Xerox 2007 Annual Report Download - page 74

The following table summarizes our debt as of
December 31,
(in millions) 2007 2006
Debt secured by finance receivables . . $ 275 $2,059
Capital leases ....................... 19 28
Total Secured Debt .................. 294 2,087
Senior Notes ........................ 5,781 4,224
Subordinated debt .................. 19 19
2007 Credit Facility ................. 600 –
Other Debt ......................... 770 815
Total Unsecured Debt ............... 7,170 5,058
Total Debt ......................... $7,464 $7,145
At December 31, 2007, approximately 4% of total
debt was secured by finance receivables and other assets
compared to 29% at December 31, 2006.
Credit Facility: In April 2007, we amended and
restated our $1.25 billion unsecured revolving credit
facility that was originally entered into in April 2006. The
amended and restated 2007 Credit Facility (“2007 Credit
Facility”) increased the maximum amount available for
borrowing to $2 billion and includes a $300 million letter
of credit subfacility. As of December 31, 2007, we had
borrowings of $600 million and no outstanding letters of
credit under the 2007 Credit Facility.
Refer to Note 11 – Debt in the Consolidated Financial
Statements for further information regarding our 2007
Credit Facility.
Liquidity, Financial Flexibility and Other Financing
Activity
Liquidity: We manage our worldwide liquidity using
internal cash management practices, which are subject to
(1) the statutes, regulations and practices of each of the
local jurisdictions in which we operate, (2) the legal
requirements of the agreements to which we are a party
and (3) the policies and cooperation of the financial
institutions we utilize to maintain and provide cash
management services.
As of December 31, 2007, we had $1.1 billion of cash
and cash equivalents and borrowing capacity under our
2007 Credit Facility of $1.4 billion. Our ability to maintain
positive liquidity going forward depends on our ability to
continue to generate cash from operations and access the
financial markets, both of which are subject to general
economic, financial, competitive, legislative, regulatory
and other market factors that are beyond our control.
Share Repurchase Programs: The Board of Directors
has authorized programs for the repurchase of the
Company’s common stock totaling $2.5 billion as of
December 31, 2007. Since launching this program in
October 2005, we have repurchased 137 million shares,
totaling approximately $2.1 billion of the $2.5 billion
authorized through December 31, 2007. In January 2008,
the Board of Directors authorized an additional $1 billion
for share repurchase.
Refer to Note 17 – Shareholders’ Equity – “Treasury
Stock” in the Consolidated Financial Statements for
further information regarding our share repurchase
programs.
Dividends: In the fourth quarter of 2007, the Board
of Directors declared a 4.25 cent per share dividend on
common stock payable January 31, 2008 to shareholders
of record on December 31, 2007.
Loan Covenants and Compliance: At December 31,
2007, we were in full compliance with the covenants and
other provisions of the 2007 Credit Facility, the senior
notes and the Loan Agreement. Failure to be in
compliance with any material provision or covenant of
these agreements could have a material adverse effect on
our liquidity and operations and our ability to continue to
fund our customers’ purchase of Xerox equipment. We
have the right to prepay any outstanding loans or to
terminate the 2007 Credit Facility without penalty.
Refer to Note 11 – Debt and Note 4 – Receivables,
Net in the Consolidated Financial Statements for
additional information regarding the senior notes and
Loan agreement, respectively.
Financial Instruments: Refer to Note 13 –Financial
Instruments in the Consolidated Financial Statements for
additional information regarding our derivative financial
instruments.
Capital Markets Offerings and Other: In 2007, we
raised net proceeds of $1.5 billion through the issuance of
Senior Notes due in 2012 and zero coupon bond
transactions. Refer to Note 11-Debt in the Consolidated
Financial Statements for additional information regarding
these transactions.
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