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Liquidity and Capital Resources
Cash Flows
The following table summarizes the Company's cash flow activities for fiscal 2006, 2005 and 2004,
including the Company's computation of free cash flow and a reconciliation of this metric to the nearest
GAAP measures of net income and net cash flow from operations. Management's computation of free cash
flow consists of net cash flow from operations plus cash flows generated from or used for purchases and sales
of property, plant and equipment, acquisitions and divestitures of operations and investments, effects of
exchange rates on cash and cash equivalents and other financing activities. Management believes that the non-
GAAP metric of free cash flow is a useful measure to help management and investors better assess and
understand the Company's operating performance and sources and uses of cash. Management also believes the
analysis of free cash flow assists in identifying underlying trends in the business. Computations of free cash
flow may differ from company to company. Therefore, the analysis of free cash flow should be used as a
complement to, and in conjunction with, the Company's consolidated statements of cash flows presented in
the accompanying financial statements appearing in Item 15 of this Report.
Management also analyzes cash flow from operations based upon its three primary components noted in
the table below: net income, non-cash and other reconciling items and cash flow generated from or used for
working capital. Similar to free cash flow, management believes that this breakout is an important measure to
help management and investors understand the trends in the Company's cash flows, including the impact of
management's focus on asset utilization and efficiency through its management of the net balance of
receivables, inventories and accounts payable.
Years Ended
July 1, July 2, July 3,
2006 2005 2004
(Thousands)
Net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 204,547 $ 168,239 $ 72,897
Non-cash and other reconciling items(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 199,766 172,595 140,783
Cash flow (used for) generated from working capital (excluding
cash and cash equivalents)(2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (423,427) 121,002 (149,031)
Net cash flow (used for) provided by operations ÏÏÏÏÏÏÏÏÏÏÏÏ (19,114) 461,836 64,649
Cash flow generated from (used for):
Purchases of property, plant and equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (51,803) (31,338) (28,623)
Cash proceeds from sales of property, plant and equipment ÏÏÏÏÏ 4,368 7,271 5,229
Acquisitions and divestitures of operations and investments, net (294,335) (3,563) (50,528)
Effect of exchange rates on cash and cash equivalents ÏÏÏÏÏÏÏÏÏ 3,353 (10,816) 8,834
Other, net financing activities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30,991 2,274 13,914
Net free cash flow ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (326,540) 425,664 13,475
Repayment of debt, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (34,614) (100,464) (96,275)
Net (decrease) increase in cash and cash equivalentsÏÏÏÏÏÏÏÏ $(361,154) $ 325,200 $ (82,800)
(1) Non-cash and other reconciling items are the combination of depreciation and amortization, deferred
income taxes, non-cash restructuring and other charges, and other, net, (primarily the provision for
doubtful accounts and, in the case of fiscal 2006, stock-based compensation expense) in cash flows from
operations.
(2) Cash flow from working capital is the combination of the changes in the Company's working capital and
other balance sheet accounts in cash flows from operations (receivables, inventories, accounts payable
and accrued expenses and other, net).
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