Saks Fifth Avenue 2008 Annual Report Download - page 29

fluctuations are generally determined by the timing of merchandise purchases and payments. The $50.2 million
decrease in cash flows from continuing operations in 2008 from 2007 was primarily driven by the loss from
continuing operations of $122.8 million in 2008 compared to income from continuing operations of $50.7 million
in 2007 and a year over year decrease in accounts payable and accrued liabilities of approximately $114.6
million. This was partially offset by an inflow of cash resulting from a decrease in inventory of approximately
$118.5 million. The decrease in inventory and accounts payable is due to the Company’s effort to more closely
align inventories with current consumption trends. The $86.4 million decrease in cash flows from continuing
operations in 2007 from 2006 was primarily due to a decrease in accounts payable and accrued liabilities and
increased inventory levels, partially offset by higher net income.
Cash used in investing activities from continuing operations was $123.0 million in 2008, $124.4 million in
2007 and $121.2 million in 2006. Cash used in investing activities principally consists of construction of new
stores and renovation and expansion of existing stores and investments in support areas (e.g., technology and
distribution centers). The $1.4 million decrease in cash used in 2008 is primarily related to a decrease in capital
expenditures of approximately $9.4 million, partially off-set by a decrease in proceeds from the sale of property
and equipment of approximately $8.0 million. The $3.2 million increase in cash used in 2007 is primarily related
to an increase in capital expenditures of approximately $15.4 million, partially offset by the increase in proceeds
from the sale of SFA property of approximately $12.2 million.
Cash provided by financing activities from continuing operations was $35.5 million in 2008. Cash used in
financing activities from continuing operations was $119.6 million in 2007 and $1,041.2 million in 2006. The
2008 cash provided by financing activities relates to proceeds of $156.7 million from the revolving credit facility
and $4.1 million in proceeds from the issuance of common stock associated with stock option exercises partially
off-set by the repayments of long-term debt and capital lease obligations of approximately $89.2 million and
$34.9 million of common stock repurchases. The 2007 use relates to the repurchase of approximately $106.3
million in principal amount of senior notes and $27.5 million of common stock repurchases partially off-set by
$34.3 million in proceeds from the issuance of common stock associated with stock option exercises. The 2006
use primarily relates to the payment of cash dividends totaling $1,095.0 million and $6.5 million of common
stock repurchases partially off-set by $51.7 million of proceeds from the issuance of common stock associated
with stock option exercises.
On March 6, 2006, the Company’s Board of Directors declared a cash dividend of $4.00 per common share
totaling approximately $547.5 million, and the Company reduced shareholders’ equity by that amount.
Approximately $539.0 million of the dividend was paid on May 1, 2006 to shareholders of record as of April 14,
2006. The remaining portion of the dividend payable will be paid prospectively as, and to the extent, awards of
restricted stock vest.
On October 3, 2006, the Company’s Board of Directors declared a cash dividend of $4.00 per common
share totaling approximately $558.6 million, and the Company reduced shareholders’ equity by that amount.
Approximately $552.0 million of the dividend was paid on November 30, 2006 to shareholders of record as of
November 15, 2006. The remaining portion of the dividend payable will be paid prospectively as, and to the
extent, awards of restricted stock vest.
During the year ended February 3, 2007, the Company repurchased approximately 0.5 million shares of its
common stock at an average price of $14.51 and a total cost of approximately $6.5 million.
During the year ended February 2, 2008, the Company repurchased approximately 1.7 million shares of its
common stock at an average price of $15.95 and a total cost of approximately $27.5 million.
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