Creative 2007 Annual Report Download - page 17

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liabilities. The $35.8 million in adjustments to non-cash items comprised mainly $25.0 million of depreciation and amortization,
$31.5 million in impairment of goodwill and intangible assets, offset partially by a $20.9 million in net gains from the disposal of
investments.
Investing Activities
Net cash used in investing activities during fiscal year 2007 was $2.8 million compared to cash provided of $10.7 million in fiscal
year 2006. The $2.8 million cash used in fiscal year 2007 was primarily for capital expenditures amounting to $6.0 million offset
partially by proceeds from sales of fixed assets $4.3 million.
Net cash provided by investing activities during fiscal year 2006 was $10.7 million compared with $43.7 million in fiscal year 2005.
The $10.7 million cash provided in fiscal year 2006 primarily comprised sales proceeds of investments amounting to $29.2 million,
offset partially by net capital expenditures of $13.3 million and a $4.0 million increase in other non-current assets pertaining to
additional investments in equity-method investee companies.
Financing Activities
Net cash used in financing activities during fiscal year 2007 was $99.5 million compared with $35.0 million in fiscal year 2006.
Cash used in financing activities of $99.5 million primarily consisted of a $20.9 million dividend payment (see Note 8 of “Notes
to Consolidated Financial Statements”) and $78.9 million in repayments of debt obligations.
Net cash used in financing activities during fiscal year 2006 was $35.0 million compared with $142.2 million provided by financing
activities in fiscal year 2005. Cash used in financing activities of $35.0 million primarily consisted of a $20.7 million dividend
payment (see Note 8 of “Notes to Consolidated Financial Statements”), $8.1 million in open market repurchases of Creative’s
ordinary shares, $3.8 million in repayments of debt obligations and $3.7 million in repayments of capital leases, offset partially by
proceeds from the exercise of ordinary share options amounting to $2.9 million.
Current and Expected Liquidity
As of June 30, 2007, in addition to its cash reserves and excluding long term loans, Creative has credit facilities totaling $91.3 million
for overdrafts, guarantees, letters of credit and fixed short-term loans, of which approximately $89.3 million were unutilized.
As part of its long-term business strategy, from time to time, Creative makes strategic equity investments in companies that can
provide Creative with technologies or products that management believes will give Creative a competitive advantage in the markets
in which Creative competes.
Management believes that Creative has adequate resources to meet its projected working capital and other cash needs for at least
the next twelve months. To date, inflation has not had a significant impact on Creative’s operating results.