Xerox 2008 Annual Report Download - page 42

Management’s Discussion
• $45 million decrease due to lower benefit accruals, partially
offset by higher accounts payable due to the timing of
payments to vendors and suppliers.
Cash Flows from Investing Activities
Net cash used in investing activities was $441 million for the year
ended December 31, 2008. The $1,171 million increase in cash was
primarily due to the following:
• $1,460 million increase due to less cash used for acquisitions.
2008 acquisitions included $138 million for Veenman B.V. and
Saxon Business Systems as compared to $1,568 million for GIS
and its additional acquisitions in the prior year.
• $192 million decrease due to lower funds from escrow and other
restricted investments in 2008. The prior year reflected funds
received from the run-off of our secured borrowing programs.
• $134 million decrease in other investing cash flows due to the
absence of proceeds from liquidations of short-term
investments.
Net cash used in investing activities was $1,612 million for the year
ended December 31, 2007. The $1,469 million decrease in cash
was primarily due to the following:
• $1,386 million decrease due to $1,615 million in 2007
acquisitions primarily comprised of $1,568 for GIS and its
additional acquisitions and $30 million for Advectis, Inc., as
compared to $229 million in acquisitions in 2006 comprised of
Amici, LLC and XMPie, Inc.
• $123 million decrease in other investing cash flows reflecting the
absence of the 2006 $122 million distribution related to the sale
of investments held by Ridge Re.
• $65 million decrease due to higher capital and internal use
software investments in 2007.
• $57 million decrease due to higher 2006 proceeds from sales of
land, buildings and equipment, which included the sale of our
corporate headquarters and a parcel of vacant land.
• $162 million increase due to a reduction in escrow and other
restricted investments in 2007, as we continue to run-off our
secured borrowing programs.
Cash Flows from Financing Activities
Net cash used in financing activities was $311 million for the year
ended December 31, 2008. The $308 million increase in cash was
primarily due to the following:
• $1,642 million increase from lower net repayments on secured
debt. 2007 reflects termination of our secured financing
programs with GE in the United Kingdom and Canada of $634
million and Merrill Lynch in France for $469 million as well as the
repayment of secured borrowings to DLL of $153 million. The
remainder reflects lower payments associated with our GE U.S.
secured borrowings.
• $888 million decrease from lower net cash proceeds from
unsecured debt. 2008 reflects the issuance of $1.4 billion in
Senior Notes, $250 million from a private placement borrowing
and net payments of $354 million on the Credit Facility and
$370 million on other debt. 2007 reflects the issuance of $1.1
billion Senior Notes, $400 million from private placement
borrowings and net proceeds of $600 million on the Credit
Facility, offset by net payments of $286 million on other debt.
• $180 million decrease due to additional purchases under our
share repurchase program.
• $154 million decrease due to common stock dividend payments.
• $79 million decrease due to lower proceeds from the issuance of
common stock, reflecting a decrease in stock option exercises as
well as lower related tax benefits.
• $33 million decrease due to share repurchases related to
employee withholding taxes on stock-based compensation
vesting.
Net cash used in financing activities was $619 million in year
ended December 31, 2007. The $809 million increase in cash was
primarily due to the following:
• $538 million increase due to higher net cash proceeds from
unsecured debt. This reflects the May 2007 issuance of the $1.1
billion Senior Notes, the issuances of two zero coupon bonds in
2007 resulting in net proceeds of approximately $400 million,
and the net drawdown of $600 million under the 2007 Credit
Facility. These higher net proceeds were partially offset by the
March 2006 issuance of the $700 million Senior Notes and the
August 2006 issuance of an additional $650 million of Senior
Notes, as well as, higher repayments on other unsecured debt in
2007 as compared to 2006.
• $437 million increase due to lower purchases under our share
repurchase program as cash was invested in acquisitions.
• $100 million increase relating to the 2006 payment of our
liability to Xerox Capital LLC in connection with their redemption
of Canadian deferred preferred shares.
• $278 million decrease due to higher net repayments of secured
financing. Refer to Note 4-Receivables, net in the consolidated
financial statements for further information.
40 Xerox 2008 Annual Report
• As of December 31, 2008, total cash and cash equivalents was
• We have consistently delivered strong cash flow from operations