Express 2011 Annual Report Download - page 51

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Net cash provided by operating activities was $220.0 million in 2010 compared to $200.7 million in 2009. The
increase in net income increased operating cash flow by $52.1 million in 2010 compared to 2009. We had the
following significant operating cash outflows during 2010: (1) $13.3 million in one-time fees related to the
termination of the Advisory Agreement and the LLC Agreement and (2) $12.0 million in prepayment penalties
related to the prepayments of the Term B Loan and the Term C Loan. In addition we had cash outflows related to
changes in working capital primarily related to an increase in inventories of $13.5 million to support our sales
growth. Further, as a result of our conversion to a corporation, we recognized a non-cash deferred tax gain of
$31.8 million, which was partially offset in the periods subsequent to the conversion by deferred tax expense
related to book income. We also had an $8.8 million non-cash loss on extinguishment of debt related to the
prepayments of the Term B Loan and Term C Loan.
Net Cash Used in Investing Activities
Investing activities consist primarily of capital expenditures for new and remodeled store construction and
fixtures, store maintenance, information technology, and home office renovations.
Net cash used in investing activities increased $22.4 million to $77.2 million in 2011 compared to $54.8 million
in 2010. This increase was primarily driven by capital expenditures, gross of landlord allowances, attributed to
new store openings and remodels and store fixtures, totaling $60.7 million during 2011 compared to $38.9
million during 2010.
Net cash used in investing activities increased $28.0 million to $54.8 million in 2010 compared to $26.9 million
in 2009. Capital expenditures, gross of landlord allowances, attributed to the opening of new stores, store
remodels, and store conversions to a dual-gender format totaled $38.9 million during 2010 compared to $16.7
million during 2009, an increase of $22.2 million. Capital expenditures related to investments in information
technology primarily related to our transition to a stand-alone business were $14.3 million in 2010 compared to
$10.2 million in 2009.
The remaining capital expenditures in each period relate primarily to investments in information technology,
store fixtures, heating, ventilation and air conditioning improvements, gates, and investments in the operations at
our corporate home office.
In 2012 we plan to open approximately 30 new stores, including 20 to 23 in the United States and 7 to 10 in
Canada. We expect capital expenditures for 2012 to be approximately $120.0 to $125.0 million, primarily driven
by these new store openings. These capital expenditures do not include the impact of landlord allowances, which
are expected to be approximately $17.0 to $21.0 million for 2012.
Net Cash Used in Financing Activities
Net cash used by financing activities was $170.8 million during 2011 as compared to $211.8 million in 2010, a
decrease of $41.0 million. This use of cash in 2011 consisted of the $119.7 million prepayment of the Opco Term
Loan outstanding balance and repurchases of $49.2 million of Senior Notes.
Net cash used by financing activities was $211.8 million during 2010 as compared to $115.6 million in 2009, an
increase of $96.2 million. This use of cash consisted of repayments of $300.0 million for borrowings under the
Topco Credit Facility, $261.0 million in distributions to equity holders prior to the IPO, including a $31.0 million
tax distribution in the second quarter of 2010, a special dividend of $49.5 million in December of 2010, and
$18.7 million in costs incurred in connection with the Senior Notes offering and the IPO. These uses were offset
by net proceeds of $246.5 million (net of original issue discount) received from the Senior Notes offering and
$166.9 million (net of underwriting discount) received from the IPO.
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