Ingram Micro 2000 Annual Report Download - page 33

.2 6 |INGRAM MICRO
Ma n a g e m e n t’s discu s sion and analysis ]c o n t i nu e d
attributable to higher operating income and an increase in the amount of accounts receivable sold under the Company’s accounts
receivable facilities offset by a decrease in trade creditor financing of product inventory.The significant increase in cash provided by
operating activities in 1999 compared to cash used in 1998 was primarily attributable to the increase in trade creditor financing of
product inventory (through an increase in accounts payable) and a reduction in the growth rate of accounts receivable over 1998.
Net cash used by investing activities was $19.5 million, $138.4 million, and $218.6 million in 2000,1999, and 1998, respec-
tively.These uses of cash were due in part to capital expenditures for the Company’s expansion of warehouses and other facilities,
the development of information systems and the Company’s commitment to growth through acquisitions and strategic alliances. In
2000, the Company used approximately $146.1 million in cash for capital expenditures, which was partially offset by the proceeds
from the sale of Softbank common stock totaling approximately $119.2 million. In 1999, the Company used approximately $241.9
million in cash for acquisitions,net of cash acquired, and $135.3 million for capital expenditures, which were partially offset by the
proceeds from the sale of Softbank common stock totaling approximately $230.1 million.In 1998, the Company used approximate-
ly $96.6 million in cash for acquisitions, net of cash acquired,approximately $143.2 million for capital expenditures,and approxi-
mately $50.3 million for the purchase of Softbank common stock.Mitigating the uses of cash in 1998 was approximately $75.3
million in cash proceeds from a sale-leaseback agreement entered into by the Company for the sale of its Santa Ana, California
facility and a portion of its Buffalo, NewYork facility to a third party.
Net cash used by financing activities was $802.6 million in 2000 and $413.8 million in 1999 compared to cash provided
of $497.1 million in 1998. Net cash used by financing activities in 2000 was primarily due to the repurchase of the convertible
debentures,the net repayment of borrowings under the revolving credit facilities, and the repayment of other debt through the use
of cash provided by operations and the continued focus on working capital management, as well as the proceeds received from the
sale of Softbank common stock in 2000. Net cash used by financing activities in 1999 was primarily due to the repurchase of the
convertible debentures and the net repayment of borrowings under the revolving credit facilities through the use of the proceeds
re c e i ved from the sale of Softbank common stock , as well as the continued focus on working capital management. Net cash prov i d e d
by financing activities in 1998 was primarily due to the proceeds from the convertible debentures and stock option exercises, which
were partially offset by the net repayment of other debt.
Acquisitions
The Company had no significant acquisitions in 2000.
Capital resources
The Company has three revolving credit facilities with bank syndicates providing an aggregate credit availability of $1.65 bil-
lion.Under these credit facilities, the Company is required to comply with certain financial covenants,including minimum tangible
net worth, restrictions on funded debt and interest coverage.The credit facilities also restrict the amount of dividends the Company
can pay as well as the amount of common stock that the Company can re p u r chase annually. B o rrowings are subject to the sat i s fa c t i o n
of customary conditions, including the absence of any mat e rial adve rse change in the Company ’s business or financial condition.Two
of these credit facilities, representing approximately $1.15 billion in credit availability, mature in October 2001 while the remaining
credit facility matures in October 2002.At December 30,2000 and January 1, 2000, the Company had $75.5 million and $503.5
million, respectively, in outstanding borrowings under the credit facilities.
The Company has an arrangement pursuant to which certain U.S. trade accounts receivable of the Company are transferred to
a trust, which in turn has sold certificates representing undivided interests in the total pool of trade receivables without recourse.
The trust has issued fixed-rate, medium-term certificates and has the ability to support a commercial paper program. Sales of
receivables under these programs result in a reduction of total accounts receivable on the Company’s consolidated balance sheet. In
March 2000, the Company completed a new 5-year accounts receivable securitization program, which provides for the issuance of
up to $700 million in commercial paper. At December 30,2000 and January 1,2000, the amount of medium-term certificates out-
standing totaled $50 million and $75 million, respectively, and the amount of commercial paper outstanding under the new pro-
gram totaled $650 million and $0, respectively.The Company believes that available funding under this new program provides