Snapple 2008 Annual Report Download - page 66

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The following table summarizes our cash activity for 2008, 2007 and 2006 (in millions):
2008 2007 2006
For the Year Ended December 31,
Net cash provided by operating activities ...................... $ 709 $ 603 $581
Net cash provided by (used in) investing activities . .............. 1,074 (1,087) (502)
Net cash (used in) provided by financing activities . .............. (1,625) 515 (72)
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $106 million for the year ended December 31, 2008,
compared with the year ended December 31, 2007. The $809 million decrease in net income included a
$1,033 million increase in the non-cash impairment of goodwill and intangible assets, an $83 million decrease
in the gain on the disposal of assets due to a one-time gain recorded in 2007 upon the termination of the glaceau
distribution agreement, an increase of $39 million in depreciation and amortization expense driven by higher capital
expenditures and the amortization of capitalized financing costs and the impact of the write-off of $21 million of
deferred financing costs related to our bridge loan facility. These amounts were partially offset by a decrease of
$296 million in deferred income taxes driven by the impairment of intangible assets. Changes in working capital
included a $71 million favorable decrease in inventory primarily due to improved inventory management and lower
sales volumes offset by an increase of $43 million in trade accounts receivable and a $43 million decrease in
accounts payable and accrued expenses. Trade accounts receivable increased despite reduced collection times due
to an increase in sales in December 2008. Accounts payable and accrued expenses decreased primarily due to lower
inventory purchases as we focus on inventory management. Cash provided by operations was also impacted by our
separation from Cadbury.
Net cash provided by operating activities in 2007 was $603 million compared to $581 million in 2006. The
$22 million increase was primarily due to changes in non-cash adjustments and working capital improvements. The
increase in working capital was primarily the result of a $99 million increase in accounts payable and accrued
expenses and a $74 million decrease in trade accounts receivable. These changes were partially offset by increases
in related party receivables of $55 million, other accounts receivable of $84 million and inventories of $27 million.
Net Cash Provided by Investing Activities
The increase of $2,161 million in cash provided by investing activities for the year ended December 31, 2008,
compared with the year ended December 31, 2007, was primarily attributable to related party notes receivable due
to the separation from Cadbury. For the 2007, cash used in net issuances of related party notes receivable totaled
$929 million compared with cash provided by net repayments of related party notes receivable of $1,375 million for
2008. We increased capital expenditures by $74 million in the current year, primarily due to early stage costs of a
new manufacturing and distribution center in Victorville, California. Capital asset investments for both years
primarily consisted of expansion of our capabilities in existing facilities, replacement of existing cold drink
equipment, IT investments for new systems, and upgrades to the vehicle fleet. Additionally, cash used by investing
activities for 2007 included $98 million in proceeds from the disposal of assets, primarily attributable to the
termination of the glaceau distribution agreement, partially offset by net cash used in the acquisition of SeaBev.
Net cash used in investing activities for the year ended December 31, 2007, was $1,087 million compared to
$502 million for the year ended December 31, 2006. The increase of $585 million was primarily attributable to the
issuance of notes receivable for $1,846 million, partially offset by $842 million due to the repayment of notes
receivable and a decrease of $405 million for acquisitions, principally the acquisition in 2006 of the remaining 55%
interest in DPSUBG. Additionally, cash used by investing activities for 2007 included $98 million in proceeds from
the disposal of assets, primarily attributable to the termination of the glaceau distribution agreement, partially offset
by net cash used in the acquisition of SeaBev.
Net Cash Provided by Financing Activities
The increase of $2,140 million in cash used in financing activities for the year ended December 31, 2008,
compared with the year ended December 31, 2007, was driven by the change in Cadbury’s investment as part of our
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