Annual Report - RR DONNELLEY FINANCIAL

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Annual Report - RR DONNELLEY FINANCIAL

The following summary table presents a comparison of our capital resources for the years ended

December 31, 2008 and 2009 with respect to certain of our key measures affecting our liquidity. The changes set

forth in the table are discussed in greater detail below. This section should be read in conjunction with the

financial statements and notes to financial statements included in Item 8 of this report.

Year ended December 31,

2008 2009

Net cash provided by operating activities ...................... $22,243,958 $ 11,593,059

Net cash provided by (used in) investing activities ............... (1,412,383 ) 14,528,981

Net cash used in financing activities .......................... (23,928,690) (23,682,768)

Net increase (decrease) in cash and cash equivalents ............. (3,097,115 ) 2,439,272

Net Cash Provided By Operating Activities. Net cash provided by operating activities decreased by $10.7

million during the year ended December 31, 2009 compared to the same period in 2008 primarily due to a $26.5

million decrease in cash receipts from the sale of advertising airtime, a $1.1 million increase in cash paid for

interest, and a $1.0 million decrease in cash refunded for income taxes. These decreases were partially offset by a

$17.1 million decrease in cash paid for station operating expenses and a $0.9 million decrease in cash paid for

corporate general and administrative expenses.

Net Cash Provided By (Used In) Investing Activities. Net cash provided by investing activities in the year

ended December 31, 2009 was primarily due to cash proceeds of $15.3 million from the sale of assets in Las

Vegas, Nevada, which were partially offset by cash payments for capital expenditures of $1.0 million. Net cash

used in investing activities for the same period in 2008 was primarily due to cash payments for capital

expenditures of $1.6 million.

Net Cash Used In Financing Activities. Net cash used in financing activities in the year ended December 31,

2009 was primarily due to scheduled repayments of $4.0 million and voluntary repayments of $18.7 million

under our credit facility, and payments of $0.8 million of loan fees related to the amended credit facility. Net

cash used in financing activities for the same period in 2008 was primarily due to voluntary repayments of $16.6

million under our credit facility, cash dividends of $5.5 million, and $1.8 million for repurchases of our Class A

common stock.

Credit Facility. As of February 28, 2010, the outstanding balance of our credit facility was $151.8 million.

As of December 31, 2009, our credit facility consists of a revolving credit loan with a maximum commitment of

$65.0 million and a term loan with a remaining balance of $96.0 million. As of December 31, 2009, we had $8.3

million in remaining commitments available under the revolving credit loan of our credit facility. The revolving

credit loan included a $7.5 million sub-limit for letters of credit which may not be increased. At our election, the

revolving credit loan and term loan may bear interest at either the base rate or LIBOR plus a margin that is

determined by our debt to operating cash flow ratio. The base rate is equal to the higher of the prime rate, the

federal funds effective rate, or the one month LIBOR quoted rate plus 1.0%. Interest on base rate loans is payable

quarterly through maturity. Interest on LIBOR loans is payable on the last day of the selected LIBOR period and,

if the selected period is longer than three months, every three months after the beginning of the LIBOR period.

The revolving credit loan and term loan carried interest, based on various LIBOR rates, at 4.1955% and 4.2747%

as of December 31, 2008 and 2009, respectively, and mature on June 30, 2015. We must pay a quarterly unused

commitment fee equal to 0.5% of the unused portion of the revolving credit loan. We paid unused commitment

fees of approximately $72,000 for the year ended December 31, 2009. The scheduled reductions in the amount

available under the revolving credit loan may require principal repayments if the outstanding balance at that time

exceeds the maximum amount available under the revolving credit loan.

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