UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
FORM 8-K |
CURRENT REPORT |
PURSUANT TO SECTION 13 OR 15(d) OF THE |
SECURITIES EXCHANGE ACT OF 1934 |
Date of Report (Date of earliest event reported): May 25, 2016 |
CSRA INC. | ||
(Exact name of Registrant as specified in its charter) |
Nevada | 001-37494 | 47-4310550 | |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |
3170 Fairview Park Drive | 22042 | ||
Falls Church, Virginia | (Zip Code) | ||
(Address of Principal Executive Offices) | |||
Registrant’s telephone number, including area code 703-641-2000 | |||
(Former Name or Former Address, if Changed Since Last Report) | |||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): | |||
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
99.1 | Earnings Press Release issued May 25, 2016 |
CSRA INC. | ||||
Dated: May 25, 2016 | By: /s/ William J. Haynes II | |||
William J. Haynes II | ||||
Executive Vice President, General Counsel and Secretary |
Summary Operating Results | ||||||||||
(unaudited $ in millions, except for per share data) | Three Months Ended | Twelve Months Ended | ||||||||
Apr 1, 2016 | Apr 3, 2015 | Apr 1, 2016 | Apr 3, 2015 | |||||||
GAAP revenue | $ | 1,290 | $ | 1,001 | $ | 4,250 | $ | 4,070 | ||
GAAP earnings before taxes | $ | (107) | $ | 100 | $ | 149 | $ | 429 | ||
GAAP diluted EPS | $ | (0.440) | $ | 0.43 | $ | 0.53 | $ | 1.82 | ||
Pro forma revenue | $ | 1,290 | $ | 1,350 | $ | 5,198 | $ | 5,444 | ||
Pro forma adjusted EBITDA | $ | 225 | $ | 209 | $ | 895 | $ | 865 | ||
Pro forma adjusted diluted EPS | $ | 0.50 | $ | 0.38 | $ | 1.96 | $ | 1.72 | ||
Note: All figures and their computation methods are shown at the end of the release. | ||||||||||
• | Securities and Exchange Commission (SEC) IT Solutions. Under a potential $252 million, 10-year award, CSRA will deliver a broad range of services supporting the overall day-to-day IT operations, while migrating agency IT services contracts from staff augmentation to fixed price, information technology as-a-service and managed services. |
• | Alabama Supercomputer Authority (ASA) Network Services. Under a $96 million, five-year contract, CSRA will continue its 22-year relationship with ASA to provide industry-leading supercomputing and network services to the academic community in Alabama. |
• | Scientific Models, Applications, Visualization, Computational Science and Statistical Support. The Environmental Protection Agency (EPA) Office of Research and Development (ORD) awarded CSRA a $54 million contract to create, apply and distribute complex environmental simulations in support of research initiatives. |
• | Transformation Twenty-One Total Technology Next Generation (T4NG). The Department of Veteran's Affairs (VA) awarded CSRA operating subsidiary, SRA International, Inc., a prime position on the T4NG contract, which has a potential ceiling value of $22 billion over 10 years. The contract will support the VA's efforts in information technology infrastructure improvements, cybersecurity and operations, and network management. |
Metric | Fiscal Year 2017 |
Revenue (millions) | $5,000 - $5,200 |
Adjusted EBITDA (millions) | $870 - $905 |
Adjusted Diluted Earnings per Share | $1.91 - $2.04 |
Free Cash Flow (millions) | $300 - $350 |
CSRA INC. CONSOLIDATED AND COMBINED BALANCE SHEETS (unaudited) | ||||||
As of | ||||||
(Dollars in thousands) | April 1, 2016 | April 3, 2015 | ||||
Current assets | ||||||
Cash and cash equivalents | $ | 130,016 | $ | 4,979 | ||
Receivables, net of allowance for doubtful accounts of $21,295 (fiscal 2016) and $14,733 (fiscal 2015) | 751,228 | 696,727 | ||||
Prepaid expenses and other current assets | 123,278 | 92,665 | ||||
Total current assets | 1,004,522 | 794,371 | ||||
Intangible and other assets | ||||||
Goodwill | 2,332,158 | 802,582 | ||||
Customer-related and other intangible assets, net of accumulated amortization of $200,611 (fiscal 2016) and $150,295 (fiscal 2015) | 869,409 | 33,405 | ||||
Software, net of accumulated amortization of $95,034 (fiscal 2016) and $75,544 (fiscal 2015) | 41,427 | 35,261 | ||||
Other assets | 68,697 | 58,931 | ||||
Total intangible and other assets | 3,311,691 | 930,179 | ||||
Property and equipment, net of accumulated depreciation of $773,027 (fiscal 2016) and $696,796 (fiscal 2015) | 530,087 | 436,732 | ||||
Total assets | $ | 4,846,300 | $ | 2,161,282 | ||
Current liabilities | ||||||
Accounts payable | $ | 170,359 | $ | 130,551 | ||
Accrued payroll and related costs | 199,512 | 109,539 | ||||
Accrued expenses and other current liabilities | 527,734 | 440,606 | ||||
Current capital lease liability | 42,191 | 21,351 | ||||
Current maturities of long-term debt | 128,000 | — | ||||
Dividends payable | 17,943 | — | ||||
Total current liabilities | 1,085,739 | 702,047 | ||||
Long-term debt, net of current maturities | 2,656,324 | — | ||||
Noncurrent capital lease liability | 108,530 | 129,933 | ||||
Noncurrent deferred income tax liabilities | 162,844 | 153,297 | ||||
Other long-term liabilities | 742,625 | 80,957 | ||||
Commitments and contingent liabilities (Note 22) | ||||||
Equity | ||||||
Net parent investment, prior to Spin-Off | — | 1,067,492 | ||||
CSRA Stockholders' Equity: | ||||||
Common stock, $0.001 par value, 750,000,000 shares authorized, 162,925,821 shares issued and outstanding | 163 | — |
Additional paid-in capital | 117,376 | — | ||||
Accumulated deficit | (73,901) | — | ||||
Accumulated other comprehensive income (loss) | 20,908 | (405) | ||||
Total CSRA stockholders' equity | 64,546 | 1,067,087 | ||||
Noncontrolling interests | 25,692 | 27,961 | ||||
Total equity | 90,238 | 1,095,048 | ||||
Total liabilities and equity | $ | 4,846,300 | $ | 2,161,282 |
CSRA INC. CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (unaudited) | ||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||
(Dollars in thousands) | April 1, 2016 | April 3, 2015 | April 1, 2016 | April 3, 2015 | ||||||||
Revenue | $ | 1,290,151 | 1,000,051 | $ | 4,245,673 | 4,061,914 | ||||||
Related party revenue | (1) | 1,067 | 4,774 | 7,832 | ||||||||
Total revenue | 1,290,150 | 1,001,118 | 4,250,447 | 4,069,746 | ||||||||
Cost of services | 1,227,065 | 810,782 | 3,570,857 | 3,274,469 | ||||||||
Related party cost of services | (1) | 1,067 | 4,774 | 7,832 | ||||||||
Total cost of services (excludes depreciation and amortization) | 1,227,064 | 811,849 | 3,575,631 | 3,282,301 | ||||||||
Selling, general and administrative expenses | 52,398 | 49,429 | 187,244 | 194,207 | ||||||||
Separation and merger costs | 18,008 | — | 117,987 | — | ||||||||
Depreciation and amortization | 69,266 | 32,786 | 182,242 | 137,058 | ||||||||
Interest expense, net | 28,876 | 5,301 | 53,475 | 21,864 | ||||||||
Other (income) expense, net | 1,467 | 1,967 | (15,221) | 5,608 | ||||||||
Total costs and expenses | 1,397,079 | 901,332 | 4,101,358 | 3,641,038 | ||||||||
(Loss) income from continuing operations before taxes | (106,929) | 99,786 | 149,089 | 428,708 | ||||||||
Taxes on income | (38,724) | 38,300 | 46,167 | 160,996 | ||||||||
(Loss) income from continuing operations | (68,205) | 61,486 | 102,922 | 267,712 | ||||||||
(Loss) income from discontinued operations, net of taxes | — | (166) | — | (1,877) | ||||||||
Net income | (68,205) | 61,320 | 102,922 | 265,835 | ||||||||
Less: noncontrolling interest | 3,658 | 3,601 | 15,777 | 14,078 | ||||||||
Net income attributable to CSRA common stockholders | $ | (71,863) | 57,719 | $ | 87,145 | 251,757 | ||||||
Earnings (loss) per common share | ||||||||||||
Basic: | ||||||||||||
Continuing operations | $ | (0.44) | 0.43 | $ | 0.54 | 1.82 | ||||||
Discontinued operations | — | — | — | (0.01) | ||||||||
$ | (0.44) | 0.43 | $ | 0.54 | 1.81 | |||||||
Diluted: | ||||||||||||
Continuing operations | $ | (0.44) | 0.43 | $ | 0.53 | 1.82 | ||||||
Discontinued operations | — | — | — | (0.01) | ||||||||
$ | (0.44) | 0.43 | $ | 0.53 | 1.81 |
CSRA INC. CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (unaudited) | |||||
Twelve Months Ended | |||||
(Dollars in thousands) | April 1, 2016 | April 3, 2015 | |||
Cash flows from operating activities: | |||||
Net income | $ | 102,922 | $ | 265,835 | |
Adjustments to reconcile net income to cash provided by operating activities: | |||||
Depreciation and amortization | 191,404 | 146,764 | |||
Pension and OPEB actuarial & settlement losses (gains) | 202,800 | 8,359 | |||
Stock-based compensation | 10,215 | 17,618 | |||
Excess tax benefit from stock-based compensation | (605) | — | |||
Deferred income taxes | (44,187) | (2,615) | |||
Net (gain) loss on dispositions on business and assets | (6,620) | 3,521 | |||
Provision for loss (gain) on accounts receivable | 337 | (265) | |||
Net loss on sale of receivables | 2,458 | — | |||
Amortization of debt issuance costs | 3,785 | — | |||
Other non-cash items, net | (4,811) | — | |||
Changes in assets and liabilities, net of acquisitions and dispositions: | |||||
Decrease in receivables | 185,939 | 7,996 | |||
(Increase) decrease in prepaid and other assets | (29,836) | 42,674 | |||
(Increase) decrease in payables and accrued expenses | (17,537) | 30,165 | |||
(Increase) decrease in defined benefits liability | (56,714) | (5,000) | |||
Increase (decrease) in other long-term liabilities | 13,985 | (22,099) | |||
Other operating activities, net | (19) | (6,015) | |||
Cash provided by operating activities | 553,516 | 486,938 | |||
Cash flows from investing activities | |||||
Purchases of property and equipment | (139,420) | (70,183) | |||
Software purchased and developed | (21,913) | (7,720) | |||
Payments for acquisitions, net of cash acquired | |||||
Payments for acquisitions, net of cash acquired | (341,606) | (49,370) | |||
Extinguishment of SRA long-term debt and costs | (1,100,698) | — | |||
Reimbursement of SRA-related expenses | (29,885) | — | |||
Proceeds from business dispositions | 34,001 | 3,000 | |||
Proceeds from disposals of assets | 3,714 | 7,624 | |||
Other investing | (9,512) | — | |||
Cash (used in) provided by investing activities | (1,605,319) | (116,649) | |||
Cash flows from financing activities |
Borrowings under lines of credit | 200,000 | — | |||
Repayments of borrowings under lines of credit | (150,000) | — | |||
Borrowings of long-term debt | 2,800,000 | — | |||
Payments of long-term debt | (20,000) | — | |||
Debt issuance costs | (56,415) | — | |||
Excess tax benefit from stock-based compensation | 605 | — | |||
Proceeds from stock options and other common stock transactions | 3,692 | — | |||
Repurchase of common stock | (50,000) | — | |||
Special Dividend payment | (1,147,807) | — | |||
Dividends paid | (16,252) | — | |||
Repayment of Transitory Note | (350,038) | — | |||
Payments on lease liability | (16,497) | (28,902) | |||
Payments to noncontrolling interest | (18,000) | — | |||
Net transfers to CSC | (10,425) | (340,387) | |||
Other financing | 7,977 | — | |||
Cash provided by (used in) financing activities | 1,176,840 | (369,289) | |||
Net increase (decrease) in cash and cash equivalents | 125,037 | 1,000 | |||
Cash and cash equivalents at beginning of period | 4,979 | 3,979 | |||
Cash and cash equivalents at end of period | $ | 130,016 | $ | 4,979 |
Segment Operating Results | ||||||||||
CSRA delivers IT, mission, and operations-related services across the U.S. federal government through two reportable segments–Defense and Intelligence, which supports customers in the Department of Defense (DoD) and Intelligence Community, and Civil, which supports customers in homeland security, law enforcement, healthcare, and other civil agencies as well as certain state and local government agencies. The following table summarizes revenue by reportable segment: | ||||||||||
Three Months Ended | ||||||||||
(unaudited $ in thousands) | Apr 1, 2016 | Apr 3, 2015 | ||||||||
Pro forma revenue | ||||||||||
Defense and Intelligence | 577,559 | 630,468 | ||||||||
Civil | 712,591 | 720,358 | ||||||||
Total pro forma revenue | $ | 1,290,150 | $ | 1,350,826 | ||||||
SRA revenue prior to November 30, 2015 | — | 349,708 | ||||||||
Total revenue | $ | 1,290,150 | $ | 1,001,118 | ||||||
Pro forma segment operating income | ||||||||||
Defense and Intelligence | 76,392 | 67,946 | ||||||||
Civil | 83,271 | 89,815 | ||||||||
Total pro forma segment operating income | $ | 159,663 | $ | 157,761 | ||||||
SRA segment operating income prior to November 30, 2015 | — | 20,036 | ||||||||
Total segment operating income | $ | 159,663 | $ | 137,725 | ||||||
Note: Values in bold have been derived by subtracting nine-month GAAP figures from the unaudited Third Quarter Fiscal Year 2016 Form 10-Q from twelve-month GAAP figures from the audited Fiscal Year 2016 Form 10-K. | ||||||||||
Metric | Q4 2016 | FY2016 | Q4 2015 / FY2015 |
Pro Forma Revenue | None (GAAP) | = + SRA revenue - Intercompany revenue | = + SRA revenue - Intercompany revenue |
Pro Forma Adjusted EBITDA | = - Pension mark-to-market expense - Integration costs - Spin/merger costs | = + SRA EBITDA - Intercompany EBITDA - Pension mark-to-market expense + Pension income - Integration costs - Spin/merger costs + CSC IP expense | = + SRA EBITDA - Intercompany EBITDA + Pension income + CSC IP expense |
Pro Forma Adjusted Diluted EPS | = - Pension mark-to-market expense - Integration costs - Spin/merger costs - SRA backlog amortization + Normalized tax rate | = + SRA income - Intercompany income - Pension mark-to-market expense + Pension income - Integration costs - Spin/merger costs - SRA backlog amortization + CSC IP expense + Normalized interest expense + Normalized tax rate + Weighted share count since spin | = + SRA income - Intercompany income + Pension income + CSC IP expense + Normalized interest expense + Normalized tax rate + Share count at spin |
Pro Forma Adjusted Revenue | ||||||||||
CSRA INC. | ||||||||||
PRO FORMA REVENUE (unaudited) | ||||||||||
Three Months Ended | Twelve Months Ended | |||||||||
(Amounts in thousands) | April 1, 2016 | April 3, 2015 | April 1, 2016 | April 3, 2015 | ||||||
Revenue(a) | $ | 1,290,150 | $ | 1,001,118 | $ | 4,250,447 | $ | 4,069,746 | ||
Historical SRA revenue(b) | — | 349,708 | 949,661 | 1,377,239 | ||||||
Separation and merger effect(c) | — | (804) | (1,844) | (3,015) | ||||||
Pro forma adjusted revenue | $ | 1,290,150 | $ | 1,350,022 | $ | 5,198,264 | $ | 5,443,970 | ||
Note: Values in bold have been derived by subtracting nine-month GAAP figures from the unaudited Third Quarter Fiscal Year 2016 Form 10-Q from twelve-month GAAP figures from the audited Fiscal Year 2016 Form 10-K. | ||||||||||
(a) | For the quarter and year ended April 3, 2015, GAAP results reflect the operations of CSRA LLC. | |||||||||
(b) | Revenue prior to the November 30, 2015 merger from the most closely corresponding reporting period, which is January 1, 2015 to March 31, 2015, in the case of the three months ended April 3, 2015. | |||||||||
(c) | Adjustment for inter-company revenue prior to the November 30, 2015 merger. |
Pro Forma Adjusted Diluted Earnings Per Share | ||||||||||||
CSRA INC. | ||||||||||||
PRO FORMA ADJUSTED DILUTED EARNINGS PER SHARE (unaudited) | ||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||
(Amounts in thousands except per share amounts) | April 1, 2016 | April 3, 2015 | April 1, 2016 | April 3, 2015 | ||||||||
(Loss) income from continuing operations before taxes(a) | $ | (106,929) | $ | 99,786 | $ | 149,089 | $ | 428,708 | ||||
Historical SRA loss from continuing operations before taxes(b) | — | (6,175) | (61,724) | (23,920) | ||||||||
Separation and merger costs(c) | 15,512 | 14,500 | 236,472 | 82,847 | ||||||||
One-time integration costs | 11,833 | — | 7,688 | — | ||||||||
Mark-to-market pension and OPEB expense | 202,800 | — | 202,800 | — | ||||||||
Amortization of funded backlog associated with SRA acquisition(d) | 16,300 | — | 17,906 | — | ||||||||
Pro forma adjusted income from continuing operations before taxes | 139,516 | 108,111 | 552,231 | 487,635 | ||||||||
Pro forma adjusted income tax expense(e) | 54,411 | 42,163 | 215,370 | 190,178 | ||||||||
Pro forma adjusted net income | 85,105 | 65,948 | 336,861 | 297,457 | ||||||||
Less: Noncontrolling interest | 3,658 | 3,601 | 15,777 | 14,078 | ||||||||
Pro forma adjusted net income attributable to CSRA common stockholders | $ | 81,447 | $ | 62,347 | $ | 321,084 | $ | 283,379 | ||||
Pro forma adjusted diluted earnings per common share(f) | $ | 0.50 | $ | 0.38 | $ | 1.96 | $ | 1.72 | ||||
Note: Values in bold have been derived by subtracting nine-month GAAP figures from the unaudited Third Quarter Fiscal Year 2016 Form 10-Q from twelve-month GAAP figures from the audited Fiscal Year 2016 Form 10-K. | ||||||||||||
(a) | For the quarter and year ended April 3, 2015, GAAP results reflect the operations of CSRA LLC. | |||||||||||
(b) | Income prior to the November 30, 2015 merger from the most closely corresponding reporting period, which is January 1, 2015 to March 31, 2015, in the case of the three months ended April 3, 2015 and April 1, 2014 to March 31, 2015, in the case of the twelve months ended April 3, 2015. | |||||||||||
(c) | Inter-company income prior to the November 30, 2015 merger plus costs directly associated with the separation and merger transactions, before tax effect. | |||||||||||
(d) | Total value of $65 million amortized over one year is included in GAAP net income from continuing operations before tax. | |||||||||||
(e) | Effective tax rate applied at 39% in all periods. | |||||||||||
(f) | Diluted share count set at share count as of November 30, 2015 for the three and twelve months ended April 3, 2015. |
Pro Forma Adjusted EBITDA | |||||||||||||
CSRA defines pro forma adjusted EBITDA as revenue less cost of services and selling, general, and administrative (SG&A) costs. In addition, pro forma adjusted EBITDA excludes periodic mark-to-market adjustments to the pension plan as well as certain non-cash items such as stock-based compensation expense. | |||||||||||||
CSRA INC. | |||||||||||||
PRO FORMA ADJUSTED EBITDA (unaudited) | |||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||
(Amounts in millions) | April 1, 2016 | April 3, 2015(a) | April 1, 2016 | April 3, 2015(a) | |||||||||
(Loss) income from continuing operations(b) | $ | (68) | $ | 62 | $ | 103 | $ | 268 | |||||
Historical SRA loss from continuing operations before taxes(c) | — | (3) | (40) | (16) | |||||||||
Separation and merger costs(d) | 35 | (43) | 184 | (292) | |||||||||
Interest expense, net | 29 | 29 | 117 | 116 | |||||||||
Tax expense on income | (27) | 5 | 109 | (36) | |||||||||
Depreciation and amortization | 49 | 69 | 198 | 270 | |||||||||
Amortization of contract-related intangibles | 2 | 2 | 10 | 10 | |||||||||
Provision for losses on accounts receivables | — | — | — | — | |||||||||
Loss on sale of receivables | — | 1 | — | 1 | |||||||||
Stock-based compensation | 2 | 6 | 12 | 23 | |||||||||
Restructuring costs | — | 10 | 4 | 14 | |||||||||
Foreign currency loss | — | — | — | 1 | |||||||||
Pension and post-retirement actuarial losses (gains), settlement losses, and amortization of other comprehensive income | 203 | 68 | 212 | 493 | |||||||||
Gain on disposition | — | — | (17) | — | |||||||||
Separation and CSRA merger costs | — | — | 2 | — | |||||||||
Impact of acquisitions(e) | — | 3 | 1 | 13 | |||||||||
Pro forma Adjusted EBITDA | $ | 225 | $ | 209 | $ | 895 | $ | 865 | |||||
Note: Values in bold have been derived by subtracting nine-month GAAP figures from the unaudited Third Quarter Fiscal Year 2016 Form 10-Q from twelve-month GAAP figures from the audited Fiscal Year 2016 Form 10-K. Adjusted EBITDA may not equal the sum of the component figures due to rounding. | |||||||||||||
(a) | The reconciliation to Pro Forma Adjusted EBITDA for the periods ended April 3, 2015 differs from that used to calculate the periods ended April 1, 2016. For example, Losses from continuing operations for the periods ended April 3, 2015, incorporate amounts furnished in the Form 8-K dated December 24, 2015, derived on the basis described therein. The same profitability measures for the periods ended April 1, 2016, are derived from the same basis of accounting used to prepare GAAP financial information for those periods. | ||||||||||||
(b) | For the quarter and year ended April 3, 2015, GAAP results reflect the operations of CSRA LLC. | ||||||||||||
(c) | SRA income prior to November 30, 2015 merger from the most closely corresponding reporting period, which is January 1, 2015 to March 31, 2015, in the case of the three months ended April 3, 2015 and April 1, 2014 to March 31, 2015, in the case of the twelve months ended April 3, 2015. | ||||||||||||
(d) | Inter-company income prior to the November 30, 2015 merger plus costs directly associated with the separation and merger transactions, net of tax; and one time integration costs. | ||||||||||||
(e) | Pro-forma EBITDA contribution of SRA acquisition made prior to merger (revised from amounts furnished in the Form 8-K dated December 24, 2015). |
Free Cash Flow | |||||||
CSRA defines free cash flow as equal to the sum of (1) operating cash flows, (2) investing cash flows, excluding business acquisitions, dispositions and investments and (3) payments on capital leases and other long-term asset financings. Free cash flow is further adjusted for certain non-recurring cash flow items, such as (i) separation-related payments and (ii) the sale of accounts receivables. Quarterly free cash flow and its components are calculated by subtracting the nine-month values from the 10-Q filed on February 16, 2016, from the annual values presented on the year-end statement of cash flows. | |||||||
CSRA INC. | |||||||
FREE CASH FLOW (unaudited) | |||||||
Twelve Months Ended | Nine Months Ended | Three Months Ended | |||||
(Amounts in millions) | April 1, 2016 | January 1, 2016 | April 1, 2016 | ||||
Net cash provided by operating activities | $ | 554 | $ | 375 | $ | 179 | |
Net cash (used in) provided by investing activities | (1,605) | (1,551) | (54) | ||||
Acquisitions, net of cash acquired | 1,472 | 1,473 | (1) | ||||
Business dispositions | (34) | (34) | — | ||||
Payments on capital leases and other long- term assets financing | (16) | (13) | (3) | ||||
Separation-related payments | 80 | 70 | 10 | ||||
Sale of receivables | (172) | (208) | 36 | ||||
Free cash flow | $ | 278 | $ | 112 | $ | 167 | |
Note: Free cash flow may not equal the sum of the component figures due to rounding. |