,812
Investing activities (6,729) (9,285)
Financing activities (14,700) (11,834)
Effect of exchange rate changes
on cash and cash equivalents 98 58
Net change in cash and cash equivalents $ (558) $ (2,250)
Net cash from operating activities for 2009 increased $1,961
million as compared to 2008 driven by the following key factors:
• An increase in cash provided by accounts receivable of
$1,857 million, driven by Global Financing receivables due to
lower volumes in 2009;
• Lower payments resulted in a benefit in accounts payable of
$1,030 million year to year;
• Tax refunds of approximately $710 million; partially offset by:
• Higher retirement-related funding of $875 million;
• Derivative instruments in cash flow hedging relationships rep-
resenting a use of cash of $247 million in the current year in
comparison to a source of cash of $176 million in 2008; and
• Higher payments for workforce rebalancing actions of $377
million.
Net cash used in investing activities decreased $2,556 million on
a year-to-year basis driven by:
• A decrease of $5,119 million in cash used for acquisitions
primarily driven by the acquisition of Cognos in 2008;
• A decrease in cash used in net capital spending of $704
million driven by a decline in rental additions and lower
invest ment requirements in the Strategic Outsourcing and
Microelectronics businesses; and
• An increase in cash from divestitures of $329 million as a
result of the Geodis transaction in 2009; partially offset by:
• The net impact of purchases and sales of marketable securi-
ties and other investments that resulted in a use of cash of
$2,005 million in the current year in comparison to a source
of cash in 2008 of $1,510 million.
Net cash used in financing activities increased $2,866 million
compared to 2008 as a result of:
• An increase of $5,019 million in net cash payments used to
retire debt;
• A decrease of $721 million in cash generated by other com-
mon stock transactions primarily due to lower stock option
exercises; partially offset by:
• Lower common stock repurchases of $3,150 million.
Within total debt, on a net basis, the company utilized $7,463
million in net cash to retire debt versus $2,444 million in net
cash used in 2008. The net cash used to retire debt in 2009
was comprised of: $13,495 million in cash payments to settle
debt and net payments of $651 million in short-term borrow-
ings, partially offset by $6,683 million of new debt issuances.
See note K, “Borrowings,” on pages 90 to 92 for a listing of the
company’s debt securities.
Noncurrent Assets and Liabilities
($ in millions)
At December 31: 2009 2008
Noncurrent assets $60,087 $60,520
Long-term debt $21,932 $22,689
Noncurrent liabilities (excluding debt) $28,334 $30,815*
* Reflects the adoption of the FASB guidance on noncontrolling interests in con-
solidated financial statements. See note B, “Accounting Changes,” on pages 79
to 82 for additional information.
The decrease in noncurrent assets of $433 million compared to
the prior year-end balance was primarily driven by:
• A decrease of $3,075 million in deferred taxes primarily driven
by pension related activity;
• A decrease of $904 million in long-term financing receiv-
ables, offset by a currency benefit of $365 million, driven by
maturities exceeding originations; and
• A decrease of $365 million in intangible assets driven by
amortization; partially offset by:
• An increase of $1,964 million in goodwill primarily driven by
a currency impact of $1,035 million and the acquisition of
SPSS; and
• An increase of $1,401 million in pension assets mainly driven
by plan contributions and pension remeasurements.
Long-term debt decreased $758 million primarily due to reclasses
to short-term debt as certain instruments approached maturity
($2,282 million); offset by new net debt issuances ($1,885 million).
Other noncurrent liabilities, excluding debt, decreased $2,481
million primarily driven by:
• A decrease of $3,500 million in retirement and nonpension
postretirement benefit obligations primarily driven by pension
remeasurements and plan contributions; partially offset by:
36