Radio Shack 2009 Annual Report Download - page 39

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32
We believe free cash flow is a relevant indicator of our ability to repay maturing debt, change dividend
payments or fund other uses of capital that management believes will enhance shareholder value. The
comparable financial measure to free cash flow under generally accepted accounting principles is cash
flows from operating activities, which was $245.8 million in 2009, $274.6 million in 2008, and $379.0
million in 2007. We do not intend for the presentation of free cash flow, a non-GAAP financial measure, to
be considered in isolation or as a substitute for measures prepared in accordance with GAAP, nor do we
intend to imply that free cash flow represents cash flow available for discretionary expenditures.
The following table is a reconciliation of cash flows from operating activities to free cash flow.
Year Ended December 31,
(In millions) 2009 2008
2007
Net cash provided by operating activities $ 245.8 $ 274.6 $ 379.0
Less:
Additions to property, plant and equipment 81.0 85.6 45.3
Dividends paid 31.3 31.3 32.8
Free cash flow $ 133.5 $ 157.7 $ 300.9
SOURCES OF LIQUIDITY
As of December 31, 2009, we had $908.2 million in cash and cash equivalents. Additionally, we have a
credit facility of $325 million. As of December 31, 2009, we had $291.3 million available under this credit
facility due to the issuance of standby letters of credit. We have not borrowed from this facility. We believe
that our cash flows from operations and available cash and cash equivalents will adequately fund our
operations, our capital expenditures, and our maturing debt obligations. Additionally, our credit facility is
available for additional working capital needs or investment opportunities.
The table below lists our credit commitments from various financial institutions.
(In millions) Commitment Expiration per Period
Credit Commitments
Total Amounts
Committed
Less Than
1 Year
1-3 Years
3-5 Years
Over
5 Years
Lines of credit $ 325.0 $ -- $ 325.0 $ -- $ --
Standby letters of credit -- -- -- -- --
Total commercial commitments $ 325.0 $ -- $ 325.0 $ -- $ --
Available Financing: As of December 31, 2009, we had $291.3 million in borrowing capacity available
under our existing credit facility due to the issuance of standby letters of credit. We incurred no
borrowings from this facility during 2009. This facility expires in May of 2011.
Our $325 million credit facility provides us a source of liquidity. This facility is provided by a syndicate of
lenders with a majority of the facility provided by Wells Fargo, Citigroup, and Bank of America. We
incurred no borrowings from this facility in 2009. Interest charges under this facility are derived using a
base LIBOR rate plus a margin which changes based on our credit ratings. Our credit facility has
customary terms and covenants, and we were in compliance with these covenants at December 31,
2009.
Credit Ratings: Below are the agencies’ ratings by category, as well as their respective current outlook
for the ratings, as of February 8, 2010.
Rating Agency Rating Outlook
Standard and Poor’s BB Stable
Moody's Ba1 Stable
Fitch BB Stable