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33
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
2006 2005 2004
Cash flows from operating activities:
Net income $ 266,080 $ 272,092
$ 241,445
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 28,138 21,493 16,998
Accretion of marketable securities (149) (53) 392
Stock-based compensation expense 15,754 3,873 314
Allowance for doubtful accounts 1 (326) (167)
Deferred income taxes (13,726) 1,059 2,217
Gross excess tax benefits from share-based compensation (17,053) - -
Tax benefit from stock option and restricted stock transactions - 10,952 19,625
Minority interest - - 446
Gain on sale of investment in CDW Leasing, LLC - - (287)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable (132,194) (56,884)
(135,868)
Merchandise inventory (17,813) (30,342) (29,332)
Other assets (21,968) (6,756) (1,699)
Accounts payable 46,149 60,903 55,899
Accrued expenses 57,498 19,573 11,413
Long-term liabilities 5,996 8,076 2,810
Net cash provided by operating activities 216,713 303,660
184,206
Cash flows from investing activities:
Purchases of available-for-sale securities (327,323) (392,058)
(528,820)
Redemptions and sales of available-for-sale securities 442,425 382,099 453,307
Purchases of held-to-maturity securities (80,000) (30,000)
(110,000)
Redemptions of held-to-maturity securities 131,600 85,000 70,000
Purchase of property and equipment (85,567) (49,062) (22,113)
Acquisition of businesses, net of cash acquired (180,742) - -
Sale of investment in CDW Leasing, LLC, net of cash sold - - (2,321)
Net cash used in investing activities (99,607) (4,021)
(139,947)
Cash flows from financing activities:
Purchase of treasury shares (227,669) (258,298) (86,010)
Proceeds from issuance of common stock under share-
based compensation plans 78,337 29,683 34,866
Dividends paid (40,723) (35,114) (30,027)
Gross excess tax benefits from share-based compensation 17,053
Change in book overdrafts 2,788 16,421 (36,966)
Net cash used in financing activities (170,214) (247,308)
(118,137)
Effect of exchange rate changes on cash and cash equivalents (61) 115 257
Net (decrease)/increase in cash (53,169) 52,446 (73,621)
Cash and cash equivalents – beginning of period 201,250 148,804 222,425
Cash and cash equivalents – end of period $ 148,081 $ 201,250
$ 148,804
Supplementary disclosure of cash flow information:
Taxes paid $ 137,422 $ 155,871
$ 134,769
The accompanying notes are an integral part of the consolidated financial statements.