VMware 2015 Annual Report Download - page 44
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andsizeofacquisitions,investmentsandstockrepurchases.Shouldwerequireadditionalliquidity,wemayseektoarrangedebtfinancingorenterintocredit
facilities.
OurcashflowssummarizedfortheyearsendedDecember31,2015,2014and2013wereasfollows(tableinmillions):
For the Year Ended December 31,
2015
2014
2013
Netcashprovidedby(usedin):
Operatingactivities $ 1,899
$ 2,180
$ 2,535
Investingactivities (336)
(2,785)
(1,472)
Financingactivities (1,141)
371
(367)
Netincrease(decrease)incashandcashequivalents $ 422
$ (234)
$ 696
Operating Activities
Cashprovidedbyoperatingactivitiesdecreasedby$281millionin2015comparedto2014,drivenbychangesinunearnedrevenuesandaccountsreceivable.
Whilecashcollectionsincreasedin2015,theywerenegativelyimpactedbythestrengtheningoftheU.S.dollaragainsttheforeigncurrenciesinwhichweinvoice.
Additionally,cashprovidedbyoperatingactivitiesin2015reflectspaymentsforlegalsettlements,primarily$76millionfortheGSAsettlement,approximately
$185millionofinstallmentpaymentsmadetocertainkeyemployeesofAirWatch,andincreasesinpayrollandoperatingexpensesresultingfromgrowthin
headcount-relatedexpensesdrivenbygrowthinheadcount.Cashflowsfromoperationswillcontinuetobeimpactedbyinstallmentpaymentsofapproximately
$29milliontocertainkeyemployeesofAirWatchthroughthefirstquarterof2016.
Cashprovidedbyoperatingactivitiesdecreasedby$356millionin2014from2013,mainlyasaresultofdecreasedprofitabilityduetoanincreasein
headcount-relatedexpensesdrivenbytheAirWatchacquisition,includinginstallmentpaymentsmadetocertainkeyemployeesofAirWatch.Thedecreasewas
alsodrivenbythechangeinincometaxespayableasaresultoftaxpaymentsmadetoEMCunderthetaxsharingagreement.Underthetaxsharingagreement,we
areobligatedtopayEMCanamountequaltothetaxexpensegeneratedbyusthatEMCmayrecognizeinagivenyearonitsconsolidatedtaxreturnandEMCis
obligatedtopayusanamountequaltoanytaxbenefitgeneratedbyus.In2014,wepaid$150milliontoEMCunderthetaxsharingagreement,andin2013we
benefitedfromthenetreceiptof$24million.
Investing Activities
Cashusedininvestingactivitiesisgenerallyattributabletothepurchaseofavailable-for-salesecurities,businessacquisitions,andcapitalexpenditures.Cash
providedbyinvestingactivitiesisimpactedbythesalesandmaturitiesofouravailable-for-salesecurities.
Cashusedininvestingactivitiesdecreasedin2015comparedto2014primarilyasaresultofouracquisitions,includingAirWatchfor$1,068millionduring
thefirstquarterof2014.Additionally,thenetcashusedrelatedtoouravailable-for-salesecuritiesdecreasedin2015compared2014.
Theincreaseinrestrictedcashduring2014included$75millionforamountsheldinescrowandpayabletocertainAirWatchemployees,subjectto
achievementofcertainemploymentconditions.During2015,$75millionwasreleasedfromescrowandpaidtotheemployees.Thereleasefromescrowis
reflectedasaninflowwithininvestingactivitieswhilethepaymenttotheemployeesisreflectedasanoutflowwithinoperatingactivities.
Cashusedininvestingactivitiesincreasedin2014comparedto2013primarilyduetoanincreaseinthenetcashusedrelatedtoouravailable-for-sale
securities.Additionally,cashusedininvestingactivitiesincreasedsignificantlyin2014comparedto2013primarilyasaresultofouracquisitionofAirWatch
duringthefirstquarterof2014.
Financing Activities
Netcashusedinfinancingactivitiesin2015changedcomparedtonetcashprovidedbyfinancingactivitiesin2014primarilyasaresultofthecashreceived
inconnectionwiththenotespayableexchangeagreementwithEMCduring2014andanincreaseinourrepurchaseofourcommonstockduring2015.
Netcashprovidedbyfinancingactivitiesin2014changedcomparedtonetcashusedinfinancingactivitiesin2013primarilyasaresultofthenotespayable
exchangeagreementweenteredintowithEMCinconnectionwithouracquisitionofAirWatch.Theproceedsfromthenotespayableexchangeagreementwith
EMCwerepartiallyoffsetbyanincreaseintherepurchaseofourcommonstockin2014.
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