Ingram Micro 2011 Annual Report Download - page 46

cash flow generated from operating activities. Conversely, when sales volume decreases, our net investment in
working capital decreases, which generally results in increases in cash flows generated from operating activities.
The following is a detailed discussion of our cash flows for 2011, 2010 and 2009.
Our cash and cash equivalents totaled $891,403 and $1,155,551 at December 31, 2011 and January 1, 2011,
respectively. The lower cash and cash equivalents level at December 31, 2011 compared to January 1, 2011,
primarily reflects: the repayment of our unsecured term loan; our repurchases of Class A Common Stock; our
investments in property and equipment; and our investment in the business in the form of net working capital to
address our year-over-year sales growth. These factors are partially offset by: the ongoing generation of profits
from the business excluding noncash items and the proceeds from the exercise of stock options. As of
December 31, 2011 and January 1, 2011, we have book overdrafts of $511,172 and $517,107, respectively,
representing checks issued on disbursement bank accounts but not yet paid by such banks. These amounts are
classified as accounts payable in our consolidated balance sheet and are typically paid by the banks in a relatively
short period of time. We have closely managed our overall working capital investment in 2011 and 2010 and our
level of working capital days achieved as of December 31, 2011 and January 1, 2011 was at the low end of our
targeted range. Our investment in working capital may increase in future periods. For instance, we recently have
pursued and may continue to pursue profitable sales and market share growth and/or new business opportunities
through targeted investment in working capital. This could include our strategic pursuit of additional early pay
discounts on trade accounts payable or purchase discounts on inventory, or we may allow extended payment
terms or larger credit lines to certain customers. While each of these factors may yield net additional investment
in working capital, as well as sales growth and/or improved profitability, we also continue to manage the risks
associated with these strategies and the optimization of our resulting returns on invested capital.
Operating activities provided net cash of $295,859, $179,322 and $240,801 in 2011, 2010 and 2009,
respectively. As noted above, our cash flows from operations are significantly affected by net working capital
which is in turn impacted by both fluctuations in volume of sales, as well as normal period-to-period variations in
days of working capital outstanding due to the timing of collections from customers, movement of inventory and
payments to vendors. The net cash provided by operating activities in each of the last three years principally
reflects our net income before noncash charges, offset partially by an increase in our net working capital. The
principal driver of the increase in working capital is the previously discussed higher sales volumes in 2011 and
2010, as our working capital days outstanding were flat at the end of both 2011 and 2010, and the higher levels of
sales to close out the fourth quarter of 2009 compared to the end of 2008 as we began to see some positive trends
in the macroeconomic environment by the end of 2009 compared to the end of 2008.
Investing activities used net cash of $124,620, $79,351 and $99,908 in 2011, 2010 and 2009, respectively.
The net cash used by investing activities in each of the last three years was primarily due to capital expenditures
as well as cash payments primarily related to the acquisitions of Albora, interAct and Asiasoft totaling $8,329 in
2010 and $35,415 primarily related to the acquisitions of CCD, VAD and Vantex in 2009. The capital
expenditures for 2011, 2010 and 2009 were primarily for expected investments to enhance our underlying
infrastructure and IT systems and our incremental investment in a new warehouse in Australia in 2011. We
presently estimate that our capital expenditures will approximate $110,000 in 2012 for ongoing investments to
support existing infrastructure and continued enhancements to our IT systems.
Financing activities used net cash of $414,042 and $51,178 in 2011 and 2009, respectively, and provided net
cash of $146,357 in 2010. The net cash used by financing activities in 2011 primarily reflects the repayment of
the outstanding principal balance of our senior unsecured term loan and related interest rate swap agreement of
$239,752 and the repurchase of $225,905 of Class A Common Stock, partially offset by $39,465 in proceeds
from the exercise of stock options and $9,017 in net proceeds from our revolving credit facilities used to fund
normal operations. The net cash provided by financing activities in 2010 primarily reflects $297,152 in net
proceeds from the issuance of our $300,000 senior unsecured notes due in 2017 and $38,439 in proceeds from
the exercise of stock options, partially offset by the repurchase of Class A Common Stock for $152,285 under
our stock repurchase programs, and net repayments of $40,672 on our debt facilities and senior unsecured term
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