Avis 2007 Annual Report Download - page 53

Table of Contents
CASH FLOWS
At December 31, 2007, we had $214 million of cash on hand, an increase of $42 million from $172 million at December 31, 2006. The
following table summarizes such increase:
For 2007, we generated approximately $1.5 billion more cash from operating activities in comparison to 2006. This change principally
reflected (i) an increase in operating results in 2007 primarily due to lower expenses than those incurred in 2006 related to the Cendant
Separation of $266 million and debt extinguishment costs of $313 million, (ii) decreased interest expense and (iii) reduced use of cash for
working capital requirements.
We used approximately $1.2 billion more cash in investing activities during 2007 compared with 2006. This change was principally due to the
activities of our vehicle programs which produced a greater cash outflow of approximately $1.2 billion in 2007 compared to 2006 and reflected
the reduction in the size of our fleet in 2006, changes in vehicle prices and the timing of payments and receipts for vehicles. As a result of these
changes we received $1.9 billion less cash during 2007 compared to 2006 in payments received on vehicles repurchased by manufacturers
partially offset by our reduced investment in vehicles purchased of $715 million during 2007. During 2008, we expect to utilize at least $4.9
billion of cash to purchase rental vehicles, which will primarily be funded with proceeds received on sale of rental vehicles to manufacturers
under our repurchase or guaranteed depreciation agreements or in the used car market and our borrowings under our vehicle-backed debt
programs. We anticipate aggregate capital expenditure investments for 2008 to approximate $100 million.
We used approximately $4.9 billion less cash in financing activities during 2007 compared to 2006. This change primarily reflects (i) the
absence of $3.6 billion of cash used in 2006 to repay corporate debt previously issued by Cendant, (ii) an approximately $2.9 billion decrease
in principal debt payments related to our vehicle rental activities net of decreased proceeds, (iii) a reduction of $247 million in cash utilized as
compared to 2006 for net repurchases or issuances of common stock and (iv) a reduction of dividend payments of $113 million. These
increases were partially offset by the absence of the proceeds received in connection with the issuance of $1,875 million of fixed and floating
rate notes in 2006.
For 2007, we received approximately $4.8 billion less cash from discontinued operations compared to 2006, which primarily reflects the
absence of the net proceeds of $4.1 billion received in connection with the sale of Travelport in 2006.
DEBT AND FINANCING ARRANGEMENTS
At December 31, 2007, we had approximately $7.4 billion of indebtedness (including corporate indebtedness of approximately $1.8 billion and
debt under vehicle programs of approximately $5.6 billion).
48
Year Ended December 31,
2007
2006
Change
Cash provided by (used in):
Operating activities
$
1,714
$
252
$
1,462
Investing activities
(1,917
)
(753
)
(1,164
)
Financing activities
239
(4,704
)
4,943
Effects of exchange rate changes
6
2
4
Cash provided by discontinued operations
-
4,829
(4,829
)
Net change in cash and cash equivalents
$
42
$
(374
)
$
416