Ingram Micro 2008 Annual Report Download - page 46

our term loan, revolving credit and other facilities, and trade and supplier credit. The following is a detailed
discussion of our cash flows for 2008, 2007 and 2006.
Our cash and cash equivalents totaled $763.5 million and $579.6 million at January 3, 2009 and December 29,
2007, respectively. The higher cash and cash equivalents level at January 3, 2009 compared to December 29, 2007,
primarily reflects the positive cash flow that results from lower working capital requirements associated with the
lower volume of business in the current economic environment, coupled with the ongoing generation of profits from
the business excluding non-cash items.
Operating activities provided net cash of $553.9 million, $327.8 million, and $92.8 million in 2008, 2007 and
2006, respectively. The net cash provided by operating activities in 2008 principally reflects decreases in accounts
receivable and inventories, partially offset by decreases in accounts payable and accrued expenses. The decreases in
accounts receivable, inventories, accounts payable and accrued expenses largely reflect the lower volume of
business due to the overall weakness in the economic environment in markets in which we operate. The net cash
provided by operating activities in 2007 was primarily due to net income before noncash charges, partially offset by
a net increase in working capital due to the higher volume of business. The net cash provided by operating activities
in 2006 principally reflects net income before noncash charges, partially offset by a net increase in working capital.
The increase in working capital largely reflects the higher volume of business, higher inventory levels due to the
warehouse management system issues in Germany and timing of certain product purchases.
Investing activities used net cash of $61.4 million, $160.5 million and $105.3 million in 2008, 2007 and 2006,
respectively. The net cash used by investing activities in 2008 was primarily due to capital expenditures of
$81.4 million and cash payments related to acquisitions of $12.3 million, partially offset by the collection of
collateral deposits. The net cash used by investing activities in 2007 was primarily due to cash payments related to
acquisitions of $129.0 million and capital expenditures of $49.8 million, partially offset by the proceeds from the
sale of our Asia-Pacific semiconductor business. The net cash used by investing activities in 2006 was primarily due
to capital expenditures of $39.2 million, short-term collateral deposits on financing arrangements of $35.0 million
and cash payments related to acquisitions. As our business has continued to grow over recent years and we have
continued to integrate acquisitions of distribution and adjacent businesses, additional investments are necessary to
support our underlying infrastructure, business processes and IT systems in order to continue to effectively manage
the higher volume and greater diversity of business. As a result, we presently expect our capital expenditures will
approximate $85 million in 2009.
Financing activities used net cash of $271.4 million in 2008 and provided net cash of $45.9 million and
$10.5 million in 2007 and 2006, respectively. The net cash used by financing activities in 2008 primarily reflects our
net repayments of $323.2 million on our debt facilities and the repurchase of Class A Common Stock of
$222.3 million under our $300 million stock repurchase program, partially offset by $250 million of proceeds
from our senior unsecured term loan and $23.0 million in proceeds from the exercise of stock options. The net cash
provided by financing activities in 2007 primarily reflects the proceeds from the exercise of stock options of
$66.7 million, partially offset by our repurchase of Class A Common Stock of $25.1 million under our $300 million
stock repurchase program instituted in the fourth quarter of 2007. The net cash provided by financing activities in
2006 primarily reflects the proceeds from the exercise of stock options of $98.1 million, partially offset by the net
payments of debt facilities of $96.5 million.
Our debt level is highly influenced by our working capital needs. As such, our borrowings fluctuate from
period-to-period and may also fluctuate significantly within a quarter. The fluctuation is the result of the
concentration of payments received from customers toward the end of each month, as well as the timing of
payments made to our vendors. Accordingly, our period-end debt balance may not be reflective of our average debt
level or maximum debt level during the periods presented or at any point in time.
Acquisitions and Disposition
In 2008, we acquired Eurequat SA in France, Intertrade A.F. AG in Germany, Paradigm Distribution Ltd. in the
United Kingdom and Cantechs Group in China, all distributors offering value-added distribution of automatic
identification and data capture/point of sale (“AIDC/POS”) technologies and/or mobile data to solutions providers
and system integrators. These acquisitions further expand our value-added distribution of AIDC/POS solutions in
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