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44
Management’s Discussion
Xerox 2010 Annual Report
Net cash provided by financing activities was $692 million for the year
ended December 31, 2009. The $1,003 million increase in cash from
2008 was primarily due to the following:
$812 million increase because no purchases were made under our
•
share repurchase program in 2009.
$170 million increase from lower net repayments on secured debt.
•
$21 million increase due to lower share repurchases related to
•
employee withholding taxes on stock-based compensation vesting.
$3 million decrease due to lower net debt proceeds. 2009 reflects
•
the repayment of $1,029 million for Senior Notes due in 2009, net
payments of $448 million for Zero Coupon Notes, net payments
of $246 million on the Credit Facility, net payments of $35 million
primarily for foreign short-term borrowings and $44 million of debt
issuance costs for the Bridge Loan Facility commitment which was
terminated. These payments were partially offset by net proceeds
of $2,725 million from the issuance of Senior Notes in May and
December 2009. 2008 reflects the issuance of $1.4 billion in Senior
Notes, $250 million in Zero Coupon Notes and net payments of $354
million on the Credit Facility and $370 million on other debt.
ACSAcquisition
On February 5, 2010 we acquired all of the outstanding equity of
ACS in a cash-and-stock transaction valued at approximately $6.2
billion, net of cash acquired. The consideration transferred to acquire
ACS was as follows:
(in millions) February 5, 2010
Xerox common stock issued $ 4,149
Cash consideration, net of cash acquired 1,495
Value of exchanged stock options 168
Series A convertible preferred stock 349
Net Consideration – Cash and Non-cash $ 6,161
In addition, we also repaid $1.7 billion of ACS’s debt at acquisition and
assumed an additional $0.6 billion.
Refer to Note 3 – Acquisitions in the Consolidated Financial Statements
for additional information regarding the ACS acquisition.
CashFlowsfromInvestingActivities
Net cash used in investing activities was $2,178 million for the year
ended December 31, 2010. The $1,835 million increase in the use of
cash from 2009 was primarily due to the following:
$1,571 million increase primarily due to the acquisitions of ACS for
•
$1,495 million, EHRO for $125 million, TMS Health for $48 million,
IBS for $29 million, Georgia for $21 million and Spur for $12 million.
$326 million increase due to higher capital expenditures (including
•
internal use software) primarily as a result of the inclusion of ACS
in 2010.
$35 million decrease due to higher cash proceeds from asset sales.
•
Net cash used in investing activities was $343 million for the year ended
December 31, 2009. The $98 million decrease in the use of cash from
2008 was primarily due to the following:
$142 million decrease due to lower capital expenditures (including
•
internal use software), reflecting very stringent spending controls.
$21 million increase due to lower cash proceeds from asset sales.
•
CashFlowsfromFinancingActivities
Net cash used in financing activities was $3,116 million for the year
ended December 31, 2010. The $3,808 million decrease in cash from
2009 was primarily due to the following:
$3,980 million decrease due to net debt activity. 2010 includes the
•
repayments of $1,733 million of ACS’s debt on the acquisition date,
$950 million of Senior Notes, $550 million early redemption of the
2013 Senior Notes, net payments of $110 million on other debt
and $14 million of debt issuance costs for the Bridge Loan Facility
commitment, which was terminated in 2009. These payments were
offset by net proceeds of $300 million from Commercial Paper issued
under a program we initiated during the fourth quarter 2010. 2009
reflects the repayment of $1,029 million for Senior Notes due in 2009,
net payments of $448 million for Zero Coupon Notes, net payments
of $246 million on the Credit Facility, net payments of $35 million
primarily for foreign short-term borrowings and $44 million of debt
issuance costs for the Bridge Loan Facility commitment which was
terminated. These payments were partially offset by net proceeds
of $2,725 million from the issuance of Senior Notes in May and
December 2009.
$66 million decrease, reflecting dividends on an increased number of
•
outstanding shares as a result of the acquisition of ACS.
$182 million increase due to proceeds from the issuance of common
•
stock primarily as a result of the exercise of stock options issued under
the former ACS plans as well as the exercise of stock options from
several expiring grants.
$58 million increase from lower net repayments on secured debt.
•