Xerox 2012 Annual Report Download - page 46

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Management’s Discussion
44
Cash Flows from Operating Activities
Net cash provided by operating activities was $2,580 million for the
year ended December 31, 2012. The $619 million increase in cash from
2011 was primarily due to the following:
• $879 million increase from finance receivables primarily due to sales
of receivables as well as higher net run-off of finance receivables as
a result of lower equipment sales (see Note 5 – Finance Receivables,
Net in the Consolidated Financial Statements for additional
information).
• $124 million increase due to lower inventory growth.
• $74 million increase due to lower restructuring payments.
• $62 million increase due to lower contributions to our defined
benefit pension plans primarily in the U.S. as a result of the recently
enacted pension funding legislation.
• $41 million increase as a result of less up-front costs and other
customer-related spending associated primarily with new services
contracts.
• $390 million decrease due to a lower benefit from accounts
receivable sales as well as growth in services revenue.
• $45 million decrease from higher net income tax payments primarily
due to refunds in the prior year.
In March 2012, we elected to make a contribution of 15.4 million
shares of our common stock, with an aggregate value of approximately
$130 million, to our U.S. defined benefit pension plan for salaried
employees in order to meet our planned level of funding.
Net cash provided by operating activities was $1,961 million for the
year ended December 31, 2011. The $765 million decrease in cash
from 2010 was primarily due to the following:
• $533 million decrease due to lower benefit from changes in accounts
payable and accrued compensation primarily related to the timing
of payments as well as lower spending.
• $189 million decrease due to higher contributions to our defined
benefit pension plans.
• $101 million decrease as a result of up-front costs and other
customer-related spending associated primarily with new services
contracts.
• $65 million decrease from higher net income tax payments primarily
due to refunds in the prior year.
• $49 million decrease due to higher finance receivables of $39 million
and equipment on operating leases of $10 million, both reflective of
increased equipment placements.
• $46 million decrease in derivatives primarily due to the absence of
proceeds from the early termination of certain interest rate swaps.
• $16 million decrease due to a lower benefit from accounts receivable
sales partially offset by improved collections.
• $290 million increase in pre-tax income before depreciation
and amortization, litigation, restructuring, curtailment and the
Venezuelan currency devaluation.
• $113 million increase due to the absence of cash outflows from
acquisition-related expenditures.
In September 2011, we elected to make a contribution of 16.6 million
shares of our common stock, with an aggregate value of approximately
$130 million, to our U.S. defined benefit pension plan for salaried
employees in order to meet our planned level of funding.
Cash Flows from Investing Activities
Net cash used in investing activities was $761 million for the year
ended December 31, 2012. The $86 million increase in the use of cash
from 2011 was primarily due to the following:
• $64 million increase in acquisitions. 2012 acquisitions include
Wireless Data for $95 million, RK Dixon for $58 million, as well as
seven smaller acquisitions totaling $123 million. 2011 acquisitions
include Unamic/HCN B.V. for $55 million, ESM for $43 million,
Concept Group for $41 million, MBM for $42 million, Breakaway for
$18 million and ten smaller acquisitions for an aggregate of
$46 million, as well as a net cash receipt of $35 million for Symcor.
• $19 million increase due to lower cash proceeds from asset sales.
Net cash used in investing activities was $675 million for the year
ended December 31, 2011. The $1,503 million decrease in the use of
cash from 2010 was primarily due to the following:
• $1,522 million decrease in acquisitions. 2011 acquisitions include
Unamic/HCN B.V. for $55 million, ESM for $43 million, Concept
Group for $41 million, MBM for $42 million, Breakaway for
$18 million and ten smaller acquisitions for an aggregate of
$46 million, as well as a net cash receipt of $35 million for Symcor.
2010 acquisitions include ACS for $1,495 million, ExcellerateHRO,
LLP for $125 million, TMS Health, LLC for $48 million, Irish Business
Systems Limited for $29 million, Georgia Duplicating Products for
$21 million and Spur Information Solutions for $12 million.
• $24 million increase due to lower cash proceeds from asset sales.
Cash Flows from Financing Activities
Net cash used in financing activities was $1,472 million for the year
ended December 31, 2012. The $114 million decrease in the use of
cash from 2011 was primarily due to the following:
• $670 million decrease reflecting the absence of payment of our
liability to Xerox Capital Trust I in connection with their redemption
of preferred securities.