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Table of Contents
both of which were partially offset by $375.5 million of payments on accounts payable. Although receivable days
have increased three days as compared with the prior year, the Company has not experienced any significant change
in delinquencies. Although management expects to continue to generate cash from operating activities, it does not
anticipate generating the levels of cash flow experienced in fiscal 2009, primarily because working capital velocity is
at appropriate levels for the business (5.9 times at the end of June) and revenues appear to be stabilizing.
During fiscal 2008, the Company generated $453.6 million of cash from its operating activities as compared
with $724.6 million in fiscal 2007. These results are comprised of: (1) cash flow generated from net income
excluding non-cash and other reconciling items, which consist of the add-back of depreciation and amortization,
deferred income taxes, stock-based compensation, gain on sale of assets and other non-cash items (primarily the
provision for doubtful accounts and periodic pension costs) and (2) cash flow generated from (used for) working
capital, excluding cash and cash equivalents. The working capital outflow in fiscal 2008 was driven by cash
payments on accounts payable ($123.3 million) and other items ($170.7 million), partially offset by collection of
receivables and a reduction in inventory. The cash outflow for payables was primarily attributable to TS and the cash
outflow for other items was primarily a result of income tax payments.
During fiscal 2007, the Company generated $724.6 million of cash from its operating activities of which
$126.2 million was generated from working capital, excluding cash and cash equivalents. TS experienced growth in
receivables as well as payables driven, in part, by the acquisition of the Access business for which the largest
supplier is Sun Microsystems whose strongest quarter is typically its June fiscal year end. The reduction in inventory
was a net result of EM’s decrease of $74 million partially offset by a small increase in inventory at TS. In addition,
during fiscal 2007, the Company paid $29.7 million associated with the restructuring, integration and other charges
and exit-related costs accrued through purchase accounting.
Cash Flows from Financing Activities
During fiscal 2009, the Company utilized cash of $406.8 million related to net repayments of notes and bank
credit facilities, $300 million of which related to the extinguishment of the 2% Convertible Senior Debentures due
March 15, 2034 (the “Debentures”).
In March 2009, $298.1 million of the Debentures were put back to the Company
and the remaining $1.9 million was repaid in April 2009. As a result of the substantial cash generation from
operating activities during the fiscal year, the Company was able to use cash on hand to settle the $300 million of
Debentures’ principal plus accrued interest. In fiscal 2008 and 2007, the Company used $41.9 million and
$35.6 million, respectively, of cash for net debt repayments. During fiscal 2007, the Company issued $300.0 million
of 6.625% Notes due September 15, 2016 and $300.0 million of 5.875% Notes due March 15, 2014. The net
proceeds of $593.2 million from both issuances were used to repay existing debt. Other financing activities, net, in
fiscal 2009, 2008 and 2007 were primarily a result of cash received for the exercise of stock options and the
associated excess tax benefit.
Cash Flows from Investing Activities
The Company used $314.9 million of cash related to acquisitions during fiscal 2009. The Company also
received $14.3 million in proceeds related to earn-out provisions associated with the prior sale of the Company’s
equity investment (see Results of Operations — Gain on Sale of Assets). In addition, the Company utilized
$110.2 million of cash for capital expenditures related to system development costs, computer hardware and software
as well as expenditures related to warehouse construction costs.
The Company’s cash flows associated with investing activities during fiscal 2008 were related primarily to
payments for acquired businesses which totaled $369.4 million. In addition, the Company received proceeds of
$68.6 million related to the gain on sale of assets in connection with the sale of the Company’
s equity investment and
the receipt of contingent purchase price proceeds. Other investing activities included capital expenditures primarily
for system development costs, computer hardware and software.
For fiscal 2007, the Company’s cash flows associated with investing activities included capital expenditures
related to system development costs, computer hardware and software expenditures as well as certain leasehold
improvement costs. Also included in cash flows from investing activities is cash used for the acquisition of Access,
Azure and a small distributor business in Italy, net of contingent purchase price proceeds received.
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