Office Depot 2007 Annual Report Download - page 33

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Investing Activities
We invested $461 million, $343 million and $261 million in capital expenditures during 2007, 2006 and 2005,
respectively. This activity includes the opening, relocating and remodeling of retail stores in North America, as well
as distribution network infrastructure costs and investments in an enterprise-wide software platform intended to
streamline operations. We expect capital expenditures to total approximately $375 million in 2008 for similar
activities. Included in the future capital expenditure projections is continued investment in our enterprise-wide
information technology project that includes capitalized software development costs and related hardware.
Proceeds from the disposition of assets in 2007 include approximately $64 million from a sale-leaseback transaction
related to a European warehouse facility and approximately $18 million from the sale of a corporate aircraft. The
realized gain on the sale-leaseback transaction is being amortized over the lease term. During 2007, we also received
$25 million as dividends from an equity method investment and placed $18 million of restricted cash on deposit for
a transaction that closed in January 2008. Proceeds from the disposition of assets in 2006 include approximately $80
million in cash received from the sale of our corporate campus. Approximately $22 million from the sale was used
to satisfy an existing mortgage and is included as a use of cash in financing activities.
During 2007, we acquired Axidata Inc., a Canada-based office products delivery company. Additionally in 2007, we
funded previously accrued acquisition-related payments for former owners of entities acquired in 2006. During
2006, we acquired all or a majority ownership position in entities in North America, the Czech Republic, South
Korea, and China, as well as increased our ownership position in our previous investment in Israel. For those entities
that are not wholly owned, we have the right to acquire or may be required to purchase some or all of the minority
interest shares at various points over the next few years. We expect to purchase additional interests from minority
shareholders in 2008.
Financing Activities
The Board of Directors has authorized open market purchases of our common stock under repurchase plans that
were in effect during the three years presented. Under the approved plans, we purchased 5.7 million shares in 2007
at a cost of $199.6 million; 26.4 million shares in 2006 at a cost of $970.6 million; and 29.8 million shares in 2005
at a cost of $815.2 million. At the end of 2007, $500 million remained available for additional repurchases under the
most recent board approved plan. Our current plans are to repurchase shares over the next year as market conditions
warrant and as cash flow allows. Proceeds from issuance of common stock under our employee related plans were
$29.3 million in 2007, $101.0 million in 2006 and $175.9 million in 2005. Following the adoption of FAS 123R in
the third quarter of 2005, cash from tax benefits on employee related plans that are in excess of amounts based on
grant date fair value are presented as financing activities. Additionally, at the issuance of certain restricted stock
awards, employees surrendered shares to the company equal to approximately $11.2 million in 2007 and $12.8
million in 2006 in exchange for our settlement of their taxes due on these shares.
Proceeds from the issuance of long- and short-term debt totaled $177.4 million, $8.5 million and $24.5 million in
2007, 2006 and 2005, respectively. The increase in 2007 was primarily driven by the decline in our operating cash
flow, as we experienced higher levels of short-term borrowings to support our working capital needs.
In connection with the sale of our corporate campus in 2006, a portion of the proceeds was used to liquidate an
existing mortgage on one of the facilities.